Owners of small firms are cutting costs as the economic conditions in the UK become more difficult.

Many are taking on their own cleaning, going green, taking pay cuts and missing holidays.

More than four in five small business have introduced cost-cutting measures over the past six months, according to Alliance &

Leicester business banking (A&L).

The most common measures are cleaning their own premises, reviewing or changing suppliers and introducing recycling or energy-saving measures.

Since April, 22 per cent of business owners took a pay cut or went without a holiday to conserve company cash.

Bosses said they were also keeping a closer eye on staff expenses in a bid to save money. This practice was found to be more common in larger companies.

Only two per cent of small firms cut staff benefits such as pensions.

One per cent said they had reviewed their banking procedures.

A&L head of marketing Gareth Williams said:

"Although our research has shown small businesses are confident about their future prospects, this shows they are not taking anything for granted.

"Cutting costs is a sensible thing to do during any economic climate, maximising profits in the good times and minimising the impact of any bad times.

"While it is encouraging to see businesses cutting unnecessary costs, it seems the majority are still not getting the best from their banks.

"Banks, like any other supplier, should be reviewed regularly and businesses should always be on the lookout for better deals."

More than half of manufacturing
firms in the South-East plan to cut jobs because of forthcoming increases in National Insurance (NI)

contributions.

About one in three intend to move some of their business operations abroad to cut costs, said the Engineering Employers' Federation (EEF).

A poll of 1,000 firms revealed more than half predicted lower pay rises and a similar number warned they would pass on higher costs to their customers.

EEF director general Martin Temple said: "The Government is playing a very dangerous game with manufacturing jobs and future competitiveness."

The EEF said the cumulative effect of the increased costs on business was leading to a substantially less welcoming environment for manufacturing.

Chancellor Gordon Brown announced an additional one per cent NI increase for employers, employees and the self-employed on all earnings above £89 per week starting next April.