Memorandum submitted by the Institute
for Employment Studies (IES)
IES was established in 1969 to be an independent,
national centre of expertise on productivity, manpower planning
and labour market change. Since that time it has expanded and
diversified to become the UK's leading independent centre for
research and evidence-based consultancy in employment, labour
market and human resource policy and practice. It is not-for-profit,
its activities being funded through research and consultancy commissions,
and from its corporate membership programme. IES has around 70
multidisciplinary staff and international associates, and its
expertise is available to all organisations through research,
consultancy, publications and its website.
The IES mission is to help bring about sustainable
improvements in employment policy and human resource management.
IES achieves this by increasing the understanding and improving
the practice of key decision makers in policy bodies and employing
organisations.
INTRODUCTION
1. As an independent, international centre
of research and consultancy on the operation of labour markets
and human resource planning, the IES welcomes this opportunity
to submit written evidence for the Committee's consideration.
2. The Committee intends to inquire into the
Government's implementation plan for the Points-Based System (PBS),
including an examination of the impact of the proposed system
on particular groups and sectors and an assessment of the introduction
of new sponsorship arrangements. This memorandum focuses on the
latter aspect of the inquiry's remit, drawing on recent IES research
for the Home Office: Understanding the Perspective of Potential
Sponsors on the Points-Based System Sponsorship Arrangements (May
2008). More details of this research can be found in our Appendix.
3. The IES research, Understanding the
Perspective of Potential Sponsors on the Points-Based System Sponsorship
Arrangements, presents findings from qualitative research
into the attitudes of potential sponsors in Tier 2 (employers
of skilled migrant workers) and Tier 4 (education providers) towards
the proposed PBS sponsorship rules.
EXECUTIVE SUMMARY
— Overall, we found qualified support
for the proposed arrangements under the PBS, particularly among
employers. Employers cited advantages such as increased control
and a more streamlined process.— However, participants
also expressed a number of concerns regarding the proposed arrangements:
— Both employers and education providers
were concerned that sponsors could incur penalties as a result
of unwittingly employing illegal workers as a result of genuine
error, as opposed to deliberately abusing the system.
— Both employers and HEIs expressed
concern about levels of sponsorship fees. HEIs felt that additional
sponsorship fees might deter international students from coming
to the UK.
— Education providers, particularly
Higher Education Institutions (HEIs), considered the new system
to be more appropriate to recruitment of workers than students
particularly the term "sponsorship", which might be
misinterpreted as "financial sponsorship". HEIs were
also concerned that students might mistake the A- and B-rating
system as reflecting academic quality.
— Employers were concerned about possible
additional costs and bureaucracy arising from greater immigration-related
responsibilities, particularly for small and medium size enterprises
(SMEs).
— There needs to be more information
about the support mechanisms available to sponsors during this
period of change, such as the role of Account Managers.
— The proposed PBS should retain a
degree of flexibility both in responding to the needs of different
sectors and in distinguishing between people who abuse the system
and those who do so unwittingly.
— The proposed PBS should avoid imposing
a level of fees that deter migrants from coming to the UK.
OUR RESEARCH
FINDINGS
4. Below is a summary of the research findings
from the qualitative research into the attitudes of potential
sponsors in Tier 2 (employers of skilled migrant workers) and
Tier 4 (education providers) towards the different aspects of
the proposed PBS sponsorship rules.
Sponsor ratings
5. Overall, there was qualified support for the
proposed sponsorship rating system, with a more positive response
from employers than education providers. Many organisations that
took part in the study relied on recruiting migrant workers and
students and felt there was a strong incentive for compliance
within the ratings system.[27]
Anticipated advantages of the system included: a quicker and more
streamlined application process; more consistency; increased responsiveness
to different sectoral needs; and increased control for employers.
6. Concerns about the ratings system centred
on the possibility of increased costs and bureaucracy from greater
immigration-related responsibilities; confusions arising from
recruitment within more than one Tier; and a perception that the
system might disadvantage smaller organisations.
