Chancellor George Osborne has indicated counties will not be able to get the same devolved powers and controls over health and social care, transport, skills, housing and policing as cities.

In a speech in Manchester last week, Mr Osborne reinforced his ultimatum that he was “not interested in any more halfway house deals” and that the government would “transfer major powers only to those cities who choose to have a directly elected metro-wide mayor”.

George Osborne

George Osborne said the government ‘will hand power from the centre to cities’

A City Devolution Bill will be included in the Queen’s Speech and Mr Osborne said the legal framework would be in place by the end of the year “so that any city can proceed to implement a mayoral devolution deal”. Northern powerhouse minister James Wharton will be responsible for the legislation, Mr Osborne said.

However, counties hoping to follow in the footsteps of the Greater Manchester Combined Authority, which negotiated a devolution deal including powers and controls over its £6bn joint health and social care budget in return for adopting the elected mayor model, are unlikely to be afforded the same powers.

While Mr Osborne acknowledged he couldn’t “build a northern powerhouse with just the big cities of the north” as half of the economy was outside them, he confirmed that what would only be available to “the towns and great counties of the north” would be a “form of the city deals programme we ran in the last parliament”.

While city deals give places powers to promote economic growth, these are often in relation to specific projects and are not the same as being given full control through devolution.

Mr Osborne added: “I want councils and local enterprise partnerships here to come forward with plans to build on their strengths.”

Earlier in his speech he said he had been asked throughout the general election campaign why powerhouses could not be created elsewhere in the country.

He said: “Let me be candid. I think if I had tried to deliver, simultaneously, new devolution settlements in every major city, at the same time, and tried to get every city authority to accept new elected mayors, it simply would not have happened.

“Getting Manchester through the Whitehall machinery and overcoming the political divide was difficult enough.

“But I always thought this: if I could work with you to achieve this new model of civic leadership and local power here in Greater Manchester, I could hold it up to the rest of the country as the example of what was possible.”

Mr Osborne said he wanted to “confront head on” the elected mayor issue which has in the past been met with widespread opposition from leaders and residents following failed referendums in cities in 2012.

He said the Manchester model was “not like London” and that a new level of bureaucracy had not been created.

“Other cities can find the mayoral model that works for them,” he said. “But it has to involve a city-wide elected executive mayor.”

He added: “We will hand power from the centre to cities to give you greater control over your local transport, housing, skills and healthcare. And we’ll give the levers you need to grow your local economy and make sure local people keep the rewards.

“But it’s right people have a single point of accountability: someone they elect, who takes the decisions and carries the can.”

Mr Osborne said he was also willing to look at going “further down the road of fiscal devolution” now that authorities across Greater Manchester, along with Cheshire East Council, are piloting a programme to retain 100 per cent business rates growth, as are councils in Cambridgeshire and Peterborough.