SURREY County Council stands to swell its coffers by ‘more than £180 million’ should its request to be included in the Government’s new business rates retention scheme be accepted, the Herald understands.

Numerous Government cabinet ministers were moved to deny accusations that No. 10 struck a ‘sweetheart deal’ with Surrey last week after the Tory-run council cancelled a divisive referendum on a proposed 15 per cent council tax hike at the 11th hour and instead proposed a 4.99 per cent rise.

Local Government Secretary Sajid Javid later revealed Surrey has been in talks with the Government about taking part in a pilot scheme that would see local authorities in the county retain 100 per cent of business rates.

Surrey currently takes just a 10 per cent share of the business rates collected countywide, with district and borough councils taking 40 per cent and central government 50 per cent.

If accepted on the scheme, which will not run until 2018/19, Surrey would instead split business rates 50/50 with its district and borough counterparts – potentially increasing its share from a projected £45.9 million to around £230million.

A council spokesman warned the final sum would likely incorporate some of Surrey’s current government grants, and would also be subject to tariffs and other means to make sure all parties “get the right amount”.

However, on face value it has the potential to more than eradicate the £32million budget shortfall Mr Hodge warned the council was facing this year, rising to £46million in 2019/20 as Surrey struggles with spiralling demand for adult social care.

This week, two independent county councillors penned an open letter to Mr Hodge, asking for clarification on the reasons for cancelling the 15 per cent tax rise.

Nikki Barton (Haslemere) and Ewell’s Eber Kington wrote: “At the council budget meeting you stated there was no plan agreed with the Government. However, the Government has since admitted you had asked to take part in the pilot of a new business rates scheme and has also stated all conversations between the Government and Surrey had been ‘entirely appropriate’.

“Given you were in discussions and these were apparently ‘appropriate’ why did you refuse several times to confirm the details of your discussions with the DCLG when asked at the budget meeting?”

Mr Hodge responded: “You will no doubt have seen the statement released by the DCLG last week.

“This makes it clear the Government is not proposing extra funding for [Surrey County Council] and there is no proposed [memorandum of understanding].

“They have indicated Surrey could be a pilot on business rates retention in 2018/19 but I have no further details at present.”