ITF Reform of Vocational Education Submission - April 2019

SUBMISSION ON THE
Reform of
Vocational
Education
Infrastructure Industry Training Organisation marine

& composites INDUSTRY TRAINING
ORGANISATION
Active Careers through

On-Job Qualifications
APRIL 2019
Summary 1
Who we are 2
Introduction 3
What New Zealand needs from a VET system 4
Assessing the RoVE proposals 6
What would happen if RoVE were implemented as proposed? 14
A revised RoVE proposal 17
Next steps 19
Stakeholder feedback 20
Process concerns 23
SUBMISSION ON THE
Reform of
Vocational
Education
APRIL 2019
Submission on the Reform of Vocational Education APRIL 2019 1
SUBMISSION ON THE
Reform of
Vocational
Education
APRIL 2019
Summary
We support:
• strengthened industry standard setting and skills leadership;
• consistent delivery and adherence to industry standards across the vocational
system;
• financial stabilisation of publicly funded vocational education providers; and
• consolidated funding rates for on-job and off-job training.
We do not support:
• transferring responsibility for workplace training and apprenticeships to vocational
education providers.
We believe:
• the government’s vision of a more integrated and coherent vocational sector is
fully achievable through building on the strengths of industry-led training and
apprenticeships; and
• this proposal does not provide a compelling case that the proposed system structure
will be more sustainable for the Crown or better meet New Zealand’s skills needs
– the ultimate purpose of any vocational education and training system.
We also submit:
• that stakeholders have not been provided sufficient opportunity to provide input
in a reasonable timeframe;
• that the discussion document does not provide sufficient detail of the costs and
benefits of the proposed changes to enable them to be meaningfully evaluated;
• that it would be reckless of the government to pursue these changes without a
better sense of the costs of transition, potential disruption, and risks; and
• failure to consider these factors properly and get it right could be devastating for
New Zealand’s workforce development at a time of acute skills shortages.
Our advice:
1. Strengthen Industry Training Organisations (ITOs) through mandating and
resourcing skills leadership, and enforcing the use of industry standards. Rename
them Industry Skills Bodies (ISBs) if you wish, and add and amend ISBs through
industry-led application for recognition.
2. Continue to have ITOs (or ISBs) arrange training. This is to retain existing expertise,
capability, and relationships, particularly with employers already in the ITO system.
3. Reconfigure the ITPs as the first step of any reform.
4. Implement proposal three, establishing consistent funding rates for provision
across the sector.
5. Introduce an employer incentive scheme to encourage many more employers
to join the system and offer formal traineeships and apprenticeships.
SUMMARY
2 Submission on the Reform of Vocational Education APRIL 2019
Who we are VET Learners In New Zealand 2017

The Industry Training Federation (ITF) is
12,825
the national body for New Zealand’s 11
Industry Training Organisations (ITOs). We
are the collective voice for the industry 31,600
training and apprenticeships sector. In

2017 industry training accounted for 57
percent of all vocational learners, and 51 138,100
percent of all vocational qualifications
achieved in the Vocational Education and 65,310
Training (VET) system.

This submission has been prepared in
consultation with the ITF membership, and
is informed by feedback from over 6,500
industry associations, employers, iwi, ITOs ITPs PTEs Wānanga
trainees and apprentices, and other key
stakeholders in New Zealand’s industry
training and apprenticeships sector.
If you would like to discuss any element
of this submission, please contact VET Qualifications 2017
Josh Williams, ITF Chief Executive, on
04 894 3190 or josh@itf.org.nz.
8,920
15,060
50,315
24,755
ITOs ITPs PTEs Wānanga
WHO WE ARE
Introduction
A strong VET system is a key component of The Government has asked our sector
any thriving economy, and vital to meeting to provide feedback on what needs to
New Zealand’s current and anticipated be kept from the current system. Placing
skills needs. We need a system that is agile, responsibility for standard-setting and
coherent and responsive to the evolving training arrangement with the same
needs of industry and learners. The ITF organisations is a key component of the
welcomes this public discussion on how to success of New Zealand’s industry training
ensure our vocational system can best meet and apprenticeship system, and should be
that goal. retained.
We support the intent of the RoVE proposals We also have substantial concerns about
to ensure New Zealand learners and the lack of meaningful consultation with
employers have access to a sustainable the industry training sector during the
and fit-for-purpose VET system. We see development of the RoVE proposal, and the
considerable potential in proposals to wholly inadequate consultation process
ensure the sustainability of regional VET currently underway. We are similarly
provision, strengthen industry’s role in concerned at a lack of detail in several areas
standard setting, and to consolidate the VET that make it very difficult to meaningfully
funding system. assess the merits of the proposal.
However, we have significant concerns Despite this, we do see significant
about the proposal to place responsibility opportunities within elements of the
for arranging training for industry trainees proposal, and seek to work with the
and apprentices with a new New Zealand Government in co-designing a fit-for-purpose
Institute of Skills and Technology and other VET system that will develop the skills and
providers. This will result in the removal capabilities New Zealand needs to face
of an important feedback loop between several challenges associated with the future
standard-setting and training arrangement, of work.
and the removal of industry voice from This submission presents the ITF’s views on
how training is developed. It will also place what New Zealand needs from a VET system,
responsibility for an effective and efficient our assessment of the current RoVE proposal,
industry training and apprenticeship system and a revised approach that we believe
with organisations that will be ill-equipped to will better meet the needs of Government,
maintain current levels of service delivery. industry, and learners.
INTRODUCTION
What New Zealand approaches to tuition and training, as swiftly as

possible. Those responsible for the development
needs from a VET of such products must be well connected to

