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Reform of Vocational Education

The world of work is changing significantly, and vocational education needs to adapt to stay ahead of these changes.

We want a strong, unified, sustainable system for all vocational education that delivers the skills that learners, employers and communities need to thrive, one that helps improve the skills of all New Zealanders no matter where they are in their education or career, and supports a growing economy that works for everyone – learners, employers and communities.

We expect around one-third of jobs in New Zealand will be significantly affected by automation. Today, people over the age of 65 are three times more likely to have jobs than similar aged people were in 2001. The trends driving the future of work will change the skills needed in all jobs, see people changing jobs and careers more frequently over the course of their working lives, and see people working beyond the traditional retirement age.

People with no or lower level qualifications and credentials are most likely to see their jobs become increasingly automated, and many may find it difficult to adapt to new jobs and new technologies. Workers will need to either upskill to do new aspects of a job, or reskill to adapt to a digitally automated environment, or to a new field.

Work-integrated learning will become an increasingly important part of the vocational education system. It gives people the opportunity to earn while they learn, and to gain an education that is more directly relevant to the changing needs of employers.

To support this move towards work-integrated learning, we must ensure that appropriate support is available to learners, employers, and educators, that there is a reliable high-quality assessment process, and that delivery is cost-effective.

The current vocational education system is split, and doesn’t always meet the needs of learners, employers or regions

We currently have two vocational education systems: an industry training system for apprentices and trainees through 11 industry training organisations (ITOs), and another for students enrolled with providers. These providers are: 16 institutes of technology and polytechnics, three wānanga and around 150 specialty private training establishments that deliver vocational education. ITOs arrange training for employees in the workplace, and providers deliver primarily off-the-job training, each with its own system of government funding.

Over time, these two systems have drifted apart, leading to people being confused about how to begin training or learning and how to progress, particularly between on-the-job and off-the-job learning options, or when they get a job or move region. Some employers are concerned that off-the-job learners are not acquiring the technical or employability skills needed in the workplace, and that the current system may keep some learners in off-the-job learning for longer than they need to be. People learning on the job aren’t always getting the support they need to succeed, and this frustrates both learners and employers.

Many employers don’t engage in training and apprenticeships because they find the system too complex and they think it’s too costly for them. For some industries, there isn’t the high-quality, work-focused learning they need.

The system also needs organisations that prioritise the needs of learners who have traditionally been under-served by the education system such as Māori, Pacific peoples, and disabled learners, particularly as Māori and Pacific peoples will form a growing part of the working-age population in the future. Māori, Pacific and disabled learners are more likely to be enrolled in lower-level vocational education qualifications and credentials, and have poorer employment outcomes. This needs to change, particularly as they will form a growing part of the working-age population in the future. Māori and Pacific students often can’t access culturally-responsive learning. Disabled learners often don’t get the support they need. People in rural areas and smaller towns may not have access to vocational education at all.

Some employers have told us the lack of industry input into off-the-job learning is frustrating

One of the roles of ITOs was intended to be standard-setting, but in reality their ability to influence and shape off-the-job delivery to ensure that it meets the needs of their industry is modest. Even though ITOs may represent industry, they can’t always influence the type or standard of delivery across all providers. Their influence has been moderated in order to manage conflicts of interest that might encourage them to use their standard-setting powers to strengthen their competitive position with providers.

While some providers have strong direct industry connections, this is not always the case and the level of industry input and influence across providers is uneven in the current system.

Some employers and some industries have told us that the current ITO system doesn’t meet their needs. In other areas, there is no ITO due to gaps in industry coverage, such as information and communications technology, management, and creative arts.

Institutes of technology and polytechnics are facing a number of challenges

Some institutes of technology and polytechnics have continued to experience growth and are high-performing institutions. But others have suffered from falling domestic enrolments in recent years, and some growth among institutes of technology and polytechnics has come from competing in other regions or international enrolments. This has been due to a number of factors, including a strong labour market, government education and funding policies, and increased competition from the labour market, private training establishments, wānanga and universities.

Many costs in institutes of technology and polytechnics have not fallen in line with their declining enrolments, largely due to the fixed nature of these costs, while their communities expect them to continue to offer a broad range of locally relevant programmes. These factors all have, to a degree, contributed to driving higher fixed costs. As a result, several institutes of technology and polytechnics are now under considerable financial stress, some are already in crisis, and more will become so if nothing changes. If things do not change, we are likely to continue to see a retrenching of regional delivery, often in areas where New Zealanders most need access to education.

Institutes of technology and polytechnics are public institutions meant to ensure that vocational education is available throughout New Zealand. However, rather than being a system that shares programmes, resources, costs, risk and other organisational and system elements, institutes of technology and polytechnics are separate public entities that need to sustain themselves independently.

Some are doing well, and there are examples of strong collaborations in the current system, and even those that are struggling with viability issues are able to deliver education in their regional communities – for now. However, the financial viability of institutes of technology and polytechnics affects the whole public vocational education system and the current system has made this quite challenging for many. In recent years, some institutions have been forced to focus heavily on financial viability and pursuing areas of competitive advantage, rather than focusing on teaching and learning, their region and future needs.

Change will benefit the regions

The Government wants to create a vocational education system that delivers more for our regions, so that every learner has more choice in accessing quality vocational programmes and teaching where they live and work.

The proposals aim to improve and extend regional access and responsiveness. Making the system more efficient and more flexible, as well as more embedded in regional labour markets, will mean better service for our regions.

The Government’s plan is ambitious and necessary

The changes are an interlinked and interdependent package that collectively will result in a more streamlined and efficient system of vocational education to meet the needs of all New Zealanders.
The Government believes the changes will result in a significantly improved vocational education system that is both sustainable and fit for the Future of Work.

The risks of not acting are significant. We need to accept that disruption now will strengthen the vocational education system for the long term.

What are the changes?

We want to create a strong, unified, sustainable system for all vocational education that delivers the skills that learners, employers and communities need to thrive.

The scope of the Reform of Vocational Education includes seven key changes that will create a unified vocational education system:

Create Workforce Development Councils: Around four to seven industry-governed bodies, to give industry greater leadership across vocational education.
Establish Regional Skills Leadership Groups: These groups would provide advice about the skills needs of their regions to the Tertiary Education Commission (TEC), workforce development councils, and local vocational education providers.
Establish Te Taumata Aronui: A group to help ensure that the Reform of Vocational Education reflects the Government’s commitment to Māori Crown partnerships.
Create a New Zealand Institute of Skills & Technology (the Institute): A unified, sustainable, public network of regionally accessible vocational education, bringing together the existing 16 ITPs.
Shift the role of supporting workplace learning from ITOs to providers: The new Institute and other providers would support workplace-based training as well as delivering education and training in provider-based settings, to achieve seamless integration between the settings and to be well connected with the needs of industry.
Establish Centres of Vocational Excellence: CoVEs will bring together the Institute, other providers, workforce development councils, industry experts, and leading researchers to grow excellent vocational education provision and share high-quality curriculum and programme design across the system.
Unify the vocational education funding system: A unified funding system will apply to all provider-based and work-integrated education at certificate and diploma qualification levels 3 to 7 (excluding degree study) and all industry training.

Together, these changes aim to create a vocational education system that is ready for a fast-changing future of skills, learning and work.

This unified system will:

Deliver to the unique needs of all learners, including those who have been traditionally under-served, such as Māori, Pacific peoples, and disabled learners, particularly as Māori and Pacific peoples will form a growing part of the working-age population in the future.

Be relevant to the changing needs of employers.

Be collaborative, innovative and sustainable for all regions of New Zealand.

Uphold and enhance Māori Crown partnerships.

The new system will have a stronger focus on employers, delivering the skills they need, providing more support for their employees, and ensuring greater consistency in vocational education across the country.

Longer term, this will increase the number of employers who are engaged in vocational education.

Learners will receive more support while they are training, and vocational education that is more relevant to work. They will be able to move more easily between regions and between work-based and provider-based training, and will be able to continue training more easily if their employment situation changes.

Structure of the vocational education sector

Why are you creating a single institute of skills and technology?

We heard that many communities value what their institutes of technology and polytechnics provide, and want the best of their work to continue. Communities understand that the financial problems of some parts of the sector mean they can’t continue as they are. We also heard that the communities that have a strong institutes of technology and polytechnics don’t want to lose that asset to their region.

We also heard that institutes of technology and polytechnics are seen to be competing with each other, leaving some institutions struggling and not being able to offer a choice of courses. Some employers don’t see that institute of technology and polytechnic graduates have the skills needed to do the job. Māori and Pacific communities and businesses told us that they often don’t feel institutes of technology and polytechnics offer them learning that responds to their culture and skills needs.

