British IT contractors are calling for a tightening of immigration laws which they say are allowing cheaper foreign contractors to undercut them.
More than 28,000 fast track visas were issued to overseas IT staff over the year to 30 September 2001.
But the Professional Contractors' Group (PCG) is warning that, rather than tackle IT skills shortages, the work permits are being used to bring cheap IT contractors into the UK market to undercut the competition.
Susie Hughes, a spokeswoman for the PCG, said that a relaxation of immigration laws introduced last year was no longer appropriate, and meant that UK-based contractors were losing out.
The body is calling for the scheme to be re-evaluated as the economic downturn continues, and the validity of skills shortages claims is called into question.
"The scheme is being used by larger companies to undercut on price. It means that overseas contractors can be brought into the country and their services sold on for a profit. Small British companies don't have the same rights," said Hughes.
The rules were relaxed to address IT skills shortages across the UK and help Britain compete head to head with other nations starved of IT skills.
But now Tim Conway, director of supplier body the Computing Services and Software Association (CSSA), said the rules governing the work permits need to be revised.
"There are very stringent requirements on employers that they bring overseas workers in on market rates. But the current economic climate suggests that shortages are no longer the case," he argued. "Last year the government relaxed the requirements for the amount of experience people needed to have. We should start re-imposing those requirements."
But Conway added that contractors were also losing out to overseas IT staff because their skill sets didn't always meet the requirements of industry.
"We still see ridiculous situations where unemployed Cobol programmers who can't find work feel hard done by. Part of that involves planning ahead and investing in lifelong learning," he explained.
The CSSA is pushing the government to introduce tax credits or rebates for employers or individuals who can fund their own education.
John Handby, chief executive of CIO Connect, the UK forum for senior IT executives, pointed out that skills shortages were still an issue for many IT employers.
"Companies used to invest more in providing people with skills and took a bigger interest in their careers. Today the responsibility lies much more with the individual to guarantee continued employability," he said.
"Contractors have to see themselves as part of a wider market and, in the short term, they need to be realistic. It's fair to say they charge more money than most because when there are downturns they do lose out," he added. "But the work permit system needs to be monitored very carefully to make sure we're bringing people in for the right reasons."
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