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Almost a million jobs have been created in cities in recent years but average salaries have fallen by £1,300 a year, according to new research. Centre for Cities said only one in four cities were delivering a “high wage, low welfare” economy.

The think tank’s study of 63 cities between 2010-14 found almost half were classified as having low wage, high welfare economies, including Hull, Blackburn, Blackpool, Mansfield and Sunderland.

At the other end of the scale, London, Reading, Aldershot, Aberdeen and Milton Keynes were among those with a high wage, low welfare economy. Cities with high wages had seen the fastest jobs growth.

Alexandra Jones, chief executive of Centre for Cities, said the report highlighted the size of the challenge facing the Government in building a high-wage, low-welfare economy.

“One of the most pressing issues is the need to tackle skills-gaps and improve schools attainment, especially in low-wage cities, to help those places attract businesses and jobs, and support more people to move into work, particularly in high-skill sectors.

“This should be a key part of the Government’s Northern Powerhouse initiative alongside investment in infrastructure, and a top priority for local leaders.

“For cities which have seen strong growth in wages and jobs, the focus should be on addressing housing shortages, to ensure that their success isn’t derailed by a lack of affordable homes.”

A spokeswoman for the Department for Communities and Local Government said: “Today’s report is out of date, ignores the latest Office for National Statistics figures showing the employment rate at a record-breaking 74%, and focuses solely on cities which takes no account of employment growth in large swathes of the country.

“In fact, 1.5 million more people are in work outside London and the South East compared to 2010, a third of new apprenticeship starts in the last year were in the Northern Powerhouse, and full-time wages grew faster in areas including Greater Manchester, Leeds, Birmingham and Worcestershire compared to the national average – even before our new National Living Wage takes effect in April this year.

“All this is good to see. Every new job means the security of a pay packet for a worker and their family. But we are far from complacent and we continue to help local leaders boost their economies through ground-breaking devolution deals and support businesses to grow and create jobs through investment in transport, science and innovation.”

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