industry, and the environment in which they
system
operate must allow products to be brought to
market as swiftly as possible, while still ensuring
sufficient quality assurance takes place.
We wish to clarify our views on the • The VET system must combine strong regional
essential aspects of a fit-for-purpose VET provision with clear national consistency. While
system, and where we see barriers to this in the focus on any VET system should be the
breadth and depth of its on-job training, this must
our current system. be complemented by a sustainable network of
regional off-job provision. This is vital for meeting
What do we think New Zealand needs from a
needs that cannot be met in the workplace, and
VET system?
providing education to those still looking to enter
A fit-for-purpose VET system would adhere to the the workforce. However, this regional provision
following principles: must adhere to consistent national standards, to
• The VET system must be industry-led. Industry must ensure the confidence industry needs and the
have a strong hand in standard setting and all VET clarity and portability learners need.
providers must teach to industry-defined standards. • The VET system must be focussed on delivering
While all education and training must also skills to both current and potential members of
obviously have a learner focus, if that education the workforce. Tertiary education providers tend
and training is not meeting the skills needs of to focus their energies on those currently in the
industry, it will not meet the needs of those learners tertiary system, those coming through the school
looking to enter or progress in that industry. pipeline, and those that are not in education or
• The VET system must be tailored to meet training. However, a strong VET system must also
workforce needs. The appropriate balance of be enabled to meet the needs of the wider adult
on- and off-job training for a given industry or population, recognising that in times of skills
qualification must be decided in conjunction with shortages in particular, the greatest source of
industry, and the arrangements for individual human capital is in the workplace.
trainees and apprentices must be made in close • The VET system must allow for self-determination
consultation with their employers, if those of industry and other stakeholders. Willingness
employers are to engage in the system at all. This to participate in an on-job training system is
requires that employers be able to engage with contingent on participants having a high degree
organisations that have a clear understanding of of self-determination about how and when
the realities not just of education and training, training takes place. We know this is of vital
but of the realities of the industries in which importance for employers, but it is also a key
those employees are training. consideration for Māori and Pacific peoples and
• The VET system must be responsive and agile. A other stakeholder groups.
VET system must bring new products to market
quickly if it is to provide value to learners and to What do we think needs fixing in the current system?
industry. Employers will not engage in training that It is our contention that most of the pieces of a better
does not meet the needs of their industry, and VET system are already in place, but that funding and
VET providers should not either. It is vital that the policy settings have historically created a number of
system is responsive to the needs of industry, and issues that have been detrimental to the coherence,
can deliver relevant educational products, be they efficiency and responsiveness of the New Zealand VET
standards, micro-credentials, qualifications or new system. Specifically:
WHAT NEW ZEALAND NEEDS FROM A VET SYSTEM

• Funding settings have created unfair and to employers. Conversely, the level of investment
unnecessary competition within the VET sector, in lifelong learning through the workplace is much
driving inefficient utilisation of resources and too low, especially relative to pre-employment
creating barriers to collaboration. Differential and institution-based education and training.
pricing for similar training has resulted in inefficient • The qualification system is not responsive enough.
use of funding and unnecessary competition Much existing employer frustration with New
between ITOs and providers. Concurrently, ITO Zealand’s VET system is linked to the inflexibility
funding rates have been increasingly insufficient to of the qualification system. Bringing qualifications
purchase off-job training at market rates, leading to to market can still take too long to meet industry
less utilisation of ITP provision as part of industry needs, and the interface with the funding system
training. As importantly, funding settings have drives the development of qualifications that are
driven unnecessary competition between ITPs, designed to hit a certain credit point for funding,
resulting in inefficiency and duplication in that rather than to provide a precisely targeted
part of the system. credential for industry. Progress has been made
• Parity of esteem issues inhibit pathways into VET. in this regard with the introduction of micro-
There remain fundamental problems with the credentials, but there remains work to be done.
way VET is presented as an opportunity for young
people that inhibits the flow of capable youth into
VET and on to the trade and service industries that
are in desperate need of skilled workforces. Within
this, there is a systemic bias toward classroom-
“Four key themes emerged from the
based education in any instance, which obscures 47 teachers who made comments
the opportunities available through New Zealand’s
industry training and apprenticeship system. This
about trades and services as a
is despite industry training being the only part of career option for their students.
the VET system to see increases in the delivery of
level 4+ qualifications in the last five years. Both • That trades are seen as a ‘second
the ITF and individual ITOs have gone to significant class’ option, for those who
effort to address this through development of are not academically inclined
marketing for the sector and hosting of student/
employer speed-meets, but this has been hindered and university is the actively
by ongoing delays in the development of a promoted pathway
meaningful New Zealand careers system strategy.
• That trades are ‘dirty’ work and
• The current network of public VET provision is
not sustainable or fit-for-purpose. At a system not careers that can be pursued
level, the current ITP model is neither financially by girls
sustainable, nor delivering fit-for-purpose
education in many of the industries it serves. This • Schools need to proactively
harms the perception of VET, and the certainty of promote trades and services so
regional supply for necessary off-job training. that more information gets out
• There is less fit-for-purpose VET, of all kinds, than there
is needed to meet the skills needs of New Zealand
industry. What the VET system in New Zealand • Perceptions are starting to
needs, more than anything, is more participation in change in some schools.”
VET. There are simply not enough people training
and upskilling in the New Zealand VET system to Got A Trade!: Teacher and
meet the needs of industry, and too much existing Young People Baseline
VET provision is not delivering work-ready recruits Survey, September 2018
WHAT NEW ZEALAND NEEDS FROM A VET SYSTEM

