Plans for a new Wessex strategic authority that would have included Dorset, Somerset and Wiltshire councils plus the Bournemouth, Christchurch and Poole (BCP) unitary authority have been shelved by the government – for now at least.

On Wednesday deputy prime minister Angela Rayner confirmed that Wessex has not been included within the government’s Devolution Priority Programme which backs the creation of larger strategic authorities around England.

Councillors in Gillingham had hoped that the town might have been been a potential location for the headquarters of the Wessex authority.

The refusal to accept the Wessex authority into the government’s devolution has now raised fears that the region, including Dorset, could miss out on vital funding.

Dorset Council said that the four councils of Wessex had submitted a ‘comprehensive proposal’ outlining the ‘transformative benefits’ devolution could bring, including greater local control over key areas such as transport, housing, and economic development.

In a joint statement, the leaders of BCP, Dorset, Somerset and Wiltshire Councils, Councillor Millie Earl, Councillor Nick Ireland, Councillor Bill Revans and Councillor Richard Clewer, said: ‘Despite the fact that we felt government were moving too quickly to deliver devolution, and our discussion about the format of Mayoral Strategic Authority as the most appropriate solution for our region, we worked collaboratively with ministers throughout to deliver a strong proposal. Therefore, the decision not to include Wessex within the Devolution Priority Programme is extremely disappointing.

‘We feel the Wessex proposal aligned with the aims of the White Paper, encompassing a population of approximately 1.9 million, with the region well-placed to support the government’s growth priorities, particularly in clean energy, defence, digital technologies, life sciences, and tourism.’

And they added: ‘The area could now miss out on essential funding, and combined with the likely defunding of pan-regional partnerships and the substantial reduction in the UK Shared Prosperity Fund, the fact that this will now be delayed when we are ready to go is deeply regrettable.’

It is certainly possible that the Wessex idea will still go ahead at a later date but there is as yet no clear timetable for this.

Meanwhile the independent local government think tank the Local Government Information Unit (LGUI) was blunt about the news and how it affected those councils who had expected to form strategic authorities.

Its chief executive, Jonathan Carr-West, said: ‘Councils were given 16 working days to put their applications together for the Devolution Priority Programme. Countless hours were spent by council staff and elected members who worked incredibly hard over the Christmas period to meet this deadline.

‘Today, we found out that less than half have been successful. It is essential that we understand more about the decision making process around this as there will undoubtedly be some places that feel they have been marched up the hill and then marched down again having spent considerable amounts of time and political capital getting to this point.’

He added: ‘The Government has been keen to stress that devolution is about empowering local areas. Right now, it doesn’t feel that way. So far the process has been about central government setting out the rules of the game and picking winners.’