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Immigration skills charge will impact health care funding for many years
From Caring UK August 2017 Edition
1st September 2017
On 6 April 2017 a new immigration skills charge came into force which is taking ‘desperately needed money’ from the health service for years to come, due to the service’s continuing reliance on foreign staff.
The government introduced the skills charge to incentivise the recruitment and training of British workers.
The immigration skills charge will apply to health care employers that employ non-EEA migrants in the care sector, under a Certificate of Sponsorship for a Tier 2 visa. Employers will have to pay a £1,000 annual charge for skilled workers who are applying for a Tier 2 visa outside the UK, inside the UK to switch to Tier 2 from another visa or inside the UK to extend an existing Tier 2 visa.
As such, sponsoring a migrant under Tier 2 for three years will attract an additional £3,000. Smaller businesses and charities will pay a reduced charge of £364 per employee a year. The charge is on top of the fees already in place, which include Home Office fees for the Tier 2 and the certificate of sponsorship. These home office fees do not include fees for dependants, which would substantially increase costs.
Following the acute shortage of care workers coupled with an ageing population, the UK care industry continues to rely heavily on skilled migrant workers from outside of the EEA. Many care homes sponsor skilled migrant workers as it saves the time and cost of training unskilled resident workers.
However, with the introduction of the immigration skills charge care providers may have to reconsider their approach. It is clear that this will have a significant financial impact on the care industry, and particularly on smaller care providers.
A major criticism of the introduction of the immigration skills charge is that the existing resident labour market test already ensures that there are no suitable resident workers. It is clear that by introducing the immigration skills charge the government is intentionally seeking to out-price a growing number of health care employers from the migrant labour market, limiting their recruitment options.
The increase in the National Living Wage on April 1 2017 has already place the care industry under significant financial strain. Leading providers of care in the UK raised concerns at this point about the impact the increase may have, and estimated it will ‘cost care homes an extra £1bn by 2020.’
There are serious concerns that without extra funding the sector will be at risk of collapse. Under the circumstances, the introduction of the immigration skills charge will undoubtedly place the sector under further strain.
It is important to nurture a more competitive, upskilled domestic labour market, as it is critical for the future economic sustainability and success of the UK.
However, the commercial reality remains that health care employers need to hire workers with the appropriate skills and at a commercially viable cost level.
Some health care employers faced with mounting costs of migrant sponsorship are reviewing their recruitment strategies, including exploring alternative immigration options.
Kashif Majeed is a Director at Aston Brooke Solicitors who are specialists in the Health & Social Care sector. Please do not hesitate to contact him on 020 3475 4321 for any issues related to care homes.
This article appeared in the August 2017 issue of Caring UK Magazine and does not present a detailed statement of the Law and does not constitute legal advice. This is a summary only and legal advice should always be sought on an individual case basis.