City of York Council has agreed to push ahead with North Yorkshire on plans to join a new combined authority headed by an elected mayor.

Local party group leaders welcomed aspects of the deal – which will draw down new powers from central government and unlock £540 million in funding over the next 30 years – while expressing significant concerns about elements of the plan.

That this was “the only deal on the table” and that York could simply not afford to reject it was the consensus, as councillors agreed to put the deal out to public consultation.

If the timetable goes to plan, the combined authority could be formed by Christmas 2023 and a mayor elected in May 2024.

Council leader Cllr Keith Aspden said devolution was “a huge opportunity” and an “historic moment” for the city, but said he recognised concerns about the mayoral model and its impact on local democracy.

“However, we must be pragmatic to achieve the best for local communities,” he added. “To achieve major regeneration projects and secure that much needed new investment, devolution is the only game in town from the government – even if rightly we don’t like every detail of the administrative arrangements.”

The money will be spent on transport, housing and education and could unlock a further £50 million for the York Central project.

Deputy leader Cllr Andy D’Agorne said he had some concerns about some powers, including transport, moving away from the local council up to the combined authority.

But he added: “We should be clear that rejecting the deal would mean that devolved powers would remain with central government and government funding would be significantly less at this critical time for the people of York.”

Leaders hope the initial deal will be only the start of further money and powers that will head to the region, and it has been enthusiastically welcomed by the private sector, who say guarantees of public funding will boost private investment in the region.

Independent councillor John Galvin said he feared the combined authority could eventually see City of York Council fully assimilated into a larger North Yorkshire authority.

“I feel very strongly that should not be allowed to happen and I hope those of you who are here for the long haul will fight like hell to prevent that happening,” he added.

York Press: City of York Council leader Keith Aspden and Labour group leader Claire DouglasCity of York Council leader Keith Aspden and Labour group leader Claire Douglas

Labour group leader Cllr Claire Douglas said the deal would allow the region to improve housing and public housing which was “so desperately needed".

She added: “Governance and decision making within the combined authority must work for York. Our city will need strong political leadership and a strong vision of where it wants to go over the coming 10 years.”

Speaking for the Green group on the council, Cllr Denise Craghill said it was “far from a perfect offer” and said she wanted to see the prosperity it is hoped the deal will bring shared more equally across the region.

Conservative group leader Cllr Paul Doughty said that while he had “some trepidation about bureaucracy”, the devolution cash was much needed.

“We need to make the most of every penny so this can make a difference to the lives of citizens in York,” he added.