The Government has said it is not proposing extra funding for Surrey County Council amid claims that officials made a "sweetheart deal" with the authority to cancel a 15 per cent council tax referendum.
Sajid Javid, secretary of state for the Department for Communities and Local Government (DCLG), released a statement today confirming the Government has "no proposals for extra funding for Surrey that would not otherwise be provided or offered to other councils".
The response came after the leader of Surrey County Council, David Hodge, made the shock u-turn as councillors were due to vote for a 15 per cent council tax increase - the largest in the country - on Tuesday, February 7, after delaying the budget announcement for some three hours to speak to Government officials.
Instead, councillors pushed through a 4.99 per cent increase.
David Hodge abandoned plans for the referendum at the last minute
Although councillor Hodge said that no deal had been made, he had received "assurances" from Whitehall that local government funding was going to be looked into.
But leaked texts between Cllr Hodge and a person called Nick from the DCLG, believed to be Mr Javid's special advisor Nick King, were revealed by Labour leader Jeremy Corbyn at Prime Minister's question time yesterday.
The texts alluded to a potential financial settlement between the Government and Surrey County Council to call off the referendum.
- From yesterday: Jeremy Corbyn challenges Theresa May over whether Surrey County Council was offered "sweetheart deal" to cancel council tax referendum
Referencing one of the messages sent by Cllr Hodge, Mr Javid said: "There is no 'memorandum of understanding' between Government and Surrey County Council.
"In the draft Settlement published in December, Surrey’s core spending power is forecast to rise by 1.4 per cent from 2015/16 to 2019/20.
"We believe this provides a sustainable base on which the council can plan ahead and allocate their £1.7 billion a year budget."
Mr Javid added that Surrey County Council would however be able to participate in the 2018/19 pilot schemes for the Local Government Finance Bill, that would let the authority keep all of the money it receives from business rates.
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