I recently worked for a large consultancy firm on a government project. At least half the consultancy team were foreign staff on short-term visas, renewed on a rolling basis - every few months the staff were sent home for a few weeks then flown back on fresh visas (Are work permits for IT professionals being abused? Employment matters blog, peterskyte.computing.co.uk).

None of them had especially rare skills that could not have been sourced within the UK - I knew UK developers with these skills who were out of work at the time.

Some of these foreign staff were very good, others were inexperienced or just plain incompetent. But it did not matter because they were all on Indian salaries plus tax-free UK expenses, while being charged out to the client at the same rate as the few UK contractors on the project - which was itself about twice the actual rate paid to the UK contractors - so the consultancy was making a vast profit on them.

It was more profitable for the consultancy to bring in foreign workers to cover for their incompetent colleagues, than to hire an experienced but more expensive UK developer to replace them.

Meanwhile, the government client was barred by Treasury rules from hiring its own contract staff directly, even though it would have been much cheaper and more beneficial to the project than paying inflated rates for poor quality foreign staff on revolving door visas.

And the bone-headed government isn't even making any money on tax revenues from these deals, because neither the foreign staff nor the consultancy companies pay much in the way of taxes.

Name withheld on request