A leaked video showed Rishi Sunak bragging about diverting funds from deprived urban areas has prompted calls for an investigation as both Labour and the Tories hit out at the former Chancellor.
The clip, taken as Mr Sunak addressed Tory party members in leafy Tunbridge Wells, Kent, was today branded "scandalous".
Mr Sunak was recorded stating he had started changing funding formulas which "shoved all funding into deprived urban areas".
It prompted allegations that public cash is being funnelled into wealthy areas - which Mr Sunak's team deny, saying he was attempting to address the balance between urban and rural support.
After the video was widely shared, Labour deputy leader Angela Rayner branded the candidate "Reverse Robin Hood Rishi" on Twitter.
Shadow Levelling Up Secretary Lisa Nandy announced she has written to her Tory counterpart, Greg Clark, demanding an investigation.
In a letter to the Levelling Up Secretary, she wrote: "This is deeply concerning. The former chancellor is admitting to fixing the rules to funnel taxpayers' money to affluent parts of the country at the expense of areas he himself admits are deprived."
The video, shared with The New Statesman, shows the Tory leadership candidate tell members in Tunbridge Wells, which has had a Tory MP since the constituency was created in 1974: “I managed to start changing the funding formulas, to make sure areas like this are getting the funding they deserve because we inherited a bunch of formulas from Labour that shoved all the funding into deprived urban areas and that needed to be undone.
"I started the work of undoing that.”
According to RightMove, the average house price in the leafy town 30 miles outside of London last year was £498,933 - compared to £281,161 across the rest of England.
In her letter to Mr Clark, Ms Nandy continued: "It is completely unacceptable for ministers to allocate taxpayers' funds in order to secure political gain for themselves or their party."
She called on Mr Clark to investigate any changes to the funding formula, to find out why they were made and what impact assessments were carried out. Ms Nandy said the results of the investigation should be published at "the earliest opportunity".
The shadow minister also called for an update on steps to address concerns raised by the Public Accounts Committee earlier this year about the allocation of Levelling Up funds.
The Commons PAC blasted the Department for Levelling Up, Housing and Communities for using "unsatisfactory" methods to hand out billions of pounds of taxpayers’ cash.
In a report published in June, the cross-party group of MPs highlighted how the first round of the £1.7bn Levelling-Up Fund was only awarded after the ministry knew the identities of shortlisted bidders.
Ms Nandy also said Mr Clark's department needed to reveal what steps had been taken to ensure the second round of the Levelling Up fund was fair.
Mr Sunak was filmed telling Tory Party members that he had started to change funding formulas, to ensure "areas like this are getting the funding they deserve".
Ms Nandy, branded the revelation "scandalous" and said the Tories were "showing their true colours".
Foreign Office minister Lord Zac Goldsmith said: "This is one of the weirdest - and dumbest - things I've ever heard from a politician."
Jake Berry, chair of the Northern Research Group of Tory MPs and a Truss supporter, said Mr Sunak "claims he wants to level up the North, but here, he boasts about trying to funnel vital investment away from deprived areas".
"He says one thing and does another - from putting up taxes to trying to block funding for our armed forces and now levelling up," he added.
A source inside Mr Sunak's campaign said: "Levelling up isn't just about city centres, it's also about towns and rural areas all over the country that need help too.
"That's what he changed in the Green Book and he will follow though as Prime Minister. Travelling around the country, he's seen non-metropolitan areas that need better bus services, faster broadband in towns, or high quality schools. That's what he'll deliver as Prime Minister."
The Green Book is guidance issued by the Treasury on how to appraise policies, programmes and projects.
The document also gives guidance on the design and use of monitoring and evaluation before, during and after implementation.
Supporter Ben Houchen, the Tory mayor of Tees Valley, posted on Twitter : "They should post the full clip, which would show @RishiSunak talk about the local council funding formula and how it discriminated against non metropolitan areas in favour of cities - by giving them less money for things like adult and children services, highways and fire."
And MP Richard Holden, also a follower of Mr Sunak, added: " @RishiSunak tore up HMT orthodoxy with GreenBook changes & sees areas like Co Durham, #Teesside, South West etc re-prioritised"
Last summer The Mirror reported that shameless Tories have handed 83% of a £610 million boost for struggling towns to areas that only have Conservative MPs.
Ministers have been repeatedly forced to deny funnelling ‘towns fund’ cash into their own seats and target constituencies in a bid to bribe voters.
In a list of 26 towns benefiting from the fund, only four are represented by MPs of any other party.
In March Mr Sunak was forced to deny “pork barrel politics”, after the previous list of 45 towns getting £1 billion in communities cash, included 40 with at least one Tory MP.
The Mirror has contacted the Department for Levelling Up, Housing & Communities for comment.
