Communities secretary Sajid Javid has said the government did not strike a deal with Surrey CC over social care funding ahead of the council’s surprise decision to drop a proposed 15% increase in council tax - however the county is now set to pilot 100% business rates retention.
Yesterday text messages, intended for a government official but sent in error to a Labour insider by Surrey leader David Hodge (Con), emerged on Twitter.
The texts, cited by Labour leader Jeremy Corbyn during prime minister’s questions, appeared to suggest a deal had been done – with Cllr Hodge referring to “numbers” that were acceptable to “call off the R….”.
Cllr Hodge yesterday denied a deal had been done and this morning Mr Javid insisted the government was not proposing extra funding for Surrey “that is not otherwise provided or offered to other councils generally”.
He did confirm that Surrey would become a pilot area for 100% business rates retention in 2018-19 and that the delayed final local government finance settlement would be published later this month.
The communities secretary said: “As part of the statutory draft local government finance settlement consultation, the Department for Communities and Local Government discusses local government funding with councils across the country, of all types and all political colours.
“This happens every year, and necessarily involves councils making direct representations to the government.”
Mr Javid insisted the process was “entirely transparent”.
He added: “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.
Referring to the suggestion in one of the texts there was a formal agreement wbetween Surrey and the government, he added: “There is no ‘memorandum of understanding’ between government and Surrey County Council.
“In the draft settlement published in December, Surrey’s core spending power is forecast to rise by 1.4% from 2015-16 to 2019-20.
“We believe this provides a sustainable base on which the council can plan ahead and allocate their £1.7bn a year budget.”
Mr Javid added that the government was “conscious” of growing pressures faced by councils and was therefore introducing broad reforms of local government finance, including devolution deals, health and social care integration, a fairer funding review and a move to 100% business rates retention.
He said: “Surrey County Council informed the government that they wished to become a pilot area.
“The secretary of state for communities and local government told them that this was not possible for 2017-18, but said that, subject to due process and meeting the necessary criteria, they could participate in the 2018-19 pilot.”
Mr Javid added that all councils could apply to take part in the pilots and discussions were being held with “several councils”, with an announcement to be made “shortly”.
Business rates retention pilots are already set to begin in April in combined authorities in the Liverpool city region, Greater Manchester and West Midlands, as well as Cornwall Council and the Greater London Authority.