SURREY County Council’s Tory leadership has been accused of “bodging” its budget after scrapping a proposed 15 per cent council tax hike in a last minute bid to avoid a divisive referendum in May.

And Labour leader Jeremy Corbyn waded into the row on Wednesday, accusing Tory leader Theresa May at Prime Minister’s Questions in Parliament, of offering a “sweetner” of extra Whitehall cash to stop the damaging referendum from going ahead.

Mrs May and Surrey Tory leader David Hodge both denied a secret deal offering extra cash.

Tempers ran high during Tuesday’s full council meeting, as councillors voted 53-18 in favour of Mr Hodge’s revised recommendation to seek a five per cent rise to Surrey’s lion’s share of the council tax bill this April.

It comes after a dramatic intervention by the leader, in which he told members more than three hours after the meeting was scheduled to commence, that the Government now “understood” Surrey’s perilous financial situation and the council’s cabinet was prepared to “take a risk” by adopting a more modest tax rise.

But opposition councillors were scathing of the council’s sudden change of heart, and especially the lack of detail on where Surrey planned to find £93million of extra savings needed in the next financial year.

With roughly two-thirds of the budget ring-fenced for social care, it leaves remaining services – such as libraries, the fire service, recycling and youth centres, buses and highways – vulnerable to cuts, with Mr Hodge refusing to discuss where the axe will fall until March’s cabinet meeting.

Addressing councillors after two long adjournments, Mr Hodge said it went “against the grain” for a Tory-run council to propose an increase in taxation, but added “significant financial challenges have left us facing a huge dilemma”.

He said the council had already made more than £450million worth of savings from its annual budget, but lamented the Government’s “unfair” funding formula for local authorities, which, he said, had seen Surrey absorb £170million worth of cuts to its central government grant since 2010 – leaving the council facing a budget shortfall of £32million this year, rising to £46million in 2019/20.

“At the same time as our funding is shrinking, demand for our services is increasing relentlessly,” he added. “That means more people requiring more services, more children needing more school places, more older adults requiring social care and more people with learning disabilities needing our support.

“Two-thirds of our spending now goes towards supporting the welfare of adults and children - that leaves little left in the pot to run other services.”

But having told Surrey’s cabinet just last week that increasing council tax by 15 per cent was the only alternative to service cuts, Mr Hodge said the Government was now “committed” to resolving the issues faced by Surrey and as such, the council believed a 4.99 per cent rise will be sufficient.

He added: “Government have listened to the facts, they have recognised our figures are right, they have agreed with us the methodology for funding councils is flawed and in need of serious overhauling.

“We are therefore willing to take a risk a solution will soon be found to the issues that all councils face.”

But this didn’t wash with opposition councillors.

Lib Dems leader Hazel Watson led criticism of the budget process as “secretive, shambolic and a disaster from top to bottom”.

She said: “We have no guarantees about funding from central government, no figures to measure whether the budget is on a sustainable course – we are instead being asked to cross our figures in the hope that at some point the money might magically appear in Surrey’s bank accounts.”

Mrs Watson accused Mr Hodge of cancelling the referendum at the last possible moment to save Tory seats at the upcoming election, and added the £93million of cuts were now “looming like an iceberg”.

She also accused the council of “failing” over many years to address its long-term problems, and expressed her belief adult social care should be funded “centrally and consistently across the country”.

Labour leader Robert Evans accused Mr Hodge of “panicking” in the face of a referendum he knew he would lose. He said: “We’ve spent half the day in recess while the leader has had more secret talks or phone calls with goodness knows who, and then we’re asked to trust the Government to deliver something on a budget we’ve not seen.

“Just what has the Government offered? We don’t know – because Mr Hodge won’t tell us.”

Presenting his own cost-cutting proposals, Mr Evans pointed to a “top heavy” Surrey – with 11 borough and district councils plus the county council, 12 county halls or civic centres, 12 chief executives and dozens of deputy chief executives – “all probably paid more than the Prime Minister”, as well as having some 600 councillors between them.

He declared: “If we really want to save money; if the council really wants to help the lower paid people of Surrey, let’s reduce the cost of our democracy.

Tory deputy leader Peter Martin said the council’s discussions with the Government had provided more certainty on Surrey’s financial situation, and approving a 4.99 per cent rise was “the fair thing to do, and better than a divisive referendum on a 15 per cent rise”.

• Combined with increases agreed by Surrey’s Police and Crime Commissioner (1.99 per cent) and Waverley Borough Council (£5 per band D equivalent household) – see below right – Surrey’s 4.99 per cent rise means the average household in Haslemere will see its annual bill increase £72.67 (4.3 per cent overall) to £1,762.77 for 2017/18.

Although still above the rate of inflation, it drastically reduces the near £200 (11.81 per cent overall) hike households faced on average had Surrey followed through with its 15 per cent rise.