Officialdom is seen as the main barrier to growth among Sussex businesses, according to a detailed report published today.

Red tape was a bugbear for more than a third of the companies interviewed for the 2003 Annual Business Survey.

The 25-page report was carried out by Sussex Enterprise to create a snapshot of the health of the region's economy.

Attracting new customers was the second biggest reported problem.

This was a major concern because of the high number of companies aiming to enter new markets over the next five years.

Recruitment was a major problem, especially in Brighton and Hove, despite its highly skilled workforce.

The cost of living in the city was impacting on bosses' ability to recruit lower-paid workers.

Public sector jobs in education and social services were also difficult to fill.

Lack of broadband internet access in rural areas was cited as a problem, although this is likely to improve during the next year.

But the biggest complaint overall was the level of paperwork expected of company chiefs, added to by new employment legislation.

Businesses face more regulation later this year with the arrival of disability legislation on equality of access to services.

A separate study, carried out recently, showed one in ten firms spent more than 20 hours a week dealing with administrative chores.

According to the latest figures, red tape costs UK businesses an estimated £20 billion a year.

Mark Froud, chief executive of Sussex Enterprise, blamed Whitehall, saying its inflexibility made life tough for businesses.

He said: "We actually do have a very good local authority which wants to work with us to make sure legislation can be introduced sensibly.

"The problem is the civil servants in London who gold-plate everything.

"They should start doing their job applying legislation rather than making it."

Friday March 12, 2004