NorthboundA1, yes they have legal teams. The legal teams would have confirmed that the contract was legal or not, but the strategic decision making would have been by the senior councillors involved, and "ably advised" by their chief officers on multi-thousand pound salaries. None of them with any experience of the real commercial world whatsoever.
It was a similar kind of story up the road at NCL, when the senior councillors, no doubt also ably advised, allowed an airport MD and FD to mortgage the airport for a crippling loan, and managed to get themselves a multi-million £ bonus as a result. Said councillors, then wasted more council tax payers £ on legal action against their auditors, claiming that they should have stopped the councillors agreeing to it. The Judge said basically don't be so bleeding stupid, you lot were on the appropriate decision making board, you had the papers, and you signed off on them- don't expect others to take the blame for your own failings.
It is all a disgrace, but that is our democracy for you, so why be surprised when some individuals or organisations take advantage of the weaknesses.