LIVERPOOL city council's services have continued to improve over the last year, according to an independent standards watchdog.

The annual Comprehensive Performance Assessment (CPA) by the Audit Commission, has given the council a 2 star rating, and says services are 'improving adequately'. 

Top marks went to the benefits service, which got the maximum score for the second year running following further improvements in the time taken to process claims. Just five years ago it was one of the worst in the country.

Also singled out for praise are services for children and young people, with a record 55.6 percent of pupils gaining five or more A*-C grades at GCSE - just 0.4 percent behind the national average. Work to tackle childhood obesity through free access to leisure centres is described as 'innovative'. 

The inspectors noted improvements in adult social care, with advances in the assessment, delivery and review of care packages highlighted. The Audit Commission also concluded that the modernisation of day services and home care are both progressing well. 

Improvements in street cleansing and the environment are also praised, as is the city's regeneration through major schemes such as the £920 million Liverpool One retail and leisure development and the 10,500 seat arena and convention centre at Kings Dock.

Lib Dem Council leader Warren Bradley said: "A lot of progress has been made in recent years and this report outlines what we are doing well together with the areas where we need to improve.

"I am pleased that the huge efforts we are making in ensuring children get the best possible start in life have been recognised. 

"There has also been a massive drive to improve the care we provide to older people, and this is now also making a difference to the lives of many vulnerable people.

"But there is still an awful lot of work to do, particularly in improving the condition of the housing stock in the city."

The city council's Chief Executive Colin Hilton said: "We have come a long way over the last few years and many of our services have changed beyond recognition.

"The challenge now is to take our services to the next level and there are a few areas we really need to concentrate on if we are to become a top ranking authority. 

"We have plans in tackle the major challenges such as housing and the use of resources to improve our services further." 

In housing, a stock transfer ballot is set to take place later this year, releasing £300 million to improve homes if tenants vote in favour. 

On recycling, the council is rolling out a new service soon which will enable local people to re-use plastics, glass, paper and cans. 

And the council is to improve its use of resources by more effective targeting of spending against priorities and increasing the level of reserves.

Liverpool's scores for each performance area (4 = performing strongly, 3 = performing well, 2 = adequate and 1 = inadequate) are: 

Benefits: 4 - Received the highest possible score again for further improvements in times taken to deal with claims and deal with backlogs. The benefits maximisation service which helps people claim all their entitlements was also praised. 

Children and young people: 3 - Inspectors praised innovative work around tackling childhood obesity and supporting vulnerable groups. Progress was also noted in exam results. 

Culture: 2 - Although the council received a good inspection of culture last year, a lower score on just three performance indicators in leisure and libraries meant it just missed out on a score of three.  

Environment: 3 - Inspectors reported further improvements in cleanliness and the condition of streets. The council is taking action to improve recycling by extending the service to include more materials.

Housing: 1 - The backlog of housing repairs and the poor rating for the Supporting People programme resulted in the low score. Transferring the stock to a new 'mutual' housing association if tenants vote yes will unlock the investment needed, and the council has implemented the recommendations from the Supporting People inspection in 2004 to improve the service.

Social care: 3 - Moved up from two last year to three this year following a report by the Commission for Social Care Inspection which concluded the council is serving most people well with "promising" prospects of further improvement. 

Use of resources: 2 - In order to improve the score the council is to carry out more effective targeting of spending against priorities and increase the level of reserves.