Are IT contractors winning multiple contracts and sub-letting work to low-cost workers?

I was approached yesterday by BBC radio asking me whether I was aware of a trend that is seeing IT contractors win multiple jobs and then subletting them to low cost IT professionals from overseas. These contractors known as “Ringers” are taking a slice of the work done by others.

I know there are a lot of contractors that comment on this blog about various issues so I told the BBC journalist I would put a blog post up asking for feedback. If this phenomenon is true it would be shocking with the number of UK contractors out there looking for work.

You can either leave a comment on the blog or email Fiona Leach at the BBC direct on Fiona.leach@bbc.co.uk.

If this is true I am very interested in hearing more myself.

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I have worked with Indian I T firms that have outsourced to Korea. I have worked for USA and UK firms that oursource much I T work to India. What these firms do, is decide which work can easily be packaged, usually straightforward programming that doesnt require much interface with the customer. The issue with outsourcing, by outsourcers is the lack of control over quality, deadlines and budget. But the game is to get the money, and write contracts that avoid concrete commitments, guarantees etc. Lately, Indian firms have been increasing their costs, and their prices. In order to keep the money rolling in, they in turn outsource to their low cost providers. What we need to control is the numbers of student visas and visitors visas we issue to people who are actually coming to the UK to take jobs that would have been done by now the unemployed Brit I T worker.

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Story 1: Big consultancies with friends in government have been taking billions in taxpayers' money to deliver public sector IT projects, staffing those projects with cheap but inexperienced offshore/onshored staff, the latter enjoying further implicit taxpayer subsidies through tax-free allowances. Meanwhile thousands of UK-based IT professionals are laid off - often as a result of outsourcing from private sector companies to those same consultancies - and cannot find work at all. After years of this, the UK IT industry has largely removed its own supply chain of fresh entrants to the profession and eliminated many of its most experienced staff, further accelerating the vicious circle of perceived dependency on offshore graduate trainees.

Story 2: One or two UK IT contractors may be playing this game of "ringers" and sub-contracting work on an individual basis to cheap offshore staff.

So which story do the media want to report on? Is it the one featuring big name consultancies and big name companies, people with friends in high places and money for lawyers, and the story that raises the awkward question of whether UK taxpayers should be subsidising the elimination of UK-based jobs in favour of Indian IT staff? Or is it the story featuring a handful of unknown scam artists who in their wildest dreams couldn't eliminate as many UK-based IT jobs as the big name companies and consultancies have done with exactly the same practices (and the willing support of politicians and HMRC)?

Once again, journalists are chasing the little guy while the big fish get away. Whatever happened to "follow the money"?

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