Public-sector job opportunities for IT contractors have taken another blow, as a new report seems to justify mass job cuts.

According to research from management consultancy Knox D'Arcy, if council departments were run like private sector firms, they could do the same amount of work with 500,000 fewer staff.

The firm found that junior employees in local councils were productive only 32 per cent of the time, compared to an average of 44 per cent in the private sector.

"Put simply, by matching average private sector staff utilisation levels, local government could increase its productivity by roughly a third," said Paul Weekes, principal consultant at Knox D'Arcy.

This would allow the government to cut costs without harming services to the general public, Mr Weekes added.

Chancellor George Osborne is to announce the full scale of the government's spending cuts in October, but many public sector jobs are expected to be lost.