Five and a half months after he released the ROVE (Review of Vocational Education) consultation documents, education minister Chris Hipkins has delivered the verdict – the government’s decisions on the overall design of a new vocational education system.

No one doubts that the current vocational education arrangements need change: when the system hasn’t delivered the skills New Zealand needs; when the current funding arrangements pit the polytechnic pathway against the workplace training pathway to a vocational qualification; when the polytechnic network has run up eye-watering financial deficits; when, according to latest forecasts, polytechnic enrolments are expected to decline even further, risking ongoing deficits.  And when industry training take-up is forecast to be stable.

The vocational education system is complex, weaving together the interests of employers, industry leaders, students and their families, regional groups, and an array of education organisations.  The government’s ROVE reforms run very deep – addressing organisational arrangements, the approach to delivery, the funding system. The reforms aim to strengthen the role of industry in the vocational education system while improving educational performance.  Any reform of this scale looks to find a balance, trying to meet the most urgent and important reform goals while minimising collateral damage.  Balance and trade-offs.  There is never a single right answer.  Major reform is more art than science.

This comment looks at one aspect of the planned reforms – the arrangements for workplace-based vocational education, the area that will experience the most radical change as the reforms phase in.

Workplace-based vocational education – the current approach

The system of workplace-based vocational education currently relies on the network of industry training organisations (ITOs).  Set up in in 1992, ITOs are industry-owned, industry-led organisations, responsible for skills leadership and standard-setting in their industry, for arranging training for workplace-based trainees and funded according to the volume of training they oversee.  Each ITO has coverage of/responsibility for a small number of industries.  Each trainee’s programme is defined in a training agreement that lays out the obligations of the employee/trainee and the employer (as the primary trainer).  Agreements also specify the off-job components of the training and the role of the ITO in supporting the training.

The ROVE plan

The government has decided to phase out the ITOs.  Their skills leadership role and their standard-setting role will be strengthened and passed to new groups called workforce development councils (WDCs).  WDCs will have the right to set standards for qualifications.  They will have the right to direct the Tertiary Education Commission (TEC) on some elements of funding for qualifications that focus on their industry and they will have rights in the TEC/NZQA evaluation of providers that offer those qualifications.

The role of arranging training and negotiating training agreements will pass to the new national polytechnic or to another provider.

During the consultation period, ITOs welcomed the emphasis on strengthened industry leadership but there was widespread dismay at the proposal to separate the training arrangement function from standard-setting.  A common complaint from ITOs was “We agree the polytechnic sector must be reformed.  But this should not occur at the expense of the ITO training and apprenticeship system.” This response reflected the view that the ITO-led vocational education pathway has been performing well (or at least, since policy changes made between 2010 and 2014 that resulted in improved performance by ITOs); yet the ROVE changes spelled the end of ITOs and a much expanded market for the polytechnic system, despite the recent troubles in that sector.

What to make of – Workforce Development Councils

First, the new WDCs have a range of powers that should strengthen industry influence over vocational qualifications in their areas of coverage.  They will have the right to set skill standards, and to develop qualifications, programmes and training packages in their industry area.  This represents an extension to the powers that ITOs currently have. WDCs will provide advice to employers on training and will be able to “broker” training.  In addition, WDCs will have the right to moderate assessments in those qualifications and to set assessments at the end of a programme of study that verify if a person has met the minimum competencies for the award of a qualification.  That’s new.  And, the government’s decision document makes explicit that WDCs will have the power to direct the TEC.  That’s new.

WDCs will have all the standard-setting powers of the ITOs, plus some.  The government has responded to the groundswell of opinion calling for strengthened industry leadership.

The decision document is also clear as to the government’s expectations in skill leadership in an industry; WDCs are expected to “identify future skill needs”.  WDCs are expected to play a role similar to that of the six Australian skill service organisations (SSOs), which do skills analyses and forecasts in their areas of coverage.  Until it was removed by the previous government in 2014, ITOs had an obligation, under law, to exercise skill leadership in their industries of coverage.  WDCs will pick up that role but the implication in the ROVE papers is that they will do so in a more sophisticated way than the ITOs did in the past.

