Shortage occupations list 2018: call for evidence - our response for health and social care

About this Paper

1. This paper sets out the Scottish Government response to the Migration Advisory Committee's (MAC) call for evidence on the review of the Shortage Occupations List. The MAC was commissioned by the UK Government in June 2018 to undertake this review, partly in response to changes to the UK immigration rules exempting all doctors and nurses from the Tier 2 skilled migration visa cap. Rule changes came into force on 06 July 2018.

2. This paper:

• Examines the main reasons for job shortages in health and social care and the measures that the Scottish Government has taken to address these shortages.
• Sets out how our response to this call for evidence is informed by a number of broader considerations relating to the future of the UK's immigration system, and the terms of our proposed departure from the European Union.
• Details the operating context for health and social care delivery in Scotland and how the workforce needs of the sector are dependent on our operational and service delivery priorities.
• It should be noted that it is extremely difficult to provide effective responses to this call for evidence given the inherent uncertainty surrounding the future of the UK immigration system, and in particular the future role of the Shortage Occupations Lists.

Introduction: Our Position

3. In the referendum of 23 June 2016, while the UK as a whole voted to leave the European Union, a large majority in Scotland voted to remain part of it. The way in which the UK Government has chosen to respond to this is already having and will continue to have significant consequences for Scotland's prosperity, the rights and freedoms of its people, and the safety, quality and effectiveness of our public services. In December 2018, the UK Government published a long-anticipated White Paper on a future immigration system, which proposes major reform of how EEA nationals will be able to live and work in the United Kingdom^[1]. This wider political backdrop of policy reform and unpredictability frames the Migration Advisory Committee's (MAC) recent call for evidence on the Shortage Occupations Lists^[2].

4. Fundamentally, there remain many significant uncertainties about the terms of the United Kingdom's proposed departure from the European Union. The White Paper on immigration itself makes clear that the UK Government's future immigration proposals are contingent on the UK leaving the EU subject to the terms of the current Withdrawal Agreement. Accordingly, the White Paper is predicated on their being an implementation period, during which EU citizens already resident in the UK (or otherwise arriving in the UK) will be subject to the EU Settlement Scheme and, in principle, have a route to permanence. It is not at all clear at this stage, that the proposed Withdrawal Agreement in its current form, will form the basis of the UK Government's departure from the European Union and accordingly, the White Paper on future immigration may need to be fundamentally revisited.

5. Despite this inherent uncertainty, colleagues from across Scotland's Health Boards and key social care stakeholders have again worked hard to compile the readily available evidence, in order to ensure that the needs of Scotland are appropriately represented.

6. Scotland is an outward-looking, welcoming and diverse country. We remain a country of inward migration, which brings significant economic benefit to every sector of the Scottish economy, and which helps us to address pressing demographic challenges associated with Scotland's ageing population and supporting our remote and rural communities. Nevertheless, migration is about more than mere economic benefit. Migration is about individuals and families choosing to build their lives here in Scotland and making a positive contribution to our culture, our communities and our society. Nowhere is this more evident than in the positive contribution made by migrants working in Scotland's health and social care sector.

7. In view of this, the Scottish Government believes that continuing the free movement of EU and EEA citizens is in the best interests of our health and social care sector, both for Scotland and for the UK as a whole. As such, EU citizens choosing to move to the UK would not be subjected to the restrictions of the Tier 2 visa system. Equally, the Scottish Government does not believe that a restrictive immigration model, which limits free movement and which subjects both individuals and employers to high fees and a heavy administrative burden is conducive to creating the dynamic, welcoming and responsive migration system that our health and social care system needs. The Scottish Government maintains that the least worst outcome, short of maintaining EU membership, is to continue to participate fully in the Single Market, as a member of the European Economic Area and to remain in the Customs Union, through which we would retain the free movement of people.

8. The health and social care workforce in Scotland benefits enormously from the contribution made by staff from across the European Union, and the Scottish Government has been consistently clear that free movement, and all the advantages it brings, should be allowed to continue in Scotland. For example evidence from the European Commission EC Regulated professions database (97 – 2016) demonstrates that in this period, across the whole EU 72,314 doctors applied to work elsewhere within the EU, of which 24,945 came to the UK. The equivalent proportion for nursing was equally high with 73,067 nurses moving within Europe, of which 34,678 came to the UK^[3]. The Scottish Government's Programme for Government 2018-19 notes that 'Inward migration is vital to meeting Scotland's economic, demographic and cultural needs. All of Scotland's population growth over the next 25 years is due to come from migration.' ^[4]

