Tag Archive | "ICT"

My 8 step guide to a multi-billion pound business

After a lot of study and reading all kinds of authoritative sources I think I’ve worked out a business idea that lets you build a multi-billion pound business over the course of a few years. Like all projects it has a logical plan to make sure everything happens as it should. It goes like this:

First, you need to have a workforce based in a lower-cost economy than ours, which isn’t actually that hard to achieve these days. Even our expensive European cousins are trying very hard to drop down to a third world economy rather than accept the Euro is doomed. However, basing it outside Europe is preferable.

Then you need to reinterpret the meaning of the phrase “business specific”. Make it mean “works for you and can read”. This is important; if you want to deploy your workforce over here they need to be able to get in (not that hard to do, apparently) and be permitted to work here. That needs a Visa, but luckily you can use the ICT option. That allows you to import workers who have particular knowledge of your business. Hence the need for reinterpretation; if you don’t, they won’t qualify as ICTs and you can’t use them.

These valuable workers need paying of course, and there are rules about that. For less than a year’s stay, for example, they have to be paid £24,000. Not a problem, it only says you have to pay them that, what they actually get is a different matter. After all, you are paying for the travel and accommodation, so let’s offset that against the £24,000. That way you can pay them a little bit more than they get at home and spend the rest on their expenses. Or even yours.

Ah yes, accommodation can be expensive. Best way to economise is to share it among as many people as possible. After all they’re only here temporarily so can rough it for a while.

Better make sure the workers never ever let anyone see their pay slips while we’re at it. Wouldn’t want to disclose our margins, would we?

Right, so now we have a skilled workforce in place at roughly a third the cost of the locals. Time to drum up some work for them to do. So let’s sell them to UK businesses as a cheaper alternative to using the expensive workers they normally employ. With the money saved earlier we can afford to put them out at two thirds the usual charge, so the client must be making a big saving. Easy.

Then, once we have control, we have other options to maximise revenue. If there’s a bug in something, don’t try and fix it, that’s just a fudge. Rewrite it properly, from scratch. Much more work for your workers to do, not only re-writing it but testing it and releasing it and re-training the users.

More work means more people; don’t really care how good they are. Better get some more ICTs organised then. Advertise back home that you’ll sponsor an ICT for a mere £1000, no actual job offer required. That will get the applicants flooding in.

And when the locals kick up a fuss, persuade some senior politician – ideally one who is rapidly approaching sainthood – that the skills don’t exist locally and you have the only alternative. Make sure the skills don’t exist locally, of course, by only advertising roles at non-viable rates that only your workers can live with.

And the final bonus point: in only a few years you will have killed off the local industry totally and have it all for yourself.

Brilliant plan, isn’t it? Guaranteed to succeed. Wonder why nobody’s thought of it already…

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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I’ve been having a rather quiet week, for some reason, although there have been two notable successes.

Work seems to have hit one of those periodic phases where I’ve done all I can and am now waiting for assorted other (and rather more busy) people to review what I’ve been doing. Of course when they do I go back to not having enough time in the day to do everything, of course. Still it keeps you off the streets.

To fill in some of the yawning gaps in the working day – well, while I’m eating my lunchtime sandwich, anyway – I’ve been reading a series of “Focus on…” briefing papers the PCG has produced in time for the party conference season. These cover a range of subjects, most if not all of which I may have touched on myself in here, from ICT abuse to IR35 to the soon-to-be-infamous AWR.

But the one that is closest to my heart, having been banging on about since early 2003, is the one on Security Clearance. Well not clearance itself, which does exactly what it is supposed to do, but the whole tangled Catch-22 of trying to get it and why it is doing a whole segment of contractors and a whole segment of government work a major disservice by denying access for the former to the latter.

In effect, clearance status overrides competency. No wonder so many public sector contracts go so wrong.

Anyway. The one thing I might take issue with in the paper is the claim by the Cabinet Office that clearance process times are coming down significantly. They quote Cerberus as the reason why: you may recall me talking about Cerberus recently.

OK, so you will forgive the hollow laugh.

