Kent and Medway could become one of a new generation of regional powerhouses under a devolution deal that involves having a directly-elected mayor.

In what would be the most significant overhaul of local government since the creation of Medway as a unitary authority in 1996, the county council says it can no longer adopt a position of “wait and see” and is to open talks with the government about how devolution could work.

KCC said the government’s agenda was to move towards powerful combined authorities headed by elected mayors and as such, the county needed to consider how best to exploit devolution to boost the economy, draw investors into the county and create and retain jobs.

A report to the council’s cabinet says there is a risk that Kent and Medway could fall behind other areas if it does not seek powers that devolution promises, warning: “If the county is to achieve its strategic priorities, then it must seek all the available resources and powers on offer both today and in the future to achieve this, whilst also being mindful of the risk that those areas more advanced in the devolution agenda risk pulling away from Kent in terms of their economic competitiveness, attractiveness to inward investment and quality of life provided to Kent residents.”

But It stresses that while devolution could bring benefits there will be no change to the way in which councils deliver local services.

Devolution could also give Kent opportunities to exploit its position as the Gateway to Europe, with any deal incorporating increased funding powers to deal with many of the unique challenges facing the county because of its proximity to the continent.

Among the options that will be considered is for Kent and Medway to have a directly-elected mayor to manage and implement a devolution deal, although that is not favoured by some. This is known as the Mayoral County Combined Authority model.

The government says that the powers available under devolution will be greater where councils combine to create a single institution headed by a mayor.

The combined authority would assume sweeping powers over the entire transport budget; be responsible for all key roads; brownfield funding; an investment fund; programmes to boost jobs; Mayoral Development Corporations; Police and Crime Commissioner responsibilities and a public health duty.

It would also have the power to charge residents an additional council tax and a supplement on business rates.

A report due to be considered by the authority’s cabinet this week says KCC believes that devolution could work within the existing two-tier set up but says the government’s preference is for new institutions headed by a mayor. As a result, the report says having an elected mayor should be assumed in any plans put forward.

KCC leader Roger Gough said the plans were “the start of a journey” and set out why devolution was essential “to the benefit of people in Kent and Medway.”

“We cannot go on with this as we are and some aspects of the government’s devolution agenda give us the chance of more powers coming to Kent and Medway and to do the big things that matter to people at a time when we are hugely overwhelmed by the people services like social care.”

“It sometimes means that we struggle in areas like big infrastructure, economic development and environmental management. We have begun to see how mayors in other parts of the country have begun to make a real impact and more and more counties are looking at this model and it is important we get these powers and money back into the county.”

While a mayoral-led body would not involve more money from the government, separating funding for economic development would give more opportunities to develop investment programmes.

He said that to “properly serve the people of Kent and Medway” it was necessary to move towards some kind of devolution and more and more counties were reaching the same conclusion.

“This is a starting point for discussion but it is a very important one.”

Subject to what the government says, KCC would formally submit what is known as an “expression of interest” outlining possible options.

Medway council leader Vince Maple said the issue of devolution would be considered by his cabinet and he did not want to preempt that discussion.