Small firms 'at risk' from new law

Gardening jobs are at risk, warns the FSB

Small firms are losing out to unfair competition from local authorities, according to a body representing small businesses in the UK.

The Federation of Small Businesses (FSB) adds that new powers which allow local authorities to charge for services like gardening, vehicle maintenance and security could force private firms out of business.

The FSB says public bodies only need to cover their costs, so can undercut its members by charging less.

The proposals to increase local authority powers to charge and trade being introduced in the Local Government Bill which is likely to become law in England and Wales this summer.

Local authorities already have some powers to charge for services, and the FSB says these have already caused some small businesses in direct competition to struggle.

'Jobs threatened'

FSB policy chairman John Walker said: "Local authorities only need to cover their costs and so will undercut businesses which offer similar services but also face the commercial realities of covering their overheads and making a profit.

"These new charges will be devastating for small businesses threatening jobs and livelihoods and wiping out potential markets for start ups."

He added: "Small businesses have a strong voice in Westminster, with a Minister for Small Firms, a Small Business Council, and the largest All Party Group in Parliament.

"All three promote the interests of small firms in the corridors of power and now need to make their voices heard on this vital issue."

The FSB is calling for each council to investigate the potential impact on local businesses before setting up in business themselves, and wants local authority charging activity to be monitored.