Immigration clampdown could worsen UK IT skills shortage

The government’s decision to increase the earning threshold of UK visas for overseas workers to £38,700, from its current position of £26,200, is likely to exclude many foreign IT professionals.

According to Integro Accounting, an accountancy provider to IT contractors, freelancers and small businesses, there was a dramatic increase in visas issued for web developers and technical support specialists between 2021 and 2022. These technology workers tend to be at the lower end of IT salaries, especially outside London, said the firm.

Data obtained by the accountancy firm from the Home Office, under the Freedom of Information Act, showed that the number of work permits issued to foreign technology professionals jumped from 39,899 in 2021 to 52,686 in 2022 – the highest level in five years.

The category that saw the largest percentage increase was web design and development, where the number of work permits issued increased by 76% between 2021 and 2022 from 717 to 1,261.

January 2021 saw the end of the Brexit transition period. This put an end to freedom of movement between the UK and European Union (EU), whereby EU citizens became subject to the same points-based immigration system as non-EU workers.

Christian Hickmott, managing director of Integro Accounting, said: “The UK’s chronic underproduction of tech talent is making us increasingly reliant on foreign IT professionals to plug skills gaps. While layoffs at big tech companies have grabbed headlines, the UK tech sector is still struggling with talent shortages and looking to foreign nationals to plug skills gaps.

“It was widely assumed that layoffs made by big tech would increase the depth of the talent pool for other tech businesses to dip into. While true to a limited degree, the UK was relatively insulated from mass layoffs and many of the job losses were among business professionals rather than in predominantly technical roles.

“The loss of EU-based talent due to Brexit, together with the pandemic and the off-payroll working rules accelerating the retirement of many IT professionals, has exacerbated the skills crisis in the sector.”

He added: “Increasing the salary threshold from £26,200 to £38,700 for work visas will likely exclude some of the tech occupations in which there has been a sharp rise in visas issued over the past year. There has been a dramatic increase in visas issued for web developers and technical support specialists. Many foreign nationals could be excluded by the raised salary threshold, particularly for roles outside London.”

In 2020, when the points-based immigration system was announced by then home secretary Priti Patel, Russ Shaw, founder and CEO of Tech London Advocates and Global Tech Advocates, said the new rules raised more questions than answers.

“A Brexit transition leaves us at a crossroads and the points-based immigration system outlined by the Home Office is potentially leading us down the wrong path,” he said. “The latest proposal sends the wrong message to the international tech community, dissuading overseas workers from setting up in the UK.”

Trade body TechUK said at the time: “At the heart of the policy statement is science, technology, engineering and maths [STEM] talent, with explicit mention made of the need to attract those with specific STEM skills. For the tech sector, there are many elements in the policy paper that we can welcome.”

But it also said salary was not necessarily an indicator of skill, and criticised the lack of clarity about how an applicant’s English language skill would be assessed.