House of Commons - Managing Migration: The Points Based System

Managing Migration: The Points Based System - Home Affairs Committee Contents

7 Sponsorship

Rebalancing compliance

120. A key feature of the new system is the transfer of responsibility for enforcement of immigration control from the UK Border Agency to employers. It introduces a process of sponsorship whereby all migrants, with the exception of those under Tier 1, must be sponsored by an employer, educational institute or certain other categories of overarching body. Sponsors take on compliance responsibilities for migrants, including duties to: keep accurate and up-to-date records, report changes in circumstances, comply with the law, co-operate with the UK Border Agency, and meet any additional tier-specific duties—for example, applying the Resident Labour Market Test.[134] The Government set out the rationale for this reconfiguration:

The policy intent underpinning sponsorship is that those who benefit from migration—not just the Government, but also employers and educational institutions—should play a part in ensuring the system is not being abused.[135]

121. Businesses cautiously welcomed the sponsorship system. John Cridland of the Confederation of British Industry told us "as an organisation we have accepted that we needed to step up to the plate and share the responsibilities to make sure the system is managed".[136] The Institute for Employment Studies reported that research conducted with potential sponsors had found that:

Overall, there was qualified support for the proposed sponsorship rating system…most participants responded positively to the proposals regarding compliance and felt it was both common sense to work in partnership with BIA [now UKBA] around this issue and that the monitoring procedures were reasonable.[137]

122. Witnesses made clear, though, that, as a correlative to increased compliance responsibilities, they would expect a higher level of service from the UK Border Agency. Mr Cridland told us "all we ask in return is that the service level from the Border Agency in terms of guidance sent out at the appropriate time, guidance right first time, helplines staffed by people who can answer questions, here and in international posts, has to be right".[138]

123. The education sector had a specific worry about the impact of compliance arrangements on the relationship between education provider and student. The London School of Economics (LSE) told us:

Our concern, which is shared by many UK universities, is that these additional responsibilities might fundamentally change the university/student relationship. Students may well view the universities as monitoring students on behalf of the UK Government. For many of them, particularly those who have come from countries with more authoritarian regimes, this may affect their enjoyment of UK higher education, which in turn may have knock-on consequences for the 'brand' over the medium term.[139]

Sponsor licensing process

124. Organisations wishing to become sponsors must apply to the UK Border Agency for a sponsor licence. The UK Border Agency carries out an inspection of the prospective sponsor, including of their human resources processes, before issuing them with a licence. Approved sponsors are awarded an 'A' or 'B' rating by the UK Border Agency. A 'B' rating is transitional, meaning that the sponsor must improve their performance according to a tailored plan. Strict penalties have been introduced against any sponsor who does not fully meet the new compliance and reporting procedures.

125. Our witnesses were concerned on the one hand that sponsors were being asked to provide a lot of detailed information which sponsors might struggle to access; and on the other that the potential penalties for any failure to provide this information, even unwittingly, were unduly stringent.

126. During our visit to India in October 2008 the National Association of Services and Software Companies (NASSCOM) told us that it was concerned that employers could be penalised for not reporting information, even when the employee did not inform them of any changes in their circumstance. Research conducted by the Institute for Employment Studies uncovered similar concerns amongst education providers.[140] The Immigration Law Practitioners' Association reported that many of their members were being instructed by anxious employers for the same reasons. Sophie Barrett-Brown told us:

Most of the clients that our members represent are extremely anxious about ensuring that they can meet the new duties. Some of them are exceedingly onerous and unclear. There are duties about reporting changes, including such minutiae as changing mobile phone provider, the type of data that is very difficult for an employer to ensure that they are capturing.[141]

Sarah Lee, partner at Slaughter and May law firm, remarked that: "my understanding is that the penalties are very stringent even for technical breaches and there are severe consequences, both civil and criminal".[142]

127. Des Hudson of the Law Society criticised the powers of inspection that have been afforded to the UK Border Agency in carrying out compliance checks:

