RISHI SUNAK BRAGGING about working to divert funding from “deprived urban areas” towards more prosperous towns has divided Tory figures, with Labour labelling it as “scandalous”.

The Tory leadership hopeful told party members that he had started changing public funding formulas to ensure more prosperous towns receive “the funding they deserve”.

The New Statesman magazine, which obtained video footage revealing Sunak’s remarks, said they were made to grassroots Tories in Royal Tunbridge Wells, Kent, on July 29.

A supporter of the former chancellor on Saturday insisted the comments had been “misunderstood”.

Conservative former minister Andrew Mitchell, MP for the affluent seat of Sutton Coldfield, told Times Radio: “I’m not saying for a moment that the needs aren’t far greater elsewhere, but we will not be able to rejuvenate our high street infrastructure, the town centre infrastructure, which has suffered so grievously from economic change over the last 10 years.

“We won’t be able to do that without some, admittedly smaller, but some Government taxpayer support and what Rishi was saying, I think, was that he had adapted the rules to ensure that both the Red Wall and the poorer seats can receive the help they need, but also where it’s needed on a wider front, which of course affects the Red Wall seats, such funding can be made available.”

The Sunak campaign defended the remarks, arguing he changed the Treasury’s green book setting the rules for government spending to help towns and rural areas also in need of investment.

In the video, Sunak told Tory supporters: “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.”

Speaking ahead of a Tory hustings in Eastbourne on Friday evening, the former chancellor defended his comments, saying he was making the point that “deprivation exists right across our country”.

He told Sky News: “I was making the point that deprivation exists right across our country and needs to be addressed.

“That’s why we need to make sure our funding formulas recognise that. And people who need help and extra investment aren’t just limited to big urban areas. You find them in towns across the United Kingdom and in rural areas, too.

“That was the point I was making, that our funding formulas that fail to recognise that are out of date, and they needed changing.”

The remarks from last week came as Sunak tries to make up ground against Foreign Secretary Liz Truss to win the backing of party members who will choose the next prime minister.

Foreign Office minister Zac Goldsmith said: “This is one of the weirdest – and dumbest – things I’ve ever heard from a politician.”

Jake Berry, chairman of the Northern Research Group of Tory MPs, said that in public 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,” the Truss supporter said.

Shadow levelling up secretary Lisa Nandy said: “It’s scandalous that Rishi Sunak is openly boasting that he fixed the rules to funnel taxpayers’ money to prosperous Tory shires.

“This is public money. It should be distributed fairly and spent where it’s most needed – not used as a bribe to Tory members.”

Nandy later wrote to Communities Secretary Greg Clark, who is the MP for Tunbridge Wells, urging him to investigate Sunak’s comments and the changes to funding formulas.