William Eichler 10 March 2017

Surrey promised ‘extra funding’ to abandon 15% council tax referendum

New documents have come to light revealing more evidence of a ‘secret deal’ between Surrey County Council and the Government over the county’s proposed 15% tax hike.

The Department for Communities and Local Government (DLCG) yesterday published all communication about the alleged deal with Surrey, which revealed ministers indicated ‘some extra funding’ would be available to the county after 2018.

The documents revealed Surrey's finance director, Sheila Little, sent a text to a senior DCLG official on 7th February which said: ‘Did you get any confirmation of a proposal? Thanks for the letter and as I indicated yesterday we do need a figure asap to be able to work through the implications ahead of full council debate on Tuesday.’

A later text also stated council leader David Hodge had shown Ms Little a ‘note from a Surrey MP about a conversation late last night with SJ’ which ‘seems to indicate Government are willing to get us some extra funding from 2018’.

The text continued: ‘V interested in whether this is sincere. As it stands isn't enough to call the ref off? But could it be? Grateful if we can have an officer chat, although I've told the leader he would need to speak to SJ.’

SJ is thought to be communities secretary Sajid Javid.

Matthew Style, director of local government finance, also wrote to Ms Little about the possibility of Surrey being the first to pilot 100% business rates retention.

‘We have been discussing the possibility that Surrey County Council would be the first two-tier area to pilot 100% business rates retention from April 2017,’ the letter said.

‘I am grateful to you for working so quickly to develop a proposal, but regret that we cannot take this any further.’

Surrey Council Council last month abandoned plans to hold a referendum on a 15% council tax increase to pay for social care amid accusations a ‘sweetheart’ deal had been reached with the Government.

Mr Hodge, the council’s Conservative leader, denied any such deal had been reached — although a leaked tape on Wednesday caught him admitting he had secured a ‘gentleman’s agreement’ from ministers to call off the referendum.

The new documents also showed a number of prominent Conservative MPs lobbied the Government on behalf of the county council.

In a letter dated 3rd November, 2016, MPs including Michael Gove, Crispin Blunt and Dominic Raab complained the four year local authority financial settlement was ‘unacceptable’ for Surrey.

‘Accepting such an offer would mean that Surrey residents would be faced with a 3% increase in their Surrey County Council Tax which would effectively subsidise services in other parts of the country,’ they wrote.

‘This is particularly unacceptable as Surrey residents already pay one of the highest Council Tax rates in the country.’

In another letter, Mr Hodge criticised the Government’s allocation of Better Care Funds as ‘unfair, anti-Conservative, and definitely anti-Surrey’. The county has been assessed as requiring £25m per year from the fund but is scheduled to receive £1.5m.

Teresa Pearce, shadow secretary of state for communities and local government, said this was ‘evidence of the Tories secret deal with the leadership of Surrey County Council’.

‘There is a huge crisis in social care which today’s budget won’t fix. What we need from the Tories is a long term sustainable plan, rather than sweetheart deals for Tories councils.

‘Theresa May needs to come clean. We need full disclosure of the terms of the deal and reassurance that all councils will be treated the same way not just the lucky few the Tories favour.’

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