Assessing the PROPOSAL 1: Redefined roles for industry

bodies and education providers
RoVE proposals We support the call for a stronger standard setting
role for industry. This should always have been a part
of the system, and we believe that ensuring the entire
These views have been generated through VET system is working to a consistent set of industry
wide sector consultation with industry standards will go a lot of the way to developing the
associations, employers, iwi, and other coherent and seamless system the government is
stakeholder groups. seeking. It will also ensure that provider-based VET is
fit-for-purpose in a way some stakeholders currently
The overall system aims articulated in the indicate it is not.
RoVE proposals suggest that the Government’s
aspirations for the New Zealand VET system align However, the proposal to shift responsibility for the
with longstanding ITF positions. We share the arrangement of on-job training to providers has the
Government’s goals for stronger industry voice and potential to undermine not only the gains of this
increased work-based and lifelong learning to meet proposal, but the Government’s reform process as a
future work challenges. There are aspects of the whole.
proposals which, if implemented effectively, could
significantly improve the New Zealand VET system. Firstly, it undermines key connections in the system:
• Separating responsibility for industry standard-
Having said that, there is a distinct lack of measurable setting and the arrangement of industry training
targets or success measures in the discussion. The and apprenticeships would weaken the delivery
discussion of longstanding and pressing issues in the of both roles. One of the great strengths of our
system refers largely to the financial issues currently current system is the feedback loop that exists
besetting several ITPs. This is a pressing matter, but within ITOs, linking standard setters to the ‘boots
stabilising the ITP sector should not be the primary on the ground’ training advisors who see on a
driver of improvements to vocational education. daily basis how the standards, qualifications and
We see vocational education as a key contributor to programmes developed for industry are working
workforce skills and development, and the system in the field. Separating these roles will be to the
design should reflect these ends. detriment of both. Standard setters with no real
We also consider there are mistaken assumptions connection to the workplaces their standards are
about the fundamentals of workplace training that geared towards will struggle to develop fit-for-
would undermine the goal of bringing industry and purpose products, while training advisors at arms-
education closer and would instead see the overall length from the industries they serve will lose
system weaken through employers and industries credibility in the eyes of the employers they work
declining to train workers through the formal system. with.
The following section of this submission details • Separating responsibility for industry standard-
the strengths and weaknesses we see in each RoVE setting and the arrangement of industry training
proposal as well as what we believe is missing from and apprenticeships would weaken industry and
the proposal. It then provides an assessment of how employer say in how training works in its sector.
we think the proposed changes would play out, if Fundamentally, apprenticeships and traineeships
implemented as described. are forms of employment relationships. Unless
employers have an ability to shape the training
solutions for their firms, and experience similar
or better levels of service that outweighs the
disruption, they will vote with their feet.
ASSESSING THE RoVE PROPOSALS

Secondly, it destabilises an effective part of our • Last but by no means least, it destabilises the part
current VET system: of the VET sector where graduates are currently
• It hands responsibility for a system that is experiencing markedly higher incomes, according
working well to organisations that have to IDI data.
little or no experience developing training
arrangements and apprenticeships. Earnings of qualification holders by subsector
Industry training is the only part of the VET
system to see growth in participation and YEARLY INCOME OF DIFFERENT PATHWAYS
qualification completions over the last five 70K Women in Trades ITOs
years. Importantly it has also seen significant No training
growth in higher-level participation, with 60K Other ITOs
an increase of over 12,000 learners at level Polytechnic
4+ over the last five years, compared to a 50K

Private training establishment
Wānanga
decrease of nearly 9,000 across the rest of
the VET sector. 40K
30K
Actual Changes in VET Qualification
Completions 2013–17 20K
1000
515
10K
ITPs PTEs Wānanga
0
ITOs 0K
19 20 21 22 23 24 25 26 27 28 29 30 31 32
-1000 AGE
-1120
-2000
CUMULATIVE INCOME OF DIFFERENT TRAINING PATHWAYS
0.7M Women in Trades ITOs
-3000
No training
0.6M Other ITOs
-4000 Polytechnic
-4080 Private training establishment
0.5M
-5000 Wānanga
-4920
0.4M
0.3M
Actual Changes in VET Learners
2013–17
0.2M
5000
4080
4000
0.1M
3000
2000
1000 0.0M
19 20 21 22 23 24 25 26 27 28 29 30 31 32
ITPs PTEs Wānanga
0 AGE
ITOs
-1000
-415 Source: IDI – IRD tax records for cohorts of 19 year olds in each year of
-2000
-3000 2003, 2004, 2005, 2006 and 2007. Prepared by Scarlatti Research for the
multi-ITO Women in Trades Research Programme. The Women in Trades
-4000
ITOs are BCITO, Competenz, Connexis, MITO and The Skills Organisation.
-5000
Available at www.sweetanalytics.co.nz
-6000
-7000
-8000
-7110
-7485

Total Cost of Tertiary Education and Training to Government by Sub-sector 2016 ($m)
ITO $171
ITP $588 $148 $152
$8
Wānanga $164 $21
PTE $291 $89 $78
$0 $100 $200 $300 $400 $500 $600 $700 $800 $900
Tuition and Training Allocation

Cost to Government of Student Lending
Student Allowance and Accommodation Benefit Payments
www.tinyurl.com/costofprovision
Total Cost to Government per Qualification Completion 2016 ($)
ITO $3,263
ITP $19,431
Wānanga $9,031
PTEs $17,865
$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000
www.tinyurl.com/costofprovision

