The number of software development jobs in the UK has dropped five per cent from 34 per cent to 29 per cent in the past year, according to the latest research.

The findings from ReThink Recruitment reinforce the premise that a global division of labour is emerging in IT, with the UK specialising in project management and consultancy, while developing countries increase their share of work in more technical areas.

And while development job opportunities are dropping, the highest paying roles - such as consultants and managers - are taking a larger share of the IT market than ever before, says the report.

The demand for consultants is partly fuelled by the high level of mergers and acquisitions, producing integration work. Growing public sector outsourcing requirements are also a factor.

The fear that higher-value technical roles will also be sent offshore is not new. But it is now having an impact on the jobs market, said ReThink Recruitment managing director Jon Butterfield

“Some UK financial services businesses are now shifting application development offshore to low cost locations lessening new demand for some programming skills in the UK,” said Butterfield.

“IT contractors can help guarantee their future income by updating both their IT and business skills,” he said.

Indian software engineers are paid around £6,500 a year, compared with around £32,000 a year for UK software engineers. But wage inflation of 15 per cent for Indian software engineers means the gap is narrowing fast.

“When wages for Indian software specialists reaches 40 per cent of the UK rate,the financial case for offshoring begins to unravel. We are not there yet, but in five years we could be,” said Butterfield,” said