Industry Training Review:Summary of submissions received on the Consultation Document - Proposal to improve the performance of the Government’s investment in industry training

INDUSTRY TRAINING REVIEW:

Summary of submissions received on the Consultation Document - Proposal to improve the performance of the Government’s investment in industry training

Table of contents

2Table of contents

31. Introduction and background

82. ITO functions and roles

9QUESTION 1 Arranging training and clarifying expectations

16QUESTION 3 Increasing expectations of completions

22QUESTION 4 Skills leadership

313. Apprenticeships and traineeships: definitions and funding

32QUESTION 5 Higher subsidies for apprenticeships

38QUESTION 6 Extending apprenticeship support

41QUESTION 7 Options for apprenticeship co-ordination fee

474. Industry training at higher levels and transferability across sectors

47QUESTION 8 Increasing training at levels 5 and 6

52QUESTION 9 Transferring between tertiary sectors

575. Quality assurance

58QUESTION 2 Standard settings

63QUESTION 10 External moderation and managing consistency of graduate outcomes

69QUESTION 11 Quality assurance settings

78Appendix: Submissions received

1. Introduction and background

1. On 1 August 2012, as part of the ongoing policy review of industry training, a consultation proposal was circulated for public comment. The proposal:

· clarified the roles of Industry Training Organisations (ITOs)

· increased the performance expected from ITOs

· linked industry training to employment and education work-streams to strengthen the dynamics between education, employment and industry

· enabled learners to transition more easily between employment based and other types of training.

To guide feedback the consultation paper asked submitters 11 specific questions about the proposed changes to industry training.

2. We have grouped the proposed changes in the consultation document into the following areas:

· ITO functions and roles

· apprenticeships and traineeships: definitions and funding

· industry training at higher levels and transferability across sectors

· quality assurance.

The remaining sections of this report briefly outline the proposals in each area and summarise the feedback.

3. Consultation closed on Wednesday, 12 September 2012. A total of 332 submissions were received from:

· 187 employers (189 submissions)

· 54 industry associations

· 23 ITOs (including the Industry Training Federation)

· 25 tertiary providers (including peak bodies)

· 9 independent Modern Apprenticeship Coordinators (MACs)

· 32 other submitters.

Overall summary of responses

4. Responses to the consultation document generally supported the proposals.

5. The proposal outlining options for the apprenticeship coordination fee was the most contentious. Most independent MACs were strongly against both proposals to change the funding rates. The MACs contend the proposed changes would give ITOs a monopoly of modern apprenticeship coordination and eliminate independent MACs.

6. The proposal to open up skills leadership to non-ITO organisations also caused some controversy. Most employers’ submissions were against this proposal, while there was only mixed support from industry associations. However, this may have been because the intent of the question was misinterpreted by some submitters as removing the skills leadership function from ITOs, whereas the purpose of the proposal was to open up skills leadership to other organisations.

7. Some of the issues raised, such as implementing a working group on the governance of ITOs, were outside the scope of the proposals in the consultation document.

8. Although we endeavour to provide some evidence of the number of submitters supporting different proposals or voicing the same argument, some caution needs to be taken in interpreting these numbers. Many responders made submissions on one or two proposals only, so the number of responders on many proposals is smaller than the number of non-responders. In addition, of the 189 submissions from employers, 130 came from Competenz-linked employers. Most of these employers made submissions on a standard form letter provided by Competenz. The views of Competenz-linked employers may not be representative of the employers’ views more generally.

Employers

9. Responses were received from a wide variety of employers ranging from large employers with more than 600 employees, to small-owner operators. Employers who responded operate in a variety of industries including construction, care, dairy, energy, engineering, food, maritime, service, tourism, and hospitality.

10. In general, employers supported the proposals. However, they detailed the following areas of concern:

· the importance of aligning training with industry requirements

· the lack of recognition of the in-kind costs employers bear in training

· the importance of retaining current levels of funding for levels 2 and 3 as employers were concerned focus on higher-level qualifications may marginalise foundation levels

Industry Associations

11. There were 54 industry association submissions.

12. Industry associations support ITOs retaining arranging training. They state strong support for ITOs being responsive to industry and being recognised and incentivised for this.

