The government office which protects small businesses from excessive local regulation is under threat as part of the coalition's cost-cutting strategy a move which could hinder its aim to reduce the burden of regulation.

The Department for Business, Innovation and Skills will review how effective the Local Better Regulation Office (LBRO) has been in helping businesses grow by cutting red tape imposed by local health and safety, licensing and trading standards services.

The National Federation of Retail Newsagents has urged the government to not only retain the LBRO, but also to pay more attention to its findings. "The LBRO is an invaluable office that proactively seeks to consult and advocate the views of small shops in a way that no other government department does," a spokeswoman said.

"We hope that far from putting the LBRO on the chopping board for public funding cuts, the government will instead seek to strengthen its support and take action on the recommendations of the review."