Reform UK levy on employing overseas staff ‘would harm NHS and social care’

Exclusive: Experts say policy could also cause shortages of school teachers and drive some universities to bankruptcy

Reform UK’s plan to make employers pay an annual levy for overseas staff would harm the NHS and social care, cause a shortage of schoolteachers, and could push some universities into bankruptcy, experts have warned.

Nigel Farage’s party has pledged a “migrant worker surcharge”, which would involve a higher rate of employer national insurance as well as a separate annual charge. It would apply to any employees without a UK passport, including EU nationals with settled status, with the exception of Irish passport holders.

The Guardian has also been told that there will be no exceptions for sectors with frequent staff shortages and a reliance on overseas workers, including the NHS and education.

Reform argues that the policy, which would apply UK-wide, is intended to push organisations into taking on British employees. But thinktanks and professional groups in health, care and education said these were very often not available in sufficient numbers.

The King’s Fund, a leading health thinktank, said that while it was unclear how much employers would have to pay – Reform has said only that the levy will be higher for lower-paid staff – with 20% of NHS England staff not being UK nationals the policy would “add costs to a service that is already stretched”.

Suzie Bailey, from the King’s Fund, said: “I think, ultimately, it would impact on the care that the service is able to give, because that money would have to come from somewhere, so other cuts would have to be made.

“It is very hard to see how this would do anything other than impact on healthcare. I really struggle to see how this would work in practice, and that it wouldn’t just have negative impact.”

Prof Victoria Tzortziou Brown, the president of the Royal College of General Practitioners, said moves to penalise overseas GPs risked being especially counter-productive given they would have undertaken specialist training in the UK at public expense.

She said: “General practices, most of which are small-scale independent services contracted to deliver NHS services, could also be disproportionately affected by policies that increase the cost of employing staff.

“Any policy that further increases costs or reduces workforce capacity ultimately risks affecting patients’ access to care.”

Jane Townson, the chief executive of the Homecare Association, said employing overseas care staff was already more expensive and complex, but happened because of rising demand and a lack of UK workers, especially after the Covid pandemic.

A levy that was higher for low-paid workers would particularly affect the care sector, she said: “Providers cannot absorb this. The predictable risks would be reduced access to home care, causing harm to individuals and families, more people stuck in hospital, greater exploitation of workers, and provider failure damaging continuity of care for people – with the bill ultimately landing back on the public purse.”

For schools, the impact could vary. While nearly 6% of teachers in England are non-UK nationals, they are disproportionately represented in secondary schools, and particularly in subjects with shortages of staff such as languages and physics.

James Zuccollo, the head of school workforce at the Education Policy Institute thinktank, said many overseas teachers were long-term UK residents: “A measure that includes settled-status holders would operate not only as a brake on future recruitment but as a charge on staff already teaching in our schools, in many cases for years.”

Nick Hillman, the chief executive of the Higher Education Policy Institute thinktank, said the plans could significantly affect universities, with many spending up to 60% of their budget on salaries.

He said: “As close to half are running deficits at the moment, higher costs still would lead to other spending being cut. No UK university has ever yet gone bust, though some are close, so higher wage bills could, in extreme circumstances, also push one or more to the wall.”

Dr Alicia Greated from the Campaign for Science and Engineering said the plans could also be “highly damaging” to the wider research and development sector.

She said: “High visa costs and complex visa policies already put significant strain and costs on organisations and individuals, taking away money that could be invested in research.”