LABOUR leader Jeremy Corbyn accused the Government of agreeing a “sweetheart deal” with Surrey County Council this week to ensure the Tory-run council scrapped plans for a referendum on a divisive 15 per cent council tax hike.

Tempers ran high during Tuesday’s meeting of the county council, as councillors voted 53 in favour to 18 against leader David Hodge’s revised recommendation to restrict its tax increase, to cover spiralling social care costs, to 4.99 per cent this April.

However, the sudden U-turn came only after dramatic ‘behind closed doors’ talks delayed the start of the meeting, after which Mr Hodge told members the Government now “understands” Surrey’s perilous financial situation and as such the council’s cabinet is prepared to “take a risk” by adopting a more modest tax rise.

This prompted Mr Corbyn to ask at Prime Minister’s Questions on Wednesday “how much” the Government had offered Surrey to drop the 15 per cent hike - to which Theresa May replied all councils faced the same rules on raising taxes.

In a statement, Mr Hodge also denied a deal had been struck with the Government, commenting: “Surrey’s decision not to proceed with a 15 per cent council tax increase was ours alone.”

Opposition councillors at Surrey were also scathing of Mr Hodge’s announcement on Tuesday, and particularly the lack of detail on where Surrey plans to find £93 million of additional savings now required in the next financial year.

With roughly two thirds of Surrey’s 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 the March cabinet meeting.

Addressing councillors after two long adjournments on Tuesday, 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 has already made more than £450m worth of savings from its annual budget, but lamented the Government’s “unfair” funding formula for local authorities, which he said has seen Surrey absorb £170m worth of cuts to its central Government grant since 2010 - leaving the council facing a budget shortfall of £32m this year, rising to £46m 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.”

However, 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 is now “committed” to resolving the issues faced by Surrey and as such, the council believes a 4.99 per cent rise will be sufficient.

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

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

This didn’t wash with Surrey’s opposition councillors however, and leader of Surrey’s Lib Dems group, 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 Surrey’s leadership of cancelling the referendum at the last possible moment “to save their seats at the upcoming election”, and added the £93m of cuts are now “looming like an iceberg”.

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

These sentiments were echoed by independent and Green party members, as well as Labour councillor for Stanwell, Robert Evans, who also accused Mr Hodge of “panicking” in the face of a referendum he knew he would lose.

“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,” he said.

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

Responding, councillor for Farnham North and Surrey cabinet member, Denise Le Gal, defended her leader as “standing up for the rights of residents”, and added “it is not unusual for us to agree a rise and then hammer out the details later”.

• Combined with increases agreed by Farnham town council (two per cent), the Police and Crime Commissioner for Surrey (1.99 per cent) and Waverley Borough Council (£5 per Band D equivalent household) - Surrey’s 4.99 per cent rise means the average Band D household in Farnham will likely see its annual tax bill increase £73.87 (4.31 per cent overall) to £1,789.08 for 2017/18.

Although still above the rate of inflation, this is drastically reduced from the £200.82 (11.7 per cent overall) hike households faced on average had Surrey followed through with its 15 per cent rise.