Who will pull Doncaster out of the doldrums?

With its council condemned and almost one in 10 of its inhabitants unemployed, the South Yorkshire town is in dire need of entrepreneurial spirit.

What do dealmaker Amanda Staveley, cosmetic surgery tycoon John Ryan and DFS founder Lord Kirkham – who has just sold the furniture business for £500m – have in common? Answer: they are all successful business people hailing from Doncaster.

Not that that little fact ever gets much attention. Doncaster has its critics, particularly when it comes to enterprise and business. And the campaign to make it sound an attractive place to do business has suffered some recent setbacks.

Westminster took the drastic step of intervening in the running of the local council last week after a series of crises – including the brutal attack on two young boys in Edlington by a pair of older lads in council care, and the under-performance of the council's housing and education services.

The Audit Committee report castigated the local authority for being paralysed by political infighting and concluded: "Doncaster Metropolitan Borough is failing. Those leading the council ... do not collectively have the capacity or capability to make the necessary improvements in governance."

The collapse of Jarvis, rail maintenance firm, has also hit the Doncaster workforce hard. Bill Rawcliffe, a National Union of Rail, Maritime and Transport Workers (RMT) official, is even standing as a candidate in Doncaster North against Cabinet minister Ed Miliband, in protest over what he says is inaction by local MPs.

All of which makes for entertaining reading around a general election, but the various predicaments come against the backdrop of another potential calamity that could affect the economy of the whole town.

Around 275,000 people call Doncaster home. Like many British towns, the biggest single employer is now the state – be that the local authority, the healthcare trust or the prison. Elsewhere, another sizeable chunk of the town's jobs, around 8 per cent, are in construction, much of which is related to public-sector projects.

So with all political parties admitting that budgets must be slashed after the election – on top of a cost-cutting agenda already implemented by the town's English Democrat mayor, Peter Davies – the expectation is that Doncaster's already high unemployment figure, 9.6 per cent, will grow larger still unless private enterprise can somehow fill the void.

Jim Board, a branch secretary at public-sector union Unison, says: "I expect substantial job losses in the local authority over the next four years and a reduction to core services. The problem I have with enterprise is enterprise for whose benefit? The private sector will create low-paid jobs. These are the jobs that have replaced the higher paid, high skilled jobs that Doncaster used to have."

Predictably, the business community sees things differently. Nadeem Shah, the chairman of local property developer Vigo Group, says: "I want higher paid jobs and am working to bring them to Doncaster. One of the largest employers in the town now is LA Fitness, which has just moved its head office to Doncaster. We had to fight to get them here – we gave up our office to get them here. That has a knock-on effect with hotels, restaurants and so on. Obviously I did it for the rent, that's what I do for a living. But we have brought 180 jobs to Doncaster and that helps make it a better place for my children and grandchildren." He adds: "But you have to take your own opportunities in life, as we did. We are immigrants, for God's sake. A lot of the problem is bitter and twisted unions. But what we really need is leadership."

That leadership seems unlikely to come from business – simply because creating opportunities for Doncaster as a whole is not its focus. Theoretically, a lead might come from local government, if only it could get its chaotic affairs in order and if there was a figure that most interested parties could unite behind – all of which appears a long way off.

Over at Unite's offices, officials openly joke that they like to punch an image of mayor Davies which hangs on a meeting room wall, while others argue that having a mayoral figurehead has been positive for business.

John Ryan, who, apart from creating and selling his cosmetic surgery business, is chairman of Doncaster Rovers Football Club, says: "Doncaster is fortunate to have a mayoral system. Martin Winter [the first mayor] got a lot done. The current mayor is having a go. Before, there was so much bureaucracy, so much procrastinating. No one wanted to stick their head above the parapet. That's what held Doncaster back."

Sophie Brodie, the Conservative candidate who is fighting Miliband in Doncaster North, has set out a plan for a Silicon Valley-style centre for new technology and hi-tech manufacturing in Doncaster. "Until now, new energy technologies have been built on an ad hoc basis in disparate locations across the UK and around the world," she says. "Bringing them together in a single area would allow them to develop more quickly and effectively towards solving the energy problems that face us." Miliband, the Energy minister, has also supported the drive to bring more jobs to the area.

While the unions obviously support new job creation, they remain doubtful about efforts to attract new investors into the troubled region. As are members at the Carcroft Working Men's Club – even more so since the plans come from a Tory. In a village that once housed scores of miners, they remain suspicious of the Conservatives and many seem to be more interested in how immigration affects local employment prospects. Undaunted, Brodie goes to the club to try to convince them that her plan is serious.

But she's fighting a losing battle. "I'm BNP, me," one member tells her, before another chips in: "What's the point in creating jobs and then bringing people in to fill them?"

But most observers think jobs urgently need to come from somewhere. The council's director of development, Peter Dale, points to the creation of 1,713 businesses via its "Success Doncaster" programme, and insists: "We are working with our partners to respond to the economic downturn and help local people. Our Invest in Doncaster team is working with the private sector, encouraging businesses to locate within the borough, creating jobs."

All of which should be positive, but will it be enough? Doncaster is probably more enterprising than it was, but there are still thousands of long-term unemployed who are likely to be joined on benefits by a raft of new claimants.

Without the leadership that Shah speaks of, Doncaster looks to be in for a tough time. Having changed so much from the heavy industrial town of old, Doncaster now needs the next generation of Staveleys, Ryans and Kirkhams.

Three Labour candidates – and one angry man

Fighting for seats

Ed Miliband, 40, is Secretary of State for Energy and Climate Change and brother of David, the Foreign Secretary. Elected in Doncaster North in 2005 with a majority of 17,531 and more than 55 per cent of the vote. Was tasked with writing the Labour manifesto, and has announced plans to help local councils become energy providers, by setting up renewable energy companies.

Bill Rawcliffe, 53, lost his job when rail maintenance firm Jarvis went into administration. Also standing in Doncaster North, for the Trade Unionist and Socialist Coalition, in protest over what he says is inaction by MPs.

Caroline Flint, 48, held Don Valley for Labour last time. The former minister for Europe has campaigned for the Rossington Inland Port, which will create up to 5,000 jobs – many accessible to the former mining community, where high levels of deprivation exist and where future alternative prospects are limited.

Rosie Winterton, 51, held Doncaster Central for Labour in 2005 with a majority of 17,000-plus. Seen as a good MP, but was caught up in the expenses scandal. Pledges to boost local jobs, and to support building more council and affordable housing.