The plan to replace New Zealand’s eleven ITOs with four to seven industry-governed Workforce Development Councils was one of the key changes to New Zealand’s vocational education system as confirmed by Education Minister Chris Hipkins today.

Over 2000 people tuned in to the Minister’s live Facebook announcement at lunchtime today regarding the highly anticipated reforms.

The Minister outlined how over the next two to three years, the role of supporting workplace learning will shift out of the hands of industry training organisations and into those of training providers.

With regard to providers, Hipkins’ mega-polytechnic also got the green light in today’s announcements, with New Zealand’s 16 institutes of technology and polytechnics to be brought together to operate as a single national campus network.

A new Institute will start on 1 April 2020 and will be a new kind of organisation that provides on-the-job and off-the-job learning. The head office will not be in Auckland or Wellington, confirmed Hipkins.

One of the key concerns in response to the initial proposal to centralise the polytechnic sector was that regional interests would be brushed aside. However, Hipkins has always been keen to alleviate these concerns, so it was no surprise to see among the changes the establishment of new Regional Skills Leadership Groups to represent regional interests and make sure the system is delivering the right mix of education and training to meet the needs of regional populations.

In a further effort to promote regional interests, Centres of Vocational Excellence (CoVEs) will be established at regional campuses to “drive innovation and expertise, and improve linkages between education, industry and research”.

UCOL chief executive Dr Amanda Lynn has described the CoVEs as “progressive”.

“UCOL looks forward to being a part of a strong national system, focussed on meeting the needs of regional employers and communities.”

Andrew Lessels, President of Younited at the Eastern Institute of Technology is also among those pleased to see that the Minister has heeded calls to retain regional autonomy within the new Institute.

“Providers such as the Eastern Institute of Technology have a fantastic relationship with their communities which empowers learners and improves their educational outcomes.  Having this community buy-in is vital to regional success and the new Institute needs to be established with this in mind.”

However, National’s spokesperson for Tertiary Education Dr Shane Reti was more scathing about the announcements saying they could spell closure for some polytechnics.

“Moving apprentices back to polytechnics and creating one mega polytechnic will cost at least 1300 jobs in industry and probably as much again in polytechnics,” says Reti.

Reti is concerned that well performing polytechnics such as the Southern Institute of Technology to Otago Polytechnic will lose the very essence of their successful and innovative local decision making.

However, chief executive of Otago Polytechnic Phil Ker says while that remains a risk two years down the track, for now the announcements have opened the path for well performing polytechnics to continue to prove themselves.

When the proposed reforms were first announced earlier this year, Ker feared a new system that would see regional polytechnics disestablished. What has eventuated instead, as a result of today’s announcement is that polytechnics will be constituted as a subsidiary as of 1 April 2020.

“Two years down the track, the Minister of the day will make a decision about who remains a subsidiary,” says Ker.

Ker says while there is a possibility of closure at this point, it also opens the door for polytechs to “earn their autonomy”.

“The playing field has been evened out and we’re keen to play on it,” says Ker.

However, Ker is disappointed to see an “undertone of blame” still apportioned with regards to sector funding. One of the key announcements today was the creation of a more unified and simplified funding system to support the integration of on-the-job and off-the-job learning.

Ker says that although he is pleased to see the funding model overhauled, he is frustrated not to see any funding increase for the sector signalled in today’s announcements. By Ker’s calculations, it would take an 8% funding increase to get the polytech sector into surplus.

“The truth is if we don’t inject more money into the sector, it will fall over,” says Ker.

These concerns were echoed by Ara Institute of Canterbury’s chief executive Tony Gray.

“Whilst the Minister has announced that some transition funding has been addressed, there is a significant lack of detail about how the subsidiary institutions will be funded and what the funding model will look like. We have to get this right!”

Hipkins says under the new model, industry and employers will be able to influence funding decisions, as well as identify skill sets and approve qualifications. It’s all about giving industry greater control to make the system more responsive to employers’ needs, he says.

“The changes will also ensure we do better for learners who haven’t been well-served by the present system,” says Hipkins.

However, Industry Training Federation chief executive Josh Williams believes the changes will need to be carefully managed if they are to continue the success of the ITOs.

“We need to build on the efficiency and success of the ITO-led training system to ensure that employers continue to have strong confidence in the future training options available,” says Williams.

“We need many more of New Zealand’s employers to participate in the vocational system, to address pressing skills shortages and increase the numbers going through our vocational providers.

“Our vocational providers need to be made sustainable, but in the end, industry will be the judge of whether the system is successful.”

Bill Newson, National Secretary for union E tū, says the changes are very important for working people and industry.

“Providing an industry voice through Workforce Development Councils is good, as is the transitionary approach to change. However, E tū’s concern is that on the job training is not compromised over time to shore up Polytechnic viability. We will be taking the time to assess the changes carefully.”

Hipkins is also eager not to rush things. He has allowed three to four years for implementation of the changes. And with costs for the reforms expected to be “significantly higher” than the $197m allocated over four years in this year’s Budget, there is certainly a need to get things right.

A Cabinet paper released today says the actual costs for the total estimated implementation and transition cost could be between $285m to $395m (excluding inflation) with the bulk of this cost relating to the establishment of, and transition to, the new Institute.

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