London, May 27: The outsourcing of jobs to India is the main reason why the salaries of low-paid staff in the IT industry in Britain have remained static for the past five years, a report has claimed.

The industry report also predicted that only when salaries in India start matching those in Britain would conditions improve for the lowest paid in the UK.

The report from the Association of Technology Staffing Companies (ATSC) effectively blamed India for depressing the wages of staff at the bottom of the IT rung.

Not everyone will agree with this analysis, however.

While it is true that British unions have resisted the outflow of jobs to India, others, including senior politicians, have argued that many companies have been able to survive by cutting costs through outsourcing. Were it not for India, it was argued, many of the lowest paid workers might now be languishing in the dole queue.

But the report claimed the outsourcing of computer contracts to other countries, notably India, had cut the wages of workers in the UK.

It added that the wages of new information technology support staff have remained stuck at £18,000 over the past five years — this is slightly below the national average — while longer serving employees have only seen their pay increase by 0.8 per cent a year.

But salaries for managers have increased by 20 per cent over the last five years to an average of £45,000, the researchfound.

The report predicted that there could be an IT skills shortage in the UK in the future as young people were not studying the subject in sufficient numbers — in marked contrast to the situation in India.

According to the findings published yesterday, low-skilled jobs leaving the UK “acted as a disincentive” for people in the UK to study IT, which could worsen skill shortages in the industry.

Ann Swain, chief executive of the ATSC, underlined the seriousness of the problem: “The outsourcing of entry-level IT jobs has meant fewer graduate-level jobs are available in the UK. It’s like removing the bottom rung from the career ladder.”

She said: “The shortage now is of candidates with a few years’ experience looking for second and third jobs. But how do you get that experience if entry-level jobs are being sent offshore? Concerns over quality of service and data security in outsourced operations are constantly being voiced. However, these concerns haven’t yet prompted organisations to bring their IT support roles back onshore en masse.”

The report predicted that a turning point would arise when Indian salaries, increasing at over 14 per cent, came close to those of UK professionals.

“As the gap converges, it will make less and less economic sense to outsource support functions to India,” added Swain.

One reason for the salary slowdown could be unrelated to India. A sluggish economy has seen a downturn in business in all fields.

India was not blamed when Swain made an upbeat assessment at the end of last year. She had then said: “2007 seems to be concluding the same way that it started with strong demand for contract and permanent IT staff. Our members predict this trend to continue into 2008 with those possessing niche skills more likely to see a rise in pay rates.”

Now, it seems politically more convenient to pin the blame on India rather than the ripple effect of the sub-prime crisis in the US.