The things that concern me are the very ill-defined and rather vague rights of entry and inspection of documents. We must all be concerned about authorities having power to come in and go through the files of a law firm. The files and papers that they can look at are not explicitly limited to those matters relating to sponsorship. Let us say that I am acting as a solicitor for a prominent Member of this House who is the subject of police investigations and I have a file on it and I also have some people from the Abu Dhabi office working in my office. I think we would all be very concerned about the powers of UKBA to go through my files.[143]

Mr Hudson proposed that the powers of entry and inspection given to UK Border Agency officials should be restricted "to be exercisable by reference to looking only at papers relation to an issue concerning an individual who is being sponsored. I would like to see…some arrangement as to what conditions must be satisfied by UKBA before it can exercise those powers of entry".[144]

128. Some witnesses were concerned about the administrative burden, particularly on small businesses. The Highly Skilled Migrants Forum told us that:

The risk of misunderstanding any aspect of the PBS in terms of duties as a sponsor would effectively bankrupt smaller businesses, yet demands significant financial investment in fees, legal advice and employing HR staff with the requisite expertise.[145]

It concluded that "given…the red-tape, recordkeeping, and monitoring, only large firms with HR departments will plan on becoming Tier 2 sponsors".[146]

Sponsorship Management System

129. Administration of the sponsorship process rests on a new Sponsorship Management System (SMS)—a secure online IT system which allows licensed sponsors to bring in and manage migrants under Tiers 2, 4 and 5. Designated individuals within a sponsoring organisation are granted differing user rights to the system. Sponsors use the SMS to provide and update information about their migrants, view and issue certificates of sponsorship, and make payments.

130. Universities were sceptical of the capacity of the Sponsorship Management System to handle the intensive period of demand during the three month university enrolment season, during which up to 80,000[147] students might need to be registered; and of the speed with which it was being implemented by the UK Border Agency. Simeon Underwood told us:

We have repeatedly warned UKBA that PBS is going to result in a very high level of demand on their system in a very concentrated space of time, principally between July and September each year. We do not wish to assume the worst but what we would like to see is more discussion about the precise specification and the way that the UKBA system can integrate with the student record systems that exist. We would also like to see piloting going on.[148]

131. Witnesses elucidated the consequences for the higher education sector and the UK economy if any failure in the Sponsorship Management System prevented universities competing effectively for international students. Professor Wellings told us that "higher education is worth something like £19.5 billion to the UK economy. International students are worth 8 per cent of that".[149] Mr Underwood said that, if the system failed:

We would be totally unable to plan for the year that is happening around us…from the point of view of our finances this could be very dramatic indeed. We could find ourselves having to rearrange substantial parts of our curriculum and timetable at very short notice.[150]

Professor Wellings added:

There are some strategic things that would follow very quickly. You would see rather forensic holes appearing in the system at discipline level that would be really rather unintended and potentially quite deleterious to the UK's economy.[151]

This was echoed by other universities in written evidence.[152]

132. Education providers were also critical that use of the SMS would reinvent the wheel by requiring them to collect and input data already stored on other databases. Universities UK stated:

In particular the new sponsor management system must be able to receive data from and have an interface with HEIs' [Higher Education Institutions] own student record systems. HEIs will be handling several thousand migrants each year and it is both inefficient and insecure to expect HEIs to re-enter data into the new Home Office system when the data is already in HEIs own systems and could be transferred to the new Home Office database.[153]

The London School of Economics calculated the cost of such additional work:

At LSE, based on an estimate of 6,500 annual non-EU offers, this will amount to 1625 hours of additional work and £160k in additional salary costs.[154]

133. Others reported that there had been limited or no testing of the new system. The National Campaign for the Arts was "concerned that throughout the development of the IT systems for PBS there has been no end-user testing. We believe such testing could have produced solutions to the difficulties currently faced".[155] The Association of Circus Proprietors of Great Britain stated that "there was no opportunity to test the system by making trial applications".[156]