The decision document states that the number of WDCs will likely be between four and seven.   It suggests, as a starting point, that the WDCs might be focused on the current vocational pathways.  The number is important; too few and you risk assigning so many industries to one body that it can’t represent them all effectively while, if too many, it would be hard to get a coherent view across allied industries within a sector.  (At one time, we had 43 ITOs – literally, 43 – meaning that their coverage was very narrow so that, for instance, there were six ITOs getting in each other’s way in different trades in the construction industry).

The WDCs are represented in the government’s decision document in a way that should ensure that these new bodies have power to influence and shape the vocational system, much more power than the ITOs have now.  This is an important advance.  It also reflects the weight of ITO submissions during the consultation round.

But the whole system has a complicated architecture, with the TEC and NZQA jostling with WDCs, the new super-polytechnic (NZIST) and its regional delivery centres/subsidiaries, Regional Skills Leadership Groups, Te Taumata Aronui and Centres of Vocational Excellence.  All these groups have important roles in the system.  But they have overlapping and intersecting interests. Holding this structure together and getting the value from that array of competing perspectives will be a challenge.  How to manage the intersecting interests of WDCs and TEC (on funding) and NZQA (on programme approval, assessment and quality assurance) will be tricky.  All three will have to learn to operate together.

In particular, the effectiveness of WDCs, their ability to shape the direction of vocational education in their areas of coverage and the credibility of their directions to the TEC will depend on their ability to create evidence-informed insights. That will require them to develop much greater analytical and forecasting capability than the ITOs were able to muster.  And that will require funding.

What to make of – the proposals for workplace-led vocational education

Workplace-led training requires a balance between educational expertise, including curriculum design and pedagogy on the one hand and an industry/employer focus on the other.

During the consultation, all ITOs and many employer groups argued that arranging workplace-led training should remain with an industry-led organisation, rather than sit with a provider.  They claimed that the current success of the industry training system derived from the fact that training has been arranged and brokered by an industry-facing organisation.  Arrangers need to have close connections with employers and firms in their industry and region and they need to have a deep understanding of the industry’s skills profile, and its current and forecast skills needs, to help employers identify their skill and training needs.  Most ITO field staff who do the arranging of training and monitor the on-job training have come from the industry.

ITOs told the government that, if NZIST were responsible for brokering and arranging, many experienced ITO field staff would be likely to opt out, and return to the industry, with a loss to the system of experience and expertise.  They stated that employers trust ITOs because they are industry-focused organisations. They implied that employers will have less trust in NZIST arrangers.

In not accepting those submissions and in choosing to give providers the role of arranging workplace-led training, the government appears to have weighed these claims against the advantages of locating workplace-led training in an educational institution, in particular, the opportunity to provide better pedagogical support to the employer (who is the primary trainer) and to strengthen the industry training curriculum.  The government appears to have assumed that the NZIST could recruit arranging staff displaced from the ITOs.

How that works out is yet to be seen.  There is a lot of detail to be settled.  And there is to be an extended transition period from ITOs to the new system of arranging training.  WDCs and government agencies will need to monitor the success of this call carefully, both during implementation and over time as the new system beds in.  If there are advantages to workplace-led training by linking it more strongly to the institute, this shouldn’t be at the expense of the strong employer focus that ITO field staff now bring to the training arranger role.

What is next

This is an ambitious reform programme.  As noted above, the new system will be complex, with a landscape crowded by agencies and decision-making and influence groups.  At the last count, there will be four new acronyms (offset by the disappearance of one).  The design is informed by lots and lots of excellent analysis.  Teasing out the detail, so as to make it all work, is the next challenge. The extended transition period gives us comfort.  So does what we have learned so far about the principles underlying the new, integrated vocational education funding system.  But more hard work is ahead – developing the operational policy, creating an operating model, overseeing the implementation of the system, creating a monitoring approach …

The next article in this series will look at the design of the NZIST.

Roger Smyth has 30 years’ experience working in tertiary education – initially in senior management in a university and later in the Ministry of Education.  He now works as an independent advisor on and contractor in tertiary education.

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1 COMMENT

  1. That’s a well-informed comment Roger. If the cards are played right, the ITOs will have influence on the formation/development of the WDCs. The key is for the WDCs to be industry-facing and skills-facing rather than provider-facing. It’ll be an interested couple of years. Lots of good opportunities though to get this right if it is unhurried and well-thought through.

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