People from all walks of life agree that New Zealand needs a public vocational education system that works for everyone. To make sure that we have an education system that can continue to deliver throughout the regions – and increase regional opportunities – we need something that is more sustainable than the present polytechnic system. While there are some institutes of technology and polytechnics that are managing very well financially, and we recognise that, we need to take a system view to create something that works for all New Zealanders – not just those fortunate enough to live in a region with a successful institutes of technology and polytechnics.

A single New Zealand Institute of Skills & Technology (the Institute) will be a new kind of organisation that supports on-the-job and off-the-job learning, in a way that is culturally responsive. It will be a unified, sustainable, public network that supports the shift of industry training into a provider-based support system, while also bringing together the existing 16 institutes of technology and polytechnics to operate as a national campus network. This will ensure that high quality vocational education will be available to all parts of New Zealand.

The Institute will be the cornerstone of a sustainable system of vocational education provision. Its national network will enable students and employers to transition between delivery sites and educational modes, so that the Institute can be a true long-term, skills training partner to firms operating both regionally and nationally.

The majority of vocational education provision would be offered through the Institute via the network of regional campuses, a network of support for on-the-job training, and a network of online delivery based on capability at The Open Polytechnic, the Southern Institute of Technology, polytechnics involved in the TANZ eCampus platform, and at other institutes of technology and polytechnics involved in e-learning.

Regional and local campuses will focus on delivering high-quality and relevant services to learners, employers and communities across all of New Zealand, guided by the advice of regional leaders – rather than competing with each other for enrolments. The services of the whole Institute will help the regions respond comprehensively to regional need. This includes a stronger focus on the groups that have been under-served to date, such as Māori, Pacific peoples, and disabled learners, particularly as Māori and Pacific peoples will form a growing part of the working-age population in the future.

It will be a consolidated organisation that makes strategic use of capital, achieves greater efficiency in programme design, development and delivery, and reduces the duplication of functions within the current vocational education network, allowing regional campuses to focus on what is most important to their communities – teaching, learning and student support.

Will there still be regional polytechnic campuses after this process is finished? What do the changes mean for regional communities?

Yes. The Government is committed to providing access to high quality tertiary education and lifelong learning for all New Zealanders, so that every learner has more choice in accessing quality vocational programmes and teaching where they live and work.

A single New Zealand Institute of Skills & Technology (the Institute) will provide on-the-job and off-the-job learning through a unified, sustainable, public network that supports on-the-job learning, while also bringing together the existing 16 institutes of technology and polytechnics to operate as a national campus network.

This will ensure that high quality vocational education will be available to all regions.

A charter for the Institute will be set out in legislation, providing an enduring guarantee that the Institute and successive Governments will continue to preserve a strong network of regional campuses and delivery, and that the Institute will support learners effectively and be responsive to the needs of industries and communities. The Council of the Institute will be expected to give effect to the provisions in the charter and report as to how it is doing so through its accountability documents.

The Institute will be the cornerstone of a sustainable system of vocational education provision. Its national network will enable students and employers to transition seamlessly between delivery sites and educational modes, so that the Institute can be a true long-term, skills training partner to firms operating both regionally and nationally.

Regional and local campuses will focus on delivering high-quality and relevant services to learners, employers and communities across all of New Zealand, guided by the advice of regional leaders. The services of the whole Institute will help the regions respond comprehensively to regional need. This includes a stronger focus on the groups that have been under-served to date, such as Māori, Pacific peoples, and disabled learners, particularly as Māori and Pacific peoples will form a growing part of the working-age population in the future.

The Institute will work closely with employers to bring together the best aspects of each vocational education system, leading to a mix of delivery methods (on-the-job and off-the-job) that responds to the needs of employers and prepares learners for their career (or career change).

The Institute’s Council will have a statutory duty to ensure that the Institute has effective local and national stakeholder engagement processes, which should include arrangements for Pacific community and business voices, disabled learners and others, and gives appropriate consideration to international learners and their potential contribution to regions.

Regional Skills Leadership Groups will support the regional skills system, including providing advice to the Tertiary Education Commission (TEC), new workforce development councils (WDCs) and local vocational education providers. The TEC would be required to take their advice into account when making investment decisions. Regional Skills Leadership Groups will work across education, immigration and welfare systems to help deliver on regional economic development strategies that work for everyone.

Will my polytechnic lose its name and brand?

Existing qualifications and credentials will be grand-parented under individual current institute of technology and polytechnic brands. The Institute will be expected to carefully work through any changes to the ongoing use of existing brands with communities.

Existing institute of technology and polytechnic councils will be disestablished from day one of the Institute and replaced with a subsidiary board appointed by the national Council. Subsidiary boards could provide some continuity of members with existing councils; it will be required that around half the members of subsidiary boards will be regional representatives, so that communities will have a strong voice in the development of and transition to the Institute.

While the Institute would be set up as a new and unique tertiary education institution, the Institute and its subsidiaries would still be able to use the protected terms “polytechnic” and “institute of technology” to describe themselves.

Is my polytechnic going to disappear on 1 April 2020?

At present, the 16 institutes of technology and polytechnics all operate largely independently, and using a number of different systems, processes, methods, accreditations and brands.

The approach proposed is establishing the Institute on 1 April 2020 with 16 subsidiaries for up to two years as a transition measure. The Minister will decide whether to extend the life of any or all subsidiaries on advice of the Institute.

Transitioning institutes of technology and polytechnics to subsidiary companies will minimise initial disruption to their activities compared with folding all institutes of technology and polytechnics into the Institute from day one. Learners will experience little change during this phase of the transition, and business-as-usual activities would continue uninterrupted.

It will be up to the Establishment Unit and the Institute Board to determine what organisational structure is most appropriate for the Institute in the longer term.

Will my polytechnic lose its cash assets?

A number of communities have indicated concerns about retaining access to reserves, where these have been built up over time and have involved the cooperation of the wider community.

The Institute will set a policy whereby existing reserves from previous institutes of technology and polytechnics (above a set limit) would be consolidated through the central balance sheet of the Institute, but would only be able to be drawn upon for projects and capital expenditure in the relevant region that have been approved by the Institute head office (within specific operating parameters).

Would a New Zealand Institute of Skills & Technology be based in Wellington?

The Institute will not have a Wellington or Auckland head office. The Chief Executive’s office would not be based in Wellington or Auckland.

The head office functions may be distributed across multiple locations. It is not necessary for all of the Institute’s head office staff to be in the same place – a geographically distributed group of staff can operate as a virtual team nationwide, and still be centralised in functional terms, because they are acting as a single team.

Why are you proposing to change the roles of providers and ITOs?

We have heard that learners and employers can find the current system confusing and inconsistent. We heard that to have effective vocational education, industry needs a say in what providers teach and that on-campus students don’t always learn the skills they need to be ready for the world of work. We heard from some employers there is no industry coverage for their training needs.

We heard from some employers that the industry training system works well for them, and that they want to keep what works while also improving what doesn’t. At the same time, the system should aim to cover all industries and enable more employers to access on-the-job training.

We have also been told that learners aren’t always getting the skills to do the job, and may be kept in off-the-job learning for longer than they need to be. We heard that some apprentices and trainees aren’t getting the culturally competent support they need.

We also heard some students at institutes of technology and polytechnics want greater access to work experience and to employer networks to help them understand better the world of work and get the connections they need to secure employment.

The new system will bring down the system barriers between training in a classroom and training in a workplace, so that people can move easily between the two, even within a single programme of study.

As Workforce Development Councils (WDCs) take the place of ITOs, the role of supporting apprenticeships and other on-the-job training will move to the Institute and other providers (wānanga and private training establishments). This will create tighter connections between these trainees and those doing off-the-job training, and will give them access to the same range of learning and pastoral support.

These changes will not change employers' role in training staff. The change in responsibility for the arranging training function to providers should enhance the support that employers receive in training. This would remove the undesirable competition that most agree exists between the two current systems, and remove disruption to learners moving between study and work.

The role of ITOs

The consultation process raised significant concerns from ITOs and employers currently involved in industry training about what they saw as industry losing this role. It will be a major change for approximately 140,000 trainees and apprentices working for 25,000 employers.

The Government has engaged closely with these concerns, and Ministers have met with a number of ITO leaders and some employer representatives. In the end, however, the Government has decided that the benefits, supported by a strong transition, outweigh these concerns.

We need to strengthen connections between providers and employers, so that all learners are work-ready upon completing their qualifications and credentials. We also need to ensure that all learners have strong learning and pastoral support from providers, whether they are studying at providers, or training in the workplace. Finally, we need to avoid a potential conflict of interest that would occur if WDCs were to retain the role of supporting on-the-job learning while also having enhanced standard-setting powers, thereby enabling them to set standards that could favour their own interests in supporting on-the-job learning.

