Pointing to Liverpool's lowly 62.5% employment rate – the England average is 74% – the report added: “There remain wide differences in employment rates between British cities and little evidence of catch-up in the latest trends.”

However while Liverpool is listed as “vulnerable” to the downturn because of its large number of public-sector jobs, it is not “highly vulnerable”, like Swansea and Ipswich.

The annual report also stressed the importance of Liverpool as one of five “big hitters”, which – together with London, Manchester, Birmingham and Leeds – account for 39% of jobs.

But it warned “shiny new buildings” were not the answer insisting: “Struggling cities first of all need to fix the basics – improving their schools, adult skills and public transport. Only then will businesses want to invest and create jobs.”

The study comes amid growing government confidence that unemployment is under control. Once tipped to top three million, it is now predicted to stall not far above 2.5 million.

However late last year Wallasey MP and work and pensions minister Angela Eagle admitted to “teething problems” in the Future Jobs Fund adding: “You can’t suddenly magic opportunities out of thin air. That takes time.”