My clearance – a humble CTC, mind you, nothing too heavy – finally turned up this week. That’s precisely 147 days since I submitted the original application back in May. Or, to put it another way, a mere 112 days over the stated SLA for processing CTC clearances in 85% of cases. And given I’ve worked several cleared roles over the years, including a stint in the Cabinet Office, you might suppose that mine would have been in the 85% range.

But a slight clue as to what may be going wrong is in the email I got telling me the clearance had come through. We’ve been badgering the client for weeks about my situation and how difficult it is for a one man band like me to work when I can’t move around the building. When they got the nod, they passed it over immediately. At which point I discovered that the clearance runs from 12th of August.

In other words, it’s taken a month for DVA to tell my end client that I’d been cleared. Brilliant…

Anyway, I rush down to the office to get the badge, fill out yet another piece of paper (a blue one this time) and present myself to the lady wot does. “Oh sorry”, says she, “Our badge printer is broken. Can you come back tomorrow?” Aaarrghhh…

Never mind, all done now. My coffee consumption has quadrupled overnight. Success…

Oh yes, the other success. Got off the train last night and was walking through the ticket hall at the station – the ticket hall, note, full of rush-hour people and manifestly not the car park or the approach road – and was confronted by some middle-aged GoreTex-clad loon in a silly plastic hat riding his bicycle through the crowds towards my not insubstantial presence. I was so flabbergasted I simply stopped still in front of him. At which point he suddenly realised I was there and did a sharp left. Straight into one of Mr Brunel’s rather substantial stone pillars. Didn’t do his front wheel a lot of good, although his stupid hat did stop him smacking his head on it. Shame…

Sadly I left before the advancing and rather irate-looking railway official had words with him. But strike one for the pedestrians.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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Who said we need to import skills to ensure success…?

I was somewhat taken aback this week to read that someone in government had had a fit of the vapours and said something sensible. Even more confusing was that this was from the Labour side of the House. Although, just to restore my faith in human nature, he’s been shouted down by the rest of his side.

This was Lord Glassman, who has said that we need to put a freeze on immigration. Not a cap or a phased reduction, but a total stop, with the sole exception of the small number of skilled people we actually need to encourage to come over.

Of course none of this would be an issue if we had a better history of controlling who’s coming in, but we are where we are. At least we have some much more effective rules in place to bring a bit of sanity to the ICT system these days, which is the bit that really concerns us IT people. And for which, let us not forget, we owe a debt to the work the PCG has been doing over the years.

But as usual, nothing is as it seems.

There’s a bit of a debate going on about the new rules, centring of all stupid things on payable expenses, that well known fiddle factor beloved of the umbrella companies and assorted MPs…

But I digress. The rules set a minimum salary for the ICT candidate. However, with the usual stunning clarity of purpose, they haven’t actually defined how that salary should be made up. So you can include, for example, the costs of bringing your worker over here and giving them somewhere to live while they’re here.

Then we get into the Kafkaesque realms of do we include expenses paid for travel and accommodation while working somewhere else? I mean, let’s just think about that for a moment. You ship someone into the country, pay for their accommodation and give them a living wage. Then they have to go somewhere else on your behalf, for which you are paying the bills (or damned well ought to be). So how can that be part of their gross salary? Because I’m willing to bet that they never see any of it; if they did, their payslips wouldn’t be subject to the same level of secrecy as those nice people at GCHQ.

And just to pile on the ineptitude, the rules are being arranged so that “the taxpayer is not disadvantaged”. Excuse me? Taxpayer? The taxpayer, to the man on the Clapham omnibus, is someone who has a life here, a permanent address, is known to the gentlemen at HMRC. He’s not just popped over to perform a limited engagement (much of which seems to be to learn how to do the job so he can take those skills back home). And since his prime purpose is to take away work that could be done by someone who does live here, I’m afraid I’m not all that minded to be fair in how he gets paid.

Other countries have twigged this. Canada, for one, is taking positive action. How typical of our team that we try to treat them fairly and actively assist them in their efforts, less we tread on someone’s toes.

