6 October 2010
The TEC has announced a series of changes to funding policy to improve performance in the industry training sector.
“For nearly 20 years Industry Training has made significant contributions to meeting the training needs of the workforce and lifting productivity in the workplace,” said TEC Chief Executive Dr Roy Sharp.
““Each year approximately 35,000 National Certificate completions are achieved through industry training. While there are many reported successes in industry training, the average completion rate across the sector is about 31 per cent. We are now taking steps to improve on that and get better value for both the Government and industry spend.”
“In 2009, at the Government’s direction, the TEC began a programme of work aimed at improving the educational and financial performance of Industry Training Organisations (ITOs).
“We have undertaken detailed analysis of 2008 and 2009 industry training data as well as initial reviews in several ITOs. This process has identified areas that require improvement and we are modifying funding rules governing ITOs’ use of funding, improving the systems that track trainees, and strengthening the TEC’s own monitoring processes,” said Dr Sharp.
“While our work in this area is ongoing we have been able to work with the sector to develop new operational policies that:
- place an annual cap on funding for each trainee,
- clarify the need for clear evidence of trainee achievement; and
- ensure ITOs are funded at rates that reflect the actual progress of trainees.
“The new operational policy will take effect on 1 January 2011. However, we are already seeing improvements in tracking of trainee progression and removal of low-performing provision.” said Dr Sharp.
“From March 2011 the TEC will be introducing the Industry Training Register which will offer near real time reporting of trainee progression. We are also introducing a regular, in-depth monitoring and review programme of ITOs, alongside governance support, and a Code of Practice to help guide funding decisions in the sector.
“We are confident that the changes proposed will improve the educational and financial performance of the industry training system and ensure taxpayers’ money is spent supporting trainees to achieve.” said Dr Sharp.
A copy of the new operational policy is available here.
Media contact: for more information, please contact the TEC on 027 285 3371 or media@tec.govt.nz
Questions and answers
What are the key operational policy changes?
Changes to industry training operational policy from January 2011 include:
- Over-duration of trainees
From 1 January 2011 we will recover funding where a material difference in actual and nominal durations exists. - Over-enrolment by trainees
From 1 January 2011 we will limit the total funding a trainee may attract to the equivalent of 70 credits per year across all ITOs. This doesn’t impose a limit on the number of credits a trainee can enrol in, just the extent to which the Government will fund that trainee. - Inactive trainees
We will introduce a funding rule that enables us to recover funding from ITOs relating to trainees that have not achieved any credits within a specified period of time. From 2011 the introduction of the ITR will improve the quality of data collection, reporting systems and establish stronger links between funding and training activity.
An ‘exceptions regime’ will ensure there is adequate flexibility in the system. We would expect to agree any exceptions in advance as part of the Investment Plan system.
What will the result of these changes be?
We expect the new operational policy settings will show:
- a reduction in the volume of the lowest-value provision in the ITO sector
- a reduction in the overall level of reserves held by some ITOs as their level of Government funding reduces
- an improvement in overall efficiency of the Industry Training system as ITOs focus on ensuring their trainees succeed
- a stronger focus by ITOs on compliance with the TEC’s funding rules and conditions and the monitoring and management of trainees
- a programme of audit work to enforce compliance with the TEC’s funding rules and conditions
- more robust data on the performance of the Industry Training system.
From March 2011 the TEC will be implementing the Industry Training Register (ITR) which will offer near real time reporting of trainee progression.
We are also introducing a regular, in-depth monitoring and auditing programme of ITOs, alongside governance support, and a Code of Practice to support ITOs in undertaking their core functions.
How will this affect Modern Apprenticeships?
The Modern Apprenticeships fund will be fully allocated for 2011. This is to ensure young people are engaged in core vocational education and trades training.