ITOs have, over the past 25 years, developed a strong focus on supporting on-the-job learning. They support employers through a range of mechanisms to train their staff to meet national industry standards and gain recognised qualifications and credentials. Training will continue to be delivered in the workplace, but providers will be responsible for providing this support. They will need the support of industry and employers to fully develop this capability. The system needs to change in order to better connect all vocational education with the workplace, but fundamentally employers will continue to be supported to deliver this training in their workplaces.

We need to retain regional contact with employers and providers to ensure that on-the-job training is able to be successfully delivered through providers like institutes of technology and polytechnics.
ITOs also have significant limitations. One of the roles of ITOs was intended to be standard-setting, but in reality their ability to influence and shape off-the-job delivery to ensure that it meets the needs of their industry is modest. Even though ITOs represent industry, they can’t influence the type or standard of delivery across all providers.

Some employers and some industries tell us that ITOs don’t meet their needs. In other areas, there is no ITO at all due to gaps in industry coverage, such as information and communications technology, management, and creative arts. Providers may also be able to provide more holistic solutions to an employer’s training needs and offer a package to address skills requirements that are outside an ITO’s normal area.

Changed role for providers, more influence for industry

New Zealand needs a vocational education system in which industry and providers have strong and distinct (but complementary) roles. The new system will draw more strongly on industry expertise in setting expectations, providing leadership, and setting standards; and on provider expertise in delivering education and pastoral care. Everyone will have a clear role, with much more industry and employer influence.

Providers’ roles (the new Institute, wānanga and private training establishments) need to expand to support all forms of education and training – on-the-job and off-the-job. There needs to be seamless integration between these different modes of delivery, and providers need to be well connected with the needs of industry.

We need to ensure that all learners have strong learning and pastoral support from providers, whether they are studying on campus or training in the workplace. We also need to strengthen connections between providers and employers so that all learners are work-ready upon completing their qualifications and credentials.

Workforce Development Councils

WDCs will be industry-governed statutory entities, which will give industry greater control over all aspects of vocational education. In the original consultation proposals, these were referred to as Industry Skills Bodies. We heard that this name fell short of describing their proposed role, and have developed the new name from suggestions provided from submitters.

We will work with industry to set up around four to seven WDCs from 2020 onwards to cover most industries. Wānanga will remain outside WDCs’ standard-setting, other than where they support on-the-job learning.
WDCs will get to decide whether programmes are fit for purpose, whether those programmes are on-the-job programmes (like an apprenticeship), taught off-the-job through a provider, or a combination of both. Unless a programme has the WDC’s confidence – effectively, industry’s confidence – it won’t be approved and won’t be funded. WDCs will also provide advice to the Tertiary Education Commission (TEC) on its funding decisions more generally and will get to determine the mix of training in their industries within a fixed funding envelope determined by the TEC.

WDCs will also have the power to require programmes of study to have a ‘capstone assessment’. This is an external assessment, overseen by the WDC, so that everyone can be sure that qualification-holders in that area meet a standard that is acceptable to industry.

WDCs will provide skills leadership for their industry and, like today’s ITOs, they will sometimes provide employers with brokerage and advisory services. But, given their powerful oversight role, they won’t be directly involved in running apprenticeships and other on-the-job training themselves.

Transitioning from ITOs to provider-based support for on-the-job learning

Transfer of on-the-job training to providers will be carefully managed and will occur progressively from 2020 as confidence is gained that sufficient capability is in place in providers to ensure successful transfer of on-the-job training. The use of mechanisms such as creating holding organisations from existing ITOs will be considered to continue current on-the-job training arrangements, with the goal of moving all training to providers by 2022.

This would give employers who are satisfied with their current support the assurance that the transition will be carefully managed over a three-year period to minimise any disruption to services. It would also provide a more structured transition, where that is required, easing pressure on both ITOs and the Institute, and would reassure the Government that providers are migrating towards the sort of organisation that can appropriately manage both off-the-job and on-the-job learning, before confirming the final transition.

A key purpose of the use of any holding organisations would be to protect the interests of employers during the transition period. This allows industry bodies to reform to allow continuity of services. They would enable a phased and well-managed transition of ITO functions to workforce development councils and providers. Holding organisations, which would have statutory recognition, would be able to continue to use existing ITO branding.

Priority industries, such as the primary industry and construction sectors, would be likely to transition first. Officials will work closely with ITOs to develop transition plans.

What other options for change were considered?

In terms of the day one structure, our analysis suggests that the choice is between establishing subsidiaries within the Institute or a consolidated Institute. At present, the 16 institutes of technology and polytechnics all operate largely independently, and use a manner of different systems, processes, methods, accreditations and brands.

The Government has decided to establish the Institute with 16 subsidiaries for up to two years, as a transition measure and enabling the Minister of Education to decide whether to extend the life of any or all subsidiaries on advice of the Institute.

This will contribute to:

ensuring continuity for learners on day one of the Institute, through having legacy brands, accreditations, qualifications and credentials, and powers to award qualifications and credentials contained within individual subsidiaries
avoiding unintentional financial distress as a result of unknown financial arrangements within the Institute
providing the cleanest possible lift and shift process, minimising the transition risk to stakeholders

Further options were explored for the enduring model for the Institute. However, with a change process as complex and far-reaching as this, it is not realistic or prudent to try to lock everything down in advance. For this reason, the Establishment Unit and the new Institute will be tasked with determining the most appropriate structure for the Institute itself.

What are Centres of Vocational Excellence (CoVEs)?

CoVEs will play a key role in driving innovation and excellence in vocational teaching and learning in areas of strategic importance to New Zealand by strengthening links to industry and communities. CoVEs will do this by developing excellent vocational education provision within their areas of specialty and sharing high quality curriculum and programme design across the system.

Their coverage could be pan-sector (e.g. primary sector), industry-wide (e.g. agriculture) or specific (e.g. viticulture). They could potentially also cover key types of educational delivery, such as kaupapa Māori delivery, and include applied research.

CoVEs will bring together the Institute, other providers, workforce development councils, industry experts and leading researchers to grow excellent vocational education provision and share high-quality curriculum and programme design across the system. They will be hosted by a regional campus of the Institute or by a wānanga, and over time, should the network of CoVEs grow, we would expect to see an appropriate regional distribution across New Zealand.

The Government intends to fund between one and three CoVEs in the current Fiscal Year.

Will the changes to vocational education be affected by other reviews, e.g. Tomorrow’s Schools or the review of NCEA, the Tertiary Education Strategy and the Tomorrow’s Schools review?

This is a once in a generation opportunity to align support for coordination and improved skills planning at a regional level across Government initiatives. The Minister of Immigration has progressed proposals to introduce regional mechanisms to support skills planning and facilitation. The Government’s response to the Tomorrow’s Schools independent taskforce proposals might also offer an opportunity for regional alignment coherence across the education and skills systems.

As the education, immigration and other proposals progress, agencies will work together to ensure this work is aligned. When we put learners at the heart of the system and consider the journey they take through school, into tertiary education or training and then the workplace, our initiatives naturally create a coherent whole.

There are opportunities across the Government’s Education Work Programme to reposition vocational education as a valued pathway for learners. The proposed changes, together with the review of NCEA, improvements to careers education and guidance, and the development of a School Leavers’ Toolkit, will support learners to achieve in vocational education and find sustainable employment.

As we implement the reforms, and alongside the NCEA Review, there will be opportunities to strengthen vocational learning school students undertake. This includes working with workforce development councils to ensure the development of vocational standards and packages of learning that are appropriate for delivery to students enrolled in school, but which are still industry relevant. A Vocational Entrance Award will also be developed in collaboration with schools, workforce development councils, vocational educational providers, employers and NZQA to support learners to begin meaningful study towards vocational qualifications while at school and support direct entry into higher-level vocational education.

A strengthened vocational education system will also be supported through ongoing tertiary Fees Free settings, the Tertiary Education Strategy, the International Education Strategy and the review of the New Zealand Qualifications Framework.

How is NZQA involved in the Reforms?

NZQA has worked closely with the Ministry of Education on development of the proposals for the Reform of Vocational Education, and will continue to have an important role during the implementation and transition phase. NZQA will work with the sector to review the settings for qualifications, programmes and standards to ensure these are fit for purpose.

How will workforce development councils’ role in developing qualifications and endorsing programmes be developed and set out?

