The Regeneration Bill will now not proceed as planned, with Mervyn Storey stating he now wishes to wait for the restructuring of Executive Departments before looking again to decide if the Bill should proceed as planned.
Responsibilities previously scheduled to be transferred included neighbourhood renewal abilities and helping local economic growth.
Alliance MLA Mr Dickson said it had prevented key services being provided for citizens.
“This whole process has done nothing but treat Councils with disrespect from the start. Firstly it was delayed because of spats between the DUP and Sinn Fein, meaning it would have transferred powers to Councils a year after they assumed authority.
“Now we have the Minister dropping the Bill for this mandate and likely altogether. It is a bad move for regeneration, a bad move for decentralisation and a bad move for the public. A number of key projects will now have a question mark over their funding.
“There were no good reasons for the delay and now there’s no good reason for the axing of the Bill. The failure of the DUP and Sinn Fein to agree in many areas is now blocking much-needed reform.”