Talking of treading on toes, let’s give a small Hurrah for the PCG. Actually no, let’s make that a very large one. They have won not one but two trade awards, for electronic communication and membership success, against some much bigger (and older) organisations. Bearing in mind this is a very small team, the impact their work is having where it matters is out of all proportion.

Who said we need to import skills to ensure success…?

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited

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Four words that seem to have passed by St Vince of Cable

I see St Vince of Cable is back in the news, challenging Mr Cameron’s views on immigration. What a shame that he is continuing to confuse two entirely different issues, which is most unlike a Liberal Democrat.

I offer no comment on immigration in general. I tend to side with the Cameronian view that controlled immigration is a good thing while uncontrolled immigration is not, but that’s as far as I go on that subject.

However, the importing of foreign labour to do jobs that used to be done by UK workers? That, I’m afraid, is a different issue entirely.

Sadly it is a distinction that Cable seems determined not to make. He remains wedded to the view that UK PLC is in such dire straits that it absolutely has to import a range of technical and engineering workers to maintain its position in the world economy. Furthermore he is supporting this contention by pointing out that it allows us access to markets that would otherwise be closed to our industries. This has a degree of merit, if you allow that we have something that market wants to buy.

But it is interesting to note that I don’t see a great influx of Chinese workers on ICTs coming in to the country to do a range of fairly low level technical jobs. After all, China has a rapidly growing economy and probably the biggest untapped market anywhere in the world. And we seem to be pretty good at selling into it, without reciprocal trade deals – at least, none that I’ve seen reported. I could be wrong but I also don’t see us paying for China’s growing nuclear industry, nor its education system.

Funny that, isn’t it?

It doesn’t help that the people charged with supervising the new ICT rules on salary banding and the like don’t seem to have much of a clue what’s going on either. The transcript of a discussion at the Public Accounts Select Committee makes for depressing reading. Not that they aren’t concerned about the issue, they clearly are, but that they are so vague about the rules themselves and vague about how compliance is going to be measured. At one point they are saying that the number of request for salary information to enforce the rules is too high for the system to cope. In other words, the rules are in place but there’s no effective way to apply them. They are even rather vague about the local resident working test, which is intended to stop an existing worker being booted out by an incoming ICT one.

And Cable and friends still fail to grasp the fundamental point here. If we give all the entry-level jobs away, how are those 20,000 IT graduates, to take one example, ever going to get their first step into their chosen career? And in a few more years’ time, where will we find the middle managers and technical experts who actually get this somewhat overrated ICT workforce to deliver to the required standard?

This is something that needs decisive and effective action. Four words that seem to have passed by the honourable Secretary of State for Business, Innovation and Skills without leaving a visible imprint.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited

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Intra Company Transfers – a BIG step in the right direction

It seems there has been a major step forward in the battle to bring a little sanity to the importing of non-EU workers under the Intra Company Transfer visa rules. This has long been a bone of contention, most notably in the IT contractor market, but also in some other areas such as engineering. Today’s change in the rules marks a step change that should benefit UK PLC

Firstly let’s be very clear that there is nothing wrong with the concept of ICTs. Given the multinational nature of many big companies these days, it would be foolish to put artificial barriers in the way of being able to move key staff around to where they are needed. And listening to the screams of protest from some corners – most notably, that of St Vince of Cable who, you might think, ought to know better – limiting ICTs will only spell doom and disaster for the UK economy.

Or will it?

Well, no, to be honest. If you look at the numbers carefully, it is clear that there is a baseline of ICTs that has remained pretty much constant for some time. This, we can assume, represents the number of key people that are moving in and out for good reason. However, the overall number of ICTs has been growing, and growing at an increasing rate, for some time. This coincides very closely with the increasing use of off-shoring work to save money. That is something that started in the mid 80s but which has been steadily accelerating ever since and is now something of an epidemic. But, and it’s a big but, in recent years the growth exceeds the amount of work to be done; especially in a time of recession and business slowdown. Which puts good people out of work.

OK, so businesses need to optimise their bottom line, and going to the cheapest supplier is a way to do it. Provided, of course, the quality is comparable which, to be blunt, it quite often isn’t.