From an industry training and apprenticeship • It will not benefit the new NZIST, and risks wider
perspective we see no compelling reason to take this system efficiency. Giving providers responsibility
risk with a part of the system that is delivering skills for workplace training and apprenticeships will
efficiently and sustainably under current settings. New not reduce costs to those institutions. The only
Zealand’s ITOs currently manage relationships with way it bolsters an institutional business model
25,000 employers, employing 46,000 apprentices is if more workplace training is taken off-job, at
and 100,000 trainees. These employers have shown the insistence of the provider, which employers
a willingness and preference to train as part of the are unlikely to prefer. Current industry cash
current system. These relationships are at risk in investment in ITOs of over $55 million in 2017 are
any transition, and we do not share the discussion unlikely to be generated by ISBs if they are not
document’s assumption that current ITO employers providing direct services to employers.
will continue to choose to participate.
More broadly, it places current uptake of on-
We also contest the assumption that either the new job training at risk, which could have significant
NZIST, or PTEs and wānanga, will be better placed to impacts on the overall efficiency of New Zealand’s
provide pastoral care to on-job learners. Regardless of VET system. Industry training as currently
the current capacity of providers in this regard, we do structured is by some margin the most efficient
not believe it can be assumed this will either be easily mode of tertiary education for the taxpayer – with
ramped up to support a far larger student cohort, or a $1m investment in industry training yielding
that as a model it will be effective in meeting the approximately 300 qualifications, compared to
needs of on-job learners who may spend little or no the 50 achieved for the same investment in ITP
time at a provider. We are in fact concerned that the learners.1
lack of familiarity those organisations have with the
In short, risking the ability of employers to choose the
workplace may hinder their ability to support trainees
mix of training that suits their needs will impact their
and apprentices.
willingness to engage. Disrupting this in respect of
• It risks supply capture in what must always be a employers currently in the ITO system, and/or future
demand-driven system. Giving one body, or set of employers is unnecessary, and unwise.
bodies, responsibility for both on-job training and
By comparison, retaining industries’ role in
off-job provision removes an appropriate demand-
determining training arrangements does not work
side check and balance at the point of delivery,
against the reform’s overall goals of a more integrated
and risks a disconnection between VET and labour
system, rather, it ensures that training activity is
market needs. In order to support its business,
linked with real needs in the economy, and deployed
or for capacity and capability reasons, vocational
productively.
providers may seek to increase provider-based
provision in ways that employers may not prefer Finally, we would also note that at present, the
and from which industries may not benefit. demarcation of responsibilities between Industry
Industry Skills Bodies, as described, will not have Skills Bodies, Centres of Vocational Excellence,
the ability to direct this level of provider decision- Regional Leadership Groups, and the proposed New
making, and nor will employers. Zealand Institute are unclear, except that in creating
• It places the delivery of necessary skills at risk. all of these bodies, the system will be layered and
We are concerned for small employers and niche introduce a number of tensions, in a small country. We
industries, employers seeking to develop skills at see a great risk that this will create undue complexity
lower levels on the NZQF, and employers in large in the system, slowing down the responsiveness of
and critical industries where there is currently no a system that must be able to meet the needs of
ITP training activity or capability. These areas have learners and industry as swiftly as their needs change.
not generally been well served by the provider
system, and we are concerned at the steep
learning curve and low incentives that system will
have to reengage with them.
1 www.tinyurl.com/costofprovision (tab 3)

PROPOSAL 2: Create a New Zealand Institute If a new consolidated funding system was well-
of Skills and Technology implemented, it could remove unfair competition,
We support efforts to reconfigure public VET and enable ITOs to purchase more off-job provision.
provision and place it on a sustainable footing for This move alone could create much better levels of
the future. Achieving this will, in conjunction with productive collaboration in the system and better
ensuring greater provider adherence to industry utilisation of off-job training where it best meets
skills standards, help ensure New Zealand is able to industry and learner need.
maintain a fit-for-purpose network of regional VET However, if implemented in concert with the shift to
provision. a system where provision and training arrangement
Without any indication of the costs and efficiencies are the responsibility of the same organisation(s), we
expected from the current proposal it is difficult to would see a very real risk in the gaming of the funding
fully assess its merits. However, we note the advice of system to strike a balance of on- and off-job training
education officials that consolidation of the current to optimise funding, rather than skills, reducing
ITP sector into a single institution could create a single the effectiveness and efficiency of the system
point of failure, meaning any future instances of poor for Government, industry, and learners alike. This
management or operation would have a significant highlights our key concern around supply-side capture
national impact. Also, by creating a monopoly on of on-job training.
public VET provision, there is a risk that the new NZIST
will be large enough to unduly influence the advice of What is missing from the proposals?
industry standard-setters, and/or the funding body. Beyond our comments on the current proposal, we
note some key issues that are not meaningfully
Regardless of the model ultimately adopted, we addressed, and which must be a focus of consideration
note the significant upheaval this will cause, and the in any redesign of the New Zealand VET system:
significant ‘bedding-in’ time that will be required.
This is another reason to provide ITO-led continuity 1) School transitions. The proposals provide limited
for 25,000 current employer relationships. Any insights as to how schooling and VET will be
structural changes to the system must be phased better connected in a new VET system. While
in such a way that public VET provision is stabilised we understand existing arrangements such as
prior to other substantive changes. It is not sensible Gateway and Trades Academies will continue,
to add substantial new and additional responsibilities we are concerned that the transition of training
before assessing whether reconfiguring of the existing arrangements to providers will further limit the
providers has been effective. ability of schools to connect with industry. We
would also note that ITO standards were used by
PROPOSAL 3: A unified vocational education 95 per cent of New Zealand’s secondary schools
funding system to support NCEA achievement by over 64,000
We see funding as the strongest single driver of students in 2017, and we seek clarity on how this
behaviour in the system, and the ITF has long inclusion of industry developed standards will be
advocated for a consolidation of the VET system maintained in any new system.
that would see funding subsidies linked to mode 2) Addressing parity of esteem for VET learning: There
of provision, rather than to provider types. One of is little in the proposals to suggest a concrete plan
the key reasons some ITOs have shifted away from for improving the esteem of VET pathways and
including more substantial off-job components trade and service industry careers to improve the
in their programmes is simple affordability, with throughput of VET learners into and across the
current industry training rates increasingly making workplace. This is vital to meeting our immediate
the purchase of ITP provision at current market rates and longer-term skills needs, but we see no clear
unaffordable in many circumstances – to the detriment connection between the proposals and plans to
of ITPs. In other cases, through the preferences or address this issue. Indeed, the disestablishment of
realities of industries, all on-job options must be an ITOs would potentially see much existing sector
allowable choice. effort in this regard lost.

