Vocational education – a tortured path

An in-depth look at the industry training, where it has been, how it got changed, and where it might go – by Jeremy Sole.

With the recent changes in Wellington, I feel emergence into a fresh new world of freedom from ideological trigger words sending things down rabbit holes and having to subscribe to overtly politically correct contrivances. George Orwell may just be emitting a sigh of relief from his grave right now.

But, that’s not what I am tasked with speaking about, so I seek your patience with my dalliances and indulgences.

Over the past 30 years, our vocational education system has been through tremendous destabilising changes and disruptions. In the construction sector, our Industry Training Organisations (ITOs) were established in 1991, consolidated in 2013, disestablished in 2021, and now another round of change is coming in 2024.

The disestablishment of ITOs was part of the Labour Government’s Review of Vocational Education (RoVE), which brought wholesale changes to the sector and rolled out faster than the ability of training providers, regulators, and government funders to respond and adapt to.

While the government agencies, the Tertiary Education Commission (TEC), New Zealand Qualifications Authority (NZQA), and the Polytech sector (Te Pukenga) have borne the brunt of criticism, it should be acknowledged that they had unforeseen epochal scale change forced on them without adequate notice, funding, or support.

For example, TEC’s Industry Training Register (ITR) for managing learner data and paying for apprenticeship training was broken and surviving primarily because there had been no change in operating requirements for almost 20 years. While the RoVE brought the ability for a select few training providers to gain access to the system, rather than subcontracting to the ITOs, the ITR was only partially functional, and the people who wrote the software had long since disappeared. It was also expensive, up to $200,000, for new providers to configure their IT systems for the required real time ITR reporting. Most training providers still don’t, and probably won’t, get access to the direct funding for workplace support functions, so they won’t be able to fully participate in the new regime.

The RoVE also brought consolidation of 16 polytechs into one body, but at the front end, the Te Pukenga ‘subsidiaries’ are still operating independently. Te Pukenga’s top-down change process perhaps reflects traditional differences between private training organisations and the polytechs. While the private providers tend to focus on and invest in the learner/tutor interface, the polytechs often appeared to be prioritising background systems and processes.

One of Te Pukenga’s worries during the RoVE transition, was that the private providers might ‘eat their lunch’ while it was sorting itself out.

Indeed, many learners, where they had choice, have shifted away from Te Pukenga, but learners only move from one training provider to another if they think they will get better training at their new provider. If the polytechs could get their act together with all the resources they have, private training organisations would probably be out of business overnight – but that scenario coming to fruition is hard to imagine.

For Te Pukenga, another complicating factor in the RoVE has been the transfer of workplace support functions from ITOs.

The Government’s intent and philosophy around coordinating on-job and off-job learning support was a good idea – and it had already been working well with some private providers, but at Te Pukenga it appears the integration support hasn’t occurred.

It seems that inserting workplace support functions into the Polytech training environment has been like adding oil and water, and expecting them to spontaneously mix and produce something better than the inputs.

This doesn’t seem to have occurred and the two functions are still pretty much operating independently of each other. Indeed, the traditional Polytech people became quite militant with their unions and rather loud in the media due to being worried the workplace support people were going to displace them.

This dynamic may change as the new coalition government has strongly signaled it will undo Te Pukenga and establish several independent regional polytechs.

If so, we may be seeing a shift within a two-year period, from 16 Polytechs to one Polytech and now out to maybe seven or eight. Fortunately, this is likely to be more an administrative change and, given Te Pukenga’s integration hasn’t really gained traction, the learners probably won’t be affected and frankly they probably won’t notice.

It isn’t yet clear what will happen with the workplace support functions in this scenario – it has been suggested that the ITOs get pulled back out of Te Pukenga. But, ITOs were never transitioned into Te Pukenga – just a couple of their functions. ITOs no longer exist as legal or functional entities since their functions were redistributed, only their branding has survived.

One of the successes of the RoVE was the separation of ‘bums on seats’ funding from the funding of standards setting and qualification development.

