WORK PERMITS ARE JUST A BAND-AID, SAYS CSSA
The CSSA, a trade association for the computing services and software industry, says much more needs to be done to address the IT skills shortage than simply cutting processing time for work permit applications.
CSSA's Director General, John Higgins said: "Obviously, we are very pleased with the Government's response, which reflects suggestions we made in consultations with the Overseas Labour Service and DTI about the work permit system. But we need to understand that importing skills is very much a short-term band-aid to the overall problem."
The IDC recently estimated the total IT skills shortage across Western Europe was over 1,200,000 people, with UK demand exceeding supply by more than 220,000 people.
Mr Higgins said: "More seriously, unless there is a slackening in demand, these estimates will grow to over 1.7 million people in Western Europe by 2003, with the UK shortfall over 320,000. This shortage has a significant economic cost. For the UK alone, our economic loss will be over £30 billion. This needs to be viewed in context with other front page stories, such as the threatened closure of car factories.
"The IT skills shortage is worldwide. The work permit changes announced by the Government make the UK more competitive in attracting people from elsewhere with key skills, and this is critical in the short term. But there are other important steps we must still take."
According to CSSA, paramount among these in the short term is to make the UK much less tax hostile to the footloose, flexible IT workforce.
Mr Higgins said: "The taxation changes announced by the Inland Revenue in its IR35 news release are driving IT contractors away. Likewise, the imposition of the National Insurance tax on employee share options will make the UK a much less competitive location for skilled workers that the US.
"As with the work permit changes, it is well within the power of the Government to overcome these in the short term, almost in a pen stroke. However, the key long term problem remains. Government and industry must invest much more, more quickly, in education, training and retraining to produce a larger IT workforce in the UK, and to encourage higher levels of IT literacy throughout society."
To meet this need, the CSSA would be urging the Government to invest part of its windfall gain from mobile licence sales in education and training.
The CSSA describes itself as 'one of the fastest growing trade assosicates with 700 members and 100 new members joining each year'. The 700 members represent 80 per cent of the computer and software industry by turnover and had combined revenues of more than £14 billion last year.