But where it’s really gone wrong is in the use of ICTs. These are meant to be used to bring in specialists for short term purposes. With the greatest will in the world, a specialist is not someone you would expect to be taken into a training regime to learn how to do the job they are supposed to be a specialist in. And that is what has been happening. ICT visas have been used to bring in technical staff that, while technically qualified, can’t do the job. They are here to learn how to do it and then take their new skills back home. The only reason that can work, economically, is if the cost of transport, accommodation and salary is low enough to produce a viable profit. Which it is, but only if the wages in question are really low; on a par, for the sake of an example, with what a well qualified coder will get in, say, Mumbai.

So what has changed then?

Basically, HMG has responded to a long and hard fought campaign by the likes of the PCG that tried to demonstrate that ICTs were being abused in order to keep the economies of importing staff viable. As a result they’ve made a very simple change: if your ICT is for a year or less, you must be paid £24,000, if it’s any longer, you must be paid £40,000. Which are still a bit less than the going market rate for the skills in question, but a lot more than what has been the norm. And, of course, totally irrelevant if you are bringing in an established, skilled employee who will no doubt already be on a market rate salary.

It’s early days to see what impact this will have: there are several ways the new rules can be neutralised. Indeed, one of the issues in proving abuse of ICTs exists has been the total lack of any documentary proof about how much people were being paid in salary and expenses and there’s no reason to believe the suppliers will willingly give up a very lucrative market. But it is a big step in the right direction.

PCG – and one or two very dedicated individuals – are to be congratulated for achieving a major success. Not least by the several thousand UK-based contractors whose jobs are now an awful lot safer.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited<

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That was the year that was

And, I have to say, quite a successful one, perhaps unexpectedly given where we started from. Speaking strictly as a freelance contractor of course, I thought it appropriate to round off 2010 with my slightly biased view of how the year has gone. So here goes with a very personal summary of the key events.

The main one, of course, has to be the replacement of Gordon the Glum with a real person. You may not like CallMeDave but you have to agree he’s an improvement on his predecessor: OK, not if you’re Ed Balls or Piers Morgan of course, but who listens to them anyway…?

We’ve gone from a Government that was totally and utterly convinced they knew best how to spend your money to one who was perfectly happy to let you spend it how you wanted. Of course, there wasn’t all that much to spend and they were going to have to hang on to even more of it than before. But let’s not be picky; at least we know why they’re being so mean.

So let’s look at the good things…

ICTs and the abuse thereof. Something I may have mentioned once or twice before? Leaving aside the wider question of uncontrolled immigration, there is a clear intent by HMG to cut down the number of workers coming in to the country to undercut the local workforce. Of course we are never going to stop companies using the cheapest labour they can find, that’s all part of capitalism and globalisation, but at least someone is trying to make it a bit harder to get us to train them how to do take our jobs away and kill off the industry at its source. Which, ultimately, has to be a good thing?

We still labour (geddit, geddit…?) under the Damoclean threat of IR35 of course. I never shared the conviction of some that a Tory government – oops, sorry, a Coalition led by the Tories – would instantly delete IR35 from the statute book. That was never going to happen; there is a political justification for IR35 that, while utterly barking, is not going to be reversed in any meaningful way.

Obviously the establishment of the OTS, and its very clear directive to look at IR35 as a priority was highly welcome. Even more welcome was the PCG gaining an influential seat on the Consultative Committee of the OTS looking at small business taxation. An organisation with 20,000 members and a 10 year lifespan gaining such access and respect at that level is something that simply cannot be underestimated. The OTS is working to some impossible deadlines, but fingers crossed, progress is being made.

The job market certainly seems to be picking up. I’m seeing hugely more jobs in my scope that I saw this time last year. Of course, 95% of them I won’t bother going for because the hirers are demanding impossibly tight lists of skills, industry knowledge and qualifications. The agencies are still incapable of challenging them and offering alternatives. For example I’ve been tracking a discussion on LinkedIn about how to use shared services and/or outsourcing to save money in Local Government. Good idea and one that may well work. Sadly, the consensus is that it won’t happen because the hirers put Local Government knowledge well ahead of any business experience that means you might actually understand how to do it properly. You see the same thing in Finance, which is a real shame since that’s where the work is. And don’t get me started on Security Clearance.

