A REPORT stating that York is suffering a brain drain has been dismissed by the leader of the city council.

The report by Geoeconomics, which was commissioned by the job vacancy website Graduates Yorkshire, says that York is failing to retain the graduates it produces from the city's two universities.

The report states the city needs to build a "strong and dynamic knowledge economy" - which is defined as industries where at least 25 per cent of the workforce are educated to degree level and where at least 30 per cent of the workforce needs to be employed in professional, managerial, scientific and technical occupations.

But instead the report states that York is failing to attract and retain graduates and that "the performance of the city's private sector was rated the worst in the region when it came to the growth of the graduate employment opportunities it offered".

Martin Edmondson, chief executive of Graduates Yorkshire, said: "Businesses and industries use knowledge to produce economic benefit. This is crucial to compete and grow.

"This report highlights that graduates play a crucial role in this as they provide employers with a huge resource that is just waiting to be tapped into and promises a high-value return."

"Through its two universities the city produces a tremendous amount of graduate talent and if this talent can be better retained within York then the future would be very bright for the city."

But the report has been dismissed by Coun Steve Galloway who is responsible for economic development, while a major York employer has said it is inundated with applications from local graduates.

Coun Galloway said: "It sounds like complete nonsense.

"We would not expect all graduates from the universities to take up jobs, but the growth of knowledge and science-based jobs in the city has been phenomenal. Science City York employs 10,000 people and with the expansion of the university it could double the amount of people involved. If you look at the report produced by the Local Government Association, which compares the success of different cities across the country, then York was rated very highly in terms of economic growth."

Norwich Union, one of the city's largest employers, said its records showed that graduates from York and other universities in the area made up a large percentage of all the applications they received.