The West Midlands has seen a surge in small businesses owners operating from home, according to one of the largest national surveys of SMEs.

The Federation of Small Business' Lifting Barriers to Growth Survey suggests the number of West Midland small businesses operating from home shot up ten per cent to almost a third in 2005. This compares to the 2004 figure of 22 per cent.

The primary reasons for home working included that it was convenient, cut down on costs and was suitable for firms that did not need commercial premises.

Denise Craig, West Midlands policy development officer for the FSB, pointed out that very few respondents blamed a lack of suitable office space for their choice.

She said: "Over recent years the region has come under fire for its lack of suitable commercial buildings and this has given rise to a number of initiatives designed to move home worker into business incubation units or start-up offices.

"Although this may be suitable for some, our survey proves that there are benefits to permanently working from home that may not have been highlighted."

The figures were revealed yesterday at the West Midland launch of the FSB's biennial survey at Birmingham's International Convention Centre, which studies the behaviour of business across the UK. The fourth in a series, which was started in 2000, is carried out on behalf of the FSB by the universities of Stirling and Strathclyde.

Ms Craig said the rise in home workers was partly due to the switch to broadband internet.

She said: "In my role I work from home and I need technology to communicate effectively.

"I think the region's commitment to broadband provision is partly responsible for the rise in home working. It also gives people with the opportunity to combine business and family life more effectively."

The West Midlands still remains the region with the largest number of manufacturing businesses at 18 per cent. A quarter of the region's businesses are based in factories - second only to Yorkshire and Humberside with 26 per cent.

The survey reviewed 1,400 responses across the West Midlands and 18,000 nationally.

Across the UK, the biggest barriers to small business growth were skills, red tape and crime.

A quarter of all businesses reported encountering one or more skills barriers - such as literacy, numeracy, technical or communication skills - when seeking to recruit new employees

Almost 60 per cent of small businesses also claimed to have been victims of crime during 2005.

Around 56 per cent of firms reported an increase in time spent on regulation, with 55 per cent unhappy about the complexity of legislation.

John Walker, FSB national policy chairman said: "Regulation, both its volume and complexity, crime and a poorly skilled workforce are issues that we have raised many times before.

"It is therefore worrying that they are still the main barriers to growth for small firms.

"It demonstrates that action taken so far has been inadequate.

"We will therefore call on the Government in our discussions to do more to lift these barriers and open up the way for small businesses to prosper."