A row has erupted over a new index announced today, which puts York at only 89th out of 200 UK towns which are the best places to relocate or start a business.

Harrogate, on the other hand is fifth. Bournemouth is top.

The UK Top Towns survey was undertaken by business intelligence specialist Blue Sheep, with research company Oxford Economic Forecasting. It classifies the growth potential of each town's businesses.

It led Iain Lovatt, joint managing director of Blue Sheep, to conclude: "For potential business relocation, knowing where business is booming could be the decisive and critical factor to future success."

But top business organisations in York were scathing in their criticism of the report.

Andrew Lindsay, president of the York and North Yorkshire Chamber of Commerce, said: "Unless Bournemouth has the most entrepreneurial old age pensioners in the UK, then Blue Sheep may be barking up the wrong tree.

"Bournemouth is known as the blue rinse capital of the south. How can it compare with York, which a Dun & Bradstreet survey has found to be the most profitable city in Britain and, more lately, the most buoyant city in Yorkshire and Humberside?

"It is a city whose 1.7 per cent unemployment represents one of the lowest rates in the UK, whose university not only appears among the top five in the country, but also has a high retention of graduates and postgraduates staying on to work for trail blazing sectors like bioscience, health care and e-science"

Imelda Havers, chief executive of York-England.com, the inward investment board for York and North Yorkshire, claimed the figures were skewed. "While it is excellent news for Harrogate, it is preposterous that York, which is listed as the best city to do profitable business, should have plunged so far down the league. The way these figures are calculated means that the bigger and more diverse a city's economy, the lower down the ratings they go."

Will Dutson, software developer for Blue Sheep, said businesses in each town were examined across a range of ten types, from Trailblazing and Dynamic at one end, to Black Hole, Meltdown and Sinking at the other. In York, only 18 per cent of the city's 125,000 employees worked for companies which were Trailblazing and Dynamic.

Updated: 09:55 Wednesday, December 01, 2004