9. For migration from outside the EU, it is equally clear that a one-size fits all approach does not meet with Scotland's needs. The Scottish Government published a discussion paper on 7 February 2018 outlining Scotland's population needs and migration policy, which recommended devolving further powers to the Scottish Parliament to allow Scotland to take a differentiated approach. In doing so, that paper argued that major components of the UK Government's current approach to immigration policy were not propitious to the Scottish Government's domestic policy aims. In particular, that paper argued for the abolition of the net migration target and immigration skills charge in Scotland, alongside devolution of administrative responsibilities to the Scottish Parliament for determining the composition of the Scotland-Only Shortage Occupations List.

10. Overall, it is the view of the Scottish Government that the Shortage Occupations List is currently an inflexible tool. This is compounded by the fact that only Home Office Ministers can commission the MAC to review the lists, and only the Home Office can determine whether those lists are amended. The last wholesale review of the Shortage Occupations Lists took place some seven years ago^[5]. Whilst there was a partial review in 2015, it is clear that the current approach is not sufficiently dynamic or responsive. The Scottish Government would welcome the adoption of a revised approach, that reduced both administrative bureaucracy and financial burden, and which allows the Shortage Occupations Lists to be flexible to both local and regional challenges, as well as supporting a growing economy.

UK Government White Paper: A Future Skills-Based Immigration System for the UK.

11. Given the UK Government's stated commitment to a 12 month programme of engagement on the immigration proposals as set out in the White Paper it is regrettable that the consultation on the SOL is being viewed separately and to a different, significantly constrained timetable. We would therefore call on the MAC to facilitate further engagement with stakeholders between this deadline and Spring 2019 to capture as much of this missing evidence as possible.

12. The existence of the Shortage Occupations Lists is intrinsically bound up with the restrictiveness of the wider Tier 2 immigration system. A case in point can be found in the changes to the Immigration Rules made in July of last year, which exempted all doctors and nurses from the Tier 2 visa cap. The rule changes followed a period during which applications for certificates of sponsorship had exceeded the monthly available allocation in every month since November 2017. The effects were felt across the UK economy. Arguably, the impact was most acutely felt within healthcare, where it was widely reported that in the 5 month period between November 2017 and April 2018, only 34% of all Tier 2 visa applications for doctors were granted, notwithstanding continuing acute shortages of medical specialists in parts of the health service across the whole of the UK^[6].

13. It is welcome that the UK Government has accepted the recommendation of the MAC to permanently abolish the artificial cap on skilled migration. It is also welcome that the UK Government proposes to abolish the Resident Labour Market Test, which posed an unnecessary restriction on overseas employment and prolonged vacancy periods for posts that are critical to health services delivery.

14. Notwithstanding these changes, the UK Government's proposals for a future immigration system still present a number of acute risks for the future security and sustainability of the health and social care workforce in Scotland. These are a result of the narrow and arbitrary lens through which the proposals seek to define 'skilled migration', which do not take account of the social value of public sector employment, particularly that undertaken in the health and care professions. Further, these proposals seek to retain the principal elements of the current Tier 2 visa system, through which salary measures are used as an unreliable proxy for determining the skill level of a given job role.

15. Of particular and notable concern is the decision to retain the Minimum Salary Threshold at £30,000 for applicants seeking a Tier 2 visa. This decision is indifferent to the fact that many health and social care staff may routinely earn less than £30,000, including qualified nursing staff, care home staff, allied health professionals (such as physiotherapists and radiographers) and healthcare scientists (such as cardiologists, neurophysiologists, audiologists and nuclear medicine practitioners). It ignores the fact that even staff with a number of years post-qualification experience may not be earning in excess of £30,000 and it also ignores the fact that public sector employers, who are subject to national pay guidance and collective bargaining, are unable to unilaterally adjust pay rates in order to attract overseas staff to fill vacancies and skills gaps. The ability of the private and voluntary sector to adjust salary rates is also heavily restricted. Equally, the minimum salary threshold requirement for permanent residence (£35,000) would exclude many health and social care professionals from ever being able to settle in the UK.

