The Court of Appeal's decision to outlaw Department of Health plans to limit the number of applications from international medical graduates has important implications for the 2008 recruitment round, write Nick Chronias and Afrene Campbell

It never rains but it pours. This must be the sentiment felt by the DoH at the moment. It has recently learned that the Court of Appeal has deemed its guidance to NHS employers unlawful and that it believes international medical graduates on the Highly Skilled Migrant Programme should be considered equally with European Economic Area medical graduates.

This only adds to the problems associated with its Modernising Medical Careers programme: too many candidates and not enough jobs.

Postgraduate deaneries and NHS employers have experienced difficulties of late in managing the recruitment process for postgraduate specialty training. The problem has been simple economics: demand outweighs supply.

Last year, there were nearly 28,000 applicants for just over 15,000 specialty training places, according to national statistical information collated by the DoH. International medical graduates accounted for roughly two-thirds of the total applicants and were in direct competition with UK medical graduates for training places.

Historically, the NHS has depended on international recruitment to fill skills shortages. This was made easier by the Home Office's decision to relax the immigration rules. This meant that graduates from overseas could enter the UK to take up training posts in the NHS which could not otherwise be filled by resident workers.

Foreign graduates have welcomed the opportunity to gain experience and training by working in UK hospitals and community services. A significant number, largely from the Indian sub-continent, have entered the UK expecting a career in the NHS.

The NHS has become increasingly self-sufficient over recent years; significant investment in medical training means the earlier skills shortages have been addressed and demand for specialty training places now far exceeds the supply.

The DoH's solution was to seek to limit the number of applications from international graduates to maximise the opportunities for home-grown applicants. This decision came soon after the Home Office removed the permit-free status which overseas graduates had benefited from for many years.

This meant that unless the specialty training post fell within one of the shortage categories, the Border and Immigration Agency would not approve a work permit application from an international graduate if it was satisfied that there were suitably qualified European Economic Area nationals to take up the specialty training post (also known as the resident labour test).

In effect, there was little prospect of medical graduates from overseas being granted a work permit.

The programme for highly skilled migrants has proved a popular route to work in the UK, as those entering do not require work permits and do not need a specific job offer. And there is currently no requirement for employers to satisfy the resident labour test before offering these visa holders employment.

However, the DoH issued guidance in April last year which imposed such a requirement so that home-grown graduates would be given priority in a fiercely competitive recruitment process.

Although the DoH's decision on this issue gained support from many quarters, it was deemed unlawful by the Court of Appeal. The court's ruling was the result of a successful challenge by the British Association of Physicians of Asian Origin, a number of whose members had for many years enjoyed the benefits of the international recruitment.

The Court of Appeal agreed with the association that the guidance improperly affected immigration law and practice, by seeking to impose a restriction on the employment of the highly skilled migrant visa holders.

In so doing, the Court of Appeal overturned the decision of the High Court in an earlier unsuccessful challenge. It concluded that the DoH had used its influence as a policymaker to regulate the conditions attached to the immigration status of a particular group.

Health secretary Alan Johnson intends to appeal. It is unlikely that we have heard the last on this issue.

Practical implications

In the absence of a successful appeal by the secretary of state, the Court of Appeal's decision has some important implications for the 2008 recruitment round.

First, the DoH will not be able to reinstate its guidance, which has been held in abeyance pending the outcome of this appeal. Second, it means that employers will not be able to rely on this guidance when making recruitment decisions next year.

It also means that any international medical graduates who meet the current criteria for the highly-skilled visa will be able to compete directly with UK medical graduates for specialty training places.

On the basis of this year's figures, the one in two UK graduates who secured medical places may become one in three.

Finally, looking forward to 2008, the DoH, postgraduate deaneries and NHS employers will be forced to group applications from overseas graduates with the already complex task of managing applications for postgraduate medical training posts.

Ultimately, international applications will have to be worked into the replacement for the Medical Training Application Service.

It is likely that the Home Office will be lobbied to make changes to the immigration rules governing the highly skilled migrant programme to neutralise the impact of the Court of Appeal's judgment. It is likely that this, rather than any further appeal, will resolve the issue.

Whether such change can be introduced in time to impact on the 2008 round is unclear at present.

If those changes are introduced, the Court's ruling will have limited impact for postgraduate deaneries and NHS employers. However, in the meantime, they will be bound by the Court of Appeal's decision and should seek advice and guidance to navigate them through the next round of recruitment.