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Employment Law Digest Summer Edition – What can the Home Office’s latest statistics tell us about immigration trends?

The latest immigration statistics from the Home Office tell an interesting story about immigration over the last 12 months.

Overall numbers

In the first instance, it’s clear that travel to the UK has increased and gone a long way to recovering post-Covid:

  • The latest annual statistics reveal that some 125 million passengers arrived in the UK in the year ending June 2023 (as compared to 146 million in the comparable period in 2019, before the onset of the pandemic).
  • More than 3 million visas were granted by the Home Office in this period (which is up 58% on the previous year) with an increase in visitor visas (up 96%), work visas (up 63%) and study visas (up 34%).

Work visas

Drilling into the figures relating to work visas, this has also shown a sharp increase in the number of applications:

  • The total number of work visas (including dependents) for the year ending June 2023 stood at 538,887. Just over 300,000 of those visas were applications for a “main applicant”.
  • This was an increase of 45% on applications in 2022.

The increase in work related visas was primarily due to an increase in the number of Skilled Worker visa applications, being the primary visa route for employment in the UK:

  • The number of Skilled Worker visa applications increased by 34% in 2023 as compared to the previous year.
  • As per previous years, the highest number of applications came from Indian nationals.

This clearly demonstrates that employers continue to rely on overseas talent via the Skilled Worker visa route to fill skilled vacancies.

Skilled Worker Visas in the Care Sector

So, which employers and skilled individuals are using Skilled Worker visas?

  • Applications in the “Human Health and Social work Activities” sector made up over half of all Certificate of Sponsorship applications for the year ending June 2023. This is almost tripled from the previous year.
  • The single largest category of Skilled Worker visa applications related to individuals applying under the “Health and Care” visa category. Visa grants in this category increased by more than two and a half times in comparison with the previous year.
  • Around 50% of those applications were made by individuals applying in the “Care Workers and Home Carers” category.

What next for the care sector?

The “Care Workers and Home Carers” role code was added to the Shortage Occupation List in early 2022, following recommendations from the Migration Advisory Committee arising from concerns about staffing levels and availability in the care sector post Brexit and pandemic.

Recent stories in the national press have highlighted abuse of the Skilled Worker visa route in the care sector, and the risk of exploitation of vulnerable individuals, prompting calls for tighter regulation of when and how the Skilled Worker route is used within the sector. This may be exacerbated by the reimposition of the supplementary hours cap, which means that from 27 August 2023, Health and Care Workers are again restricted to working 20 hours per week in supplementary employment (as for all other Skilled Worker visa holders).

As a result of these very serious concerns, some commentators are calling for the “Care Workers and Home Carers” category to be removed from the Shortage Occupation List altogether.

Our experience of advising employers within the care sector is that the Skilled Worker visa is a key way in which care providers can recruit and retain key staff to ensure they are able to provide care services at the appropriate standards. In some cases, despite the initial overheads of sponsorship, it has allowed clients to reduce their overall costs by reducing reliance on agency staff.  As such, to remove this option altogether would have a significant negative impact on providers’ abilities to support key services.

However, these latest statistics will no doubt bring these issues into even sharper focus. As the political parties begin to prepare for the next General Election, there is a risk that this route could be abandoned as a result of political pressure to reduce net migration to the UK. Care sector employers should therefore not delay in taking advantage of this route, if they need to do so.

Even if the route remains in its current format, there is clearly a case for greater compliance action on the part of the Home Office to ensure that the relevant rules and regulations are being met and to ensure that disreputable employers are removed from the sponsor register.

Given the increased enforcement action which we are seeing from the Home Office generally, employers in this sector in particular would be well advised to prepare for potential compliance visits/audits from UKVI inspectors by ensuring that they are fully compliant with all of the rules related to sponsorship and that they have reviewed their practices and procedures accordingly. We would strongly recommend that care sector providers in particular take detailed advice from advisers who are experienced in working in the sector to ensure they are meeting the relevant legal requirements.