The role of workforce development councils as qualification developers will be developed in consultation with the sector and will be set out in amended Qualification Listing and Operational Rules. The process associated with programme endorsement will be developed by NZQA in consultation with the sector, and set out in amended Programme Approval and Accreditation Rules.

Timing

What is the timeline for rolling out these changes? What happens next?

An Establishment Board for the Institute will be formed by 1 September 2019. It will technically be formed as a ministerial advisory group supported by a unit within the Ministry of Education. This Board and unit will have powers to begin establishment work, spend funding under delegation from the Secretary for Education, and operate a process, independent of the Minister, to appoint the designate Chief Executive of the Institute.
The designate Chair, Deputy Chair and Council members of the Institute will form the Establishment Board. Once in place, the Establishment Board will be working swiftly, so it will be important to have strong reporting to Ministers. The Minister will issue a letter of expectations to the Establishment Board, and will expect to receive weekly progress reports from the Board.

The Establishment Board will consult with stakeholders and advise on an appropriate name for the Institute. The working name “New Zealand Institute of Skills & Technology” will continue to be used in the meantime, including in the legislation, as introduced.

The Institute will be initially formed on 1 April 2020 with each of the 16 institutes of technology and polytechnics becoming a subsidiary of the Institute for two years, with the aim of their incorporation into the Institute.

In response to ITO, industry and employer concerns, a number of refinements have been made to the initial proposal to ensure that the transition of the role of supporting on-the-job learning from ITOs to education providers is carefully managed.

This would give employers who are satisfied with their current support the assurance that the transition will be carefully managed over a three-year period to minimise any disruption to services. It would also provide a more structured transition, easing pressure on both ITOs and the Institute, and would reassure the Government that providers are migrating towards the sort of organisation that can appropriately manage both off-the-job and on-the-job learning, before confirming the final transition.

A key purpose of holding organisations would be to protect the interests of employers during the transition period. This allows industry bodies to reform to ensure continuity of services. They would enable a phased and well-managed transition of ITO functions to workforce development councils and providers. Holding organisations, which would have statutory recognition, would be able to continue to use existing ITO branding.

Priority industries (such as primary and construction sectors) would be likely to transition first. Education officials will work closely with ITOs to develop transition plans.

This staged approach has a number of advantages:

ITOs are given time to prepare for handing over on-the-job learning to providers and can be supported to assist providers in making the transition.
It will help support the continuity of assistance for trainees and apprentices, e.g. in terms of ITO staffing.
It provides a more structured process for the Government to ensure a well-managed transition that will maintain engagement by industry in structured training.
It recognises that the leadership of the Institute will have a major change process with the consolidation of the 16 institutes of technology and polytechnics, and allows for a careful process for transferring direct responsibility for supporting on-the-job learning.
It acknowledges the concerns raised by some ITOs and employers about whether, emerging from the institute of technology and polytechnic sector, the Institute will initially have the necessary capability and culture to successfully support on-the-job training, including an orientation towards workplaces.

Transitions of on-the-job training from holding organisations to education providers will be actively managed. The Government will want to be assured that providers are well prepared for supporting both off-the-job and on-the-job training at the point of transition of responsibility for on-the-job training. They will need to be supported by industry to reach this point. Transition plans will also need to be approved by the Government.

In addition, a concern was raised by industry stakeholders about whether the proposed investment advice from workforce development councils (WDCs) would effectively influence Tertiary Education Commission decisions. The role has been strengthened so that WDCs can direct the TEC on key elements of investment decisions within a fixed funding envelope. WDCs could also assist the TEC in evaluating the performance of providers against those investments.

There was also a concern that WDCs would not be able to maintain regular contact with employers. In response to this concern, the scope of the role of WDCs has been expanded with the potential for WDCs to continue to provide some brokerage functions, within the scope of their TEC-approved skills leadership plan.
The establishment of WDCs (and the proposed changes to workplace learning) will involve ceasing to recognise ITOs.

The first pilot Centres of Vocational Excellence, which will play a key role in driving innovation and excellence in vocational teaching and learning in areas of strategic importance to New Zealand by strengthening links to industry and communities,, are expected to be established in the 2019/20 Fiscal Year.

We will work across all system stakeholders to develop, design and implement a new funding system to apply to all off-the-job and on-the-job education at certificate and diploma qualification levels 3-7 (excluding degree study) and all industry training. The new funding system will be a work-in-progress over the next 2-3 years. Elements of the new funding system are likely to be introduced from 2021 onwards.

Funding

Why are you changing funding for vocational education?

A large number of submitters agreed that the funding system needs fundamental change.
We heard that the system doesn’t recognise the costs to providers of supporting different types of learners, locations and ways of learning. It works poorly where there isn’t enough scale to support the costs of delivery and some degree of cross subsidisation is expected, which can be a struggle for small regional providers. At the same time, it has also meant that some industry training has moved away from high-quality, transferable learning.

We heard that the funding rules are complicated and often inflexible, and stop providers being able to innovate, collaborate and deliver to a wider range of needs. The problem is particularly acute at lower levels where there are lots of different funds.

A new, unified funding system is needed to replace a system that is driving apart providers and industry, when they need to work together. It will encourage greater integration of off-the-job and on-the-job learning, ensure learners can access more work-relevant and tailored support, and enable new models of education delivery which are more responsive to employer and industry demand.

We will work across all system stakeholders to develop, design and implement a new funding system to apply to all off-the-job and on-the-job education at certificate and diploma qualification levels 3-7 (excluding degree study) and all industry training. The new funding system will be a work-in-progress over the next 2-3 years.

The new system needs to:

reward and encourage the delivery of high-quality education and training that meets the needs of all learners, communities and employers
support access to on-the-job learning and encourage the growth of work-integrated delivery models
supply strategically important delivery to meet national priorities, address regional labour-market demand, and be highly responsive to employer skill needs.

The new funding system is a crucial element of the reform programme. Without it, New Zealand will not get the outcomes it needs from the vocational education system.

Consultation and engagement

How much consultation and engagement has there been on these reforms?

The consultation period for the original Reform of Vocational Education proposals ran from 13 February 2019 until 5 April 2019.

The Government has sought input from all perspectives: learners, trainees and apprentices, employers, industry representatives and ITOs, education providers, Māori, iwi, Pacific peoples, disabled people, people with additional learning support needs, parents, other interested groups and the general public.

We received 2,904 submissions, and met with more than 5,000 people in approximately 190 events, meetings and forums. What we heard has been fundamental to shaping the change programme for vocational education that has now been agreed to.

Agencies have engaged directly with key vocational education and training stakeholders in developing the changes. This includes education providers (including wānanga), ITOs, Māori, Pacific peoples, unions, employers, industry and learners.

Agencies have also ensured that disabled learners have been included in the consultation.

Thirty-five meetings and events were held specifically for staff and management at the 11 ITOs, while 99 meetings and events were organised with the 16 institutes of technology and polytechnics.

The 2019 consultation followed the national Kōrero Mātauranga / Education Conversation launched in 2018, and two reviews: the Vocational Education and Training (VET) system review and the ITP Roadmap 2020.

We have carefully considered what we’ve heard in engagement meetings, along with the feedback gathered through the consultation survey, and through the email address and phone line. The Minister and Cabinet received a summary of all the feedback and this has informed their decisions.

Future engagement with institutes of technology and polytechnics, employers and ITOs

The new Institute will need to work closely with institutes of technology and polytechnics and employers to fundamentally change how learning and support is delivered through all modes of delivery – on-the-job and off-the-job.

The Institute will need to organise its programmes and functions so that it can focus resources on supporting learners across the country. It will also need to draw on the best of existing practice, in particular so it can offer culturally responsive teaching and learning. It will work collaboratively with wānanga and private training establishments to deliver vocational education across New Zealand.

We expect the transition of the arranging training responsibilities from ITOs to vocational education providers to take some time. This will be a gradual process, starting with priority industries, for example primary industry and construction. The legal transition is expected to be completed by the end of 2022. The transition programme will work with industry and ITOs on the best approach and timeframes for this transition.

We will bring together industry groups to discuss the most appropriate sectors or clusters of sectors to create vocational education pathways. We are seeking to get agreement by the end of 2019 on a plan for setting up workforce development councils from mid-2020. We will work on a transition plan for shifting arranging training from ITOs to providers.

We will work across all system stakeholders to develop, design and implement the new funding system to apply to all off-the-job and on-the-job education at certificate and diploma qualification levels 3-7 (excluding degree study) and all industry training. The new funding system will be a work-in-progress over the next 2-3 years.

How much say will the polytechnic sector have in the design of the new system?

Engagement with the polytechnic sector around structural change began last year and will continue as the new vocational education system is developed.

