Over regulation is preventing businesses from the growth that would allow them to take on more IT contractors, it has been claimed.

Legislation should be in place to create and protect a management structure which allows directors to make the most of their resources, claims the Chartered Management Institute (CMI).

Yet current regulations are holding back creative activity, such as employing IT contractors, at a time when it is most necessary, according to Mike Petrook, spokesperson for the CMI.

Managers are spending the equivalent of a month every year dealing with government red tape, when they could be expanding their businesses and creating jobs, according to the Institute of Directors (IoD).

The IoD estimates the total economic burden of regulation on industry is around £80 billion per year.

"What needs to be done is much less focus on regulation and more emphasis on the development of higher end skills," said Mr Petrook.