Leeds was found to have the third highest levels of inequality in the UK, following close behind Birmingham and Belfast, in a study of 64 towns and cities by the Centre for Cities thinktank.
Bradford was also ranked among the ten most unequal towns and cities while York was in the top ten for fairness.
The report from Centre for Cities shows that in more deprived areas of Leeds, such as Holbeck, more than 15 per cent of residents are on Jobseekers’ Allowance, whilst in other areas, such as Weetwood, this figures stands at just 0.2 per cent.
Leeds City Council leader Keith Wakefield said: “Reducing inequality and protecting the most vulnerable in our city remains an absolute priority for the council.
“But make no mistake, the substantial reductions which are being made to our budget is making this challenge more and more difficult.”
Leeds Community Foundation has spent the past decade working with people in need across the city.
Sally-Anne Greenfield, chief executive, said: “It is no great surprise to see that the report concludes that inequality is high in Leeds because, although it shows that the city is doing well – business confidence is growing and more cranes are appearing on the skyline - it also illustrates that the more disadvantaged areas of the city have not shared in this growth.
“We still have one in five people living in a place that is classified as being amongst the most disadvantaged 10 per cent of areas in the UK.”
In a separate report, Oxfam has said the richest one percent of people will own more than the combined wealth of the other 99 percent by next year unless “staggering” levels of inequality are tackled.
Political and business leaders gathering at the World Economic Forum in Davos later this week are set to be challenged over the issue of the widening gap between the wealthiest and the rest.
A research paper released by Oxfam suggests 80 per cent of the world’s population own just 5.5 per cent of wealth - an average of 3,851 dollars (£2,500) each.