Under the pre-RoVE model ITOs were funded primarily based on fluctuating learner numbers. This instability meant they needed to accumulate reserves, which inevitably resulted in some ITOs underservicing qualification development to siphon and hoard cash. And for some, it reoriented their focus towards achieving financial rather than sector outcomes. I have often referred to this evolution as the ‘Golum-isation’ of ITOs. (I’m sure Tolkien will forgive my appropriation of his character).

The reason some qualifications became neglected was that, while the cost of developing and maintaining a qualification for the, oft quoted, five Monumental Stone Mason apprentices in New Zealand was essentially the same as for a building or a civil apprenticeship qualification, the funding difference was in the magnitude of many thousands.

This previous system-generated effect that enabled some ITOs to drift away from core business meant there was a strong case for change.

So, along came the RoVE, which ended up as a classic governmental attempt to address a few issues by catching the whole system in a ‘drift net’ that also caught the best practice ITOs who became by-catch.

The ensuing $40 million spend on consulting firms resulted in a new model that essentially dismembered the ITOs and reassembled their parts across different entities. After the consultants were finished, government apprenticeship funding went directly to a select few training providers, the responsibility for attracting learners went to the same providers, and managing the qualifications passed to the new Workforce Development Councils (WDCs).

One reason the direct funding went only to a select few providers was the limited ability of TEC’s broken Industry Training Fund software (ITR) to accept new providers.

Another reason proffered for restricting to the select group was that the government was protecting Te Pukenga from its learner base being raided by private training providers while it was in a vulnerable transition state.

Notwithstanding of course, that learners only change providers when they are dissatisfied with the quality of their current one. After all, the learners just want access to high quality teaching, to qualify and to move into their respective professions.

Maybe I am a little too cynical here as there have been some positive outcomes from the RoVE.

Most notably, the establishment of the WDCs has brought an orientation around industry sector clusters and consistent funding for qualifications and standards setting. The separation of funding for standards setting activities, from the previous regime where standard setting activities were funded based on learner numbers, has given impetus for stronger industry engagement and more focus on qualifications development.

A recent report on WDCs by The Business Performance Team found four overarching themes around WDCs and their impact and influence: increased industry collaboration, improved workforce alignment with industry needs, matching programmes with labour market requirements, and a consistent approach to maintaining qualifications and standards around the country.

While there are some issues arising from implementation of the WDC model, which are being addressed at an operational level, it is possible the causes of some of these issues are more structural in nature.

Given the WDCs’ functions, and to eliminate unintended functional overlaps between NZQA and the WDCs, we posed a question around whether it is still necessary or appropriate for NZQA to reach past the WDCs to continue auditing the training providers.

It is recognised that the existing regulator and funder audit, and control systems, were well established before WDCs were anticipated, and there may be a need to take a fresh look at how these can be integrated with the WDCs’ responsibilities to increase efficiency, reduce overlaps and system-induced costs.

In this respect, it might be appropriate for the WDCs to conduct the provider audits and reviews on behalf of itself and NZQA, and TEC. The NZQA could fulfil its regulatory and quality oversight responsibilities through oversight of the WDCs.

One of the policy positions of the incoming Government is to disestablish the WDCs and redistribute, again, the various responsibilities. One of these potential changes might be to transfer WDC standard setting/qualifications responsibilities to NZQA.

To suggest that NZQA could, or should, take on these responsibilities is flawed given it would potentially create a conflict of interest between these activities and the agency’s regulatory functions.

It was interesting that the National Party election policy announcement about the proposed disestablishment of WDCs was made in the finance policy and not the tertiary education policy.

This suggests the objective is to reduce spending rather than to improve the system. If that is the Government’s primary objective, it could achieve both through consolidating the WDCs into one entity.

This would enable a reduction in the number of WDC governing Boards from six to one and, instead of six CEOs, perhaps a single CEO with three sector GMs reporting to them. But, most importantly, it would support the retention of an industry engagement and qualifications development model that has proven, even in its early days, to make a significant contribution to industry and skills development (apologies to friends in WDC CEO and Board roles).

We can only hope the new Government makes changes on a considered and logical basis rather than simply setting out to reverse the previous one’s initiatives to return to the previous status quo – which is long gone now, and arguably unrecoverable.