ENDLESS red tape and paperwork has moved back on top of the list of key concerns for small businesses.

A report shows that 20 per cent of firms in the South West now see excessive Government regulations as the biggest problem facing their business a jump of seven per cent over the last six months.

NatWest, which compiled the quarterly report, said it has now overtaken fears about the economic climate to take top spot.

The bank also found that the performance of Britain's small firms had weakened slightly this quarter with more bosses reporting a drop in investment and staffing levels.

Greg Smith, managing director of digital printing firm CATS in Rushey Platt said: "Completing the red-tape paperwork is a full-time job, which is why I have had to get someone in to do it. If I were to do it myself the business would suffer.

"It is certainly frustrating for SME bosses. There are endless health and safety forms that have to be filled in and it's annoying because the Government seems to change it every year."

Dennis Grant, chief executive of Swindon Chamber of Commerce, believes the red tape is driving many SMEs out of business.

He said: "There is far too much red-tape involved these days. Larger organisations are better equipped to deal with it, because they have the staffing levels.

"But smaller ones are being driven against the wall. The owners will be the highest paid and they are the ones who will be completed the insurance forms, many of which are time sensitive.

"In some cases the business could be losing up to £50 per hour. This issue definitely needs addressing."

Jeremy Peat, chief economist at NatWest, said: "This survey provides pause for thought at a time when recent economic news has tended to be distinctly positive.

"Small firms have continued to find regulation and paperwork a sizeable burden in recent months, against a background of a slight deterioration in their economic performance."

Kevin Shoesmith