Accident and Emergency? The Move to Exempt Doctors and Nurses from the Tier 2 Cap

In June 2018, the government announced plans to exempt doctors and nurses from the cap on the number of Tier 2 (General) visas for skilled workers who can be sponsored to come to the UK from outside of the EU. This commentary looks at the implications of this policy change.

Context: why now?

The Tier 2 cap has been on the books for years, yet it is only recently that it has become a major political issue. Initially it was something that existed only on paper. The cap set a 20,700 limit on the Certificates of Sponsorship (CoS) employers have to obtain to recruit non-EU workers but this didn’t make any practical difference because the number of applications by employers consistently fell short of that level until the year 2017/18.

As the Migration Observatory reported in March, demand for CoS began to outstrip supply from December 2017 onwards. At this point, employers started to be refused requests to recruit non-EU citizens in skilled roles that were not PhD level jobs and not on the Shortage Occupation List (SOL). Because the rest of the applications are prioritised largely on the basis of proposed salary, this meant that the effective salary required for most applicants rose from a minimum of £30,000 to an amount that fluctuated month-to-month between £50,000 and £60,000. A more detailed explanation of why the binding cap means higher salary requirements can be found in our previous commentary on the topic.

The resulting refusals have caused some controversy. FOI data obtained by the Campaign for Science and Engineering suggested that increasing numbers of CoS applications were being refused each month, from 1,093 in December 2017 to 1,956 in March 2018. About a quarter of refusals were doctors and a further 6% were other health professionals (e.g. pharmacists) (Table 1), leading to calls to exempt the NHS from the cap. Nurses were placed on the shortage occupation list in 2015 and so get priority over others such that they are not affected by the changing salary requirements, which is why they are not represented in these figures.

Table 1

CoS refused, December 2017 to March 2018, by occupation group

	Dec-17	Jan-18	Feb-18	Mar-18
Total	1,093	1,383	1,648	1,956
Doctors	266	375	390	487
Other health professionals	62	80	107	108
Corporate managers/directors	40	47	63	76
Science, research, engineering and technology professionals	274	359	423	542
Teaching and educational professionals	33	45	60	59
Business, media and public service professionals	282	346	435	478
Others	136	131	170	206

Source: Campaign for Science and Engineering, Tier 2 refusals FOI data

This commentary combines the CaSE FOI on refusals with FOI data requested by the Migration Observatory on grants of Certificates of sponsorship over the past two fiscal years, to give a picture of who has been using the Tier 2 system and what the doctor and nurse exemption might mean in practice.

How many doctors and nurses get Tier 2 visas?

Health professionals have been an important factor behind increasing demand for Tier 2 visas over the past 2 fiscal years, but they are not the only one. Figure 1 shows the combined grants and refusals of CoS, which gives an indication of overall demand from employers. Note that this double counts applicants who were refused in or after December 2017 and reapplied in subsequent months. Total applications (i.e. both grants and refusals) for health professionals sharply increased by approximately 3,600 between FY2016-17 and FY2017-18, equivalent to half of the total increase in applications between the two years. Growth in applications for science, research, engineering and technology professional roles accounted for most of the rest of the total increase, driven primarily by applications from scientists and IT professionals.

Figure 1

Source: FOI data from CaSE and Migration Observatory

One effect of this increase in demand is that doctors and nurses have taken up a growing share of Tier 2 CoS actually granted (Table 2). Their share of CoS granted rose from 27% to 35% over the two-year period examined. (Note that this is slightly lower than the 40% reported by the Home Office, probably due to the inclusion of data from FY2018-19 in the latter figures.) By FY2017-18, doctors and nurses accounted for 8,115 CoS granted. Because nurses are on the Shortage Occupation List, they receive priority for capped CoS, and therefore already did not have to compete with other applicants on the basis of salary.

