LEEDS has been named as one of "five cities to watch" because of its potential to create private sector jobs and survive the impact of the squeeze on Government spending.
A report out today says Leeds – along with Milton Keynes, Reading, Aberdeen and Bristol – is well placed to create jobs and drive economic recovery.
It warns that economic recovery will be "unevenly spread", with some cities needing extra Government help to create jobs this year.
Research group Centre for Cities said many areas were now "bouncing back" from the recession, including some places hardest hit by job losses such as Hull, Doncaster and Northampton.
These all saw drops of 1.2 per cent in the number of people claiming Jobseeker's Allowance in the past year, more than twice the UK average.
The study also revealed that more than one in three jobs in private companies were provided in 11 of Britain's major cities – Leeds, Sheffield, London, Birmingham, Bristol, Edinburgh, Glasgow, Liverpool, Manchester, Newcastle and Nottingham
Five "vulnerable" places were named as Sunderland, Liverpool, Birkenhead, Swansea and Newport in south Wales, which the research group said might not feel the full benefits of economic recovery for some time.
Cities and towns such as these will be affected more by Government spending cuts and will need extra financial support as well as a "realistic" local plan of action.
Alexandra Jones, chief executive of the Centre for Cities, said: "Buoyant cities like Leeds and Bristol, which have been fast-growing and have lots of private sector jobs, are best placed to lead the UK's recovery.
"It's time these places had new financial freedoms such as full control over the local business rate, and new powers to raise money.
"They could also benefit from having London-style mayors. During 2011, the UK cities most dependent on the public sector, and which have seen slower economic growth over the last decade, will find it more difficult to rebalance towards the private sector. These cities will need realistic plans of action to ride out the spending cuts and create jobs – but they will also need additional financial support from central Government."
A Department for Business spokesman said: "It is reassuring to see that there are areas of the country that are starting to see an economic recovery, particularly areas which were badly hit by the recession.
"However, we need to make sure that all parts of the country begin to see the benefits of the economic recovery, and the Government is doing all it can to help with this. There are now 28 local enterprise partnerships which have been given the go-ahead and these will play an important part in boosting growth and creating a strong environment for businesses to succeed in the areas they serve."
TUC general secretary Brendan Barber said: "It's great that some areas may be starting to bounce back but many towns and cities, particularly in the North, are failing to see any sort of recovery. Vulnerable cities are suffering from low skills and high joblessness that hit consumer spending and business investment, but instead of providing financial support the Government is piling on the misery with deep welfare cuts."
Baroness Margaret Eaton, chairman of the Local Government Association and former leader of Bradford Council, said: "Councils recognise the need to support private sector growth and job creation, particularly for young people.
"Decisions on how to go about that are best made at a local level, where councils can identify need and find solutions."