Some agency bodies argued strongly that barring their members from applying directly for permits would harm their businesses in the long-run. One such body was the Association of Technology Staffing Companies (ATSCo) who had been lobbying for the Government to review the current situation.

Ann Swain, Chief Executive of ATSCo, said: "We are very disappointed that Work Permits (UK) has concluded that the existing policy of not issuing work permits to recruitment companies should be retained.

"We believe that this decision is a short sighted one and is partly based on complacency about IT skills shortages. The IT market may be depressed at the moment but it will recover and, once it does, the Government will find itself fire-fighting again to fill the skills gap.

"ATSCo will continue to campaign for IT recruitment companies to be able to obtain permits for workers from overseas. It will be important to concentrate on skills where there is a genuine shortage because we will not want to open the floodgates. However, the reality is that if the Government were to allow selected IT recruitment companies to apply for work permits, the total number coming in may be less because the skills sets would be more effectively utilised."

The other agent's represenative body, REC, had a different reaction. Marcia Roberts, REC's External Relations Director, said: "There are mixed views within the industry, largely dependent on whether you view the main issue to be skills shortages or a lack of demand.

"The latter is of greater concern to members, as demonstrated by recent statistics from the Report on Jobs."

A REC spokesman added: "We're totally neutral because of the mixed views."

Work Permits UK responded to ATSCo's criticism, saying: "The outcome of the Agency Review followed a comprehensive and detailed consultation exercise undertaken by Work Permits(UK). The exercise covered all the major employment sectors and the majority of respondents supported the existing policy. A number emphasised the strength of current arrangements in linking the issue of the permit to the existence of a specific vacancy and checks on the terms and conditions of employment prior to the issue of the permit.

"Additionally, it was also stressed that the current arrangements ensured that the employer (and not an intermediary) of the overseas worker was accountable for their terms and conditions of employment which serve to protect the interests of the overseas worker.

"In general, there was no compelling evidence calling for a change to existing policy."

Freelance IT workers had argued against the opening of the work permit scheme to agents.

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The Editor