SOME political leaders in the North-East are jeopardising a major devolution deal because they are “risk averse”, Government insiders say.

Council chiefs of “smaller authorities” lack the bravery of other areas which are taking on extra powers in return for agreeing to be run by a ‘metro mayor’, The Northern Echo was told.

The comment – by a source close to the talks with the North-East Combined Authority (NECA) – lays bare Government frustration at the lack of progress made.

But it risks widening a rift which saw the North-East punished by being left out of George Osborne’s Budget speech, last week, for refusing to accept his “mayor for devolution” rule.

Publicly, none of the seven NECA authorities - Durham, Newcastle, Sunderland, North Tyneside, South Tyneside and Northumberland – have ruled out a cross-border mayor.

And they have rejected criticism that they are dragging their feet, insisting detailed devolution proposals must be drawn up and win public backing before the mayor issue is decided.

However, that stance triggered a clash with ministers who demanded a firm commitment to a mayor – to be imposed without a referendum – before Budget day.

The source said: “There is a risk aversion in the smaller authorities in the North-East, compared with some of the others we are talking about devolution with.

“The smaller players need to be on board and need to be in the room for every single negotiation, which put a stop on things. It means we have to go back to the table on everything.”

Simon Henig, Durham’s Labour leader and the NECA chairman, declined to comment on the suggestion that its smaller councils are “risk averse”.

But he said: “We want to see more power and influence devolved to the North-East – that’s what this should be about, not individuals or individual structures.

“It’s important that we keep talking to ministers while developing our devolution offer and we have made clear that we have ruled nothing out.”

Manchester is already being handed extensive powers over transport – including to run bus services – planning, housing, the police and to integrate health and social care budgets.

And, in the Budget, the Chancellor highlighted progress in talks with South Yorkshire, Merseyside and West Yorkshire.

The omission of the North-East prompted warnings that it could fall dangerously far behind in the race to win devolution deals, unless the row is settled quickly.

However, the criticism of “risk averse smaller authorities” may also be aimed at the Tees Valley, which is due to hold devolution talks in the next few weeks.

That deal will be particularly important to both the Middlesbrough-born Local Government Secretary Greg Clark and local government minister James Wharton, the MP for Stockton South.

On NECA, a Treasury spokeswoman said: “We are very optimistic that the progress we are making will result in North Eastern leaders signing up to our plans to hand local powers back to local people.”