7. HEIs voiced concerns that the ratings
system could be misleading for prospective students, who might
think gradings related to academic quality. The term "sponsor"
could also have misleading financial connotations (proposed alternatives
were "certificate of education provision", "eligibility",
or "authorisation"). Some education providers felt that
to avoid this confusion, sponsors should be "accredited"
or "non-accredited". While some participants saw an
A-rating as a marketing opportunity, some education providers
objected to published ratings to avoid sending the wrong message.
Sponsor responsibilities
8. Many participants reported that they
already undertook immigration-related responsibilities, but were
concerned about having the necessary resources to undertake the
more rigorous checks that would be required under the proposed
new system. While they felt it would be difficult to give a more
informed view on the impact of the new requirements until there
were more precise details available, both employers and education
providers envisaged an increased role for Entry Clearance Officers
(ECOs) in checking credentials overseas at the application stage.
9. It was generally felt that there should be
little difference in the responsibilities of A- and B-rated sponsors,
other than a "lighter touch" approach for A-rated sponsors
with regard to monitoring and compliance visits. B-rated organisations
would already be on notice to improve, and so should expect more
regular monitoring.
Compliance and monitoring procedures
10. Most participants responded positively
to the proposals regarding compliance and felt it was both common
sense to work in partnership with BIA around this issue and that
the monitoring procedures were reasonable. However, it was felt
that they should be tailored to different organisational needs
and a "one-size-fits-all" approach to compliance should
be avoided.
11. Education providers were specifically concerned
that if compliance procedures made it difficult for overseas students
to change courses, either through dissatisfaction or planned progression,
it might take away their "consumer choice" and make
UK providers less competitive. Participants from the English Language
Teaching (ELT) sector were additionally concerned that English
language schools might be discouraged from regular reporting of
non-attenders and absconders, for fear of being downgraded to
B-status as a result.
12. Participants considered that routine
monitoring could be on a six-monthly or annual basis and responded
positively to proposed random checks on the basis that organisations
should be expected to "keep their houses in order".
However, there was a need for further clarification about what
the checks would entail and what level of detail would be required
from sponsors.
13. Participants agreed that a distinction
should be made in the monitoring procedures for established and
trusted organisations on the one hand and new, unknown organisations
on the other. New sponsors would need to "earn trust"
and should be subject to more intensive monitoring initially.
However, a clear distinction should be maintained between "new"
and "poorly performing" organisations.
Incentives and sanctions
14. The majority of participants agreed
that their reliance on being able to recruit migrant workers and
overseas students would provide the strongest incentive for maintaining
their A-rated status. The threat of being downgraded to B-status
was a significant deterrent and sponsors felt it could be potentially
disastrous as it could discourage migrant applications to their
organisation.
15. Discussion of specific incentives that could
be built into the system mostly centred around differential treatment
of A- and B-rated sponsors and a system that focused on rewarding
companies with good track records, for example through reduced
fees or "fast-tracking" of recruitment and visa application
processes.
16. Although many participants believed
the threat of being downgraded to B-status would be a sufficient
deterrent, others favoured additional sanctions for B-rated sponsors,
including financial penalties and higher fees. It was felt there
should be a sliding scale for any fines, depending on the size
and resources of the organisation.
Border and Immigration Agency (BIA) support issues
17. There was a high degree of consensus
across the participants that the Account Manager role would be
a welcome development. Account Managers could provide a single
point of contact for sponsors and help build better links with
the BIA. There were concerns that Account Managers might be "too
thin on the ground", impacting on the consistency and quality
of support services across the country.
18. Suggestions for other support included: more
support from, and closer liaison with, ECOs in checking migrants'
credentials and documentation; web-based and online materials;
on-site training in operating the new system; and awareness-raising
for "hard-to-reach" organisations.
Non-compliance and abuse of the system
19. The proposed distinction between "unwittingly"
and "knowingly" employing illegal workers was considered
important by potential sponsors. Whereas there should be tough
measures in place for those who deliberately abused the system,
allowances should also be made for genuine errors.
20. Some participants commented on their perception
that the new measures were shifting more responsibility to sponsors
but in areas where they had little control, eg by expecting education
providers to "police" how many hours overseas students
were working. There were concerns that sponsors could be penalised
over circumstances they saw as beyond their control, eg if a migrant
were to abscond or misinform the sponsor.