13. Industry associations support increased completion targets. However, they were concerned higher completions should not be at the expense of lower level qualifications. They stressed it was important levels 1-3 qualifications retain their importance and that there will be no decrease in quantity or funding of these. Moreover, the measures adopted for measuring completions should be linked to industry.

14. Industry associations expressed mixed feedback on the skills leadership function proposal. Some support the proposal to make skills leadership more industry focused, while others think ITOs should retain this role or advocate a combination of industry and ITO responsibility for skills leadership.

15. There is widespread support for introducing a higher apprenticeship subsidy rate. Industry associations also strongly support extending apprenticeship support to all apprentices, but this should be balanced with protecting youth involvement in the scheme.

16. Industry associations were split over whether they favoured an incorporated apprenticeship co-ordination fee or a separate fee. An incorporated fee is seen as easy to administer and more cost effective, but there is a concern how this would affect transparency and independent MACs.

17. Industry associations generally support allowing a greater volume of industry training at levels 5 and 6 and increased transferability for learners.

18. Industry associations hold a range of views on how external moderation should be conducted and how to manage the consistency of graduate outcomes. In general, industry associations agree that the whole training system is dependent on high quality, consistent moderation and the moderation system must therefore be simple, robust and reliable. There is also general support for a common currency of learning and skills.

Industry Training Organisations

19. There are 23 ITO submissions. ITOs are generally supportive of the overall direction of the proposed changes.

20. The main points ITOs raised include:

· ITOs strongly support themselves retaining the functions of arranging training and setting standards.

· ITOs strongly indicate that they do not wish to lose the skills leadership role. They want to remain involved in this role, either in partnership with industry or retaining complete responsibility for this function.

· ITOs want to ensure that any changes in completion targets are industry-led and meet industry needs. They suggest flexibility of targets to take into account the realities of industry work flow including different learning situations and learner groups.

· ITOs support increased funding for industry training. They also strongly support developing a simple, clear definition of what an apprenticeship is.

· ITOs are generally supportive of increasing provision at levels 5 and 6. However, many question why a cap is needed, at all.

· ITOs are generally supportive of recognising completions for learners who transfer between tertiary sectors. However, many ask how this will work in practice.

· ITOs agreed that consistency in qualification outcomes in individual standards is important and that at least some external moderation needs to be retained to ensure industry confidence in the system. However, there were a range of views on how external moderation should be conducted and how to manage the consistency of graduate outcomes. There was also general support for a common currency of learning and skills.

Tertiary Providers

21. There were 25 submissions from tertiary providers.

22. Providers maintain there is the need for a clear distinction between what constitutes ‘arranging’ and ‘delivering’ training. They were concerned that ITOs circumvent the rules restricting them from delivering training.

23. There was mixed feedback on whether ITOs should retain their role as standard setters because of the conflict of interest between ITOs not only setting standards, but also arranging training.

24. Providers generally supported the other proposals. They support a review of unit standards and suggest uptake of unit standards is currently limited by factors such as unit standards being too task specific or detailed. A common currency was also widely supported as this would benefit employers by ensuring more accurate expectations of what an employee can bring to the workplace.

Independent Modern Apprenticeship Coordinators

25. Nine independent modern apprenticeship coordinators (MACs) made submissions on the consultation document.

26. The greatest concerns of the MACs were with the proposal 7, options for the apprenticeship coordination fee. Most MACs rejected both options proposed, as they considered this would give ITOs a monopoly of modern apprenticeship coordination and eliminate independent MACs. They argued this proposal was inadequate given the poor performance of many ITOs and previous accountability concerns over their performance.

27. Responses to other questions also reflected independent MACs concerns over poor performance and accountability of ITOs. In the view of many MACs, ITOs focus on minimising cost and maximising revenue, rather than on supporting quality training. Given the poor past performance of ITOs some MACs questioned whether ITOs should retain their arranging training role. Although there was some support for additional funding of apprenticeships, there was also concern over how of this funding would be spent by ITOs.

