Toby2sticks said:
I can and will be purchasing a backup service from my provider however if they do the back up they do not use WHM and so it will be difficult to restore; alternatively they will back up my backup files but that does not solve the problem that the backups are taking up so much space.
I'd do that as a matter of urgency, as you're not protected against disk failure at the moment. I'd also use cpanel news to remind customers they need to do their own backups. Even though it's frustrating when we all remind you of this, we do so because your current backups are glaringly worthless (well, almost so).
You can use rsync or rdiff to get the same sort of backup coverage as the (slow/clumsy) cpanel backup system, with most or all of the recovery potential.
Toby2sticks said:
Back to my original question: What settings can I use that might reduce the size of the backup files whilst still keeping a reasonable amount of information suitable for restoring the system and databases if we had a problem. The sites are not majorly active, will it help to change to weekly or monthly backups?
There are no magic settings per se that will help - the backups are already compressed, and there is little more that you can do other than use a rdiff-type strategy which would reduce the size of your subsequent backups, and if there's little actual activity that might be a significant win for you. As you suggest, you may also want to switch to weekly or monthly backups; so long as you advise your users there should be little problem with this strategy.