Forty per cent of businesses say government regulation is now more time-consuming, according to a National Audit Office (NAO) report published today.
The report found just one per cent of businesses said that complying with regulation has become less time consuming in 2007. It also found very few businesses are aware the government is even making efforts to reduce regulations.
Commenting on the report, shadow business secretary Alan Duncan said: "Peter Mandelson clearly has his work cut out. He should start by cutting red tape.
"The question is whether the new secretary of state is back to merely to pick up his pension and the prestige, or is he serious about helping businesses to survive the economic storm and address the red tape?"
William Sargent, executive chair of the Better Regulation Executive - part of the Department for Business - said: "The NAO report highlights the challenges that still remain for the whole of government to engage with, and deliver benefits to, the businesses that help drive the economy."
Since 2007, there has been a small positive shift regarding the public's opinions toward regulations, the report said, but businesses still have yards of red tape to work through.
Matthew Elliott, chief executive of the TaxPayers' Alliance, said: "It's no use talking about reducing the cost of regulation if the reality is that the amount of red tape is rising.
"It's time those in government realised that every new page of unnecessary regulation puts people out of work due to rising overheads."
Critics of government plans to cut regulation argue red tape is needed to keep checks and balances on businesses. They say reduced regulations led to the current economic crisis in the markets.
TUC general secretary Brendan Barber said: "The credit crisis, which has been caused by the free reign given to the financial sector, surely serves as a warning against the deregulatory crusade that business lobbyists are calling for.
"While no-one wants pointless form filling, what employers often consider 'red tape' are important guarantees of safety and wellbeing at work."
The government has aimed to decrease regulations by 25 per cent by 2010. It says the Administrative Burdens Reductions Programme has made progress on easing red tape.
Currently, 19 departments are working with the public bodies to make the task of completing the regulations easier. Throughout 2007, government departments implemented over 150 initiatives to decrease the administrative barriers.
The current task for the programme is to pin-point changes which show visible affects of helping businesses, such as revision and consolidation of legislation.