Other submitters

28. There were 32 submissions from other organisations or individuals. These came from a wide variety of submitters, including central and local government agencies, consultants, unions, Crown entities, and private individuals. Eight of these submissions primarily address training for emergency management personnel.

29. There are few over-arching themes from submitters in this category. However, many submitters did indicate their overall support for the directions outlined in the proposals. One theme that did emerge across questions was the value placed on training at levels 1-2. There is strong support for ensuring that any changes to the current system do not undermine provision and quality at this level.

Emergency management

30. There are serious concerns about whether the proposals meet the needs of a coordinated emergency management sector. Submitters stated that the proposals do not take into account that in emergency management the majority of trainees are volunteers and their service provides a public good to the community. The aim and types of training are also different compared to workplace training generally is the focus of training is not to increase productivity, but to ensure they are ready for action in the event of an emergency.

31. Several of the submitters support Emergency Management Qualifications’ (EMQUAL) proposal for the creation of standard setting bodies alongside ITOs. These bodies would align training standards, but have no responsibility for arranging and delivering training. Seven submitters support EMQUAL as the best organisation for this role.

2. ITO functions and roles

Proposals

ITOs focus on providing excellent service and support to employers and trainees.

Higher expectations of qualification and programme completions for ITOs.

Industry will be responsible for communicating skill needs to Government, with support from the Ministry of Business, Innovation and Employment (MBIE) and the Tertiary Education Commission (TEC).

Overall

32. Most submitters agree with clarifying expectations of service to employers and trainees of ITOs. It is felt this would help to improve the consistency of performance and accountability.

33. In general, submitters support ITOs retaining their function of arranging training. ITOs are seen as best placed to arrange training due to their industry focus and institutional knowledge.

34. Providers and employers commented that the main risks of this proposal relate to the variability of service between ITOs and the extent of ITO coverage across industries and geographical locations. Some MACs questioned whether ITOs should retain their function of arranging training given their previous poor performance.

35. ITOs claim that defining too narrowly services and support could stifle innovation and flexibility.

36. A higher completion expectation for ITOs is also well supported. Submitters state that this would provide many benefits including improving returns on investments in industry training, increasing skill levels and encouraging improved cooperation between ITOs and tertiary providers.

37. Industry associations, employers, tertiary providers and ITOs all express concern that an emphasis on higher-level qualifications might marginalise levels 1 and 2 qualifications. Moreover, employers and industry associations commented that focusing on completions might lead to too much emphasis on qualifications rather than skills that add value. Another risk identified by independent MACs is that this might result in ITOs ‘dumbing down’ qualifications to achieve completions and too much emphasis on short-term targets.

38. There was a lack of consensus on the proposal to open up skills leadership to non-ITO organisations. On the one hand, some said this would improve links between industry and Government and make training more relevant. Independent MACs thought this would lead to improvements in skills leadership. On the other hand, most submitters are concerned over how small businesses or certain sectors would have a voice in this process and how this would be implemented. Many submitters feel ITOs are better placed to continue to represent industry, rather than industry providing skills leadership. ITOs and industry associations note the skills leadership role is neither well-defined nor funded.

QUESTION 1 arranging training and clarifying expectations

In your view, what are the benefits and risks for employers and trainees in your industry of retaining the arranging training role of ITOs and clarifying expectations of service to employers and trainees?

Employers

39. The majority of submitters, 160 of the 188 employer submissions, support their ITO and note the value ITOs bring to business. Reasons for this support include: connections between ITOs and individual businesses; cost efficient and effective service provision; and active engagement with employers in facilitating training opportunities.

We value the roles ITOs have in arranging industry training and ensuring a high quality of delivery is adhered to for both on- and off-job learning within the industries we operate in. We strongly value the trainee/apprentice coordination service provided by ITOs which provides effective direction and monitoring for our learners at this level. Downer New Zealand

40. ITOs’ collaborative approach is valued by a wide range of employers, including members from the engineering and food industries, particularly when arranging on-the-job training. Employers emphasise the importance of on-site, employer-led training, as it is efficient, convenient and well-aligned to job requirements. Employers also collaborate with ITOs to develop learning materials.

