A Year Ago: Government headhunting plan under attack

Tue, 28 Mar 2000 16:35:42 GMTPlan to relax work permit restrictions contrasted with IR35 tax burden on UK contractors

The government's decision to attract IT skills by relaxing work permit restrictions on foreign nationals will be no panacea, IT industry leaders have warned. Although most observers said the work permit scheme was necessary to address the drastic shortage of skills, many said the government needed to look at its policy for developing the UK as centre for IT skills.

The UK is short of up to 100,000 workers with key IT skills, according to a government report. But although its plan to make up for that shortfall has been welcomed, it has also been contrasted with the government's IR35 tax regulations, which could cripple IT freelancing in the UK.

"It's a Band-Aid solution," said Tim Conway, director of the Information Age unit at UK IT trade group the CSSA. "There's some out-of-step thinking in government and some old-economy thinking at the Inland Revenue and the Treasury. Our industry requires a flexible workforce and a lot of that revolves around contractors. It's a pity that on the one hand we have IR35, which is clearly a deterrent, while on the other we have started this process."

Conway said people from the Indian subcontinent, eastern Europe and Australasia would be most in demand, but warned that it would not be easy to import skills.

"There's a shortage of people all over the world and technology cycles are getting shorter," he said. "Whenever somebody invents a new technology, there's always a lag in people with the skills to implement it."

Others also doubted the UK's ability to lure foreign skills. "I'll believe it when I see it," said one IT director. "The US, Germany and others are looking for the same people. We might get some of those with a cultural fit but others will go to the sun and the big bucks in America."

Graeme Gillespie, a client partner at leading UK Internet consultancy NVision, said: "How long is the process and how many more comical hoops still remain, given that many fast-growing Internet businesses need people yesterday?"

Others said the government needed to improve UK IT infrastructure by making broadband Internet access cheaper and improving education.

"We are years behind the US in terms of the IT skills our children have by the time they leave school," said Jay White, IT manager at electronics parts distributor BF Components. "Even kids in heavily disadvantaged areas of the US have their own homepages and probably know more about Unix than a lot of network administrators in this country. We need more cash and more foresight for our schools."

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