The ITO Sector:

3) Maintaining and increasing industry engagement
in our VET system. Industry training and
apprenticeships is not only the largest part of
the current VET system, but its ‘classroom’, the
workplace, is also the largest untapped pool of
A Five-Year
potential learners. Throughout the proposals, it
is assumed that employers will transition to the Snapshot
new system, but little detail is given on how the
proposals will encourage more employers to train,
or sustain the current cash contribution from
industry. Instead, the supply-side focus of the
2013–2017
proposals puts current demand-side engagement
at risk. Without investment to increase $808,675,584 – Total government
participation and a continuation of existing ratios training subsidies.
of industry investment, the financial sustainability
of the new system cannot be certain. $237,003,717 – Total industry financial
4) How any transition will be managed. The contribution.
proposals provide limited insight as to how such
a substantial system change would be managed.
43% increase in annual industry
The extent to which any element of the proposed
change may be effective will be hugely dependent contributions, rising to $55.9 million
on how well-managed that change is. Reform must in 2017.
be phased, with the successful bedding-in of ITP
reconfiguring a pre-requisite for consideration of $35,349,477 – investment in training
further structural changes. materials.
5) Improving outcomes for Māori and Pacific peoples.
The education system has not served Māori $157,497,817 – direct purchase of
and Pacific peoples well over the generations. provider-based training.
Māori and Pacific peoples are overrepresented
in those vulnerable in the workforce, as well as
experiencing less success in traditional education
$29,599,580 – NZQA Fees.
settings. Addressing this is reflected in the
priorities of many Government departments, and $0 – student loans and allowances.
so it is concerning that fundamental proposals
to change a part of the system that provides
the sort of agency and self-determination that
iwi and other groups are seeking, have been
made without any meaningful reference to the As at 31 December 2017
anticipated benefits for these groups.
This is particularly concerning in the context of 69.7 percent of revenue from
a proposal to shift responsibility for training to government.
providers. Current experience with Māori and
Pasifika Trades Training and past experience with
private training establishments operating as
Net Assets/Equity: $113,774,395.
Modern Apprenticeship Coordinators, suggest the
provider-based VET system is often more focussed

on retention in that part of the system, than on

transitions into meaningful employment. “This is untested ground
It is also concerning that the proposals as they
stand seek to make major structural change to the
for these ITOs, but they
part of the system which Māori and Pacific peoples
are increasingly turning to meet both the training have taken a bold step
and the signals that they
needs of their people and their businesses. This
can be seen both in the recent increase in Māori
and Pacific participation and achievement in the
industry training system, and in initiatives such as have sent to the market
the kawenata signed in 2018 between Waikato-
Tainui and all 11 ITOs. today will have far-
6) Ensuring a more responsive qualifications system.
The proposal makes meaningful reference to the reaching and positive
qualification system only through references to
new standard-setting rules. In reality, standard-
setters will be hamstrung without meaningful
consequences for our
shifts to make the New Zealand Qualification
Framework (NZQF) more responsive to the
people and our region,”
needs of a wider variety of users, including
industry. While we acknowledge that a review Donna Flavell, Chief Executive Waikato-
of the NZQF is currently in its early stages, the Tainui, in response to the signing of a
lack of connection between that work and this kawenata between Waikato-Tainui and all
consultation proposal is a missed opportunity. 11 ITOs, stuff.co.nz 22 February 2018
Shifts in Level 4+ Participation 2013–2017

14000
12000
10000
8000
6000
4000
2000
Māori Pacific Total Māori Pacific Total Māori Pacific Total
0
Māori Pacific Total
ITO ITP Wānanga PTE
-2000
-4000
-6000

Pacific Peoples VET Participation

“We like the idea of a fairer
1,625 funding system, and we
heartily support a greater
5,520
skills leadership role for
11,760
the industry. However, we
want to actively co-design
5,985
a vocational education
system that we know will
ITOs ITPs PTEs Wānanga work for Māori. We need
to keep industry training
owned and delivered by
Māori VET Participation industry.”
A key message from the Hui Taumata held on
6,355
14 March 2019, at the Waikato-Tainui College
of Research and Development, attended by
stakeholders representing 21 iwi.
8,770
22,520
15,770
ITOs ITPs PTEs Wānanga

What would “There are some

happen if RoVE industries that the ITP
were implemented sector does not provide
as proposed? or arrange training
As noted, we see a number of laudable and/or apprenticeships
goals in the RoVE proposals as currently
presented, and much that can be built on to for. Examples of these
ensure an integrated and sustainable VET
system. However, as described, the proposal
industries include glass
will result in a loss of industry voice on the manufacturing, aircraft
ground. Unless employers have a voice in how
training is organised, they will not participate. servicing, electricity
Unless employers have a say in how training
is organised, vocational providers, unchecked, supply, butchery, boat
will do what they know best. building, and industrial
If the current suite of RoVE proposals is implemented
in their current form, we anticipate a reduction in
participation and performance for the New Zealand
rope access.”
VET system, with deleterious effects for the learners
and employers it serves.
Hon Chris Hipkins, Minister of Education, in
response to written Parliamentary Question
The upheaval of transition, including asking willing 9800
employers to move their training arrangements, will
lead to employers stepping away from the formal
training system, lowering overall engagement in VET
and heightening skills shortages at a time we can least
afford it.
It is also likely that current ITO staff will elect to return
to industries, rather than redeploy to ISBs or providers,
which will remove current capability and expertise
from the system.
We are also not convinced it will secure a sustainable
network of provision, and will ultimately drive up
costs of VET. Adding responsibility to providers
for workplace trainees and apprentices will not
reduce costs to those providers. Incentives may
drive providers to offer more off-job provision to
sustain underutilised resources and classroom-based
capability. Employer contributions to the system, both
financial and in-kind will reduce as a result.
WHAT WOULD HAPPEN IF RoVE WERE IMPLEMENTED AS PROPOSED?