Table 1. Proportion of Workforce (Selected Categories) beneath £30,000 Salary Threshold and former £35,000 Settlement Threshold

	Estimated proportion of WTE earning <£30k	Estimated proportion of WTE earning <£35k
Healthcare Scientists	31.9%	49.9%
Nursing staff	45.4%	75.7%
Physiotherapists	25.0%	49.5%
Radiographers	27.2%	53.4%
Occupational Therapists	29.5%	57.4%
Speech & Language Therapists	21.4%	43.8%
Source: ISD national workforce data (WTE) as at Sep-18: https://www.isdscotland.org/Health-Topics/Workforce/Publications/2018-12-04/visualisation.asp These calculations are for basic pay (i.e. without on-costs or allowances, overtime etc.) using the 2019-20 pay scales. Radiographers include Diagnostic and Therapeutic Radiographers.

16. The salary threshold of £30,000, will restrict access to new entrants within the professions outlined in Table 1. Staff earning entry level salaries, represent young, mobile, elements of the workforce, for whom relocation poses fewer challenges. These prospective staff have the potential to settle and establish careers within the NHS. Restricting the flow of entry level staff negatively impacts on international recruitment initiatives. Therefore, it is important that we make special provisions for new entrants, not only in terms of a reduced skills threshold as suggested by the MAC^[7], but also a reduced salary. By extension, where Doctors appear on the list, we would support their inclusion at training grades of CT1 and above.

17. Similar detailed data on salaries is not readily available for the social service sector, but for social care staff, estimates from stakeholders and employers indicate that with the exception of social workers and nurses working in care service providers, a significant proportion of social care staff earn less than £30,000. A reduced skills threshold would benefit the social services sector (over 22,000 of the care and managerial workforce in social services in Scotland have to gain qualifications at RQF6, while from 2020 the majority of the care workforce will have to gain qualifications to RQF3^[8]).

18. The White Paper indicates that there should be some flexibility to the minimum salary threshold, to enable migration at lower salary levels^[9]. It is important that a reduction in the salary threshold is considered, to allow entry for appropriately skilled health and social services staff.

19. In addition to the proposed retention of minimum salary thresholds, it is concerning that the UK Government has accepted the recommendation of the Migration Advisory Committee not to adopt a so-called 'low-skilled' migration route. UK Government accepts that this is likely to have an acute impact on particular sectors of the economy, including social care. Nevertheless, the White Paper proposals for a transitional and time-limited route for temporary short-term workers will not address these likely impacts. It is the view of the Scottish Government that the proposal will categorically not meet on-going workforce needs across health and social care. In our view, such a scheme would promote instability and increase costs by encouraging higher levels of workforce turnover. Consequently, this would have significant negative impacts on health and social care employers, including health boards, local authorities and third and private sector care providers, not to mention the beneficiaries of health and social care provision. The transitional time limited route will also negatively impact the continuity of care, interfering with the relationships established between staff and service users, that form a key component of high quality, rights-based care provision.

20. Additionally, as the proposal stands, it is antithetical to the principles of fairness and dignity, offering applicants no right to access public funds, no ability to extend their stay, no ability to switch to other visa routes, no ability to bring dependents to live with them, and no prospect of working towards permanent settlement. Not only is this grossly unfair, but the scheme will offer little or no incentive for international workers to seek to come to the UK in the first place and as such is not likely to provide the necessary assistance that employers will need as they seek to fill skills shortages across the sector. It must be recalled that there is significant interdependence across the health and social care system. Where shortages exist within the social care workforce that affect service delivery capacity, this can have a concomitant impact on service delivery within both primary and secondary healthcare services.

Economic and Fiscal Impacts: The Net Negative Effect on Health and Social Care Services Delivery

21. Turning briefly to the UK Government's own analysis of the impact of the White Paper proposals, the Economic Appraisal appended to the White Paper acknowledges that moving to a system that applies both an RQF3+ skills threshold and a £30,000 salary threshold could reduce annual inflows of EEA long term workers by around 80%^[10]. Again, using the UK Government's own analysis, this could result in a reduction of between 200,000 and 400,000 fewer long-term EEA workers in the UK by 2025^[11]. This is predicted to have a negative effect on the UK's economic output with anticipated reductions in both aggregate GDP and GDP per capita. Again, the UK Government's own fiscal analysis indicates that this net reduction in EEA migration would have a negative impact on Exchequer receipts, particularly as EEA migrants tend to have a lower fiscal cost and present a greater fiscal benefit than the resident overall migrant population.

