Leaked tape reveals Surrey's council tax government 'deal'

The BBC has obtained a leaked recording of a council leader saying he struck a deal with the government before scrapping a 15% council tax hike.

The prime minister has repeatedly denied Surrey County Council was given what Labour calls "a sweetheart deal".

But on the recording, Councillor David Hodge said he had written government assurances and recordings of talks.

A government spokesman said "there was no special deal" and to imply the opposite was untrue.

Mr Hodge announced he was abandoning plans for the 15% hike during a meeting of council members in February.

A rise of 4.99% was approved instead, avoiding a referendum on the issue, which deputy leader Peter Marin said was the "right thing to do".

Of the recording, Mr Hodge said "every leader... will always have these conversations to try and get a better deal".

'Don't get annoyed'

In the audio obtained by the BBC, Mr Hodge claimed senior councillors and officials spoke on the phone to Communities Secretary Sajid Javid "in his car outside number 10" on the morning they took the vote.

Mr Hodge said he was "looking for help on how we could stop a referendum" and told councillors of "a gentleman's agreement".

When asked about the recording, Mr Hodge said he was still hoping Chancellor Philip Hammond would announce extra money for Surrey in the budget.

He said: "Every leader, if they're any good at the job, will always have these conversations."

Asked if he was angry the recording appeared to have been leaked by one of his own councillors, he said: "I'm a politician, I don't get annoyed."

'Come clean'

Gareth Thomas, Shadow Minister for Communities and Local Government, said: "Theresa May and her ministers have been playing political games, conducting backroom sweetheart deals for their friends, whilst councils across the country struggle to cobble together the money to adequately fund social care."

He urged the prime minister to "come clean about the terms of the deal... and ensure other local councils get the same treatment".

A government spokesperson said: "As we have repeatedly made clear, there was no special deal... they will not receive any extra funding that would not otherwise be provided or offered to other councils.

"To imply the opposite is simply untrue."

In a statement David Hodge Leader of Surrey County Council said: "Surrey's decision not to proceed with a 15% council tax increase was ours alone and there has been no deal between Surrey County Council and the government.

"However, I am confident that the government now understands the real pressures in adult social care and the need for a lasting solution."

Analysis: Political editor Peter Henley - BBC South

The government says it won't do deals - but it was desperate to stop Surrey's referendum.

David Hodge boasts to his councillors he's got a last minute "arrangement" - a gentleman's agreement.

"You have nothing in writing!" one of his councillors points out on the leaked recording of the supposedly private meeting.

"Don't worry," he says, name-dropping the people he has spoken to. It's backed up by recordings of phone calls, some lasting two hours, and written assurances, he adds.

"Keep those poker faces," his councillors are urged as they walk out.

Which might have worked, if Hodge hadn't sent those texts to a Labour councillor. And now one of his own side has blown the whistle.

The Department for Communities and Local Government spokesperson said Surrey had wanted to become a pilot area for the 100% business rates retention scheme and was told it could apply for the 2018/19 pilot.

It added: "DCLG discusses local government funding with councils across the country of all types and all political parties. This... has always been the process."

Surrey County Council announced its original plan of a 15% rise in January, blaming government cuts of £170m and an increased demand for social care.

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.