Coun Martin Smith criticised Sheffield City Trust during a debate at full council about why it had cancelled Roy Chubby Brown at the City Hall.
The trust said his comments were “unwarranted and unfair”.
Coun Smith said: “Whatever side of the debate you’re on, by accepting and then cancelling the booking they’ve done a spectacularly good job of upsetting everybody.
“They’ve generated a lot of publicity for Sheffield and it hasn’t been great. This is the latest in a series of poor judgments from the trust going back over the past two years.
“We had auditors report very serious concerns about their financial management. We’ve had a whole series of maintenance issues. We’ve had Sheffield council tax money been used to prop up loss making operations in Scarborough and now this.
“Their track record hasn’t been great and I have to question whether the current relationship between the council and the trust is really fit for purpose. We need to do something to address that relationship.
“It’s entirely appropriate, given this example where they’ve managed to upset everybody, that the Executive reviews the current arrangements between the council and the trust.”
Trust chairman David Grey said the trust took its responsibilities very seriously and staff had worked incredibly hard. He said difficult decisions had reduced the potential cost to Sheffield taxpayers by £4m.
“It is disappointing to hear Coun Smith hold such a negative view. There has been no suggestion of any financial mismanagement in audits. As a not-for-profit organisation, we follow all UK regulatory requirements.”
Mr Grey said he wrote to Lib Dem councillors more than a year ago, addressing each of these points, and invited them to meet with the trust but did not receive a response.
“The wholesale criticism is unwarranted and unfair. I would like to again offer an invitation to see our work so that he has the facts regarding our activities and can see for himself the strength and depth of our management skills.
“No Sheffield taxpayer money has been used in Scarborough. As a result of pandemic restrictions, we cancelled this operational contract to focus our organisation on Sheffield.”
Mr Grey said some venues were more than 30 years old and needed regular maintenance.
“During a number of years of austerity, to minimise costs to the city, some maintenance work has been delayed. In agreement with Sheffield Council, we have a clear maintenance plan.
“Through the enforced closure of our venues, we have taken the opportunity to complete maintenance projects at the Arena and Sheffield City Hall.
“We have also brought forward planned works at Ponds Forge to minimise the impact on our customers of a necessary closure of one area within the building.
“I have absolute confidence in our people and I want to make it clear that we continue to do everything we can to support the people of Sheffield.”