Performance linked funding
Performance-linked funding applies to Student Achievement Component (SAC) funded Tertiary Education Providers and to Industry Training Organisations.
Performance-linked funding is one of a number of approaches intended to improve educational outcomes for students and employers and improve value for taxpayers’ money.
Performance-linked funding will be targeted to encourage all Tertiary Education Providers and ITOs to reach an acceptable standard of educational performance.
The TEC publishes performance information annually for all SAC-funded TEOs[1] and ITOs[2].
Tertiary Education Providers and ITOs also have to define performance commitments as part of their Investment Plans. These performance commitments encompass the Government’s priorities in the Tertiary Education Strategy 2010–15, for example, achievement for young people at higher levels of study.
Key features
Further information is available on the:
Key features of the performance-linked funding framework for the SAC funded sector
The performance of each SAC funded TEO will be measured at four grouped New Zealand Qualifications Framework (NZQF[3]) levels: 1 - 2, 3 - 4, 5 - 6 and 7 - 8. In order to create a level playing field, performance-linked funding treats all providers in each grouped qualification level the same.
TEOs performing above the 50th percentile in each grouped qualification level will continue to receive 100 percent of their funding.
A maximum of 5% of a TEO's funding in 2012, at each of the grouped qualification levels, will be based on the provider's performance in 2011 against up to four of the following Educational Performance Indicators:
Qualification completion rate: this measures successful qualification completions as a proportion of total enrolments in a given year.
Course completion rate: this measures successful course completions as a proportion of course enrolments in a given year.
Retention (completion/continuation): this measures the proportion of students in a given year that complete a qualification, or re-enrol at the same organisation in the following year.
Progression: this measures the proportion of students who progress to a higher level of study after completing a qualification in the previous year.
These performance indicators have been selected for performance-linked funding as they are a good indication of a TEO's performance in relation to the educational achievement of its learners. Longer term, it may be possible to include other outcomes, such as students’ success in the labour market.
Further details of how performance-linked funding for SAC funded TEOs will work are available. These include details on weightings, performance scores, and thresholds.
Key features of the performance-linked funding framework for the ITO sector
The educational performance of each ITO will be measured at two grouped NZQF[4] levels: 1 to 2, and 3 and above.
A maximum of 5% of an ITO’s funding in 2012, at each of the grouped qualification levels, will be based on the ITO’s performance in 2011 against the following two Educational Performance Indicators:
Credit completion rate (achieved vs. expected credits rate)
This represents the credits achieved by trainees at an ITO, as a proportion of the total number of credits in which trainees were enrolled in a given year.
Programme completion rate (credit-weighted programme completion rate)
This measures the number of programmes being completed by trainees, as a proportion of the total number of credits enrolled at each ITO. The rate is weighted by the number of credits associated with each of the completed programmes, in order to take into account the ‘size’ of the programme.
These performance indicators have been selected for performance linked funding as they are a good indication of how ITOs support trainees to achieve. Longer term, it may be possible to include other outcomes.
Further details of how performance-linked funding for ITOs will work are available. These include details on performance scores.
Note: Performance Linked Funding for the ITO sector includes both the Industry Training Fund and the Modern Apprenticeships fund (STM component only).
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Last changed:
8 February 2012