The economic benefits of migration to local communities has been underestimated by the UK government, according to an influential think tank.

The economic benefits of migration to local communities has been underestimated by the UK government, according to an influential think tank.

A report by the Institute for Public Policy Research (IPPR) said migrant workers fill skill gaps and do jobs British workers do not want to do.

However, the research found that employers and local economies are not reaping the full benefits because many migrants are only staying for short periods rather than settling in the UK.

The full report will be published next month, but early findings from the centre-left think-tank said local economies benefit because migrants often tend to be more entrepreneurial and may have different skills which can lead to the establishment of new types of businesses.

They report also argues that the experience of migrants setting up small businesses can also expand the market for firms in the area they move to by establishing links to their countries of origin.

IPPR analysis of immigration statistics showed that more than a million migrants came to the UK from the eight countries that joined the EU in May 2004, but about half of those have since returned home.

The report recommends that local councils and the government should ensure they are doing enough to attract and retain migrants.

Latest figures from the General Registers of Scotland show 16,800 more people came to Scotland from overseas in 2007 than those who emigrated.

Since 2004, official statistics show more than 52,000 people came to Scotland from the new EU countries, most of them from Poland.

However, business leaders north of the border have cautioned that immigration cannot be seen as a substitute for a skilled Scottish workforce.

David Lonsdale, of CBI Scotland, said: "Few issues are of more importance to firms than ensuring they have access to a supply of good quality, skilled, and enthusiastic workers.

"Our country has to be able to attract migrants of all skill levels if it is to compete in the global economy. That means making Scotland an attractive place to work for highly-qualified scientists or IT experts.

"And it means making sure that lower-skilled migrants are able to step into the often hard-to- fill vacancies in sectors such as agriculture, food production and hospitality that indigenous Scots don't find attractive.

"The reality is that without migrant workers many jobs would not be done at all. That would be bad for the individual businesses affected, but also for the wider economy, and tax revenues would suffer too.

"Our economy benefits from being open to the skills that migrant workers bring, but we must not fall into the trap of thinking that immigration is the sole solution to the skills problems this country faces. Inward migration cannot be an alternative to upskilling our home-grown workforce or to labour market policies that help those on incapacity or unemployment benefits back to work."

The IPPR also said local authorities and employers need to ensure that British workers' wages and job opportunities are not damaged and that firms do not become overly reliant on migrant workers.

Laura Chappell, IPPR research fellow, said: "Migrant workers can bring enormous benefits to local businesses and areas.

"However, many of these contributions - such as new ideas and ways of working, and an entrepreneurial spirit - may have been neglected in the past.

"To get the most out of migration, local communities, alongside local leaders, businesses, universities, and central government, need to recognise the variety of benefits that migrants can bring, and plan accordingly.

"Migration flows are critical, but the bigger story is how we manage more diverse communities to deliver the greatest benefits for everyone."