The analyst group says the number of offshore staff being used by UK companies will double to 130,000 by 2008 and, as a consequence, there will be a 6% fall in the number of UK-based software and IT services staff.

The bulk of the job cuts are expected in programming and other technical roles, among call centre/help desk staff and in back-office corporate administration– functions which can be relatively easily offshored and, in some areas, automated.

Despite the outflow of jobs at that level, the report concludes that there will still be strong demand for higher-skilled functions in the local domain.

Without the entry level positions, there is concern however over where the next generation of project managers and other skilled managers will come from. The researchers conclude that workforce development, graduate recruitment and formal training has slipped down the agenda, again reducing the potential pool of key skilled workers.