Industry Training Organisations (ITOs) 2012

The 2011-13 planning environment

ITOs will need to deliver on their core/statutory roles, meet Government expectations, and support the TES priorities within the resource allocations for their Plans.  A capped tertiary education funding environment, with limited funding for enrolment volume growth will continue over the planning horizon.

Meeting Government expectations for ITOs

The TES defines the core roles and expectations for ITOs as:

Core Roles

Government Expectations

To design national qualifications and run moderation systems to ensure fair, valid and consistent assessment against national standards. To arrange for the delivery of industry training that enables trainees to attain these standards. To provide leadership to their industries on skill and training matters, identify current and future skill needs, and work with employers and employees to meet those needs.

Work with industry to ensure that vocational learning meets industry needs. Enable working New Zealanders to complete nationally recognised qualifications. Create clear pathways towards advanced trade qualifications at levels four and above. Build and maintain strong support from the industries they serve.

Providing leadership in industry training needs

The contribution of different ITOs to achieving the Government’s TES priorities depends upon the training needs of their industries.  Ensuring New Zealand has the skills it needs means providing qualifications that respond to the changing skill needs of business and industry.  In this way, they can prepare trainees and employees with the skills they need for a successful career.

ITOs are expected to build on the progress they have made to date in providing leadership to their industries and the whole tertiary education sector on skill and training matters.  This may include sharing information and expertise across industry groupings.  ITOs should also seek to ensure that vocational learning offered at schools, in the workplace, and by other tertiary providers meets the needs of industry.

Through these actions, ITOs will enable working New Zealanders to complete nationally recognised qualifications, and create clear pathways towards advanced trade qualifications at NZQF Level 4 and above.

The performance of ITOs against the Government expectations set out above will be assessed as part of both the recognition of organisations as ITOs, and the decisions about the funding of Plans. 

Designing and arranging training

ITOs are expected to continue to develop national qualifications and robust moderation systems for the delivery of vocational education in a range of settings including at schools, in the workplace, and by tertiary providers.  ITOs should also further enhance their ability to lead the development of advanced trade qualifications through collaborative arrangements with ITPs and other TEOs as relevant to their industry, to increase the uptake of these qualifications across the tertiary education sector.

The performance of ITOs in terms of the design of national qualifications and leadership to their industries is more directly tested as part of the recognition process.  This reflects the importance of these roles as key enablers of the success of the wider tertiary education sector.

ITOs’ core role in terms of arranging the delivery of industry training is measured through the monitoring of the performance against Plan commitments.  This is because the results arising from this core role lend themselves to direct measurement.  Nevertheless, ITOs should outline through Plans how they will give effect to all of their core roles as appropriate to the need of their industries.

In addition, ITOs are accountable for continuing to effectively monitor the training arrangements of trainees, both in terms of ensuring effective learning in the workplace and the excellence of provision purchased from ITPs, wānanga and PTEs.

Financial performance

The TEC will measure the financial performance of ITOs and expects public funding to be used for the purposes for which it has been allocated.  ITOs should ensure that funding, including any accumulated surpluses, is used for the purposes of arranging training and ensuring trainee success.

ITOs are expected to seek opportunities to improve the effectiveness and efficiency of their operations.  This could include exploring further opportunities for collaboration and expanding on the existing ITO clusters.  ITO should also pursue opportunities for the sharing with other TEOs of ‘back-office’ services such as trainee management systems, the development of generic qualifications, and administrative services.

The rate of the industry cash contribution to costs of industry training is a key test of the value of that training to industry.  ITOs are expected to ensure that this rate meets or exceeds the Government’s expectations.

Each ITO will need to:

• determine the Government expectations and TES priorities, consistent with its role, on which it will focus to meet the educational needs of its learners, communities, industry and employers
• ensure that its proposed activities are prioritised to meet this focus
• set performance commitments that will drive improved educational delivery and performance
• collaborate with other ITOs, tertiary providers, and schools (where appropriate) to provide learners with more effective pathways for achieving higher qualifications, and to reduce unnecessary duplication.

ITOs’ proposed Plans are also expected to demonstrate that:

• public funding will be used for the purposes for which it is intended
• the rate of industry cash contribution will meet or exceed the Government’s expectations.

Achieving the TES priorities

ITOs will contribute to the following TES priorities:

• Increasing the number of young people (aged under 25) achieving qualifications at level four and above, particularly degrees
• Increasing the number of Māori students enjoying success at higher levels
• Increasing the number of Pasifika students achieving at higher levels
• Increasing the number of young people moving successfully from school into tertiary education
• Improving literacy, language, and numeracy and skills outcomes from level one to three study.

There are three key areas that ITOs will be required to focus on in order to support the TES Priorities:

• Aligning provision to support the TES priorities
• Raising achievement rates for trainees
• Enabling employees to contribute to the local and national economy.

Aligning provision to support the TES priorities

The TES states the Government wants to see more young people, Māori, and Pacific peoples achieving at higher levels, particularly at level four and above.

This may result in some ITOs identifying a change path to better target programmes towards the education needs of young people, Māori, and Pacific peoples.  The principal objective of this change path is to ensure that the achievement of young people, Māori, and Pacific peoples matches that of other trainees.  Additionally, ITOs will also need to ensure that the rate at which Māori and Pacific peoples participate in industry training reflects their representation in the relevant industries.

