Leeds is bouncing back from the recession and is one of five "cities to watch" this year, according to economic experts.
A report published today by the Centre for Cities think-thank claims that Leeds is "better-insulated" than most cities to weather the government's deep spending cuts.
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The coalition's policies for fostering a private sector jobs recovery are likely to pay off in the city, it is claimed.
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The think tank calculated that the government's cuts to welfare payments – including housing benefit, working tax credit, child benefit and council tax benefit – is the equivalent to each person in Leeds losing 125.
However, many cities are hit much harder with Birkenhead in Merseyside losing the equivalent of 197 per head and Rochdale in Greater Manchester 194 per head. The worst hit area in Yorkshire is Barnsley,
which is losing the equivalent of 181 per head in welfare payments.
The Centre for Cities concluded that economic recovery is likely to be unevenly spread across the country in the year ahead and called for cities to be handed "new financial and political powers", with some requiring "additional financial support from central government".
The report pinpointed Leeds, along with Milton Keynes, Reading, Aberdeen and Bristol, as being the cities "best placed for a private sector led recovery."
It said: "These places will be better insulated from the economic impact of the spending squeeze, and have high potential to create private sector jobs.
"They have low vulnerability to public sector job losses and spending cuts and – given the right powers and freedoms – could make an even bigger contribution to the national economy."
Despite a growing number of public sector job losses, Leeds had the second highest employment rate of the major cities at 70.4 per cent between July 2009 and June 2010, up 1.1 per cent from 69.3 per cent between July 2008 and June 2009.
However, the city was also found to have the 6th worst level of inequality. The proportion of people on Job Seekers' Allowance varies across the city from 0.4 per cent in affluent areas to 21.5 per cent in poorer neighbourhoods.
Alec Shelbrooke, the Conservative MP for Elmet and Rothwell, said: "This is very welcome news. Leeds is a thriving and expanding city and certainly I have seen a lot of private sector growth in and around the constituency."