Britain’s economy is becoming increasingly reliant on agency workers, with 800,000 temporary staff now part of the workforce, a new report has found.

This marks an astonishing 40 per cent rise over the past 10 years, according to research carried out by the Resolution Foundation.

The think tank surveyed 500 managers across a range of industries and found that a third hired agency employees on the understanding that they would prove cheaper than full-time staff, although the accuracy of this perception is open to doubt. Another third believed the opposite.

The most common reason cited for reaching out to an agency for cover was to plug short-term gaps caused by holidays or illness.

Seasonal demand was also found to prompt a spike in agency hiring, while the outsourcing of traditionally in-house responsibilities, such as training or payroll management, was another common reason for taking on new short-term contractors.

One in four of the companies questioned by the foundation said that they expected to increasing agency hiring over the coming years. And reduced immigration, as a result of Brexit, could accentuate the trend further.

“Demand for agency workers grew significantly over the past five years – particularly among firms who use them as a core part of their business model and have become agency worker-reliant,” said Lindsay Judge, a senior policy analyst with the Resolution Foundation.

“Agency workers are still used largely as a stop-gap measure, but for a significant minority of firms, costs, convenience and control all play an important part in explaining their reliance on agency workers,” she said.