COUNCIL leaders have voted against current proposals for North-East devolution, despite Government pressure to accept the deal.

Local authorities in Newcastle, Northumberland and North Tyneside voted to move forward, but Sunderland, Durham, South Tyneside and Gateshead voted against.

The agreement would have guaranteed £30million a year to be spent in the region.

Powers covering employment and skills, transport and planning and business activity would also be devolved to drive economic growth.

The decision was made at a meeting of the North East Combined Authority Leadership Board this afternoon at Sunderland Civic Centre.

Councillor Paul Watson, leader of Sunderland City Council and chairman of NECA, said: “Each of the seven councils which make up the North East Combined Authority has always made clear that they support the principle of devolution for the North-East.

“Following the outcome of the EU referendum and the subsequent changes within Government, council leaders have been equally clear that to move forward, the new Government must provide assurances regarding the terms of the region’s devolution deal.

“Extensive discussions and negotiations have taken place with Government and within the region over recent months but unfortunately, despite our best efforts, it has not been possible to reach an agreement which all of the seven local authorities feel able to support.

“Although this is disappointing we will continue to work together with Government to achieve our ambition of a stronger regional economy with improved opportunities for residents and businesses.”

Business leaders have called for talks to continue so progress can be made.

Graham Robb, chairman of the Institute of Directors in the North-East, said: “Business will not appreciate this delay. It appears the councils are paralysed by politics.

“The Government has a mandate which is less than two years old and can reach this deal now, there is no need for the councils to add further layers of consultation.”