The TEC began working with the institute of technology and polytechnic sector and the wider community in early 2018 to identify options for structural change to institutes of technology and polytechnics, with the goal of making the sector more sustainable and agile while retaining and building on the sector’s key strengths in regional vocational delivery.

The TEC met with all 16 institutes of technology and polytechnics in 2018 while consulting on the ITP Roadmap 2020 project. It talked to staff, students, local government, the community and other interested parties about what they think will make the sector sustainable. It also set up working groups to exchange knowledge and created online surveys so more people could contribute to the conversation about the future of institutes of technology and polytechnics.

At the same time, the Ministry of Education led a review of vocational education to identify policy issues needing attention both at institutes of technology and polytechnics and in the wider vocational system.
Agencies have engaged directly with key vocational education and training stakeholders, especially institutes of technology and polytechnics, in developing the changes.

During the February-April 2019 consultation, we received 2,904 submissions, and met more than 5,000 people in approximately 190 events, meetings and forums. Ninety-nine of these conversations were organised with the 16 institutes of technology and polytechnics. What we heard has been fundamental to shaping the change programme for vocational education that has now been agreed.

Future engagement with institutes of technology and polytechnics, employers and ITOs

The new Institute will need to work closely with institutes of technology and polytechnics and employers to fundamentally change how learning and support is delivered through all modes of delivery – on-the-job and off-the-job.

The Institute will need to organise its programmes and functions so that it can focus resources on supporting learners across the country. It will require specific capabilities to be developed, which will ensure that its staff are equipped to deal with a fundamental shift in the system. It will also need to draw on the best of existing practice, in particular so it can offer culturally responsive teaching and learning. It will work collaboratively with wānanga and private training establishments to deliver vocational education across New Zealand.

We expect the transition of the arranging training responsibilities from ITOs to vocational education providers to take some time. This will be a gradual process, starting with priority industries, for example primary industry and construction. The legal transition is expected to be completed by the end of 2022, unless extended by the Minister. The transition programme will work with industry and ITOs on the best approach and timeframes for this transition.

We will bring together industry to discuss the most appropriate sectors or clusters of sectors to create vocational education pathways. We are seeking to get agreement by the end of 2019 on a plan for setting up workforce development councils from mid-2020. We will work on a transition plan for shifting arranging training from ITOs to providers.

Learners

What does this mean for my study plans for 2019 and 2020?

From the perspective of learners, trainees and apprentices, the reforms will not have an immediate impact, although in future, there will be improvements in your learning experience.

Learners and workplace trainees are encouraged to continue studying towards their qualifications and credentials. Learners should enrol in the education provider of their choice as they normally would in 2019 and 2020, including in multi-year programmes. Existing programmes, qualifications and credentials are continuing, and students will continue to receive support to continue their studies.

The Institute will consult carefully on this and will take a cautious and relationship-based approach to any changes to the use of current institute of technology and polytechnic brands. For workplace trainees, at some point before the end of 2022, support for your learning will come from a different organisation.

We will work closely with education providers and ITOs to manage the transition to the new system and minimise any impact on learners and trainees. The goal with any changes are to make the system work more effectively for learners and trainees.

As the new system rolls out, learners and workplace trainees and apprentices will have more access to high quality workplace learning and employer networks in addition to on-campus study. You will be able to move between on-the-job and off-the-job study more easily and you’ll be able to move to another part of the country, if necessary, without affecting the qualification you’re working toward.

Later in your career, you’ll have access to a system that’s stable and fit for the future any time you need or want to upskill, reskill or retrain.

We will keep you up to date with developments, especially where any changes affect you.

What does this mean for me as an apprentice and people who want to study while they work?

There will be no immediate changes to programmes. Any changes will occur over a number of years, and will be endorsed by the industry you are training to be a part of.

Downstream, there will be a lot of improvements in your learning experience.

Workplace trainees are encouraged to continue studying towards their qualifications and credentials in 2019 and 2020. Existing programmes, qualifications and credentials are continuing, and you will continue to receive support for your training.

There will be some carefully managed changes down the track. For workplace trainees, at some point before the end of 2022, support for your learning will come from a different organisation.

We will work closely with education providers and ITOs to manage the transition to the new system and minimise any impact on apprentices and trainees.

As the new system rolls out, learners and workplace trainees and apprentices will have more access to consistent, high quality workplace learning and employer networks in addition to on-campus study. You will be able to move between on-the-job and off-the-job study more easily and you’ll be able to move to another part of the country if necessary without affecting the qualification you’re working toward. Qualifications and credentials will be more easily transferable, regardless of employer or other circumstances. You will be able to join the workforce sooner, while completing training.

Later in your career, you’ll have access to a system that’s stable and fit for the future any time you need or want to upskill, reskill or retrain.

We will keep you up to date with developments, especially where any changes affect you.

Who will support/guide apprentices and undertake assessments?

Under the changes, providers will take on the role of arranging workplace-based training, including for apprentices. Workforce Development Councils will moderate assessments.

ITOs’ current role of supporting workplace learning and assessment for on-the-job vocational education will be transferred to vocational education providers. Providers will become responsible for arranging and supporting all vocational education and training, whether it takes place at a provider’s facilities on campus or in a workplace. The changes will remove the current split between training in the workplace and education through a provider.

Will the qualification I want to study still be there in 2020 and 2021?

Learners and workplace trainees are encouraged to continue studying towards their qualifications and credentials in 2019 and 2020. Learners should enrol in the education provider of their choice as they normally would in 2019 and 2020, including in multi-year programmes.

Existing qualifications and credentials will be grand-parented under current institute of technology and polytechnic brands. The institute will be expected to carefully work through any changes to the ongoing use of existing brands with communities.

There will be some carefully managed changes down the track, e.g. if you’re studying through an institute of technology and polytechnic your qualification may be awarded by the institution you enrolled with, or by the new Institute. The Institute will take a cautious and relationship-based approach to any changes to the use of current institute of technology and polytechnic brands. For workplace trainees, at some point before the end of 2022, support for your learning will come from a different organisation.

Will my current qualification still be recognised in the future?

Yes. Qualifications and credentials recognised by the New Zealand Qualifications Authority and awarded through accredited education providers will continue to be recognised in the future.

Existing qualifications and credentials will be grand-parented under current institute of technology and polytechnic brands. The Institute will be expected to carefully work through any changes to the ongoing use of existing brands with communities.

What does this mean for international students? What’s going to happen to the course I want to study?

As with domestic students, international students should continue with plans to enrol, including at institutes of technology and polytechnics, in 2019 and 2020 as they normally would, including in multi-year programmes. They will be able to continue their study uninterrupted.

The reforms will take time and we will keep everyone informed during the transition process. Students should carry on with their study and training. Existing programmes, qualifications and credentials will remain and will continue to be recognised internationally. International student wellbeing will remain a priority and pastoral care provision will not be impacted by these changes.

International learners will begin to see changes from 2020, but many of the changes (particularly to the roles and responsibilities of different organisations) will be phased in over the next few years, and the changes are aimed at strengthening and improving education provision for all students. We are committed to a managed transition to minimise disruptions during these changes.

For students enrolling in institutes of technology and polytechnics, when they complete their qualification or credential in the next few years, their qualification or credential may be awarded by the institution they enrolled with, or by the new Institute. The Institute will consult carefully about this with students and the wider community, and will take a cautious and relationship-based approach to any changes to the use of current institute of technology and polytechnic brands. The goal will be to strengthen the brand, both internationally and nationally.

Any approved visas and study arrangements will remain. Work is underway to ensure the visa status of international learners in institutes of technology and polytechnics will be transitioned over to the new Institute when it’s established without additional administrative or financial burden.

The reforms will build on New Zealand’s already strong reputation as a high-quality, safe and caring country for international students to study, live and work.

The new system will mean increased stability for the institute of technology and polytechnic sector across New Zealand. Learners will have more access to high quality learning and employer networks. They will be able to move between on-the-job and off-the job learning, and online study, and transfer to another region in New Zealand more easily.

There will be clearer and more direct pathways for international secondary students to higher-level vocational education and training.

A more coordinated vocational education system, with a strong national brand, would also be better able to maximise opportunities for New Zealand providers to promote their educational offerings to the world.

What are the implications for Māori? How are their interests being looked after?

We heard from many Māori that we need significant change to vocational education.

The reforms are an opportunity to set up the new system that works with Māori to shift to more culturally responsive teaching and learning, where learners know they are valued. It is also a chance to make sure there is a much stronger voice for Māori businesses and iwi development.

The Reform of Vocational Education needs to reflect the Government’s commitment to Māori Crown partnerships. A partnership approach would prioritise Māori learners across the vocational education system, and recognise that Māori are significant employers with social and economic goals, with an estimated national Māori asset base valued at over $50 billion.

