Dundee paid the private eyes to mount surveillance operations against workers accused of avoiding work by faking injuries or clocking off early.
It is understood the spying operations – which involved watching workers’ homes and taking video and still pictures – resulted in a handful of sackings for gross misconduct.
But the private eyes bungled some of the inquiries, resulting in at least one worker winning their job back, an insider has revealed.
The council, which is cutting services by £15m this year, was last night accused of using “Big Brother” tactics and an “incredible” misuse of taxpayers’ cash.
Critics said Dundee, which employs more than 6,000 staff, should be able to catch rogue workers without taking on expensive private investigators.
Every council in Scotland was asked under the Freedom of Information Act for details of spending on outside detective agencies in the past five years.
Only three councils admitted hiring private eyes. Glasgow spent just over £4,000 and Fife £600.
But Dundee confirmed it had handed over a grand total of £51,819 to two firms of undercover agents, thought to be charging around £45 an hour plus expenses.
Officials would only say the PIs had been hired on four separate occasions to investigate gross misconduct by council employees.
The council admitted it had hired the outside detectives to “monitor and report on staff movements in response to complaints that staff weren’t completing shifts”.
It added the PIs were ordered to “carry out surveillance on employees suspected of misrepresenting/lying about injuries”.
And in another case they were instructed to “carry out surveillance on a group of employees about whom independent information had been received about them not being at work when they should have been, and covering for each other”.
Although the council refused to give any more information, an insider revealed the detectives spent almost a month trying to catch out council concierges working in a multi-storey tower block.
The source said: “When there were supposed to be two workers on, one wasn’t. The behaviour went on for a long time.
“Three workers were sacked and one resigned.
“The firm used video footage and still photographs. But the surveillance was very poorly done. One guy even got his job back after winning an internal appeal.
“One of the guys who lost his job is still very bitter about it. He took his case to a tribunal, but lost.”
The source said detectives were sent in again after a worker who claimed he could not drive or walk was spotted walking along the street.
“He claimed he was so badly injured that he couldn’t drive and couldn’t walk. He argued with the council. But he got sacked,” the source said.
Rory Malone, secretary of the Dundee branch of the union Unison said the council should be capable of investigating and disciplining its own workers.
“The council have got appropriate people to investigate if there are any complaints against staff,” he said. “To bring in a private company, which will be reaping thousands of pounds from the council tax payer, is incredible.
“I’m totally against it. It’s like Big Brother.”
Matthew Sinclair, director of the TaxPayers’ Alliance, said rooting out lazy workers should be the job of the council’s army of managers.
He said: “Keeping track of when staff aren’t completing their shifts or are behaving inappropriately is part of good management.
“Councils should be employing staff they can trust to get on with the job not forking out taxpayers’ money on pricey investigators.”
A spokesman for Dundee City Council said they also used the private investigators to chase a debtor. He added: “The council uses these methods in exceptional circumstances.
“We have carried out these procedures within legal guidelines and the appropriate framework.”
Human rights lawyer John Scott, said it was possible the surveillance could be justified but added: “I think the council should do more to explain it to the council tax payers. And there needs to be sufficient warnings to employees that surveillance might take place.”
Earlier this year it emerged that Dundee council officials had spied on the flat of Pete Reilly, the guitarist from Dundee rockers The View.
They stepped in after a flood of complaints about excessive noise coming from his home in City Road.
Reilly’s flatmate was sentenced to community service after he admitted breaking the terms of an ASBO. But the guitarist said he hoped the surveillance had helped clear his name.