IT contractors have been unable to prevent a rise in the number of information security attacks affecting UK businesses, a new report claims.

Cyber crime is now costing UK businesses billions of pounds a year, according a survey by PricewaterhouseCoopers (PwC).

Businesses have not been neglecting the issue however, as PwC found that average spending on information security has gone up over the last two years, despite the recession.

Andrew Beard, director of OneSecurity at PwC, said that firms need to better educate their staff on security issues.

He said: "Only 19 per cent of respondents from large organisations believed their policy is very well understood by staff.

"The root cause of this is that investment in security awareness training, while on the increase, is still often inadequate."

Last week, a report produced by Imperva, WhiteHat Security and the Ponemon Institute found that firms are not using enough of their security budget to protect web-based applications, despite them being the most vulnerable to attack.