Philip Hammond’s budget has handed the largest boost in social care funding to Surrey council, according to calculations made after government ministers were accused of reaching a “sweetheart deal” with the Tory-led authority.

Analysis by Labour shows that out of the £2bn of new money for social care in England announced in Wednesday’s budget, Surrey will see the biggest increase in the share of funding by the 2019/20 financial year.

The analysis says that Surrey will get 1.66% of the money, rising from 0.75% in 2017/18, an increase of 0.91 percentage points in the three-year period – more than double the increase of the second council, Hertfordshire.

Theresa May has repeatedly denied Surrey will receive any form of funding not available to other local authorities, after the council last month called off a planned referendum on increasing council tax by 15% to pay for what it said was a crisis in social care funding.

But soon after the postponement, leaked text messages about a supposed “memorandum of understanding” between the council and government prompted Jeremy Corbyn to accuse May of buying off Surrey with a special deal, which she denied.

The Labour leader reiterated the accusation this week after the release of an audio recording in which the council leader, David Hodge, told fellow Surrey Conservatives about a “gentleman’s agreement” with ministers.

Hodge revealed in the recording that there had been a “series of conversations” with the communities secretary, Sajid Javid, in a car outside Downing Street. That was followed by a second meeting with the chancellor, Philip Hammond, he said.

Later that day, documents released by Surrey under freedom of information rules showed Hammond was among a series of Surrey Conservative MPs who lobbied Javid over the issue.

A new set of correspondence released by Javid’s department shows that on the morning of 7 February, the day Hodge announced he was backing down from the referendum, frantic negotiations were still going on.

At 8.23am Surrey’s director of finance, Sheila Little, messaged Matthew Style, head of local government finance at the Department for Communities and Local Government (DCLG), one document showed.

“The leader [Hodge] has just shown me a note from a Surrey MP about a conversation late last night with SJ,” she wrote. SJ refers to Javid.

“Seems to indicate government are willing to get us some extra funding from 2018. V interested in whether this is sincere. As it stands isn’t enough to call the ref [referendum] off? But could it be?”



May’s official spokesman was adamant when asked whether the exchange indicated the prime minister might have misled the Commons over the issue. “No,” he said. “There is absolutely no change in our position.”

A DCLG note released with the freedom of information documents made the same point.

“Whilst the final settlement has yet to be approved, the government is not proposing extra funding to Surrey county council that is not otherwise provided or offered to other councils generally,” it read.

“There is no ‘memorandum of understanding’ between government and Surrey county council.”

However, Labour’s Teresa Pearce, the shadow communities secretary, said the analysis of the extra social care money showed ministers “are busy playing political games with funding allocations in a desperate attempt to hide their sweetheart deal”.

She said: “This week’s budget won’t fix the issues facing social care. What we need from the Tories is a long-term sustainable plan, rather than cosy deals for Tory councils.

“Theresa May has failed to come clean about the terms of the deal offered to Surrey, failed to apologise for her government’s misleading suggestion that there had been no such deal and would not give the assurance that other local councils will get the same treatment.”

Late on Friday night, Labour MP Andy Burnham tweeted that he would raise the question of whether the ministerial code had been broken.

Tomorrow, I will write to Cabinet Secretary asking him to investigate this whole affair, including whether the Ministerial Code was broken. — Andy Burnham (@andyburnhammp) March 10, 2017

A DCLG spokesman said: “To suggest that any local authority is being given preferential treatment is simply not true.

“The majority of the £2bn of additional funding for adult social care announced at the budget will be allocated in the same way as the Better Care Fund, ensuring those who can raise less through the social care precept benefit most. The remainder will be allocated according to relative need in recognition of the additional challenges which social care places on certain councils.

“This is entirely fair, transparent and consistent with how we already fund adult social care.”