The FSB welcomed proposals to streamline the service and give it more powers to make the case on behalf of small businesses within Government. However, this is a cut in resources and it is not clear if money will be redirected to other sources of support for small businesses.

Clive Davenport, FSB Trade and Industry Chairman, said, "We welcome the re-focusing of the SBS and the overall trend of today's announcement.

"Small businesses need an SBS that has more clout in central government and is more responsive to the needs of small firms. Given that small businesses employ over half of the private sector workforce and generate 58% of UK GDP the SBS needs to fight their corner in Government policy making. Twelve million jobs depend on them getting it right and being effective at the highest levels of Government.

"However, we do need to ask the Government where the money saved from these changes will go. We are concerned that the savings will simply be swallowed up into the Government pot. Small firms will still be paying the same amount in taxes but may see a reduction in services."