COUNTY council chiefs in the region have joined a growing revolt by demanding more power to run their own affairs.

Both Durham and North Yorkshire have urged the Government not to leave them in the slow lane, as devolution is stepped up to England’s big cities.

The two authorities spoke out as the Commons local government select committee carries out an inquiry into “fiscal devolution” within England.

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Both are members of the 36-strong County Councils Network (CCN), which has put forward a radical submission to MPs, demanding a “more ambitious approach”.

Councillor Simon Henig, Durham’s Labour leader, said: “Devolution should be widened beyond the current offer to a small number of core cities.

“Skills funding and employment programmes would be the biggest priority for us. Increased borrowing - particularly if at a lower rate than currently available - would also be welcome.”

And Councillor John Weighell, Conservative leader of North Yorkshire, said: “It has long been my view that local government will be more accountable if it can raise more funds locally.

“County councils have had a raw deal, even though it’s the counties that deliver most infrastructure – the roads and the schools.”

However, despite both being members of the CCN, the two leaders disagree about key aspects of its submission, which calls for devolution of:

* All of business rates – at present, only a proportion are retained by councils.

* Stamp duty – something proposed for London, by Mayor Boris Johnson.

* Capital gains on property development.

* A proportion of extra tax revenues from local economic growth – an “earn back” scheme, being pioneered in Manchester.

* Skills funding and employment programmes.

* Increased borrowing - through municipal bonds.

Coun Henig repeated earlier warnings that full retention of business rates and capital gains would hurt Durham, while the “earn back” would bring little benefit.

The authority is part of the proposed combined authority, to cover Tyne and Wear and Northumberland, which is pursuing powers over skills and jobs programmes.

In contrast, Coun Weighell backed the retention of revenues from stamp duty and growth, saying: “If we are increasing the economy of the area, we should get some reward."

And he called for the return of authorities raising municipal bonds, adding: “That’s an old idea, that brought in lots of money.”

The Tory leader also attacked Local Government Secretary Eric Pickles’ attempts to force through council tax freezes, saying: “That’s a major attack on local democracy.”

The MPs’ inquiry has been sparked by the spread of ‘City Deals’ - including to Newcastle and the Tees Valley – as well as devolution to Scotland and Wales.

Ministers will be required to respond to the committee’s report, which is expected to be published in the next few months.