We suspect that if these proposals proceed, small and

niche industries are at risk of being seen as unviable “Employers and sector
by providers. A recent example of this would be in the
boat building and composites industry – an area that specialists have been
major contributors
no longer has any public provision, but which does
have an industry-led apprenticeship system which
was last year recognised as the best in the world at the
international Boat Builder Awards 2018.2 to the development
There are also critical and quite large industries
where provider-based training is simply not an of the programme
to ensure the sector
option due to the capital and/or geographical
constraints, such as forestry, or where it cannot
produce commercially competent graduates, as seen
in the hairdressing sector. needs have been met.
Lower-level and shorter duration traineeships in high
churn industries are at higher risk of being neglected Many of them have
by vocational providers. While private returns to
individuals are not necessarily as high from these been apprentices
programmes, this training provides qualifications to
people who are often vulnerable in the workforce, themselves and so have
and who have often not succeeded in formal
education settings. We see this educational success as
transformative in the workplace and in the home, and,
a clear insight into what
in the overall context of tertiary education investment,
represents extremely good value for money. These
makes a successful
programmes are run with some of New Zealand’s
largest employers, with more staff who may benefit apprenticeship
from upskilling than currently sit in many of New
Zealand’s ITPs. programme,”
Structurally, the redistribution of responsibilities
across ISBs, NZIST, PTEs, CoVEs, and regional Tertiary Education Commission discussing
leadership groups risks creating a system in a small NZMAC’s apprenticeship programme
country that is unduly complex, slowing the time to being recognised as the best boatbuilding
market of VET programmes and learning materials apprenticeship system in the world at the
and lessening responsiveness as a whole. This will international Boat Builder Awards 2018.
push employers and industry further from the centre
of a system that is ultimately meant to be meeting
their needs.
2 https://www.tec.govt.nz/news-and-consultations/top-global-honour-for-nz-
marine-apprenticeship-scheme/

Finally, we see significant risk in the very scale of “Skills education in NSW is in
change proposed, particularly given the speed
with which these changes are being pursued. The crisis, with business complaining
reforms of the 80s saw a 44% drop in apprenticeship of difficulty in working with
numbers,3 and we see very real risks in that being
replicated through this proposal. Meanwhile, the state TAFE, enrolments falling and an
of New South Wales provides a contemporary example independent report arguing a
of the impact such reforms can have. The merger
of the state’s TAFE system has seen a substantial massive reorganisation several
decline in VET participation, an extremely problematic years ago has returned the
interface with employers, and substantial problems
in aligning systems across formerly independent organisation to a discredited,
institutions. centralised structure against the
The impacts of these outcomes will be felt far more recommendations of three earlier
widely than the education system. Kiwibuild targets
can only possibly be met if there is a steady stream government reports.
of skilled labour available to deliver on those targets.
Mana in Mahi will also struggle if employers start Business people employing
disengaging from training, and the impacts of any apprentices in NSW say it is
drop-off in VET in general, and on-job training and
apprenticeships in particular, will have major flow-on impossible to obtain official
impacts for immigration policy. documents showing the
Most importantly, however, if New Zealand attendance records of students,
experiences a decline in on-job training during a
period of high employment, the next downturn will and NSW TAFE will not supply
see those people who missed the opportunity to train employers with apprentices’
paying the highest price. They will be the first to lose
their jobs, and will then enter incredibly competitive training schedules.
job markets without any credentials to attest to their
past experience. On at least one occasion, TAFE
NSW declined to supply an
“TAFE NSW has slipped further apprentice’s results to the
into the red with a loss of $239.6 employer “on grounds of privacy.”
million compared with a loss of Australian Financial Review, 7 October, 2018
$51.3 million in 2017, and industry
experts said radical action was
required to reverse the slide.”
Australian Financial Review, 3 December, 2018
3 A Brief History of Government Funding for Industry Training, Green, Hipkins,

Williams and Murdoch. ITF publication January 2003.

A revised RoVE
proposal
Recognising the need to strengthen New but when supported by greater role clarity and
Zealand’s VET system, and the risks in the greater adherence to industry standards, it has the
potential to drive change with a fraction of the
current proposals, we suggest the following risk and upheaval of the more sweeping structural
approach, which seeks to maximise what is changes proposed to industry training and
already working in our current system, and apprenticeships.
build on the elements we see as beneficial 5) Introduce an employer incentive scheme to
in the RoVE discussion. encourage many more employers to join the
system and offer formal traineeships and
There are five elements to our proposal: apprenticeships. The proposals offer little to
entice or encourage more employers to engage
1) Strengthen the ITOs through mandating and
in the formal workplace training system, while
resourcing skills leadership, and enforcing the
significantly risking relationships with employers
use of industry standards. Whether known as
currently training with ITOs through the transition.
ITOs or reconfigured as ISBs, this will go a long
We propose that serious consideration is given to
way to ensuring portability by increasing the
how policy incentives can drive greater employer
comparability of on and off-job approaches to
participation in the system – which would in
learning in our VET system – creating much of
turn bolster the numbers of workers training in
the integration and coherence sought by the
providers, as part of their industry training.
proposals.
2) Continue to have ITOs (or ISBs) arrange training.
For reasons already stated, this will ensure the
continued service delivery of industry training
and maintain important connections between
employers, training and standard-setting, and
provide a critical demand-side check and balance
in the system. It will maintain the element of the
system that best provides self-determination for
both industry and employers, and groups such as
Māori and Pacific peoples whom institution-based
learning has not always served well.
3) Reconfigure the ITPs. This should be the first step
in any reform and should be successfully bedded
in as a prerequisite for any further structural
change.
4) Implement proposal three, establishing consistent
funding rates for provision across the sector.
This will encourage meaningful cooperation
between ITOs and providers. This could be further
encouraged through operational policy settings.
Funding in-and-of-itself is not a silver bullet,
A REVISED RoVE PROPOSAL