Table 2

CoS granted by selected occupation, fiscal years 2016-17 and 2017-18

	FY2016-17	FY2017-18	Percent of FY2017-18 grants
Total	22,490	23,267	100%
Doctors	3,274	4,056	17%
Nurses	2,856	4,059	17%
IT-related professions	3,534	3,617	16%
Scientists and engineers (excluding IT)	3,031	3,368	14%
Teachers	698	519	2%
Other occupations	9,097	7,648	33%

Source: Migration Observatory analysis of FOI data. Note: data do not include allocations from April-June 2018 and so may differ slightly from other reported estimates. Note that the total number of CoS granted can exceed the 20,700 cap because if employers apply for CoS but do not use them, they are returned to the pool

This increase is not just a short-term trend in the past two fiscal years. Separate data from the Home Office show that overall Tier 2 visa applications in the ‘health and social work’ sector has more than tripled from a low of 1,572 in 2011 to 6,563 in 2017.

What are the implications of exempting doctors and nurses from the cap?

As a result of the policy change, doctors applying for a Tier 2 visa will only face the baseline salary threshold of £30,000 or the minimum required for their role (which is higher in most cases, depending on the contract type and seniority). They will not have to compete with other skilled workers for the limited number of CoS available each year. Nurses themselves are not affected by the change, since they were already on the Shortage Occupation List and so received priority.

The exemption announced this month will affect all Tier 2 occupations, not just doctors and nurses, as their exemption ‘frees up’ space for applicants in other occupations that are not currently given any special priority, such as IT. In FY2017-18, 8,115 restricted CoS were granted to doctors and nurses, not including the refusals after December 2017. In other words, if the exemption had applied throughout the past fiscal year, just over 8,000 extra places would have been available for people who are not doctors or nurses. At least for that fiscal year, this would have been sufficient to prevent the cap from being hit in any month, since the total number of refusals during the fiscal year (ending with the March 2018 allocation) was 6,080, including double-counted applicants who applied more than once.

The exemption of doctors and nurses does not necessarily mean that the cap will cease to be binding in the current fiscal year, however. There is already a pool of refused applicants who may be expected to reapply in the hopes that the salary threshold will go down. Detailed data for this fiscal year are not yet available, but Figure 2 shows how grants and refusals evolved in FY2017-18. By March 2018, the number of refusals for occupations other than doctors or nurses (1,469) exceeded the number of doctor and nurse grants (186+442=628), indicating that if the exemption had been in place in that month only, the cap would still have been binding.

The overall impact of the exemption on the number of workers recruited to other occupations remains uncertain, as it depends on whether the number of applicants in those occupations remains persistently high enough to use all of the places freed up by the exemption.

Figure 2

Source: Migration Observatory analysis of FOI data. Note: applications from December 2017 to March 2018 will include candidates applying multiple times due to refusals

Conclusion

Because doctors and nurses have made up a significant share of certificates of sponsorship, exempting them from the cap could turn out to have a significant impact by making several thousand places available for those in other occupations over the course of a year. This would be expected to reduce the effective salary requirement relative to what it would otherwise have been—bringing it closer to the £30,000 baseline amount that has consistently operated in ‘normal’ times.

Whether the doctor and nurse exemption means that the cap is no longer binding in future will depend on future demand for Tier 2. Here, a key question is whether the rise in applications from December 2017 (see Figure 2) is transient or persistent. For example, if high demand for CoS in 2018 has been fuelled largely by repeated re-applications by the same employers following refusals in the previous month, we might expect the pool of refused applicants to be gradually reduced as more spaces are made available. On the other hand, if demand in Tier 2 is substantively higher due factors such as lower net migration of EU citizens encouraging employers to look outside of the EU for new recruits—something that is plausible but difficult to confirm empirically—one might expect application levels to remain high. If that is the case, cap-related controversy is probably not over.

Thanks to Alan Manning, Michael O’Connor, Jennifer Bradley and Carlos Vargas Silva for comments on a previous draft.