To ensure these opportunities are consistently taken up through the Reform of Vocational Education, a group, with a placeholder name of the ‘Te Taumata Aronui’, will be established to work with education agencies and Ministers on tertiary education, including its links to schooling, from a community and employer perspective.

The first task for this group could be to provide advice about how the vocational education system could:

reflect Māori Crown partnerships
ensure that the system improves outcomes for Māori learners
align with other relevant components of the Education Work Programme (e.g. Ka Hikitia)
support Māori economic and social development strategies.

The Minister of Education will issue a call for nominations as soon as possible and make appointments in consultation with the Minister for Māori Crown Relations. Officials will also continue to work at a regional level with Māori.

The new system will have a stronger focus on success for Māori. The new Institute’s governance will be expected to reflect Māori Crown partnerships in its decision making and actions to deliver for Māori. Governance of the new Institute will require national collaboration and leadership with local solutions to issues. The funding system will better protect and support te reo Māori and mātauranga Māori. Regional Skills Leadership Groups will include iwi and wider Māori stakeholders. Workforce development councils will deliver to the needs of Māori businesses. Māori voice and aspirations will influence decisions on what’s important regionally.

The services of the whole Institute will help the regions respond comprehensively to regional need. This includes a stronger focus on the groups that have been under-served to date, such as Māori, Pacific peoples, and disabled learners, particularly as Māori and Pacific peoples will form a growing part of the working-age population in the future.

A commitment to Māori Crown partnerships will be included as part of the legislative provisions for the Institute. The appointment process for the Institute’s Council will also ensure that potential Councillors have the skills, knowledge and experience to support Māori needs. The Council will also be required to appoint a Board to advise on how the Institute works with Māori to improve outcomes for Māori learners and communities.

We will ensure that the next stages of the reform process include Māori as key partners, including by setting up Te Taumata Aronui to work with education agencies and Ministers on tertiary education, including its links to schooling, from a community and employer perspective. For example, this work will happen in parallel with a planned review of all funding for te reo Māori and mātauranga Māori-based provision across the tertiary sector.

The Crown’s partnership with wānanga will deepen and extend. Ministers have already begun a dialogue with the three wānanga about the nature of their partnership with the Crown.

What are the implications for wānanga?

The Crown’s partnership with wānanga will deepen and extend though the reform of vocational education.

The Government is committed to working in partnership with wānanga to determine how the changes can best support their aspirations, and whether there are alternative approaches that should be considered for their sector. In particular, we need to ensure that we acknowledge the unique role of wānanga throughout the vocational education reforms.

Ministers have already begun a dialogue with the three wānanga about the nature of their partnership with the Crown.

Wānanga are key players in vocational education as well as other areas of education. Alongside a strategic dialogue and reviews of funding rates for te reo Māori and mātauranga Māori-based provision, wānanga will be enabled to remain outside standard-setting by workforce development councils, except where they are moving into arranging on-the-job training.

Officials would co-design solutions with the wānanga to ensure the funding system reflects and supports the kaupapa Māori approach of these providers. Any new funding rates would apply to te reo Māori and mātauranga Māori delivery across the whole tertiary education sector.

What are the implications for Pacific peoples? How are their interests being looked after?

We heard from Pacific learners about the importance of a culturally competent system. Teaching and learning practices must understand different Pacific identities, languages, cultures and values. They also need to recognise the importance of family and community life.

The new system will build on successes such as the Māori and Pacific Trades Training consortia approach. The new funding system will encourage vocational education organisations to focus on the needs of Pacific peoples.

The more integrated vocational education system may help Pacific learners, families and communities to study using flexible modes of delivery, as they have voiced that they prefer to work and earn money to support their family rather than studying full-time.

More education-to-employment arrangements will be available that recognise the vital role communities play in supporting Pacific learner success and provide opportunities to tailor support to learners by those with skills, knowledge and understanding of Pacific values and cultures.

The new governance and management arrangements for the Institute will set expectations that it is governed and operated in a way that understands the different Pacific cultural contexts, and the importance of their identities, languages and cultures to support strengthened education and employment outcomes for Pacific learners. This will also ensure that transparency expectations and stronger accountability for Pacific learner success are embedded into the new system.

How are the interests of disabled people and people with additional learning support needs being looked after?

We heard that disabled people and people with additional learning support needs are not well-served by the current system, partly because they are often not well-supported to succeed in employment.

More effective support for transitions from school to vocational education and work is needed, as well as partnership with disabled learners, learners with additional learning support needs, and key stakeholders (i.e. the Disabled People’s Organisations coalition) in the disability sector and community in setting up the new system.

The new Institute’s Charter, and the funding system, will create expectations, responsibilities and opportunities to support disabled learners and people with additional learning support needs. We will work in partnership with these learners and in connection with other parts of government including the Ministry of Social Development (especially the Office of Disability Issues) and schools.

The new system will better recognise, value, and support the diversity of all learner needs, including disabled learners, people with additional learning support needs and people from lower socio-economic backgrounds.
Disabled learners and people with additional learning support needs will benefit from an integrated vocational education system, where learners studying at a provider will have more exposure to workplaces and employer networks and will be better supported during transitions between in-class and workplace learning.

This will help address issues of unequal access to employer networks for disabled learners and assist during transitional periods (both into study and employment). An integrated system will give employers more experience with disabled people, which over time will help to breakdown pre-existing negative attitudes.
Engagement and work will continue with disabled learners, their whānau, and key stakeholders in the disability sector, to ensure that the new system has the core design principle of inclusiveness – to ensure the new system better recognises, values, and supports the diversity of all learner needs, including disabled learners and people with additional support needs.

How much say will learners have in the design of the new system?

The Government is committed to providing access to high quality tertiary education and lifelong learning for all New Zealanders.

Agencies sought learners’ views on vocational education and training and the institute of technology and polytechnic sector in 2018 as part of wider discussions with the sector, industry, employers and the community.

We specifically sought learners’ input on the change proposals, including through face-to-face meetings and our online survey. We also sought input from specific groups of learners who are not getting the employment and educational outcomes they need to achieve their goals – e.g. Māori, Pacific learners and disabled learners.

We will work closely with education providers and ITOs to manage the transition to the new system and minimise the impact on learners.

The Council of the new Institute, which will have between eight and 12 members, will include one student and one staff member elected by the committees representing students and staff of the Institute respectively. All Council members will be appointed by the Minister, apart from the student and staff representatives.

A Stakeholder Advisory Group will provide officials with insights from stakeholders in vocational education, including staff, to inform design and implementation work during the transition to the new system.

From the perspective of learners, trainees and apprentices, the reforms will not have a lot of impact; in the future, there will be a lot of improvements in your learning experience.

There will be some carefully managed changes down the track, e.g. if you’re studying through an institute of technology or polytechnic your qualification or credential may be awarded by the institution you enrolled with or by the new Institute. The Institute will consult carefully on this and will take a cautious and relationship-based approach to any changes to the use of current institute of technology and polytechnic brands. For workplace trainees, at some point before the end of 2022, support for your learning will come from a different organisation.

Will any distance delivery not currently done by the Open Polytechnic be scrapped?

No. During consultation we asked the question of whether we should utilise the systems and processes established by the Open Polytechnic – the institution that offers the largest amount of distance delivery currently. We asked stakeholders for their views on whether this system, or another system, would be best.
Online learning will be an important part of the new Institute’s work. It would be offered through the Institute via the network of online delivery based on capability at The Open Polytechnic, the Southern Institute of Technology, polytechnics involved in the TANZ eCampus platform, and at other institutes of technology and polytechnics involved in e-learning.

Employers and industry

How will the changes make it easier for employers and industry to get people with the skills they need?

We heard that for some employers the current system is working well and they want to keep what’s working for them. For others, it’s virtually non-existent. New Zealand’s persistent and widespread skills shortages in many industries itself points to the need for a better system to ensure that all employers have access to a well-trained workforce that’s ready and able to work.

According to the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion (July 2019), a net 50% of businesses reported having trouble finding skilled labour. This has been steadily increasing since 2009. Of those employers surveyed, 71% said there is, or will soon be, a skills shortage in their industry sector.

We currently have two vocational education systems: an industry training system for apprentices and trainees through 11 industry training organisations (ITOs), and another for students enrolled with providers. These providers are: 16 institutes of technology and polytechnics, three wānanga and around 150 specialty private training establishments (private training establishments). ITOs arrange training for employees in the workplace, and providers deliver primarily off-the-job training, each with its own system of government funding.

