A leaked video shows Rishi Sunak claiming that Treasury formulas “shoved all the funding into deprived urban areas” of the UK before he became chancellor.
He boasted to Conservative party members in Tunbridge Wells that he was clear the situation “needed to be undone” when he was in office.
And he bragged that he had directed money towards prosperous towns like theirs instead.
He said he had started changing public funding formulas to ensure more places like the south east town receive “the funding they deserve”.
The footage, obtained by the New Statesman magazine, was from an event with grassroots Tories last week. Labour denounced it as “scandalous” that Mr Sunak was “openly boasting that he fixed the rules to funnel taxpayers’ money to rich Tory shires”.
But Mr Sunak’s campaign defended the remarks, linking it to the government’s levelling up agenda. They said he had changed the rules on government spending to help towns and rural areas also in need of investment.
In the video, Mr Sunak told Tory party members, who will choose either the former chancellor or his rival Liz Truss to be the next prime minister: “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.”
Labour’s shadow levelling up secretary Lisa Nandy said: “This is scandalous. Rishi Sunak is openly boasting that he fixed the rules to funnel taxpayers’ money to rich Tory shires.
“This is our money. It should be spent fairly and where it’s most needed – not used as a bribe to Tory members.
“Talk about showing your true colours…”
A source in 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 or high quality schools. That’s what he’ll deliver as prime minister.”
At the same event Mr Sunak was openly challenged on his track record of pandemic support for businesses by Tory party members.
The SNP’s Alison Thewliss said: “Rishi Sunak has been honest with Tory party members about his plans for the future, but not with the general public.”
In a separate video of the same event, seen by the Independent, Mr Sunak suggests people caught in the gaps of Treasury support during Covid pandemic were not Tory voters.
He was challenged on the issue Donna Potter who told him, in reference to the 3 million people who fell into the cracks of Treasury financial aid: “If we don’t sort the gaps in support they will not vote Conservative in the next general election.”
Mr Sunak replied: “As it turned out, lots of them probably were not Conservatives in the first place.”
Mr Sunak is widely thought to be trailing his rival Ms Truss in the race to secure the keys to No 10.
A series of opinion polls suggest the foreign secretary has a clear margin ahead of her former cabinet colleague.
On Thursday Mr Sunak insisted he would not drop out of the race even if surveys continue to show a huge gap between the two candidates.
Mr Sunak is running out of time to catch up. Many Tory members are expected to vote within days of receiving their ballot papers.
The next prime minister is due to be announced on 5 September.