There are very large differences between labour costs for skilled workers in the west and in developing countries. Workers in some countries are therefore able to offer the same or similar skills as British workers at a much lower cost.

This represents a major economic challenge for the UK, and PCG is concerned that in one crucial area the Government is, at best, not looking at the evidence – at worst, it could be getting it badly wrong.

This concern relates to two distinct, but related, phenomena: offshoring, where a UK company outsources its functions to an overseas provider; and the hiring of overseas contractors, granted access to the UK via a work permit, by a UK company. Very often the latter is used as a means of achieving the former via a particular type of work permit called an Intra-Company Transfer (ICT). These work permits are essentially a "loophole" as unlike all other permits, there is no requirement to prove no UK worker is available to fill the post. 

ICT Abuse

In May 2008, the Government outlined proposals under Tier 2 of its new Points-Based System for immigration for how work permits, including ICTs, will be issued to skilled migrant workers. Under the proposals, all migrants wishing to work in the UK must have a job offer from a licensed employer and must obtain enough points to qualify for a permit

When Tier 2 of the new system was first announced two years ago, workers on ICTs were automatically awarded enough points to gain entry to the UK. However, following recommendations from PCG on the issue, an ICT will now only earn 30 of the 70 points needed to gain entry: the worker must earn the rest through their qualifications, and by their earnings being at UK market rates.

For routes other than ICTs under Tier 2, jobs must either be in a shortage occupation, or be advertised in the UK via an officially-approved jobs board or other channel: companies will only be able to bring workers to the UK if the vacancy cannot be filled with a worker from the UK or Europe, and a migrant worker who earns enough points can be found. Migrants will also need to have enough points based on their qualifications, earnings in the UK, competence in English and capability to maintain themselves and their dependants while working in the UK.

PCG sits on the Migration Advisory Committee's stakeholder forum, the independent statutory body which sets skills shortage lists, minimum salaries, and makes recommendations to Government about how the Points-Based System should be administered.

PCG encourages contractors to provide evidence of abuses of the Points-Based System, particularly regarding the hiring of ICTs at below market rates, or the abuse of the complex salary allowance system. Details of such abuses can be sent to This e-mail address is being protected from spambots. You need JavaScript enabled to view it . The Points-Based System is self-policing and the UK Borders Agency will revoke sponsorship licenses for firms that break the rules.

ICT Abuse Workshop - Update December 2009

PCG’s campaign to highlight ICT abuse is to be stepped up in the coming weeks. After Christmas we will  be sending a dossier to the UK Borders Agency and Migration Advisory Committee on cases of abuse highlighted by PCG members. We will also send these examples to the Conservative Home Affairs team. Additionally, we are investigating possible pertinent Freedom of Information Act requests on the subject. Naturally, PCG will seek further meetings with UKBA and MAC to press home members’ evidence and concerns. PCG has also been interviewed for Radio 4’s investigative journalism programme, ‘The Report’, to be broadcast on the 31st December.

 PCG will be holding a workshop at 2pm on the afternoon of 29 January, at the Apex Hotel, 1 Seething Lane London, EC3N 4AX, to discuss this issue. We will endeavour to have key stakeholders and officials in attendance to present their views, and will be discussing possible ways forward for PCG. The tightening of the ICT rules and their rigorous enforcement is key to address the many issues with the current system. PCG members interested in attending this workshop should contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it to register their interest, quoting “ICT Abuse Workshop” in the subject line. Places are limited, and will be allocated on a first come, first serve basis.

Links

Recording evidence of abuses of the Points-Based System
PCG has prepared this guide to recording abuses of the PBS.

List of minimum salaries for skilled IT jobs
Non-EEA workers must not be paid below the rates listed in this table, and the job must be advertised at this rate for two weeks before they are engaged.

UK Borders Agency Code of Practice for firms looking to fill skilled IT Posts

PCG Policy Briefing: Work Permits & Offshoring
PCG believes that UK freelancers offer the best quality of IT services available and that there is sufficient supply in the UK to meet current and recent levels of demand.

PCG response to Migration Advisory Committee Call for Evidence, 2008
A call for evidence on the MAC's proposals for defining the parameters necessary to create a skills shortages list.

PCG response to Home Office questionnaire on Migration Advisory Committee, 2007
A consultation and questionnaire on plans to establish a Migration Advisory Committee to advise government on the UK's migration needs.

PCG response to Home Office consultation on work permit charges, 2006
The first of several consultations to settle the fine detail of the new PBS.

PCG response to Home Office consultation on managed migration, 2005
This consultation exercise resulted in the announcement of a new Points-Based System which will allow for the control of migration in response to economic need, meeting PCG’s central recommendation.

Comparative study of the impact of offshoring
A study examining the relative profitability of companies that offshore and companies that do not. It suggests that the benefits promised on paper often fail to emerge in practice.