22. Analysis presented by the MAC indicated that an EEA national, aged around 20 and with no dependents, would only need to earn between £10,000 and £15,000 to provide a net fiscal contribution^[12]. This is supported by the Scottish Government's own analysis, which found that on average each additional EU citizen working in Scotland contributes a further £34,400 in GDP and that as there are some 128,400 EU citizens employed in Scotland, this implies that the total contribution to GDP is in the region of £4.42 billion per annum. The Scottish Government's own economic modelling also shows that on average, each additional EU citizen working in Scotland contributes some £10,400 in government revenue. The UK Government estimates that the cumulative fiscal cost to the exchequer of a reduction in EEA migrants is likely to be between £2 and £4 billion by 2025. Investment and reform is necessary in light of the predicted impact of Brexit on the health and social care sector, and the potential economic damage to Scotland's GDP of £12.7 Billion by 2030, compared with staying in the EU^[13].

23. Equally, there are widely anticipated negative impacts on the labour market, which has implications for public services delivery, and which in turn will have impacts on the wider UK population. Worker inflows of EEA migrants (assuming an RQF3+ skills threshold and a minimum salary of £30,000) within medical services could be reduced by nearly 70%^[14]. This rises to almost 100% of EEA worker inflows into caring, leisure and other services. This does not necessarily represent a large overall proportion of the resident workforce, when contextualised in terms of the overall size of the health and social care sector. Nevertheless, the aggregate figures signally fail to account for the overall strategic and social contribution of specific posts to health and social care services delivery, nor do they factor in the impact that forestalling workforce supply will have in the context of workforce turnover. Once again, the UK Government's own analysis highlights that high, medium and lower skilled occupations are likely to face some labour market adjustment difficulties as a result of these immigration proposals. Health Professionals, Therapy Professionals, Health and Care Services Managers and Welfare Professionals are identified as being posts of comparatively high relative value in terms of wages and overall contribution to public services, whilst also being likely to encounter labour market adjustment difficulties. A reduction in care services availability linked to staffing shortages would have significant knock-on effects due to the impacts on unpaid carers' ability to participate in the labour market, with over a third of carers reporting they have given up work to provide care.

24. In addition to the foregoing, it should be noted that a reduction in EEA worker inflows is likely to have a negative impact on the working age population overall. In Scotland in particular, all domestic population growth over the next 10 years is anticipated to come from inward migration. As Scotland is significantly less urbanised than the rest of the UK, the contribution of individual migrants to the communities in which they live, along with the wider contribution to public services delivery, society and Scottish culture, cannot be underestimated, and extends well beyond their work-related productivity. In particular, the pattern of population distribution and depopulation trends in remote and rural areas means that the value of migrants is more than their skills contribution to the labour market. Rural population sustainability is dependent on a progressive commitment to support rural services delivery, key services including GP and district nursing services, social care services and access to community hospitals are vital^[15].

Health and Social Care Delivery in Scotland

25. Health and social care are largely devolved functions in Scotland. As such, the National Health Service (NHS Scotland) is structurally different from its counterparts in other parts of the UK. The vast majority of traditional health activity is conducted through NHS Scotland and a much lower proportion of healthcare activity is undertaken within the independent and voluntary sectors, as compared with England for instance. This means that the vast majority of the health sector workforce is employed by the public sector in Scotland. The private sector makes up 41% of the social services workforce, the public sector 31% and the voluntary sector 28%. However, this varies across Scotland, for example Orkney Island Council employs 82% of the workforce in their area.

26. NHS Scotland is structurally organised into 14 regional (territorial) Health Boards, which are responsible for the protection and the improvement of their resident population's health and for the delivery of frontline healthcare services. Additionally, 7 special NHS Health Boards and 1 public health body, support the regional NHS Boards by providing a range of important specialist and national services.

27. As of 1 April 2016 specified health and social care functions have been delivered under the auspices of an Integration Authority, pursuant to the Public Bodies (Joint Working) (Scotland) Act 2014. There are 31 such authorities, who oversee an integrated budget and the commissioning of services for the provision of adult social care. In some instances, children's social work services have also been devolved to the integration authorities. Health and social care integration is the most significant reform to health and social care services in Scotland since the creation of the NHS in 1948. The clear aim of integration is to place a greater emphasis on joined-up services, anticipatory and preventative care, providing an improved service to carers and their families.

28. Health Boards in Scotland recruit locally to fill vacancies and are collectively the largest group of employers in Scotland; staff working for Integration Authorities may work variously for the relevant regional Health Board or Local Authority. With the exception of territorial boards operating in the central belt (NHS Lothian, NHS Greater Glasgow and Clyde and NHS Lanarkshire, all Health Boards in Scotland deliver their services within a remote and rural context, providing specialist, emergency and elective treatment to sparsely dispersed populations over large geographical areas.