A plan B is desperately needed to improve employment levels among contractors and other professionals in order to kick start economic growth, one expert has said.

Trade Union Congress general secretary Brendan Barber said that with the economy failing before the spending cuts and increase in VAT kicked in, the chancellor must accept that his policies have failed.

"We need realism from the Chancellor, not a kind of optimism that is hard to distinguish from blind faith," he added.

These comments came after the Office for National Statistics revealed that Gross Domestic Product (GDP) saw a 0.5 per cent decline in the fourth quarter of 2010.

According to the report, the GDP estimate was substantially affected by the bad weather in December.

Additionally, total services output decreased by 0.5 per cent during that period, which compares to the increase of 0.5 per cent seen in the previous quarter.