The number of IT contractors hired by UK firms continued to increase during March, it has been claimed.

Job placements for contractors and temporary staff rose at the sharpest rate since January 2008, according to the Recruitment & Employment Confederation's (REC) April Report on Jobs.

However, the availability of contractor staff also rose, meaning there is more competition on the market for IT contractors.

Cutting costs without creating a "public sector recession" will be the immediate priority for the next government, claims the REC's chief executive Kevin Green.

He said: "Private sector employers have used short-time work, sabbaticals and pay freezes as a means of reducing costs whilst retaining high-performing staff.

"Innovative resourcing strategies will be equally crucial within the public sector."

According to mortgage provider Kensington, the recession has taken an extra million people out of permanent jobs to become self-employed.