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New report by the City of London Corporation and Ernst & Young on ‘building an immigration system for the future of work’


Report sets out how new points-based system can support UK's recovery from COVID-19 and long-term competitiveness

Date of Publication:
12 October 2020

New report by the City of London Corporation and Ernst & Young on ‘building an immigration system for the future of work’

12 October 2020

A new report by the City of London Corporation and Ernst & Young (EY) considers how the UK's new points-based immigration system can benefit employers and the economy.

CoverYou can download the 69-page report here.

The City of London Corporation and EY explain: "As we head towards 2021, we stand at a crossroads in immigration policy. The end of free movement, the redesign of the UK's immigration system and pandemic accelerated challenges create both a unique opportunity and an absolute necessity to strike the right balance between supporting the growth of domestic talent and better leveraging the immigration system to support the UK economy and job creation. The scope of this report is to consider how the UK can best deliver against this second challenge."

Catherine McGuinness, Policy Chair at the City of London Corporation, added: "This report sets out how the new points-based system – in parallel with developing domestic talent – could be adapted to support both the immediate recovery from COVID-19 and our long-term competitiveness. Cutting red tape, reducing cost and increasing flexibility will help to drive economic growth."

To gather evidence for the report, the City of London Corporation and EY conducted a series of roundtables and interviews with a range of stakeholders, including employers in the financial and related professional services sector, trade associations, government bodies and academics.

The report notes that the following four key areas emerged as priorities for stakeholders:

The attractiveness of the UK to international talent: "There was a general concern amongst many respondents that although the UK is still an attractive destination for top international talent, the UK's decision to leave the EU and the associated uncertainty over the last few years has had an impact, and that in particular the UK's immigration system could do more to encourage international talent to move to the UK and contribute to economic growth, rather than purely acting as a barrier that must be overcome."

Diversity, inclusion and flexible working: "As a greater percentage of the workforce becomes reliant on the immigration system, so too will small challenges that already exist in the system be exacerbated. One such challenge that was identified by respondents was that the sponsored Skilled Worker route will not allow part-time working where an employee's absolute earnings will drop below the minimum salary threshold – in most cases £25,600. It was felt that this was fundamentally unfair and constrains employers in supporting flexible working and achieving the diversity that this leads to. In addition, employers reported frustration with rules within the sponsored Skilled Worker route that make it difficult for staff to change roles and progress within an organisation. The accelerated shift towards flexible working models were felt to reprioritise longstanding challenges here."

Process: "Respondents were pleased with the Government's pandemic response in immigration policy, and by recent and upcoming improvements to sponsorship and visa application processes but were able to identify many remaining processes which they saw as repetitive, inefficient or of questionable efficacy. One example is the requirement to notify the Home Office of minor changes to a sponsored migrant worker's circumstances, such as their work address. It was felt that many of these processes could be eliminated or made significantly more efficient without any loss of 'control' by the Home Office. Employers pointed out that following all of these processes consumes a huge amount of internal resources – usually HR or Global Mobility teams – or necessitates outsourcing work to legal representatives."

Costs: "The overall cost of the UK's immigration system, and particularly the sponsored Skilled Worker route was very high, largely due to the Immigration Skills Charge and the Immigration Health Surcharge. Respondents understood the objectives surrounding these charges but thought that the use of these funds could be made more transparent, and could better demonstrate the positive contribution made. It was also felt that the requirement to pay the Skills Charge – a payment of up to £5,000 per person – up front before the visa application is submitted is particularly burdensome and that more flexible payment options would be welcome."

The report makes a number of detailed recommendations which the authors say will:

• Increase the attractiveness of the UK to top international talent, with a broad definition of what 'talent' means – one that works for the UK's economy and society as a whole.

• Help employers support their workforce and meet diversity and inclusion objectives by allowing migrant workers to work part-time in a wider range of situations and eliminating immigration barriers to progression and role changes.

• Further streamline immigration processes, using innovative technology and minor policy changes to reduce cost and deliver greater simplicity for employers, applicants and the Home Office.

• Offer employers flexibility in paying the significant costs associated with using the UK's immigration system, and make sponsorship more affordable for the UK's 36,000 medium sized companies.

• Support SME and larger employers' recovery from the Coronavirus pandemic by reducing cost, eliminating red tape and offering a more viable route to employ the talent needed to boost growth, even if that talent comes from outside of the UK.

Seema Farazi, UK Financial Services Immigration Leader at EY, said: "It was clear, when conducting our research that industry stakeholders have long acclimatised themselves to the end of freedom of movement. What they seek now is a streamlined cost-effective immigration system that leverages innovative technology to balance flexibility with simplicity, ultimately making it easier for them to access the talent they need, whether that is from the UK, the EU or the rest of the world. The Home Office has started the ball rolling over the last 18 months with promising technology seen in the EU Settlement Scheme, process improvements such as removing the need for applicants to submit original documents, and genuinely impressive concessions to support employers and overseas talent during the Coronavirus pandemic.

"Now is the time to leverage this innovation and, with the help of industry stakeholders, support the Government and the Home Office in prioritising those changes with the biggest positive impact to all who come into contact with the system."

Farazi added: "The UK financial services sector attracts some of the world's top talent, and a truly innovative new immigration system will continue to facilitate and improve on this, especially as we enter a post-Brexit world."