Brighton and Hove is facing the greatest challenge of its recent history: It has to take on prosperity and win.

Wiser folk than me have pointed out the contradictions being experienced by the whole of the South-East at the moment.

As the region and our city become more successful, certain people are in even greater danger of being left behind as house prices escalate, the skills required for the jobs available are higher and wages in the public and semi-public sector do not increase with the market.

But the creation of the city gives us one more reason and one more weapon with which to rise to the problem and triumph over it for the good of us all. And we cannot duck it.

We are in a cycle. But we must ensure that it is virtuous and not vicious. Brighton and Hove need jobs that are well paid and secure. Although unemployment is at an historic low at only 4.9 per cent according to Sussex Enterprise, in pockets it is still cruelly high and wages are still below the national average.

We generate some new jobs from within in, for example, tourism, the service industries or engineering.

We generate some through attracting bright entrepreneurs, often graduates, who stay after university and start businesses or operate as freelancers.

We have a 6 per cent higher graduate retention rate than any other city. And people come here from other universities or straight from school in other, duller places because of the sheer quality of life and opportunity that the unique atmosphere our city offers.

And we make a great deal of effort to attract companies to relocate, bringing employment.

Now that the Government has granted us assisted area status, there are considerable amounts of money available to companies guaranteeing new jobs in the city.

In the last week since city status was announced two major companies have reopened their negotiations with the local authority and St Modwyn, which owns the racecourse, has signed on the dotted line with the West Pier. Things are moving that fast.

However average house prices in the South-East now defeat even the financially canniest public sector worker: Who can afford a two bedroomed terraced house on a staff nurse's salary of £18,000 to #20,000?

We cannot even find bus drivers at £25,000, while cars ravage the city. And the situation is made even worse because our biggest employers are education and health, where wages rise at a pitiful rate compared with the private sector.

At the same time office accommodation is at a premium as the existing supply fills up. Queens Road will be full for the first time since redevelopment.

In the centres of both Hove and Brighton this rise in business activity combined with increasingly successful shops will play its part in creating jobs and, along with the public agencies, safer, cleaner streets.

The healthier the economy, the better the built environment of the city will be. The higher our aspirations, the better the design of the major developments will be, opening the possibility of creating buildings that the rest of Europe will want to come and see.

If we can raise our sights and lower our backward looking prejudices about new buildings in the city, we might even have our own Guggenheim equivalent, like Bilbao, one day.

But while this healthy local economy might deliver better buildings and streets without graffiti or begging, we will have to engage the developers in providing not just excellent design but housing for a mix of incomes.

We will have to use the existing planning laws and campaign for more powers to insist that developers create housing for all the people, such as teachers, police, nurses and bus drivers, and not just the wealthy, the pop stars and the middle classes.

A city too must invest in its education. And there are signs that our schools are improving. We will need to turn out better skilled young people.

And that's not just up to teachers, it's surely up to all parents to involve themselves in educating their children.

All this means we must aspire together. From our schools to our restaurants, from our commercial companies to our public services, we must aim to be a city worthy of the name.

If the pride in Brighton and Hove that I have seen in this last week is anything to go by, we are all up to the task. Together, we really can make this city ... the place to be. Happy New Year.