It's about to get much easier for UK startups to hire entire teams of people from outside the EU
The government-funded quango was granted the power to endorse visas for up to 200 skilled tech workers outside the EU in April 2014.
But Tech City UK has been under pressure to improve its immigration record after a freedom of information request revealed that it only gave out seven of the possible 200 visas in the year leading up to April 2015. Tech City UK said this was partly because it had a high bar but it's also because the visa was poorly marketed, with only 10 people applying for the so-called "Tier 1 Exceptional Talent visa" in an entire year.
Tech City UK wrote in a blog post that it is changing the visa scheme on November 12 so startups can access the talent they need to in order to grow their companies.
"The new Tech Nation Visa Scheme will prove to be a vital tool for companies that want to secure the high caliber people they need to quickly scale their product and service operations," said Tech City UK CEO Gerard Grech in the blog post.
The most significant change to the visa is arguably that it can now be applied for by up to five people at a time. This means that well-funded companies like TransferWise and Shazam will be able to poach entire teams from rival firms in hubs like Silicon Valley and Bangalore.
One of the current issues with the "exceptional talent" visa is that it's only available to a relatively narrow pool of people with a proven track record. In a bid to address this issue, Tech City UK said it now plans to start considering applications from individuals that show "exceptional promise".
Through the Tech Nation Visa Scheme, the quango also said it will offer support to UK companies that are scaling up quickly by offering them a fast-track route. The support for scale-ups comes after the Google-backed Scale-Up Institute called for dedicated immigration visas for such companies.
Tech City UK is also further expanding its focus to the North of England, where there are 170,000 people working in the technology sector, according to the Tech Nation report.
Digital businesses in Hull, Leeds, Liverpool, Manchester, Newcastle, Sheffield and Sunderland will be eligible to fast-track applications and they'll also be given access to a visa support service.
Tech City UK described the relaxed immigration rules as an evolution of the current Tier 1 Exceptional Talent visa. More details about the new criteria for the Tier 1 visa will be shared on 12 November, it said.
Tier 1 vs. Tier 2
Startups and trade bodies have welcomed the changes to the Tier 1 Exceptional Talent visa but they're more concerned about the proposed changes for the Tier 2 General visa, which many UK tech companies also use.
The Home Office has tasked the Migration Advisory Committee (MAC), a group of independent economists, with exploring how to make it even harder for non-EU nationals to enter the UK under the Tier 2 visa.
Specifically, the MAC is looking at raising the salary threshold, restricting which roles are eligible, limiting the amount of time a role can be classed as in shortage, introducing a skills levy, and restricting the rights of dependents.
The MAC is due to submit its report to the Home Office in mid-December.
Under the Tier 2 scheme, there are 20,700 visas available a year to employers who want to recruit a non-EU skilled worker.
Guy Levin, executive director of startup campaign group Coadec, (The Coalition for a Digital Economy) said: "It's important to remember that the Tier 1 route is tiny compared to Tier 2, which is under review at the moment and likely to be squeezed further. So while this is a positive step today, the bigger decision is yet to come."
Charlotte Holloway, head of policy at industry body Tech UK, which represents over 850 UK technology firms, added: "The tech community will be pleased at this development, but wider questions remain on the government's current proposals to reform the Tier 2 visa scheme for skilled workers on which many tech companies depend."
Nick Hargreaves, cofounder of Cloud Employee said 200 foreign technology specialists are really just a "drop in the ocean" of what's needed.
Injecting life into Tech City
Successful British companies like Huddle have been enrolled on Tech City UK support schemes like Future Fifty and seen little benefit to their business. The company's founder, Alistair Mitchell, told Business Insider last month that there is no longer any need for Tech City UK to exist.
But the organisation appointed prominent venture capitalist Eileen Burbidge as chair recently and she's out to change the quango's tarnished image.
"A balance we have to strike in the country, whether it's facilitated through Tech City UK or other people, is that we continue to need highly skilled workers at the same time that we try and cultivate those skills domestically through the school system," Burbidge told Business Insider when she was appointed Tech City UK chair.
"For the immediate future we absolutely need highly skilled talent, and it's difficult because obviously there's a larger political narrative which is about the stress on social services of an ever-growing population, but I think that what we can do are small measures, small things about making sure that we know where certain pockets exist for need or demand, and how to service that."
Burbidge has already introduced an entrepreneur advisory panel to help guide Tech City UK that includes JustEat CEO David Buttress, FanDuel cofounder Lesley Eccles, and TransferWise cofounder Taavet Hinrikus.