Peers repeatedly asked for clarity on whether a ‘gentleman’s agreement’ was struck with Surrey County Council, while the government reaffirmed that no such deal was made.

From today: Surrey County Council leader held talks with Government over 'gentleman's agreement' to scrap 15 per cent tax rise

Lord Kennedy (pictured below) of Southwark started the debate in the House of Lords today after a recording leaked in which council leader David Hodge is heard speaking about a ‘sweetheart deal’ with his fellow Conservatives in government.

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Pic credit: Parliament Live

But Lord Bourne of Aberystwyth, the parliamentary under-secretary of state for communities and local government repeatedly denied the allegation that Surrey had been given a secret financial settlement to avoid imposing a 15 per cent tax hike.

“There is no ‘sweetheart deal’,” he told the chamber.

“There was never a prospect of a ‘sweetheart deal’ for Surrey.

“They are in the same position as every other local authority, except that they did not sign up to the financial deal.”

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​Pic credit: Parliament Live

But Lord Bourne (pictured above) was repeatedly asked for clarification on the recording, which was leaked to the BBC last night, in which Councillor Hodge referred to a “gentleman’s agreement” and told other Tories he was “looking for help on how we could stop a referendum”.

Lord Kennedy asked: “What are the issues decided upon?

“What is the secret sweetheart deal?

“What is the gentleman’s agreement?

“Is the government being straight with us, or did Councillor Hodge dream these events up?”

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​Pic credit: Parliament Live

Liberal Democrat Baroness Pinnock (pictured above) added: “Does the Lord agree that subterfuge undermines the essential requirement of trust and confidence that has to exist between local government and central government?”

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​Pic credit: Parliament Live

Labour Baroness Armstrong (pictured above) of Hill Top said: “There is real concern that Surrey actually had less need for the additional money for social care than any other authority in the county because it has the fewest proposition of its population entitled to publicly-funded social care.

“I hope that (Lord Bourne) will pressurise the chancellor to ensure that the additional money for social care is allocated on the basis of need.

“This is an issue around the country and there cannot be any deal for Surrey without addressing the needs of places like the north east.”

But Lord Bourne reaffirmed the government’s position that no such deal had been made, and said he had “no idea” why Surrey County Council decided against holding a referendum on a potential 15 per cent council tax increase to fund adult social care.

From February: Surrey County Council leader U-turns on plans for 15 per cent tax increase minutes before vote

The council scrapped long-mooted plans for the referendum in February.

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Pic credit: Jon Sharman

Councillor Hodge had cited government cuts, and rising demand for adult social care and learning disabilities and children’s services as key factors behind the proposed increase.

From January: Surrey County Council leader confirms move to seek largest council tax hike in the country of 15 per cent

A Department for Communities and Local Government (DCLG) spokesman today said: "Surrey County Council informed the Government it wanted to become a pilot area for the 100% business rates retention scheme.

"DCLG made clear this was not possible for 2017/18, but subject to meeting the necessary criteria, it could apply in the 2018/19 pilot.

"As part of the statutory draft Local Government Finance Settlement consultation, DCLG discusses local government funding with councils across the country, of all types and all political parties.

"This happens every year, involves councils making representations to the Government, and has always been the process."

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