More than a fifth of small businesses expect to recruit this year, down from 30% in December, according to research from the Forum of Private Business.

The research shows that while 14% intend to simply recruit in the coming year, a further 8% plan to hire but believe they will have to train new staff in the necessary skills their businesses require.

The Forum’s research manager Tom Parry says: “It is concerning that small business owners’ confidence in their ability to create jobs in the current economic climate and drive recovery is falling, and clearly there is still a pressing need to address barriers such as employment taxes and red tape, steep recruitment costs and skills issues.

“But we also need measures to support staff retention - and the upskilling of senior managers and business owners themselves. Further, policies such as the abolition of the default retirement age are unhelpful at a time we should be incentivising business growth and job creation with employment-friendly incentives.