Other issues
21. A number of additional issues relating
to the proposed sponsorship arrangements were raised during the
focus groups, particularly by education providers who, on the
whole, had more concerns about the new proposals than employers.
These issues included:
— a need for more detailed information
on key issues such as proposed fee levels and timing of implementation,
particularly within an academic context;
— the potential impact of the proposed
changes on the international overseas student market, particularly
if there were significant fee increases for students;
— a request that education providers
should not be required to register more than once if they come
under both Tier 2 and Tier 4;
— concerns about the comparability
of salaries in the international context and possible disadvantage
faced by migrant workers from poorer countries; and
— the particular situation of charitable
organisations and the financial implications of having to pay
for Certificates of Sponsorship for volunteers recruited from
overseas.
POLICY IMPLICATIONS
22. The findings of our research have a
number of important policy implications that are relevant to the
nature of the Committee's Inquiry:
— There needs to be more information
about the support mechanisms available to sponsors during this
period of change. This is likely to be of crucial importance to
the successful implementation of the PBS. The focus groups engaged
in this study asked urgently for details of immigration-related
responsibilities of sponsors, information required during monitoring
visits, fee levels for registration and Certificates of Sponsorship,
the transition period and the timescales for implementation. This
will be particularly relevant to the education sector because
the education providers engaged in this study were broadly less
supportive of the proposed changes than the employers.
— The proposed PBS should retain a degree
of flexibility both in responding to the needs of different sectors
and in distinguishing between unwittingly and knowingly abusing
the system. While the Government has already provided assurances
regarding both of the above, our research indicates that this
message is not getting through to employers and those in the education
sector.
— The proposed PBS should avoid imposing
a level of fees that deter migrants from coming to the UK. Education
providers, in particular, expressed concern about fee levels in
the wider context of the competitive international market for
overseas students. Many providers were also anxious to know what
the fee levels would be as HEIs were already setting up student
fees for 2009.
Appendix
ABOUT THE RESEARCH
Our methodology
23. This was a qualitative research project
and took the form of five focus groups of potential Tier 2 and
Tier 4 sponsors. Immigration, Research and Statistics (IRS) had
responsibility for the overall design and management of the research
and worked in collaboration with IES to complete the research.
The project was governed by a need to deliver findings by a target
date and should not, therefore, be seen as providing definitive
conclusions. IRS contacted and recruited the focus group participants,
arranged suitable venues in London and Newcastle, and prepared
the topic guide in conjunction with IES and policy colleagues
at BIA. IES facilitated the focus groups, collected and analysed
the data, and prepared the research report.
24. A total of 50 potential sponsors from Tiers
2 and 4 attended, having been recruited via BIA's Stakeholder
Engagement and Communications Team, Universities UK, the Association
of Colleges (AoC) and other educational contacts. Given the tight
time frame, it was not possible to recruit a representative sample
from across all the Tiers, and further research would be required
to determine any specific concerns from other Tiers.
25. Focus group discussions addressed the key
areas of sponsor ratings and responsibilities, compliance with
sponsorship arrangements, incentives and sanctions, support required
from BIA through Account Managers, non-compliance, civil penalties,
and perceived risks and abuses of the system. A small group exercise
was also included to give participants an opportunity to raise
any queries or issues of concern for particular organisations
or sectors. The focus groups were preceded by a presentation from
BIA Managed Migration Policy staff and regional Senior Account
and Compliance Managers. They outlined the proposed changes to
the sponsorship rules and provided an opportunity for participants
to ask questions of clarification.
July 2008
27 PBS proposes to assign sponsors to two categories:
A- and B-ratings. These ratings are based on a sponsor's track
record in sponsoring migrants, policies towards employing migrants,
and the extent to which they satisfy the requirements of sponsorship,
Sponsors who meet all requirements and responsibilities, and whose
migrants conform to immigration rules, will be rated as A-sponsors.
The B-rating is a transitional rating for bona fide sponsors who
must demonstrate they are putting in improvements to some aspects
of their policies or practices, prior to becoming A-rated. Back
| 