Oh, and I nearly forgot. St Vince of Cable has shown himself to be every bit as incisive, astute and intellectually superior as I always thought he was…

Personally it’s not been a bad year. I’ve worked most of it and actually banked a profit, which is nice. There is certainly reason to be optimistic about next year. The PCG continue to make great strides forward which is a source of pride, even from my marginal input to that progress. And I’ve had some nice comments about this blog, which proves that at least people are reading it, even if they don’t agree with me.

So roll on 2011. I think it could be an interesting year. I’ll see you there…

Alan Watts can found at LinkedIn.
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So near and yet, so far

That was the immediate reaction to Theresa May’s pronouncement on how the Coalition will be handling work visas as part of its attempts to reduce immigration: a fair start but not nearly limiting enough. While it was good to see positive efforts to reduce the influx of non-EU workers, there was a sense of disappointment that the ICT visas, about which there has been so much debate, would not be included in the capped total.

Why this should be so is mostly down to two factors. Firstly the somewhat misguided belief of some Coalition members, apparently led by St Vince of Cable, that British business would flounder in a sea of amateurishness if we didn’t keep importing these vital skills from overseas in unlimited numbers. Well I’m sorry, St Vince, but I’ve worked with quite a few of these incoming experts and while the odd one or two are very good indeed, the average is rather closer to the other definition of “expert”; “ex” as in “has been” and “spurt” as in “drip under pressure”.

Joking aside (OK, it wasn’t much of a joke, I admit…), it is nevertheless a valid point. ICTs are for moving highly skilled experts around or for putting experts and trainees together. It seems a little perverse that the bulk of the ICT traffic seems to be bringing in the trainees rather than exporting the trainers.

The second pressure was from big business. Some very big businesses in fact, although oddly enough they aren’t primarily UK companies. UK businesses were involved of course, although reading between the lines a little it is horribly evident that the UK companies had a genuine fear that they would lose their ability to move modest numbers of staff freely in and out of Britain while the other guys, the predominantly non-UK ones, were clearly more worried about their bottom line. Although you have to ask exactly why non-UK companies think they should be able to redirect UK’s government policy in the first place.

Anyway, the deal has been struck, ICTs are not being capped. Gloom and despondency among the UK freelance workforce, joy unbounded from UK PLC (or should that be Elsewhere PLC?).

But wait. There is a glimmer in the gloom.

If you want an ICT visa and to be here more than a year, you have to be earning at least £40k per annum in real salary. Given the supposed qualities of the average ICT that is a not unreasonable figure for most companies.

Aim to stay less than a year and it falls to £25k. Which is a laughably low for a talented individual, of course, but still significant; many ICTs being body-shopped in the UK workforce are allegedly paid rather less than that already. But that one year cap makes all the difference. It blows a big hole in the budgeting, which has been designed to recover immigration expenses over two or three years.

The reactions to this from the big boys have been interesting. Briefly, they really do not like it. Which means basically we got it right. Shame…

And one quote is, I think, particularly revealing. One company is reported as saying that it will be difficult to pay different salaries to people depending on if they are staying more or less than a year. Well it shouldn’t anyway (perhaps they need a better IT system…), but surely you are paying these people a wage in their home location, aren’t you? Why do you want to pay them anything different for a temporary gig elsewhere?

So while at first glance it was less than we wanted, it’s actually a pretty damned good compromise. The guys who put this together were largely reacting to some solid, very high quality work by the PCG team who should be congratulated for a job very well done. That an organisation representing some 20,000 freelance members can persuade the Coalition to go against the wishes some multti-billion pound corporates is an astonishing achievement.

In fact the title of this blog is all wrong. It should have been “Nemo me impune lacessit”. Which, as I’m sure you all know, translates as “Don’t mess with me, Jimmy”.

Alan Watts can found at LinkedIn.
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Who needs an IT industry anyway?

