Small companies in the UK may be missing out on additional government funding, according to one organisation.

Commenting on the £1 billion that has been awarded to local authorities as a reward for fostering business growth, the Forum of Private Business (FPB) raised concerns that too much of the money is going to larger organisations.

According to the forum, the criteria for awarding funds under the Local Authority Business Growth Incentives scheme leads local authorities to "court big business", as opposed to nurturing small companies and start-ups.

FPB chief executive Phil Orford stated that the organisation has received reports that firms had lost out because the scheme had encouraged their local councils to invest in bigger business developments, such as out-of-town shopping centres.

He stated: "It is certainly not a process that encourages economic growth for the smallest firms."

Founded in 1977, the FPB campaigns for the fair treatment of private companies in Britain.