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Hundreds of newly established care providers have been granted licences by the Home Office to sponsor workers from abroad, despite being newly established and having no track record of providing services in Britain, the Observer can reveal.
Suspected bogus companies with copy-and-paste websites, fake-looking reviews and PO boxes as addresses are among those granted licences allowing them to sponsor workers to come to the UK.
Sponsor licences have been granted to newly formed firms that have never filed company accounts and are only a few months old. At least 268 companies that have never been inspected by the Care Quality Commission (CQC) have also been granted licences. Others appear to have been granted licences by the Home Office despite not being registered with the watchdog at all.
The findings come in the wake of a damning report by the former independent chief inspector of borders and immigration, David Neal, into the Home Office’s handling of the social care visa route.
In an unpublished report leaked to the Times last month, Neal found that lax oversight was leading to egregious abuses of the sponsor licence system, including one case where the Home Office issued 275 visas to a care home that didn’t exist.
In another case, the Home Office gave 1,234 visas to a company that stated it had only four staff when given a licence to operate. Neal, who was sacked after a dispute with the department, also found that the Home Office had only one compliance officer for every 1,600 employers licensed to sponsor migrant workers.
An Observer analysis of firms granted sponsor licences suggests failures in basic vetting checks are widespread.
In one case, a domiciliary care agency was incorporated in the UK in January 2023, registered with the CQC in May and granted a sponsor licence in July. It has never been inspected by the CQC, does not appear to have a proven track record in providing care, and lists a communal office as its address. Its website also includes signs it may not be legitimate, including reviews from clients called “Jane Smith” and “John Doe”.
Another company was granted a sponsor licence despite its online profiles stating it is a health and social care recruitment agency. The firm, which says it offers services including “CV preparation”, “interview skills coaching” and “assistance with work permits/visas”, was granted a licence, despite Home Office rules saying employment agencies are not eligible to sponsor healthcare workers.
In another case, a newly incorporated company granted a licence two months after registering with the CQC misspelt the town where it is based as “Doncascter” in its application to the Home Office, but was granted a licence anyway. Records show the firm has never been inspected and its filings are overdue.
Immigration experts and charities said the cases were proof that lax oversight of the sponsor licence system was leading to bogus providers being given approval to recruit internationally, some of which have gone on to scam and exploit workers, including charging thousands of pounds to provide UK visa sponsorship.
The government’s top immigration adviser, Prof Brian Bell, said: “Some of these firms that are setting up are not providing care at all. They are setting up, getting visas from the Home Office and then selling them.” Bell, chair of the Migration Advisory Committee, said he had seen evidence of firms that were setting up and then “immediately applying for a sponsor licence”, and said it seemed “pretty dodgy”.
He added: “There is a big question to be asked. If you’re setting yourself up and the main reason you’re doing that is so you can become a sponsor, is that what we want? Even if they’re providing care and it’s not completely fraudulent, why is it a good idea to let companies set up with the sole purpose of recruiting internationally?”
Adis Sehic, senior policy officer at the Work Rights Centre, said: “These findings appear to validate our long-held concerns that the Home Office’s due diligence activities when granting sponsor licences to employers, particularly in the care sector, are woefully inadequate.”
The Home Office said it was strengthening oversight of the sponsor licence system in the care sector to address “significant concerns about high levels of non-compliance, worker exploitation and abuse”.
Under rules coming into effect this month, providers in England will only be able to sponsor migrant workers if they are registered with the CQC. Data published last week also shows there has also been an increase in government crackdowns on bad employers holding sponsorship licences. In 2023, the Home Office revoked 337 licences and suspended a further 569, up from 331 suspensions and 273 revocations the year before.
But that level is far below what it was between 2014 and 2017, according to Home Office data published last week. The number of companies with the power to sponsor skilled workers has more than doubled in the past two years, from 41,621 at the start of 2022 to 84,730 last year, driven by a surge in overseas recruitment of care workers.
Campaigners are calling for improved minimum standards for visa sponsors, including a requirement for providers to be operating for at least two years before being allowed licences, and a requirement for them to have been inspected recently by the CQC. They say it is not enough for firms to simply be registered with the CQC, because newly registered providers are not always inspected straight away.
They also criticised a government plan to scrap the need for sponsors to apply to renew their licences, which will come into effect next month. Sehic said: “This removes a further layer of administrative accountability, leaving the door open for bogus companies to continue sponsoring, scamming and exploiting migrant workers indefinitely.”
More than 350,000 health and care worker visas were issued to main applicants and their dependants in 2023, almost twice the figure for 2022. Reports of exploitation in the care sector have also soared, with more than 10 times as many potential victims in 2022 as in 2021, according to the charity Unseen UK. Cases include workers being trapped by “repayment clauses”, given false promises, forced to live in squalor, and charged illegal recruitment fees.
In a report sent to the home secretary in December, Focus on Labour Exploitation, an anti-trafficking charity, warned that an emerging trend for “rogue businesses … set up to make profits from recruitment fees”, was fuelling abuses in the sector, and accused the government of conducting “insufficient checks” before granting licences. “The gaps in due diligence and lack of regulation (mean) the UK is facilitating exploitative practices,” it said.
The Home Office said: “We strongly condemn offering health-and-care-worker visa-holders employment under false pretences and will continue to revoke licences from those who abuse the system, as we do not tolerate illegal activity in the labour market.”