I’ve written before about the confusion in the debate about immigration and the constant refusal of government and the press to separate genuine immigration from abuse of the system, especially the misuse of the ICT programme. That debate has been raging for a while now and remains unresolved, although we did think we might be getting the message across.

Then, all of a sudden it seems we have a major triumph. We, via our fiends (sic) in Brussels, have just signed a trade agreement with India. Nothing much wrong in that by itself, we need to trade and India is a growing economy. But look a little deeper…

In exchange for India relaxing its import rules so the EU can sell into that market, we have apparently agreed to give their engineers, IT workers, project managers and other skilled trades virtually unlimited access to our market. OK, so it’s a free world and we all have to get work where we can at the best rate we can. But given that India’s official language is English, and there aren’t that many English-speaking countries in the EU – even if you count Scotland – I somehow get the feeling that the traffic in this direction will be rather heavily biased in our direction.

Again, not a problem, except that, as with the ICT scam, these aren’t likely to be long-term immigrants. Some will no doubt be here for a long time, and some will genuinely contribute to the UK economy. But I have a nagging feeling that an awful lot of them will be here to learn how to do the job we’re doing for ourselves and then move it back home where the labour rates are considerably cheaper. That might cut the bottom line but it is a horribly short-term view of things. It won’t take too long before all the real work in IT, for example, is offshored and our service economy – once one of the world’s strongest – has gone the way of the Dodo.

So if this is good news, I would really hate to see a tragedy.

And what really annoys me is that one part of Government is talking about limiting immigration, another part is making positive noises about ICT use and abuse while another part is selling us down the river. Well thanks, guys, great job.

And let’s be clear here. I have absolutely no problem with India or the Indians and never have done. I have no objection to skilled people coming into the country and benefiting us as a whole. I don’t even have a problem with the ICT system, which allows the simple transfer of key staff for shot term purposes.

But I do have a problem with our government doing all they can to close down the industry I’ve been working in for the last 35 years.

Someone has got this badly wrong. And I don’t think it’s me…

Alan Watts can found at LinkedIn.
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Going up…

A while ago I wrote in another blog about a potential problem with the IT industry in the UK, where the bottom of the career ladder was being rapidly pulled up by the continuing off-shoring of UK jobs. At the time I was just speculating out loud, but some recent numbers have made me think.

For one thing, IT graduates have the highest unemployment rate of all, at around 17%. OK, so IT is notorious at preferring experience to paper qualifications at the best of times, but this is an extraordinary figure when you consider just how much IT work is out there, even in these straitened times.

So where are the IT jobs going then, if not to the UK workforce?

If you look at the numbers of ICTs being granted you might get a bit of a clue. A recent set of figures from the Government gives a very disturbing picture. For most occupations (and the list ranges from medical practitioners to magicians), the trend is actually fairly level; for example, 80 ICTs for electrical engineers in 2000, 95 in 2008. Hardly an issue.

But look at the IT trades – programmers from 290 to 875, Business Analysts up from 255 to 1050, Project Managers from 290 to 1450. The figures stop at 2008, when the rules were changed, but the trend continues upwards: recent figures from the Home Office show a 67% rise between Q1 2009 and Q1 2010.

I agree you have to take these numbers with a bit of a pinch of salt. For instance the 2009 to 2010 increase is for applications, not ICTs actually granted. Even so, it’s clear that the tend is ever upward. What’s more, it doesn’t take long to find job adverts for IT roles at rates that are well under any kind of market value. Say it quietly, but surely people are not advertising roles nobody would take on just to prove they can’t recruit anyone so please can we have an ICT instead? Plus, just to rub some of that salt into the wound, the offshore companies are taking on UK workers as part of an outsourcing deal and then making them redundant at a fair old rate because the work is now being done “elsewhere”.

And what really annoys me is the abuse of ICTs in the first place. These are meant to be used to transfer skilled people for specific roles within a multinational organisation. My experience of some of these workers – and perhaps I’ve just been particularly unlucky, although I rather doubt it – would not lead me to believe these are highly skilled experts in their field. Quite the opposite, in fact.

