The Forum of Private Business has joined the voices expressing concern about recommendations to change the way businesses are taxed.

The FPB said the inquiry into local government operation and funding led by Sir Michael Lyons could leave small firms footing the bill for local authorities who don't have to answer to them.

On Monday, Sir Michael argued for greater local choice and a system of local government that can manage increasing pressures on public expenditure, increase satisfaction and build more prosperous communities.

However, FPB spokesperson Tim Kind said it was vital that, if local councils are granted more responsibility, small firms must be high on their agenda.

"We are talking about choice and responsibility," he said. "It's about how big the cake is and how it's divided. We need to know that small business has a hand on the knife and the spoon."

There is a possibility that local authorities could get control of setting business rates. Mr Kind added: "The way some local authorities are administered does not breed confidence that small business won't be picking up the tab for inefficiencies."