134. Although the Minister for Borders and Immigration, Phil Woolas MP, told us that he was "very aware that everyone will be expecting a major Government-sponsored IT system to fail",[157] UK Border Agency officials were confident in the capacity of the Sponsorship Management System. Neil Hughes considered that, in terms of the volume of traffic handled by the system, "the numbers coming through are within our estimates and we filled the pipe much bigger than it needed to be…so [we are] very confident on volume".[158] However, in response to the concerns of the sector, during the course of our inquiry the UK Border Agency agreed to implement Tier 4 in phases, and to set up a working group with the higher education sector to advise on data management and technical design. Matthew Coats of the UK Border Agency told us:

The way we want to introduce the rest of the system is progressively and carefully to ensure that we reduce the risk of any problems. We have drawn together a group of interested parties to make sure that, as we finish the implementation of Tier 4, everybody is involved in those decisions.[159]

135. Universities UK welcomed the slowing-down of implementation, but re-emphasised that:

We remain concerned about a lack of time for testing by universities by the autumn. The student route will have to cope with large volumes of transactions in a very short period of time so it is essential that thorough testing by universities and UKBA takes place both in the UK and overseas.[160]

136. Employers and educators, as the sponsors of migrants, are expected to take on greater responsibility for migrants' compliance with immigration controls. In return for taking on these duties, they have a right to expect a high quality service from the UK Border Agency. In providing this high quality service, the UK Border Agency must ensure speedy decision-making, access to helpful and well-informed staff in the UK and overseas, and consultation with sponsors to meet their concerns about the design or administration of the new system.

137. There is clearly great nervousness amongst sponsors over the possible civil and criminal penalties attached to any failure, even unwitting, to report changes in circumstance of their migrants. It seems odd that sponsors who have been rigorously assessed and awarded an 'A' rating should then be subject to harsh penalties for minor administrative oversights, especially in the context of a wholly new system. We recommend therefore that the Government introduces a degree of leeway for 'A' rated sponsors within which they will not be penalised. The Government must also make explicit to sponsors exactly how and when they can expect penalties to be applied, in order to allay the current insecurity felt by employers and educators.

138. We were alarmed to hear that the system gives UK Border Agency officials wide powers of entry and inspection on sponsors' premises. We recommend that the exercise of these powers be limited strictly to the inspection of files and paperwork relating to the sponsorship of migrants.

139. Given the unfortunate propensity of previous large-scale Home Office IT systems to fail, we fully sympathise with the nervousness felt by universities about a Sponsorship Management System which relies entirely on a Home Office IT project. The consequences for the reputation, functioning and finances of UK businesses and educational establishments of any failure of the system at peak times of the year, are potentially dramatic.

140. In this context we welcome the considered decision of the UK Border Agency to phase implementation of the system for the higher education sector and involve the sector in its design. However, the Government must still ensure that the system is thoroughly tested in the UK and abroad, and that pilots are run with universities in advance of the implementation date of autumn 2009, which will fall during the peak period for university enrolment. It must also ensure that adequate back up of the technology is in place.

141. We welcome the response of the UK Border Agency to concerns voiced by the education sector about the speed of implementation of the Sponsorship Management System, and its decision to implement the system more gradually for Tier 4 to allow for testing. However, we urge the UK Border Agency also to ensure adequate time for piloting, testing and feedback with users for every other aspect of the Sponsorship Management System—this is vital not only to ensure that largely untried technology and systems actually work, but also to secure the confidence of sponsors.

134 Ev 196 [UK Border Agency] Back

135 Home Office, A points-based system: making migration work for Britain, Cm 6741, March 2006, p.19 Back

136 Q 156 Back

137 Ev 124 Back

138 Q 156 Back

139 Ev 138 Back

140 Ev 123ff Back

141 Q 60 Back

142 Q 279 Back

143 Q 277 Back

144 Q 278 Back

145 Ev 78 Back