Skilled Worker Visas in Other Sectors

The other main sectors making use of the Skilled Worker visa route over the last 12 months were:

  • Information and Communications
  • Professional, Scientific and Technical Activities
  • Financial and Insurance Activities and
  • Manufacturing

Over the past 4 years, usage of the Skilled Worker route has increased across all of these sectors (barring Information and Communications, which has seen a slight decrease in the numbers applying).

The increase in Skilled Worker visa applications generally, and the specific sectoral figures above, are a clear reminder for businesses in these sectors that having a sponsor licence, and the ability to sponsor key non-UK national talent is no longer a “nice to have”; instead, it is business critical for businesses of all sizes so that they have the ability to recruit and retain key overseas talent and ensure the continued success of their business.

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Sponsor Licensing and Compliance

The latest statistics also indicate that the number of registered sponsors continues to rise post-Brexit.

  • At the end of Q1 in 2020, the number of registered sponsors stood at approximately 29,000; by the end of Q2 in 2023 this had risen to nearly 70,000.
  • The number of registered sponsors between 2020 and 2023 has more than doubled.

Interestingly, the number of sponsors shows no signs of having peaked.

  • The data illustrates that there were nearly 10,000 sponsor licence decisions between April and June 2023 alone. This was a 40% increase on the previous quarter.
  • Over 30,000 sponsor licence applications were determined in the year ending June 2023, as compared to approximately 20,000 for the previous year.

As such, businesses who do not already have a sponsor licence risk getting left behind their competitors when it comes to expansion, development and recruitment.

However, the figures also illustrate that compliance action – both pre- and post-licence – is on the increase.

  • In the pre-licence stage, some 20% of all submitted licence applications (nearly 7,500) did not result in a licence being granted (either due to applications being withdrawn or rejected).
  • Licence applications were typically taking 42 days to process on average (which is consistent with the published service standard of 8 weeks).
  • The longest application, however, took some 840 days to process!

This mirrors our team’s anecdotal experiences of increasing challenge and requests for information from the Home Office throughout the Skilled Worker visa process, particularly in designated “high risk” sectors such as care and hospitality. It also aligns with the Prime Minister’s assertions earlier this year that he intended to free up more resource to the Home Office to enable them to properly enforce the immigration regime.

Sponsorship is a privilege, not a right, so demonstrating that the business understands and meets all of the requirements is essential when applying for a sponsor licence. Failing to do so may result in a “cooling off” period when the business is barred from reapplying for a licence for anything from 6 months to 5 years, depending on the circumstances, not to mention the potential loss of the application fee, along with business disruption, delays and potential reputational damage and embarrassment.

These figures reiterate the importance of taking legal advice at an early stage of the licence application process to ensure that the application is made right, first time. This will help to ensure a successful application that is determined quickly, and hopefully avoid any requests for further information from the Home Office or the need for a pre licence compliance audit (whether in person or digital). Our team has a wealth of experience in sponsor licence applications across a multitude of different sectors with a 100% success rate.

Post-licence compliance action is also a hot topic. Successfully obtaining a sponsor licence is one thing, but keeping it is quite another!

  • Some 161 sponsors were suspended from the register in Q2 of 2023.
  • 48 sponsors ultimately had their licence revoked.

This demonstrates the importance of ongoing compliance with all of the relevant immigration law requirements, including the voluminous sponsor guidance and the ever changing immigration rules.

Revocation is the ultimate sanction for non-compliance with the rules. In this case, a business would lose the ability to recruit any non-UK, non-settled nationals. In addition, any existing sponsored staff would usually be given 60 days to leave the country or find another sponsor. This applies no matter how senior or important the individual may be. This could result in major operational disruption, be reputationally damaging and have significant implications for strategic plans, contract tenders etc. There is also the risk of illegal working penalties, depending on the exact circumstances.  Finally, Government data sharing may mean it prompts interest from other Government bodies for example an inspection from HMRC if there are concerns about National Minimum Wage compliance or PAYE records.

Taking advice on this fast moving area of law from experts in the field is crucial to protect your business interests.

Next steps

If you would like to find out more about how you can make the UK’s immigration regime work for your business, or if you would like support in relation to a sponsor licence application or compliance with your sponsor obligations, please visit the Visa Guidelines Hub or get in touch with a member of our specialist Immigration Solicitors.