Labour Party, Future of Work Commission, November 2016
In this context we refer to the findings of Labour’s managed set of incentives, such as signup and
Future of Work Commission report, which recognised completion payments, or prorated wage subsidies
the critical role for workplace-based learning in a (akin to Mana in Mahi) could encourage more formal
future of work characterised by regular and lifelong vocational education by more employers. A similar
upskilling. We urge the government to revisit the combination of signup payments and wage subsidies
Commission’s proposal to develop an employer are currently being piloted in Australia.
incentive scheme.
Ultimately, we believe our proposal will enable
In our alternative proposal, the system remains the sort of system changes envisaged in the RoVE
unified through treating a VET learner as a VET proposal. Adherence to industry standards will
learner, whether initially enrolled through a provider strengthen consistency and portability, making the
or signed into formal workplace traineeships or VET system more seamless and improving portability
apprenticeships via their employer. Were a learner for learners needing to transition across the system.
to enrol in a provider, the subsidy that follows is It will better enable collaboration, supported by a
designed to offset costs associated with that provision. funding model that encourages collaboration, while
We argue that if quality assured VET leads to the same eliminating previous drivers of competition.
nationally recognised credentials, those subsidies
At the same time, it will build on what we know is
should also accrue to employers, to offset overhead
working in the system, keeping industry at the centre
and productivity associated with their contribution to
of the VET system, ensuring both on- and off-job
workforce development.
training are fit-for-purpose for both learner and
Through already being employed, and training in the employer, and efficient and effective for Government.
industry in which they are working, the government
has a better guarantee of skills matching and a return
on its training investment.
We believe that both the fees free and Mana in
Mahi schemes could potentially be re-targeted or
broadened to support new trainees and/or new
employers to come into the system, aligned with the
RoVE’s goal of improved skills matching. A carefully
A REVISED RoVE PROPOSAL

Next steps
We believe the Government has a number
of important decisions to make. The intent
of the RoVE proposals is to be applauded,
but the current proposal needs considerable
work if it is to deliver the fit-for-purpose VET
system envisaged.
This work should not be rushed, and cannot
be progressed without greater engagement
with the industry training sector, industry
itself, iwi, and other stakeholders. While we
recognise the importance of this work, a
perception of urgency should not be allowed
to undermine meaningful consultation,
robust option development, deliberate
phasing, and effective change-management.
The costs of a poor outcome are simply
too great. However, we do recognise the
need to strengthen our system, and we are
committed to engaging in a meaningful
co-design process that will realise all our
aspirations for VET in New Zealand.
NEXT STEPS
Stakeholder feedback
Over the course of the consultation period, ITOs have heard from over
6,500 employers, industry associations, trainees and apprentices, iwi, and
other stakeholders, across dozens of industries up and down New Zealand.
The following is a snapshot of their feedback on the RoVE proposals.
“Two-thirds of [Building and “Careerforce have supported our

Construction ITO Sector Summit] staff to upskill in an environment
attendees did not support the that embraces diverse learning
Government’s proposals, voicing styles and abilities. They have
their concerns around the negative supported our organisation to
impact such widespread changes utilise our existing expertise and
would have on the sector, at a experience to develop workforce
time when we need to build more training opportunities across our
capacity and capability.” services. It would be a great loss
BCITO press release, 5 March 2019: a position losing an ITO that focuses on the
supported by over 90% of the 1,200 current and Healthcare Industry.”
former employers and 1,300 apprentices responding
to a follow-up survey Careerforce Sector Survey Response, March 2019
60% survey respondents strongly

agree/agree that the changes will
make the skills shortage worse for
industry.
57% survey respondents said they
are unlikely to enroll, or will enrol
fewer, staff into industry training
under the proposed system.
Survey of current and past Competenz employers,
industry associations and schools, March 2019 (780
respondents)
STAKEHOLDER FEEDBACK
Infrastructure Industry Training Organisation
“This will result in less training being MITO surveyed its stakeholders,
completed. Civil industry is just with the results showing strong
starting to ‘find its stride’ now with opposition to the reforms: 81% of
the new system. Change will push respondents are against transferring
this back a long way.” ITO apprentices/trainees to the
Connexis Survey Response, March 2019 new institution and 84% are
against the disbanding of ITOs.
MITO Poll, March 2019 (835 respondents)
marine
“Making a national polytechnic & composites INDUSTRY TRAINING
responsible for managing ORGANISATION
the workplace training for all

industries may not work as well
“Employers in the boatbuilding
as the current system where HITO
area from Invercargill to
ensures individualised training
Whangarei, Napier, Hastings,
plans and support for trainers and
Whanganui, Auckland – all do not
apprentices… We do support some
have confidence that any other
reform to vocational education,
organisation would be able to
however we want to ensure that
provide the trade training support
what is not working well is not
the current ITO provides the
fixed at the expense of what is
specialist, niche industry.”
working well.”
Comment by the New Zealand Marine Industry
New Zealand Association of Registered Hairdressers Association, Feb 14 2019
press release, February 2019
Primary ITO consulted formally “No sweeping changes are needed.

