Surrey Council tax rise of 15% scrapped

Surrey County Council's budget is being discussed by the full council

A 15% council tax rise initially approved by bosses at a Conservative-run council has been scrapped.

Plans for the hike were dropped during a full meeting of Surrey County Council earlier. A rise of almost 5% has now been approved.

The proposed increase would have added nearly £200 to a Band D bill and sparked a referendum which could have cost the authority up to £300,000.

Councillors will now consider an alternative budget.

The council announced its original plan in January, blaming government cuts of £170m and an increased demand for social care.

Council leader David Hodge told the meeting at County Hall: "We are willing to take a risk that a solution will soon be found for the issues that all councils face.

"However, if there isn't any progress in finding a solution to the adult social care crisis, our situation will become untenable and intolerable."

'Shambolic'

Mr Hodge said increases in tax went "against the grain" of the party and were "not in our DNA".

He said the authority had been left with "significant financial challenges" but "the government had been listening" to his concerns about funding.

Analysis: Jack Fiehn, BBC Surrey political reporter

The council meeting was adjourned twice to allow for last minute "conversations" involving the leader and the chief executive.

But we do not know what those were about or what has happened in the discussions with the government.

Opposition councillors are absolutely furious, complaining about secrecy and a lack of information about potential cuts.

This will be one of the key questions going forward, given the dire warnings over the state of the council's finances.

Meanwhile for Surrey Conservatives there is a sense of relief; they had felt uncomfortable about a referendum.

But it really is not clear where this decision leaves the council or the future of services it runs.

Surrey County Council said there was a "huge gap" in its budget

Authorities are legally required to hold a referendum for council tax increases above 5%.

After heated exchanges, 53 councillors voted in favour of a 4.99% increase, with 18 voting against, and one abstention.

Councillor Hazel Watson, leader of the Liberal Democrats, said the whole process had been a "disaster" and cuts were looming "like an iceberg".

Labour councillor Robert Evans said the situation was "shambolic" and the referendum "would have been lost had it gone ahead".

'Financial risks'

Deputy leader Peter Martin said approving a 4.99% increase was the "right thing to do" and "better than having a divisive 15%".

Councillor Hodge added: "This is about people, not politics, about the people on limited incomes, pensioners on fixed incomes."

A council spokesman previously said £450m worth of savings had been found but it was still not enough to keep services running.

The revised budget carried significant "financial risks", a finance officer told the chamber.