We all know that vocational education plays a critical role in a labour market, providing critically important skills that the economy and the public need and rely on.  As a result, there are multiple stakeholders: industries; employers; households; students and potential students; the public; the government. Meaning that any vocational education policy design needs to take account of the interests of that range of stakeholders.

In the first two parts of this series, I have explored major aspects of the policy design sketched in the government’s decisions on the Review of Vocational Education (RoVE).  In doing so, I have made passing comment on the overall architecture of the system.  This part comments in greater detail on that architecture.

The overall design of the system

In April 2018, the government’s RoVE scoping statement defined vocational education as education and training with an “emphasis on the skills, knowledge and attributes required to perform a specific role or to work in a specific industry”.  From that starting point, the government set out to explore four goals for its review:

  • A system that supports, and is supported by, industry
  • A network of vocational education provision for all regions
  • A vocational education regulatory and funding system that supports work-based learning that meets the range of needs in the system
  • Vocational education that caters for the wide range of learners.

Those goals have led to the array of bodies, described in the decision document, that will play a part in the system.

  • There will be Workforce Development Councils (WDCs) that will ensure industry leadership over the way the system operates in the industry sector for which it has coverage. The WDCs will have roles in programme design, approval and assessment, the power to direct and influence TEC’s funding decisions, the role of advising employers on training, responsibility for analysis and forecasting of skills needs in the sector.
  • While WDCs take an industry focus, Regional Skills Leadership Groups (RSLGs) look across industries to provide advice on skills needs in a region.
  • The new vocational education regulatory system will see the TEC and NZQA required to share some of their decision-making rights with WDCs and taking advice from RSLGs. And it will see the new institution, the New Zealand Institute of Skills and Technology (NZIST), absorbing all 16 polytechnics and taking much of the role of supporting workplace-based training – including apprenticeships – from ITOs.  There will be Centres of Vocational Excellence (CoVEs), focused on industries, sectors or occupations, that will promote innovation and quality in vocational education.
  • A new group, Te Taumata Aronui, will establish a partnership with Māori – learners and employers – on vocational education.

Underpinning the system, and still to come, is the promised unified funding system that will respond to the near-universal dissatisfaction with the current dual funding mechanism that pits the polytechnic training pathway against the workplace training pathway.  The goal is a funding approach that will ensure that the vocational education system caters for the range of learners, that will reflect delivery costs, that will recognise national priorities and incentivise responsiveness to labour market demand.

What does that add up to

Five new sets of groups.  And one existing group of organisations – the 11 ITOs – will disappear. Each of the new sets arises directly from the goals of the review; they respond to the needs of industry, regions and, in combination with the new funding system, learners.  Each has earned its place in the system.

But it does create a cluttered landscape, one in which agencies and the new bodies have intersecting interests.  For instance, WDCs and TEC each have roles in funding decisions while WDCs and NZQA both have rights in programme approval, quality assurance and assessment.   Intersecting rights and shared responsibility will be tricky, especially because the three bodies have different missions and because WDCs – though they are funded statutory bodies – come to their role from an industry perspective, while NZQA is a government regulator and TEC is a government funder.  This will definitely increase transaction costs – it is designed to.  However, it could enrich decisions.  That needs a cooperative approach where each body respects the others’ drivers.  TEC and NZQA will need to relearn their operating models and adapt to the new approach.

Also, for the new system to work effectively, it will need information symmetry, meaning that information – on skills needs, on industry trends, on programmes, on educational quality, on the population, on technology… – needs to be shared between the decision-makers.  Each of the three needs to bring rich data to the dialogue.  The Ministry of Education, the TEC and NZQA all currently have deep, rich information resources with long time series, backed up by skilled analysts.  But the effectiveness of WDCs in their leadership, funding and quality roles, and their ability to shape vocational education, will depend on their ability to create evidence-informed insights. That will require them to develop deep analytical and forecasting capability – to inform their role and to support the work of the RSLGs.  That needs to be part of the thinking about the funding of WDCs.

Meanwhile, the government needs to make sure that shared decision-making doesn’t result in reduced accountability.

Looking ahead

Operating this complex system will be difficult.  That’s not a criticism.  The thinking in the policy papers that led to these decisions is of very high quality.  If I were designing this system, I might well have ended up with something similar.

Certainly, there are tensions between the WDCs and the RSLGs on the one hand and the government’s two operational agencies on the other.  That’s something for the government to monitor carefully.  But it makes sense in terms of the goals of vocational education.

It’s interesting that complex policy designs often get simplified over time, once the new ways of operating arise and bed in and once it becomes clear just how much complexity is needed.  For example, the major reforms of 2001-2003 (the so-called TEAC reforms) have endured but went through two major simplifications, the first in 2006 and a second round in 2009/10.  Perhaps that will happen with vocational education in time.

To sum up …

There is plenty to welcome in the RoVE reforms – a clear strategy for vocational education, a greater leadership role for industry, a unified funding system …  There are risks.  A lot will depend on how the establishment phase plays out.  That’s where our attention will be focused over the next six months.

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