There is some light, of course. The Migration Advisory Committee is keeping a close eye on such things, and you can’t have failed to notice the debates about immigration and work visas, although this is being coloured by some very powerful companies insisting – against all rational evidence – that they absolutely have to being in people because they can’t find anyone suitable over here already. Well, apart from the 17% of IT graduates and the several thousand people on the bench since their old job got rolled offshore that is.

So as I said originally, the bottom of the career ladder is being pulled up. Which means in about another five years, we won’t have an IT industry and we can all stop worrying about it.

Just for once, I rather hope I’m wrong…

Alan Watts can found at LinkedIn.
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Why I dislike this government quite so much…

So our Beloved Leader has finally allowed us an election. Good news on several fronts. I make no secret of my desire to see the end of the current Parliament in general and our sitting PM in particular. But before we all get drowned in claim and counter claim about who is best suited to lead us out of the crisis we find ourselves in, I thought I might just remind people why I, as a humble one-man-band contractor, dislike this government quite so much.

Firstly, the iniquitous IR35. Brought in by someone who refused to pay a legally imposed tax to address a problem that didn’t exist and so badly framed only a court could decide if it applied to you or not. So you buy insurances and pay for contract reviews and live in uncertainty, or you go use an umbrella and pay a load of taxes you almost certainly don’t actually owe. Meant to bring in £400m a year, it actually generates around £1.5m. Brilliant work chaps.

Then they killed off MSCs. Not a thing that bothered me, to be honest, but I know of people who were trading perfectly correctly through them who had to shift to a different model.

Then we had the Arctic case, trying to apply the clearly defined S660a legislation to a situation it was never meant to cover and which, in fact, was positively endorsed in the House (by a Tory chancellor as it happens…).

Then when they lost that one they immediately produced the fully-formed Family Business Tax (or Income Splitting, as they termed it). That has never actually gone away, but at least the lobbyists were able to demonstrate just how poorly thought out and generally unworkably ridiculous the whole idea was. So that never saw the light of day, thank God and the PCG. The latest one is the Agency Workers Directive, another piece of EU-inspired nonsense that has a genuine purpose at heart but once again is so badly enacted you still won’t know for certain if it applies to you.

And underpinning that catalogue on ineptitude is the constant failure to distinguish between avoidance and evasion (hint: only one of them is illegal, Gordon), the joyous embracing of selling our IT industry abroad by failing to manage the abuse of the ICT system, the wholly unacceptable retrospective change behind BN66 and a raft of smaller but equally rubbish rules and regulations that blight your working life.

So all in all, I hope never again to hear a dour Scots voice telling me all this grief is in the interests of fairness. It isn’t, it’s in the interests of a discredited socialist agenda that’s wrecked the country and cost me a lot of money for no benefit whatsoever.

So farewell, New Labour. Whoever or whatever replaces you, at least the only possible direction is upwards.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: mixed.emotions.sketch by NET9

Posted in alan's blog, ir35 contract review, ir35 insurance, tax avoidanceComments (0)

Budget? What Budget?

There was quite a lot of minor change in the Budget, and we should praise the intention to focus on helping businesses with a raft of measures, but for us one man consultancy companies there was actually nothing of very much interest in there. With VAT, Corporation Tax and allowances all staying the same, there will be almost zero impact on most of us.

A lot of the business friendly things won’t really impact me, of course. I don’t pay business rates since like most freelances I am something of a nomad. I don’t have a lot of capital expenditure so changes in Investment Allowances are immaterial. I welcome the intention to increase access to HMG contracts by 15%, but that’s not happening until the end of 2010.

So all in all, something of a non-event.

Unless, of course, you are using one of the more imaginative payment schemes. There is a strong anti-avoidance programme tucked away in the detail – that’s all the things that Darling Alistair doesn’t burden his audience with in the House – some of which will impact some freelance workers. For example, payments via loans will be shut off by the simple expedient of making the loan write-off liable to CT and hence uneconomic. There is a clear message that EBTs in all their forms will be closed off. Add to that some additional international taxation treaties (including one with Belize, stamping ground of Tory donor Lord Ashcroft. Funny, that…) and a re-emphasis of the rules of Double Taxation; clearly some people are going to have to rethink how they manage their money.

