Getting the best out of our Industry Training Organisations

Changes to the way our industry training organisations (ITOs) operate will bring increased accountability and better value for taxpayers' money, says Tertiary Education Minister Steven Joyce.

He is responding to the release today of revised funding rules from the Tertiary Education Commission (TEC).

The changes will ensure all ITOs are focused on:

•  The achievement of individual trainees (by requiring evidence of credit achievement for each trainee each year);
• The rate at which trainees progress through programmes (by using evidence to align funding to the actual rate of progress); and
• Whether the programmes of study for trainees are reasonable and attainable.

Mr Joyce says these changes will bring ITOs into closer alignment with other taxpayer funded tertiary institutions.

The new rules have been developed after increased TEC monitoring of ITOs over the past year.  Modelling of the new rules and current conditions show they could result in annual funding to ITOs decreasing by as much as $20 million in 2011 while maintaining and improving outcomes.

"This reduction in funding is in addition to a short-term decline in demand for industry training as a result of current economic conditions.  The TEC is currently estimating that ITOs will under-spend their allowable budget by around $16 million in 2010."

While developing the new funding rules, the TEC has identified a number of poor practices under the existing rules including some examples where funding was claimed for trainees who were not actively engaged in training.

The TEC is working with ITOs to ensure all funding is applied appropriately. 

"Government investment in subsidised industry training has increased faster than any other form of tertiary education and training over the last 10 years," says Mr Joyce.

Between 1999 and 2009, the number of employees receiving industry training more than doubled - from 49,580 in 1999 to almost 126,000 in 2009. 

Government funding for industry training has more than kept pace with this growth and has almost trebled in the last 10 years - from $62 million in 2000/01 to $180 million in 2010/11. 

Mr Joyce says the ITO sector has lacked intensive, evidence-based monitoring for too long, which is why the TEC is to begin undertaking ongoing reviews of the sector.

"It's appropriate at this time and after the growth the ITO sector has seen, that we had a good look to ensure we are getting value for money.  Industry training is an important economic driver and we must ensure the $180 million taxpayers contribute to industry training each year delivers meaningful results for students and the economy."

All of the funding changes relate to the core industry training function of ITOs.

"These changes will have no impact on the funding for modern apprenticeship schemes," says Mr Joyce.

The TEC is currently working with ITOs to agree investment plans for next year that will take into account the new funding and operational rules.

For more information visit: www.tec.govt.nz/About-us/News/Media-releases/TEC-tightens-up-industry-training-rules