Local authorities are largely failing in their duty to provide potential businesses with the practical online information that they need to set up a company.
The Better Connected for Business survey was carried out by Socitm and commissioned by the Department for Business, Innovation and Skills.
The research was carried out to check on the progress in implementing the EU Services Directive in the UK, as set out in the Provision of Services Regulations 2009 that came into force at the end of last year.
Just five per cent of the 433 local authorities and 107 competent authorities surveyed were rated as 'very good', while 18 per cent were rated as 'satisfactory'.
Some 59 per cent were rated as 'poor', and the remaining 19 per cent displayed no relevant information.
"The results from this survey reveal that implementation of the directive has been at best patchy," the report noted.
"As far as councils are concerned, we provide some evidence that the disappointing results may have their roots in the culture of local government where the needs of citizens and individual customers have generally taken priority over the needs of businesses."
Socitm argued that many council sites failed because of inconsistent implementation and "lack of attention to the customer journey" on the site.
The findings also "raise important questions about local authority priorities for businesses and about governance of the web site", the organisation said.
This is not the first time that local authority sites have been found wanting. A customer survey in January by usability firm Webcredible revealed that a third of people find council sites the hardest to use, by far the biggest sector.
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