And of course, tax allowances have been frozen which is, as Osborne pointed out, just another Labour stealth tax. Darling’s justification made me smile as well. The indexation is based on the previous September’s inflation rate, which just happened to be negative. “Reducing them would be daft” said Alistair. Really? I think it would have been entirely fair, since those are the rules. Heigh ho…

Away from the Budget and there was another major piece of news that, perhaps surprisingly, has gone largely unnoticed. As a result of campaigning by the PCG, there has been a bit of a rethink on the rules surrounding ICT visas. These are the route that some companies are using to bring non-EU workers in to displace more expensive (allegedly) UK workers. The parameters have been significantly tightened, some taxation loopholes closed off and the original Tier 2 split into three distinct classes. The net result is that imported ICT-based labour will be less economical to use, easier to limit and more difficult to bring in.

These changes actually go farther than the PCG was asking for, which was a welcome if slightly surprising result. It is however a vindication of the power of effective lobbying and, incidentally, an indication of how much clout the PCG is beginning to assert. Well done to them, says I.

Of course, like the Budget itself, it remains to be seen exactly how effective these measures prove to be in the real world. But at least the ICT changes have a decent chance of surviving the next election and achieving tier aims, which can’t really be said about Darling Alistair…

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: yawn.jpg by Toni Verd

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IT Contractors and Intra-company transfers

The controversial subject of intra-company transfers was raised again this week by The Recruitment and Employment Confederation (REC). It has continued it’s campaign for a ‘level playing field’ for UK contractors and freelancers since the issue was first reported by the PCG last year.

Several leading contractor accountants have already voiced their disapproval at the use of ICTs, which involve the transfer of an overseas employee to this country at the expense of UK workers. According to the REC, more robust regulation of ICTs is needed to protect UK based contractors and freelancers who may have been either overlooked or worst still replaced for a contract role as a result of an ICT arrangement.

During it’s presentation on Employing and Vetting non-UK Nationals, the REC raised several issues with Tory minister Damian Green, with particular reference to the higher end interim recruitment market that often associated with IT contractors.

The REC’s external relations director, Tom Hadley, welcomed Damian Green’s assertion that the existing regulations governing the use of ICTs will be reviewed under a Tory government to safeguard the future of the interim worker in this country.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Pretty Dead Fly on the Window Sill by Amarand Agasi

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Well you have to say that was an interesting decade…

In 2000 people said (and keep on saying) that the Millennium bug was a myth and we just wasted £4.5bn fixing something that didn’t happen. Well OK, but if we hadn’t spent the £4.5bn they would still be recovering from the damage.

Then we had two years of absolutely no work, partly because everyone had upgraded in time for the non-existent millennium bug, and partly because the DotCom bubble had burst.

Then we had five years of steady growth, until some smart alec worked out that using non-EU coders was cheaper (they weren’t then and aren’t now, but heigh ho) and the bottom end work disappeared in a welter of Tier 2 visas. So we got the Tier2 visa issue sorted out and all of a sudden we get 30,000 ICTs coming into the country instead of the usual 4000 or so. Then the banks let go and there was no work for anyone.

Bring on the 2010s, says, I. They could hardly be worse than the noughties.

Anyway, enough with the nostalgia (which isn’t what it used to be, you know). This blog is about the world as it is today. It’s not going to be too heavy, it will try to comment on the week gone by in a mocking but kind of informative way, or it will poke gentle fun at my clients if doing so raises an interesting point or two.

I’m an IT guy by trade, a retired geek who saw the light and moved into interim management. I’ve been around a while, I’ve worked for some interesting (and some deadly boring) clients and have been a freelance for 15 years, well before the nonsense of IR35 and the all-out war on the contractor community. So I hope I have something interesting to say.

So right now we are at the start of an interesting year. Forgetting the election (for now, at least!) nobody has done any serious development work for nearly two years now. Assuming UK PLC has any money left to spend, there just has to be new work coming along the pipeline. Fingers crossed, everyone…

© 2009 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Geeky Smurf by nicholasjon

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