The TEC will engage with ITOs to identify how the training that each ITO arranges relates to the educational needs of its industries, the TES priority groups, and the delivery of other tertiary organisations.  ITOs will then commit in their proposed Plans to a mix of provision relevant to the needs of their industries.  Once funding decisions are made, the TEC will monitor the performance of each ITO against that mix.

ITOs will also be expected to identify how they can ensure that there is strong pastoral care for secondary students transitioning into workplace learning.

NQF Level 1-3: Preparing trainees to achieve at higher levels of tertiary education

The TES notes that provision at Levels 1-2 provides an important pathway for people in the workforce to upskill.  ITOs should identify how they can ensure that the qualifications they develop and the training they arrange improves the output performance noted above.

The TES also signals the need to improve literacy and numeracy results for learners from NZQF Levels 1-3 study. ITOs that wish to arrange training at NZQF Levels 1-3 will be required to show, during Plan engagement, how they intend to embed literacy and numeracy competencies in the provision they arrange at this level.

Effective provision at these levels also prepares learners to succeed at higher levels of tertiary education and progress to higher skilled jobs.  This includes learners that have not succeeded in a secondary school environment, learners without previous tertiary qualifications, and migrants.

ITOs will need to ensure that training adequately prepares trainees at lower levels of the framework and actively supports progression in line with each trainee’s skill development, in order to then support higher level achievement for the TES priority groups.

By 2011, ITOs will have built their capacity and capability to deliver embedded literacy and numeracy to their Level 1-3  provision as appropriate to the need of their industries.  Including literacy and numeracy as part of Level 1-3 provision will become ‘business as usual’.

Raising achievement rates for trainees

The TES states that a key driver to improve the value of public investment in tertiary education is to improve programme and qualification completion rates. Programme and qualification completion rates indicate trainees have achieved their learning goals and are associated with better employment and social outcomes.

Employers are integral to the selection of industry trainees both through their employment of suitable people and the selection of employees to participate in training.  For this reason, ITOs need to ensure that training arrangements take account of the educational needs of trainees and the priorities of business.  ITOs can influence the success of trainees by developing programmes that meet each trainee’s needs, including mentoring where required, and providing support to employers.

The TEC will measure the performance of ITOs in a number of ways. These will include the extent to which trainees are developing skills and competencies that should contribute to the productivity of workplaces (through the credits achieved by each trainee) and the attainment of qualifications.

ITOs will also need to improve the rate at which trainees enrolled in Limited Credit Programmes progress to and complete National Certificates.

As part of the Plan development process, the TEC will provide each ITO with their credit achievement and qualification completion performance information in relation to the TES priority groups.  ITOs will be expected to outline how they intend to raise output performance.

Trainee achievement rates will influence future funding allocations to ITOs.

Enabling employees to contribute to the local and national economy

The TES states that one of the Government’s six main structural policy drivers is to ensure New Zealand has the skills it needs to drive economic performance.  For ITOs, this means designing national qualifications and arranging training that respond to the changing skills needs of business and industry, and ensuring that employees have the skills they need for a successful career.

The TEC will continue to work with the sector to develop approaches to capture the employment outcome performance of qualifications.  These will inform future funding decisions and the publication of performance information. Such measures will take account of the requirement that industry trainees be in employment.

Institutions should plan their provision on the basis that outcome performance will inform funding and monitoring processes in the future.

Developing performance commitments 

ITOs are expected to set performance commitments in the following areas:

• Improving transitions from secondary school to NZQF Levels 1-3 study for younger learners, Māori, and Pacific trainees
• Improving progression rates from NZQF Levels 1-3 to higher levels of study for younger learners, Māori, and Pacific trainees
• Embedding literacy and numeracy in an increasing proportion of all STMs at NZQF Levels 1-3
• Ensuring NZQF Level 1-3 provision equips learners with the skills needed for employment
• Ensuring rates at which Māori and Pacific trainees participate in training reflects their representation in the relevant industries
• Ensuring that NQF Level 1-3 provision supports progression in line with each trainee’s skill development.

ITOs are required to make specific commitments regarding:

• Māori participation and achievement at levels four and above
• Pacific participation and achievement at levels four and above
• participation for trainees under 25 and achievement at levels four and above
• the number of trainees participating in industry training for the first time
• overall Qualification completion rate
• overall credit achievement rate
• STMs which include embedded literacy and numeracy at Levels 1-3 and the percentage of Level 1-3 STMs with embedded literacy and numeracy
• the rate of industry cash contribution
• the fulfilling of ITO’s leadership role including the developing or updating of Strategic Training Plans
• ensuring that the funding allocated to ITOs is used for the purposes for which it was intended
• the alignment between programme durations for funding purposes, and the average duration for trainees
• the rate at which trainees progress from Limited Credit Programmes to National Certificates, and complete National Certificates
• the number of ITO-developed National Qualifications that are used by other TEOs.

2010 Review of Industry Training Policy Framework

The 2010 review of policy frameworks led to a number of changes that improve the link between funding and performance.  Changes needing to be taken into account when planning provision and setting Plan commitments for 2012 include:

• Industry cash contribution (ICC): each ITO is expected to achieve a minimum of 30% ICC. From 2013, the level of an ITO’s ICC will be a key consideration when the Minister considers ITOs’ applications for recognition.
• From 2013, training arranged at levels 1-2 must be towards qualifications of 40 credits or more and must include the embedded literacy and numeracy support
• Programme completions and credit achievement for Modern Apprentices are now linked directly to all future purchasing decisions.