THE Chancellor has been told to hand over as a matter of urgency the devolved city powers he promised in his Budget.

George Osborne this week pledged to implement recommendations by Lord Heseltine to hand control of billions of pounds of central Government spending to cities and combined authorities. In the North East, seven local authorities from Northumberland to Durham rushed out plans to form a new joint body legally responsible for transport and regeneration funding.

The decision was required in order to allow the councils to access the Government cash.

But questions have now emerged over how soon the Government will agree a new series of devolution said to be opposed by some Whitehall departments.

Yesterday, Newcastle council leader Nick Forbes welcomed the leaders of England’s biggest cities to Tyneside and called on the Government to go further in its commitment to devolving power.

Mr Forbes said: “We think we might get an announcement around some issues in the coming months, but there are areas we are keen to push for further involvement, for example in housing where I believe we can do more as councils to stimulate house building.” Mr Forbes said he and the Core Cities group needed the Government to act quickly rather than get bogged down in concerns from some civil servants over the hand over of power.

The issue was also raised by a former Newcastle Council leader now acting a key Government adviser.

Speaking in the House of Lords, Newcastle peer John Shipley praised the Budget for accepting much of the devolution measures needed called for to help regional growth.

Lord Shipley has played a key role in the Government’s regeneration programme, advising cities minister Greg Clark and handing out cash as deputy head of the Regional Growth Fund.

But he called for further measures to help make cities such as Newcastle powerful economic forces.

Lord Shipley said: “From 1997 to 2010, the gap between London the North widened, now we need to challenge that.

“Devolving power in skills, transport, housing and regeneration will drive growth faster than just leaving all key decisions centralised in London. But we need real devolution.

“The Highways Agency is a good example. It is not regionally accountable and has the power to stop planning permission. The immediate solution here would be to give power over them to the regions.”

He also called for councils to be freed up to build new council homes.

Lord Shipley later told The Journal: “It is vital that the opportunities for devolved powers now being presented are picked up quickly.

“A lot will happen over the next few months and the North East needs to be at the forefront of this process.”