NORTH-EAST councils have been met with silence from the Government after rejecting a devolution deal.

Councillor Paul Watson, leader of Sunderland City Council and chairman of the North-East Combined Authority (NECA), said it was still waiting to hear from Communities Secretary Sajid Javid or his office after communicating its intentions.

However Cllr Watson said he was “not panicking” and there were “still more conversations to be had”.

He said: “Both we and the Government have statutory duties and this part of the North-East does not cease to exist.”

The Northern Echo contacted Mr Javid’s department, the Department for Communities and Local Government, but was told it had nothing to add to the previous statement in which he said legislation to transfer extra powers to the region was now being withdrawn.

Cllr Watson said there had been some “serious flaws” in the deal that was on the table and he feared council tax payers would end up paying for the administration of the combined authority and a new mayor.

He also questioned whether the £30m worth of funding a year that was proposed, ring fenced for infrastructure projects, was enough.

Councillor Watson said: “The regional development agency previously in the North-East got £300m a year. Thirty million is not going to build a lot of roads.”

Asked if he feared the region could be left behind by other areas, he added: “It is much more important to get the deal right than win some sort of imaginary race.”

NECA’s leadership body has a meeting later this month when its next move could be discussed.

Liz Mayes, North East director at EEF, the manufacturers’ organisation, said: “This is disappointing for North-East businesses who wanted to see key local decisions being taken at a local level where we are best-placed to determine the right levers for growth.

“As powers are devolved to other regions North-East businesses could be left at a disadvantage and that is a concern.”

Meanwhile, the North East Chamber of Commerce has written a strongly worded letter to Mr Javid, urging him to continue to work on a North-East deal.

Chief executive James Ramsbotham said it was “baffling and hugely disappointing” NECA had not struck a deal with the Government after a year of negotiations and called on it to reassess its position on devolution.

But John Elliott, chairman of Bishop Auckland watercooler firm Ebac, said devolution was a “side show” and said the Government needed a whole new approach to economics in order to benefit the man in the street.

Unlike the North-East Combined Authority, which consists of Durham County and six other Northern councils, councils in the Tees Valley – Darlington, Stockton, Middlesbrough, Hartlepool and Redcar and Cleveland – have agreed a transfer of powers with the Government.

A spokesman for the Tees Valley Combined Authority said: “The order creating a mayoral combined authority for the Tees Valley has been approved by Parliament.

“A further consultation on the powers and governance arrangements was conducted over the summer and the responses are now being compiled.

“We expect Ministers to deliver on their commitments to devolution and will continue to push for further progress.”