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Timeline tight for critical skills education reform, industries say

Thursday 14th February 2019

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Business and education providers have just six weeks to respond to a radical proposal from Education Minister Chris Hipkins to reform the vocational training system.

That’s not enough for such far-reaching and essential reform, some say. Treasury is concerned about a lack of financial specifics in the proposals.

However, the minister says change is urgent and needs to start soon for some parts to be ready for 2020.

Faced with collapsing polytechnics, falling student numbers and a serious shortfall in skilled workers in sectors like construction, the government has announced a three-part solution.

It proposes redefining the roles of existing providers like polytechs and industry training organisations (ITOs) and instead establishing “industry skills bodies” with more leadership and input from employers and industry.

The 16 polytechnics and institutes of technology would be combined into a single body, the New Zealand Institute of Skills & Technology, and a “unified vocational education funding system" would be created to remove barriers to collaboration, improve flexibility, ensure a sustainable network of service provision and support the wider reforms.

Announcing the proposal yesterday, the minister said the issue was urgent. He has set aside just six weeks - until March 27 - for “engagement with vocational education stakeholders across the country”.

That includes community engagement days in Auckland, Rotorua, Palmerston North and Christchurch, spokesman Richard Trow says. “These are a chance for community and industry stakeholders to talk with the Reform of Vocational Education team to learn more about the proposals and provide feedback face-to-face.

“We hope to hear from business representatives, including employers, as well as students, trainees and apprentices, iwi and community representatives, unions, members of the public, and education providers,” Trow says.

The main reason for the rush is the government's desire to avoid pumping more money into failing polytechs and institutes of technology.

During 2017 and 2018, taxpayer funding propped up Tai Poutini Polytechnic ($8.5 million capital injection, $25 million debt write-off), Unitec Institute of Technology ($50 million concessionary loan) and Whitireia ($15 million capital injection).

But some in the business and training sector say timing is too tight for such important reform.

Garry Fissenden is chief executive of The Skills Organisation, New Zealand’s largest ITO. He says the government’s solution puts solving the financial woes of the country’s polytechnics ahead of a thorough consultation process.

“There are 25,000 firms and 145,000 trainees across New Zealand impacted by the proposed reforms. The government has spent a year consulting with polytechs leading up to today’s release. They have now scheduled a six-week consultation window to receive feedback from, and genuinely respond to, thousands of Kiwi employers and apprentices – the actual recipients of the system. You do the math.”

Treasury is also doing the math and is concerned.

“Cabinet is being asked to agree to a significant in-principle decision without a clear indication of the likely overall financial implications of the changes proposed, including short-term transition costs, and enduring funding changes,” Treasury officials commented in the Proposals for Vocational Education System Reform consultation document.

“We do not think sufficient analysis has been undertaken on the options for enduring funding system changes proposed for consultation. We consider that consulting on these funding system changes is likely to create sector expectations about future funding, without Cabinet having oversight of the associated financial implications.”

No one BusinessDesk spoke to argues that change isn't needed - and sooner rather than later. Warwick Quinn, head of the Building and Construction Industry Training Organisation, says New Zealand will need some 80,000 new construction workers over the next five years to build the houses and other projects being planned, including KiwiBuild. Around half of these - or around 40,000 people - need a vocational qualification.

The trouble is that BCITO estimates that if nothing changes, only about 12,500 newly-qualified apprentices and trainees will enter the workforce during that time.

“We acknowledge there is a need to move promptly as vocational training is vitally important to New Zealand’s continued growth,” Quinn says. “However, we are concerned the six-week consultation period will not allow sufficient time for sector consultation and considered debate,” he told BusinessDesk.

“As the proposed changes are radical, consultation must be genuine to ensure we protect what is working well, particularly for high-need sectors such as building and construction. The system we develop must be fit-for-purpose and help us deliver the growth New Zealand needs across the next 20 years.”

Business New Zealand chief executive Kirk Hope agrees timing is tight for the organisation to consult with members, then put together formal feedback, and arrange meetings with officials and possibly the minister.

“We’d prefer a longer time. And the fact the polytechnics are basically bankrupt shouldn’t drive fundamental systems change.”

However, he says the timeframe is do-able.

The critical message he will be putting forward is that vocational training must be flexible and “able to respond to people’s changing skill needs and the changing skill needs of industry and employers.”

The most important part of that is “further strengthening the focus and legitimacy of workplace-based training”, Hope says. Getting that right isn’t easy, “but if you do get it right, it’s so powerful.”

At the moment there’s a mismatch between the funding for workplace-based/apprentice-type education, and the money that goes into polytechnics and institutes of technology, Hope says.

The consultation document shows industry training organisations receive $180 million a year for 140,000 learners, including 46,000 apprentices. Institutes of technology, on the other hand, get significantly more money and deal with fewer students - $509 million for 123,000 learners.

Canterbury Employers’ Chamber of Commerce chief executive Leeann Watson says the government needs to make sure a centralised system doesn’t ignore regional needs. And it also has to ensure the system doesn’t only cater for people at the beginning of their careers, but also for employees retraining and upskilling throughout their working life.

“There has to be a closer connection with industry so we understand what skills we need,” Watson says. “For example, just look at digital disruption and robotics and the impact on manufacturing. We need to be training young people, but also reskilling people in the workforce.”

Business NZ’s Hope says overall the government is taking a step in the right direction.

“It’s a bold move and it needed to happen. We are at a point now where we have the opportunity to set ourselves up for the modern economy in terms of vocational training.”


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