Overall demand for flexible workers, such as IT contractors, will be hugely impacted by the publication of the Comprehensive Spending Review.

This is according to the Recruitment & Employment Confederation (REC), which confirmed earlier this week that 120,000 temporary posts have already been lost in the last three months, in anticipation of cuts.

Following the confirmation of the scale of the cuts, the REC feels that public bodies will be forced to fundamentally reform themselves in order to achieve savings.

REC director of policy and professional services Tom Hadley believes that temporary workers will become a key part of this strategy in the future, providing cost-effective ways of dealing with peaks and troughs in demand without damaging permanent budgets.

"The REC will continue to drive a targeted campaign on this issue and to argue that using temporary, contract and interim management staff is part of the solution, not part of the problem," he explained.