and received supportive feedback We have been developing the
from 105 companies and industry current system for the last 25
organisations. years and it is working adequately.
Primary ITO consultation Feedback, April 2019 Any change will mean much
higher costs and less control for
businesses.”
Employer feedback, March 2019
55% of employers would be less

likely to take on an apprentice, or
would hire fewer apprentices, under
the proposed system. Active Careers through
Skills Organisation Employer Survey, March 2019 On-Job Qualifications
(927 respondents)
“We value the ability to talk to one

industry-knowledgeable agency,
the ITO. Our ITO not only designs
the qualifications we need, with
direct input from us and others in
our industry, but it’s also nimble
enough to provide us with bespoke
delivery methodologies. The current
system is working well.”
Sport Taranaki, April 2019
SUBMISSION ON THE
Reform of
Vocational
Education
APRIL 2019
Process concerns
As a representative organisation, the ITF is obliged to comment on what has
been viewed as a disrespectful consultation process by our sector and many of
our stakeholders. To this end we have four specific comments:
• Initial engagement with the industry training sector in development of the
RoVE proposal was insufficient to inform such significant proposals. Given
the magnitude of the RoVE proposal for both the ITP and ITO sectors, it is
significantly troubling how little consultation has been undertaken with ITOs
and employers in its development. We find it particularly egregious that an
initial information gathering exercise designed to elicit themes to guide the
scope of the VET review has been retrospectively relied on to imply employer
support for a view that “the system is broken”.
Three industries, ten employer meetings and 22 survey respondents is
not a remotely sufficient foundation for some of the assertions made in
the current proposal. We are also concerned that there is little evidence of
Ministry of Education/TEC engagement with employers or iwi as part of the
post-announcement consultation. The presentation of a survey with over 90
questions is also an impractical tool to engage busy employers, or large iwi.
• The lack of detail in the RoVE consultation document has made it difficult to
provide either clear support or effective analysis of elements of the proposal.
As noted in our submission, the ITF is supportive, in principle, of a number of
elements of the RoVE proposal. However, if our current system has taught us
anything, it is that the fine print matters. As such, the lack of clarity around
possible roles of ISBs, the rates that might be considered in a consolidated
funding model, costings for the proposed system restructure, metrics for
success, or timelines around the implementation of elements of the proposal,
make it difficult to offer unqualified support.
Despite indications that much of this information does not yet exist, a Ministry
of Education response to an Official Information request for data around
costings and funding rates indicated that information was being withheld on
the basis that it would not be appropriate to release it until decisions have
been made. Respectfully, we suggest it is inappropriate to ask stakeholders
and the public to evaluate proposals without access to this information. This
is symptomatic of a lack of clarity and transparency, is exacerbated by the
limited time available to provide feedback, and by an apparent rush to make
initial decisions.
PROCESS CONCERNS
• The presentation of a single proposal rather than a series of options in initial

consultation does not suggest an openness to alternatives. This immediately
undermines confidence and desire to contribute in the reforms from
stakeholders not used to engaging with such processes. This is exacerbated
by the lack of detail surrounding a proposal that raises suspicion of a fait
accompli.
• The seven-week consultation period has been insufficient to allow for
meaningful engagement on such a substantial proposal. The industry
training sector comprises 11 organisations, managing relationships with
approximately 25,000 employers, as well as a wide array of industry
associations, schools, iwi and other stakeholders.
The shortness of the consultation period has a disproportionate impact
on Māori and Pacific peoples in particular, who make up 21% and 10%
of VET learners respectively, and who have not experienced sufficient iwi
or community engagement, particularly in the Auckland region, to enable
meaningful consideration of the reform proposals. While we appreciate
the practical constraints of legislative and Budget timelines, we consider
it unreasonable to transfer the burden of consultation to the sector in an
untenable consultation timeline.
PROCESS CONCERNS
SUBMISSION ON THE
Reform of
Vocational
Education
APRIL 2019
Infrastructure Industry Training Organisation marine
& composites INDUSTRY TRAINING
ORGANISATION
Active Careers through

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SUBMISSION ON THE

Infrastructure Industry Training Organisation marine

Active Careers through

Who we are VET Learners In New Zealand 2017

training and apprenticeships sector. In

Training (VET) system.

ITOs ITPs PTEs Wānanga

What New Zealand approaches to tuition and training, as swiftly as

needs from a VET of such products must be well connected to

WHAT NEW ZEALAND NEEDS FROM A VET SYSTEM

WHAT NEW ZEALAND NEEDS FROM A VET SYSTEM

Assessing the PROPOSAL 1: Redefined roles for industry

ASSESSING THE RoVE PROPOSALS

4+ over the last five years, compared to a 50K

ASSESSING THE RoVE PROPOSALS

ITP $588 $148 $152

PTE $291 $89 $78

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900

Tuition and Training Allocation

Total Cost to Government per Qualification Completion 2016 ($)

ASSESSING THE RoVE PROPOSALS

ASSESSING THE RoVE PROPOSALS

ASSESSING THE RoVE PROPOSALS

The ITO Sector:

ASSESSING THE RoVE PROPOSALS

on retention in that part of the system, than on

Shifts in Level 4+ Participation 2013–2017

ASSESSING THE RoVE PROPOSALS

Pacific Peoples VET Participation

ITOs ITPs PTEs Wānanga

ASSESSING THE RoVE PROPOSALS

What would “There are some

WHAT WOULD HAPPEN IF RoVE WERE IMPLEMENTED AS PROPOSED?

We suspect that if these proposals proceed, small and

WHAT WOULD HAPPEN IF RoVE WERE IMPLEMENTED AS PROPOSED?

3 A Brief History of Government Funding for Industry Training, Green, Hipkins,

WHAT WOULD HAPPEN IF RoVE WERE IMPLEMENTED AS PROPOSED?

A REVISED RoVE PROPOSAL

Labour Party, Future of Work Commission, November 2016

A REVISED RoVE PROPOSAL

“Two-thirds of [Building and “Careerforce have supported our

60% survey respondents strongly

Infrastructure Industry Training Organisation

the workplace training for all

Primary ITO consulted formally “No sweeping changes are needed.

55% of employers would be less

“We value the ability to talk to one

• The presentation of a single proposal rather than a series of options in initial

Active Careers through

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