A new levy on council suppliers to fund good causes across Leeds has been branded a “stealthy” tax, by the city’s Opposition leader.

Local Tory chief Andrew Carter (Calverley and Farsley) said the new charge was “badly thought out”.

Leeds City Council says the “modest” annual levy on companies it does business with will bring in around £500,000 a year. This money will be used to create a new “social value fund” to aid projects , with local charities and voluntary groups expected to benefit.

The charge will only apply to private sector suppliers, who can opt out of paying if they wish.

But at a meeting of senior councillors on Wednesday, Coun Carter said: “This is nothing more than a stealthy way of screwing money out of suppliers.”

The levy will be capped at £1,250 a year for a business which employs 250 or more people. Firms with between 11 and 249 staff will be charged £500, with suppliers who employ 10 or fewer people exempt.

The council’s Labour group said suppliers had been consulted over the charge and that feedback had been positive.

But Coun Carter described the scheme as “cack-handed” adding: “The road to hell is saved with good intentions. There are good intentions here, but it is the road to hell.”

The proposals were approved.