Over time, these two systems have drifted apart, leading to people being confused about how to begin training or learning and how to progress, particularly between off-the-job and on-the-job training options, including when they get a job or move region. Employers are concerned that off-the-job learners are not acquiring the technical or employability skills to function in the workplace, and that learners are often kept in off-the-job learning for longer than they need to be. People learning on the job aren’t always getting all the support they need and this frustrates both learners and employers.

One of the roles of ITOs was intended to be standard-setting, but in reality, their ability to influence and shape off-the-job delivery to ensure that it meets the needs of their industry is modest. Even though ITOs represent industry, they can’t influence the type or standard of delivery across all providers.
Some employers and some industries tell us that ITOs don’t meet their needs. In other areas, there is no ITO due to gaps in industry coverage, such as information and communications technology (ICT), management, and creative arts.

More influence for industry

Some employers have told us the lack of industry input into off-the-job learning is frustrating. The new system will draw more strongly on industry expertise in setting expectations, providing leadership, and setting standards. Everyone will have a clear role, with much more industry and employer influence.

Providers’ roles (the new Institute, wānanga and private training establishments) need to expand to support all forms of education and training – on-the-job and off-the-job

Regional and local campuses will focus on delivering high-quality and relevant services to learners, employers and communities across all of New Zealand, guided by the advice of regional leaders. The services of the whole Institute will help the regions respond comprehensively to regional need. This includes a stronger focus on the groups that have been under-served to date, such as Māori, Pacific peoples, and disabled learners, particularly as Māori and Pacific peoples will form a growing part of the working-age population in the future.

The new system will ensure that more employers will have increasing access to a well-trained and work-ready workforce. They will have a say nationally through Workforce Development Councils and locally through Regional Skills Leadership Groups on the skills they need in their businesses. They will have assurance that regardless of where in the country a newly qualified worker did his or her learning, the standard of skill will be consistent.

Employers who have never had an apprentice or trainee before will find it easier to understand the system and the benefits of training workers in the workplace. Support from providers who understand the industry and how to help learners be work-ready, will provide greater comfort to employers who are apprehensive about having to train staff while running a business.

How much say will employers and industry have in the design of the new system?

The new system will draw more strongly on industry expertise in setting expectations, providing skills leadership, and setting standards; and on provider expertise in delivering education and pastoral care.

Everyone will have a clear role, with much more industry and employer influence.

The new Institute will need to work closely with institutes of technology and polytechnics and ITOs and employers to fundamentally change how learning and support is delivered through all modes of delivery – on-the-job and off-the-job.

We will work with industry to set up the new workforce development councils (WDCs) from 2020 onwards. Government will work with industry, including ITOs, to design the transition – how WDCs will be established, and how providers would take on responsibilities for apprentices and trainees.

Besides setting expectations, providing skills leadership and setting standards, WDCs will provide employers with brokerage and advisory services within the range of activities approved by the TEC as related to their leadership role, determine the mix of training in their industries within a fixed funding envelope determined by the TEC, and provide investment advice to the TEC.

This would give employers who are satisfied with their current support the assurance that the transition will be carefully managed over a three-year period to minimise any disruption to services. It would also provide a more structured transition, easing pressure on both ITOs and the Institute, and would reassure the Government that providers are migrating towards the sort of organisation that can appropriately manage both off-the-job and on-the-job learning, before confirming the final transition.

A key purpose of the use of any holding organisations would be to protect the interests of employers during the transition period. Where necessary, this would allow continuity of services and would enable a phased and well-managed transition of ITO functions to workforce development councils and providers. Holding organisations, which would have statutory recognition, would be able to continue to use existing ITO branding.
Priority industries, such as the primary industry and construction sectors, would be likely to transition first. Officials will work closely with ITOs to develop transition plans.

Will employers be eligible to receive government funding for micro-credentials to upskill current industry workers?

The Tertiary Education Commission (TEC) has published guidance on when it will fund micro-credentials. You can find more information here.

Workforce development councils are likely to provide advice to the TEC on potential future investments in micro-credentials.

Staff at ITOs and institutes of technology and polytechnics

What will happen to people like me who work at institutes of technology and polytechnics?

We acknowledge that change is stressful and that the vocational education reforms will impact on many people working within the sector; however, it is also true that continuing with the current system would mean lots of disruption and job losses at institutes of technology and polytechnics in particular. The reforms are all about creating a more sustainable and more coherent system that will benefit learners, employers and educators.

The new Institute will be initially formed on 1 April 2020 with each of the 16 institutes of technology and polytechnics becoming a subsidiary of the Institute for two years, with the aim of their incorporation into the Institute. This period is extendable by the Minister of Education.

Transitioning institutes of technology and polytechnics to subsidiary companies will minimise initial disruption to institutions’ activities compared with folding all institutes of technology and polytechnics into the Institute from day one.

While this subsidiary model is initially intended as a transitional measure, the Institute may decide to use subsidiary companies in some form as part of its permanent structure, in the same way that many tertiary education institutions currently do.
It will be up to the Establishment Unit and the Institute Board to determine what organisational structure is most appropriate for the Institute in the longer term.

For 2019 and 2020, staff at institutes of technology and polytechnics should simply continue to deliver the good work they’re already doing. You will learn more about the design of the new Institute and its business model, once this is clearer. This will be taking place over the next 18 months.

You may find that expectations of your role will change as approaches are standardised across the network. On the other hand, you may find that your role in the future is exactly the same as your role now.
If you’re in a teaching role, you may need to learn new teaching and training skills, or adjust how you run your programme or how you support individual learners by being flexible and adaptive to a variety of needs for on-the-job and off-the-job learning.

There will also be opportunities to meet the needs of learners and regions in a different way, including the needs of trainees and apprentices, as well as their employers.

If you are a specialist in your field, you may be invited to help establish a workforce development council or Centre of Vocational Excellence related to your field.

What the Reform of Vocational Education means for staff at ITPs? Download the information sheet.

What will happen to staff at ITOs?

We acknowledge that change is stressful and that the vocational education reforms will impact on many people working at ITOs; however, it is also true that the current system isn’t working for New Zealand as it should and continuing on the same road would mean lots of disruption and job losses in the institute of technology and polytechnic sector.

The new system of vocational education will be introduced in a managed way. ITOs will lose their standards-setting role to workforce development councils (WDCs) as these are established from around the middle of 2020. They will continue to support employers and their staff to access national qualifications and credentials in workplaces before assisting with the transition of the arranging training function to vocational education providers by the end of 2022.

If you’re working on behalf of an ITO, you should continue the relationships you have with apprentices, trainees and employers. Over the next period, officials will work with each industry and ITO to understand what provider, and what transition arrangement, could best meet their needs, on an industry-by-industry basis.

ITOs will continue to be recognised to arrange training until this occurs; however, at some point in time, your role may transition to a new organisation.

Your role will remain important and in demand, whether in WDCs or providers, and new roles will be created to fill the expansion of industry’s involvement in vocational education. Our goal is to retain the services of as many ITO staff as possible within the vocational education system.

Your role will be important for the success of this new system, and it’s important to maintain this capability through the transition.

If you are a specialist in your field, you may be invited to help establish a WDC or Centre of Vocational Excellence related to your industry.

We expect the changes to the arranging training responsibilities of ITOs to take some time. This will be a gradual process, starting with priority industries, for example primary industry and construction. The legal transition is expected to be completed by the end of 2022, unless extended by the Minister. The transition programme will work with industry and ITOs on the best approach and timeframes for this transition.

We will work with industry to set up WDCs after 1 April 2020, when legislative changes are enacted, with the aim of completing the establishment by June 2021. Government will work with industry, including ITOs, to design the transition – how WDCs will be established, and how providers would take on responsibilities for apprentices and trainees.

What the Reform of Vocational Education means for staff at ITOs? Download the information sheet.

Other parties (not directly in scope)

How will the changes affect universities?

Universities will be able to benefit from the vocational education system’s improved industry leadership.
While universities will not be covered by workforce development council skills leadership and standards setting powers, they are likely to offer certificates and diplomas that will draw on industry skills needs information. The Committee on University Academic Programmes is likely to want programme applicants to consider skills needs information from WDCs in their applications.

The new vocational education funding system will apply to a small proportion of delivery in the university sector.

How will the changes affect private training establishments?

Private Training Establishments (private training establishments) will remain key players that provide choice for employers and learners.

We heard from private training establishments that the reforms are an opportunity to deepen their role, but that they also need to ensure they can work well with the new Institute and with workforce development councils (WDCs).

Private training establishments will need to operate within the standards set by WDCs. They will also be able to gain responsibility for supporting workplace learning. Many private training establishments are already well-positioned to do this, with strong track records in supporting on-the-job training and with good employer relationships.

