Scale-up visas to help UK tech firms leave contractors out in the cold

Contractors were unfortunately again not on chancellor Rishi Sunak’s mind when he unveiled the Scale-up visa at Autumn Budget 2021, signals APSCo.

In fact, despite the visa having the potential to boost fast-growing UK technology firms from Spring 2022, the recruitment group noted yesterday how ‘un-freelance friendly’ it sounds.

Pointing out the Scale-up will be just for those with an offer of a “job” commanding a £33k+ “salary,” was the Association of Professional Staffing Companies’ Tania Bowers.

Yesterday, she told ContractorUK: “Any move to encourage international experts into the UK to drive innovation is welcome [but still] there isn’t a viable entry route for highly skilled independent [tech] professionals and the self-employed to fill current labour shortages”.

'More can, and should be done'

A director at the association, Ms Bowers said a related Autumn Budget measure - a Global Talent Network - may marginally ease shortages, but “more can, and should be done,” she emphasised.

APSCo isn’t alone in the contractor sector at being less than thrilled at Mr Sunak’s high-skill migration measures, although some are thrilled outside it -- start-ups body COEDEC for example has already commended the Scale-up as “the biggest visa improvement in a generation.”

The FCSA, whose member companies like APSCo’s support IT contractors, said Autumn Budget unveiling a ‘new system to encourage international high-skills to join the UK’ seemed at odds with the status quo.  

'Draconian'

“[The chancellor’s announcement makes] no mention of any changes to the draconian systems that have come into place since we left the EU,” regretted the FCSA’s Phil Pluck.

“Many highly skilled workers that operated through compliant umbrellas…left our economy, and [the] current [UK immigration] rules discourage them from returning.”

Yet business immigration lawyer Arshia Hashmi told ContractorUK that the new visa does seem alive to the limitations of the UK’s existing routes to entry, thanks to one key criterion.

“The Scale-up is intended to provide fast-growing companies with the ability to hire highly skilled talent quickly, thereby assisting with meeting demand but more importantly -- without sponsorship.”

In a statement to ContractorUK, the lawyer continued: “[It means companies] that have seen their staff or turnover increase by at least 20% over the last three years…[will, unlike now, be able to] take on foreign national employees without the need for sponsorship.”

'Less than the current going rate'

A senior associate at law firm Brabners, Ms Hashmi said the Scale-up would likely appeal on another front to IT contractors’ bottom line-conscious clients.

“The eligibility criteria [specifies] a salary of at least £33,000 per annum, which is less than the current ‘going rate’ for most tech-related sponsored roles, thereby creating another benefit to employers and organisations who wish to engage talented individuals from outside of the UK,” she said.

However Keith Rosser of recruitment giant Reed is downbeat about the Scale-up’s chances of becoming a game-changer.

'Small concessions'

In an Autumn Budget blog sub-headlined ‘The Great Hiring Crisis,’ the recruitment director said the Scale-up like two other incoming visas from the chancellor -- The Global Business Mobility and High Potential Individual visas, represented only “small concessions”.

“These are unlikely to be broad and strategic enough to make a large impact,” he said, potentially also referring to the Global Talent Network, which from 2022 will source technology and science workers for the UK from two sites in the US and one site in India.

Mr Rosser added: “There's investment [here from the chancellor] in skills, but this remains perhaps our largest strategic issue, as it continues to appear piecemeal. We need a joined-up, cross-government and industry strategy.

“[And] it isn't just a skills shortage or an immigration shortage that has caused severe staffing issues in many sectors. It is also a challenge of employment models and, particularly, IR35.”

'Businesses battling'

The Recruitment & Employment Confederation agrees the government’s approach looks fragmented.

Reflecting after Wednesday’s Red Book was published, the REC’s deputy CEO Kate Shoesmith said: “What we need to see from government is a long-term, strategic vision for the whole UK workforce.

“Businesses up and down the country are battling labour and skills shortages. They need the right levers to enable the right type of investment in workforce development and growth.”

'Programmer and software developer shortages'

Seeing those shortages cause issues in the tech sector is Nick Thompson, CEO of DCSL GuideSmiths.

And speaking last week on the eve of Autumn Budget, the software boss said the timing could hardly be worse.

“The shortage of programmers and software developers has come at a time when businesses need them most, with many relying on digital transformation and app development for their growth and survival,” said Mr Thompson, adding:  

“Thousands of businesses have survived covid only to find themselves stuck in a dearth of the skilled individuals needed to grow and bounce back.”

'Wait a little longer'

Yet for businesses that require tech talent to thrive having survived the pandemic, there are details to patiently check -- or even potentially forecast, because Scale Ups are still some way off.

“[Interested UK employers] will need to ensure they are eligible in respect of their staff or turnover figures for the past three years”, advises Brabners’ Ms Hashmi. “[But organisations] will ultimately need to wait a little longer to benefit from this visa route, as it is not due to launch until Spring next year.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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