A small bed needed in Berkshire town (5)
I believe the answer is:
ascot
'berkshire town' is the definition.
(town in Berkshire)
'a small bed needed' is the wordplay.
'small' becomes 's' (abbreviation - e.g. clothes size).
'bed' becomes 'cot' (cot is a kind of bed).
'needed' is a charade indicator (letters next to each other).
'a'+'s'+'cot'='ASCOT'
'in' is the link.
(Other definitions for ascot that I've seen before include "Town with racecourse" , "Racecourse with royal associations" , "Royal race meeting venue" , "Coats (anag) - racecourse" , "sporting event" .)