How will the changes affect schools?

Schools will continue to be a crucial part of the new integrated vocational education system. We want schools and tertiary education organisations better linked to each other and to the world of work.

We want a system where there are clearer and more direct pathways for vocational learners in school, through into higher-level vocational education and training in the tertiary system, all of which with a stronger workplace element.

We heard through reform consultation feedback and the NCEA Review engagement last year that valuable vocational learning opportunities are currently available for senior secondary students. We want the reforms to build on these strengths while setting up a system that is more seamlessly connected with the workplace and post-school vocational education opportunities.

What do the changes means for school leavers enrolling in tertiary education in 2020?

For now, school leavers can proceed with plans to enrol in their chosen vocational education provider as they normally would in 2019 and 2020, including in multi-year programmes. Existing programmes and qualifications will continue. Fees Free, along with financial support available through StudyLink, will remain.

What do the changes mean for schools involved in secondary-tertiary and workplace learning?

Schools are encouraged to continue supporting students as they study vocational learning options, including those undertaken through funding and programmes such as STAR, Gateway and Trades Academies. Schools should continue to work with your local tertiary education partners, including institutes of technology and polytechnics, and industry training organisations, as well as employers.

Schools will begin to see changes from 2020, but many of the changes (particularly to the roles and responsibilities of different organisations) will be phased in over the next few years. Government is committed to a managed transition to minimise disruptions during these changes.

The Ministry of Education and the Tertiary Education Commission (TEC) will work with schools and tertiary education organisations involved in secondary-tertiary learning arrangements to keep you informed and support you as part of the transition to the new system.

How will the changes affect schools involved in a Trades Academy?

For schools that currently have students in a Trades Academy undertaking learning through an institute of technology or polytechnic, you should continue to work with your local institution and other tertiary education organisations that are involved in the Trades Academy partnership. Any existing partnership arrangements that you have with tertiary education organisations and employers will continue in 2019 and 2020.

The Ministry will make Trades Academy place allocations to Lead Providers for 2020 following the usual processes and timeframes as previous years. In preparation for the transition to the new vocational system, new Trades Academy Lead Provider and Programme applications won’t be considered at this time.

In time, there are likely to be some changes to how Trades Academy arrangements operate as a result of the changes to the polytechnic sector and industry training organisations (ITOs).

When the changes to institutes of technology or polytechnics are implemented, we expect that schools will partner with local campuses of the new Institute.

In time, the role of supporting workplace learning will move from ITOs to tertiary education providers. This will include the Institute, wānanga and private training establishments. As part of this change we expect that there will be more opportunities for school students to undertake work-integrated learning.

This shift will be a managed transition over the next two to three years, the timing of this will vary by industry. Where an ITO is currently a Trades Academy Lead Provider, it will be necessary to transition this Lead Provider role to a provider or providers, schools or combination of both.

The Ministry of Education and Tertiary Education Commission will work with schools and tertiary education organisations involved in secondary-tertiary learning arrangements, to keep you informed and support you throughout the transition to the new system.

This will include working with schools and tertiary education organisations that are currently Trades Academy Lead Providers to work through the implications for Trades Academy Lead Provider arrangements as we transition to the new system.

How will the changes affect schools that work with industry training organisations?

Many schools currently deliver industry training organisation-set Unit Standards. Some schools may also partner with ITOs, for example through the Gateway programme, Trades Academies, or other secondary-tertiary learning arrangements.

If your school has ‘Consent to Assess’ Unit Standards set by ITOs, in the short-term you can continue to follow the usual processes with the relevant ITOs and NZQA. Once workforce development councils become the standard-setters for industry skill standards, schools will need to work with WDC’s rather than ITOs.

The Ministry and NZQA will keep you informed and support you through any transition arrangements when moving to the new system.

Through the reforms, and alongside the NCEA Review, there will be opportunities to strengthen vocational learning school students undertake. This includes working with workforce development councils to ensure the development of vocational standards and packages of learning that are appropriate for delivery to students enrolled in school, but which are still industry relevant.

How will the changes affect schools that receive Gateway funding?

It is expected the TEC will make Gateway funding allocations to schools for 2020 following the usual processes and timeframes as previous years. Schools should continue to partner with employers to enable learners to undertake workplace-based learning through Gateway.

As a result of the vocational education changes, there will be more opportunities for senior secondary school students to undertake work-integrated learning.

Over time the role of supporting workplace learning will move from industry training organisations (ITOs) to tertiary education providers. This will have implications for schools that currently arrange their Gateway placements through an ITO or ITOs. This shift in the arranging training function from ITOs to providers will be phased in over time and the Tertiary Education Commission and Ministry will work with schools to support this transition.

What is the Vocational Entrance Award?

A Vocational Entrance Award will also be developed in collaboration with schools, workforce development councils, vocational educational providers, employers and NZQA to support learners to begin meaningful study towards vocational qualifications while at school and support direct entry into higher-level vocational education.

Will there be changes to secondary-tertiary funding?

Funding for Trades Academy places and the Gateway programme will be allocated for 2020 as usual.

The reforms will fundamentally change how vocational education is delivered and funded. It is therefore timely to review our funding and other arrangements at the secondary-tertiary interface to make sure they are fit for purpose. To ensure that we can realise the full benefits of changes being progressed through reforms and the NCEA Review, the Ministry is planning to review secondary-tertiary funding arrangements, with a view to increasing access to secondary-tertiary learning opportunities.

This review will look at how secondary-tertiary learning programmes are funded and supported, and addressing disincentives and inequities faced by schools to enable them to offer more meaningful vocational education options for people who are enrolled at school. We will work with schools, vocational education providers, communities and employers on the development of this work.

How will the changes affect degree programmes at polytechnics?

The new Institute will also be a degree and postgraduate-granting provider and a provider of foundation learning, and will have a greater ability to create pathways through the system. This will continue the valuable role that institutes of technology and polytechnics currently have in foundation and degree-level provision and provide greater certainty that existing arrangements will be protected. It will strengthen the pathways through the system and the links between workplaces and degree-level study over time because of the workplace focus of the proposed Institute.

Polytechnic degree programmes, while not directly in scope for the reform of vocational education, will become part of the new Institute, which will be a degree-granting provider. This will continue the valuable role that institutes of technology and polytechnics currently have in degree and postgraduate-level provision and will provide greater certainty that existing arrangements will be protected.

The Institute is expected to provide benefits for degree and postgraduate-level study. It will strengthen the pathways through the system and the links between workplaces and degree-level study over time because of the workplace focus of the Institute. We anticipate that over time there will be a coordinated development approach to degree and postgraduate programmes across the Institute with programmes and adapted for delivery in regions as with vocational programmes, especially where the broad content is going to be standard.

The new funding system for vocational education will apply to all off-the-job and on-the-job education at certificate and diploma qualification levels 3-7 and all industry training – but will exclude degree and postgraduate-level programmes.

How will degrees be managed in light of various accrediting bodies, including NZQA, Nurses Association, etc?

The new Institute will also be a degree-granting and postgraduate-level provider and a provider of foundation learning, and will have a greater ability to create pathways through the system. This will continue the valuable role that institutes of technology and polytechnics currently have in foundation and degree and postgraduate-level provision and provide greater certainty that existing arrangements will be protected. It will strengthen the pathways through the system and the links between workplaces and degree-and postgraduate-level study over time because of the workplace focus of the proposed Institute.

We are working through how a single entity will work with accreditation bodies. This includes the role of regional and local campuses and the centralised administrative hub of the Institute.

What will be the impact on Government Training Establishments?

Government Training Establishments, like private training establishments, will be affected by some of the changes. For example, Government Training Establishments may need to make sure that the qualifications, credentials and programmes they offer meet the standards set by workforce development councils.

Where Government Training Establishments have roles with ITOs we will manage those carefully during the transition to the new vocational education system.

Will we be eligible to receive government funding for a pre-vocational training programme?

The new Institute will also be a degree-granting and postgraduate-level provider and a provider of foundation learning, and will have a greater ability to create pathways through the system. This will continue the valuable role that institutes of technology and polytechnics currently have in foundation and degree and postgraduate-level provision and provide greater certainty that existing arrangements will be protected. It will strengthen the pathways through the system and the links between workplaces and degree-level study over time because of the workplace focus of the proposed Institute.

Foundation learning is not within the scope of the Reform of Vocational Education, and funding for foundation level education will continue. Therefore, to receive funding directly from the Tertiary Education Commission (TEC) for delivering vocational programmes at the foundation level, organisations will (as they do now) need to be registered as a provider with the New Zealand Qualifications Authority. TEC-funded programmes also have to be approved by the NZQA.