UK user bodies unite after claims of illegal foreign contractor influx

Leading IT industry groups are to meet government officials next month to discuss reforms to the work permit system, following...

Leading IT industry groups are to meet government officials next month to discuss reforms to the work permit system, following complaints that abuse of the scheme has sparked an illegal influx of overseas contractors and deprived British IT professionals of work.

The meeting will examine allegations that UK firms and offshore Indian companies are using loopholes in the government's fast-track visa scheme to recruit cut-rate Indian contractors while British IT professionals are struggling to find work.

Although employers have welcomed the relaxation in visa controls introduced to overcome skills shortages, there are growing fears that the policy could leave the UK as an IT backwater, with little being spent on developing the skills of the domestic workforce.

The groups, including E-skills UK, the British Computer Society, trade unions and recruitment agencies, plan to press the government to explain why it is issuing between 1,500 and 2,000 work permits a month when unemployment levels stand at a record of 46,000 for IT staff and 30,000 for self-employed IT contractors.

"All the evidence is that there is an excess of supply over demand. One would expect to see the number of work permits go down and it apparently hasn't. The government has to explain why this is the case," said Matthew Dixon, who acts for the BCS on IT policy.

A draft document prepared by the Professional Contractors Group accuses firms of bending the rules of the government's intercompany transfer scheme by using it to import lower cost IT contractors from India, when workers with equivalent skills are already available in the UK.

It calls for the government to stop overseas outsourcing suppliers using the intercompanyscheme to deploy contractors to their clients' sites in the UK and introduce new controls to ensure that employers do not abuse the alternative "tier-two" work permit process.

"My gut feeling is that the level of abuse is very, very high. The majority of organisations currently using the work permit scheme in IT are either abusing the system or using it in a manner for which it was not originally intended," said Gurdial Rai, who represents the PCG on the government's work permit panel.

The Home Office confirmed this week that despite receiving hundreds of complaints about abuse over the past two years, including evidence that some companies may be in criminal breach of immigration legislation, it has not brought any prosecutions against firms in the IT sector for breaching work permit rules.

The admission has alarmed professional bodies, including the Institute for the Management of Information Systems, which warned that unless regulations are tightened, the UK's ability to compete against Pacific Rim countries in IT would be irreparably damaged.

"Simply importing overseas people at 10%-20% below UK wages jeopardises the future of the UK as a location for any future high added-value employment in the IT industry. The current work permit system is a scandal," said Imis strategic adviser Philip Virgo.

Peter Skyte, national secretary at trade union Amicus, said the scheme needed to be tightened up and that the union would highlight any cases of abuse that came to light.

"We are not opposed to the work permit system when it can be justified by the need to attract specialist skills not available in the UK, but there is a clear need to crack down on abuse and exploitation."

Analysis >>

Wanted: evidence

Do you have evidence that the work permit system is being abused? E-mail bill.goodwin@rbi.co.uk in confidence with your story, putting the word "abuse" in the subject line.

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