Working with our ITO, Careerforce, we carry out on-the-job training. We are pleased the consultation document endorses the arranging training function of the ITO, as this is what works best for our sector. TerraNova Homes and Care Ltd

We have written our own learning and assessment material which has been moderated by the Skills Organization (previously ETITO). Spotless Facility Services

41. The main concern about ITOs arranging training is the potential for misalignment between the training provided and industry requirements. In the building industry, the cost and quality of the theoretical components of training are poorly regarded because of the perceived lack of outcomes that result. For trades, employers emphasised that training must be practical and suit the learning styles of trades-people.

Carpentry is a hands-on career and must be taken and taught that way. BB Construction

Most of the time these young students are not “academics” but are hands-on physical workers who learn by doing. Jackson Engineering

42. Another criticism levelled at ITOs and training providers is that they are motivated by financial gain, and in some instances this is attributed to their funding structure. In one submission, the ITO is seen as complicating the employer/employee relationship. In another, the role of arranging training is seen as unnecessary given the employer could do this.

43. Employers asked for greater and clearer expectations for the service ITOs deliver and for increased ITO accountability. Employers of all sizes believe ITOs should facilitate improved communication from training providers in regards to trainees’ progress. Garrison Security said they “seldom get feedback on a tech’s progress”. Downer New Zealand also called for improved transparency and measurement of trainees’ progress.

44. Nine employers reported a negative experience with their ITO, and some employers said service delivery was non-existent.

The maritime industry ITO, being Competenz by default, provides little or no proactive advice to maritime employers of SOLAS ships or for that matter to trainees. KiwiRail Interislander

Industry Associations

45. Industry associations support ITOs retaining the arranging training role. Twenty-eight submitters support retention; only one does not support retention. Industry associations stated that ITOs are well placed to undertake this role and that most ITOs are doing a good job of this currently. Associations also say that this role is complementary to the standard setting role. ITOs are seen as the most effective and cost efficient way of delivering this role. Any transfer is seen as problematic.

We see major issues with transferring to anyone else. We are the sole industry body in the Fitness industry, and we fully recognise this role is the domain of the ITO (not us). Fitness New Zealand

46. There is concern that increasing standardisation may decrease ITOs’ flexibility and innovation in meeting needs or force them to provide services that are not needed.

We are well served by and fully engaged by our ITO (Competenz) and … arranging training and their moderating the trainee through their learning is best handled by them. Fire Protection Association

47. Associations acknowledge that some sectors have received variable service from ITOs. It is also noted that, the ITO is the only route into industry training in some sectors. Other associations expressed their confusion at what an ITO’s current role actually is.They suggested that there needs to be a clear definition around what services and support ITOs must provide. This would improve achievement.

48. Industry associations stated that ITOs provide consistent information, service and support, and can be a one-stop-shop for meeting training needs. Industry associations also noted the importance of ITO work with schools, and the need for this to be valued and funded. Several associations noted that they want the flexibility of on-job/off-job training maintained and that the current ITO model does this well. ITOs are also seen as a good way of increasing levels of engagement in training by employers and trainees in the workplace. The

ITOs should retain the process of arranging training in collaboration with industry and according to the specific needs of the employers and trainees in each sub-sector of the industry. Cement and Concrete Association of New Zealand

Having the ITO act in a coordinating role is desirable as the diverse skill sets required by a modern productive export sector is much more challenging and sophisticated than when ITOs originally came into existence. Pipfruit New Zealand

49. There is also support for the proposal because industry associations believe it would remove ambiguity between arranging and delivering training. In consequence, there would be a clearer delineation between ITOs and tertiary providers, which would decrease confusion, conflict and competition between the two groups. Dairy NZ said it would be more valuable if ITOs had the broader mandate of recruiting trainees for the tertiary education system as a whole (polytechnic, university or industry training path) and place trainees where they are best suited. There is some support for limiting ITOs’ ability to deliver training.

50. Several industry associations stated that they want a simplified ITO sector with reduced duplication and waste. However, there was also concern expressed about forced amalgamations.

51. Some associations support extending ITO services to employers as well as employees as this would provide benefits across the whole workforce.

Employers need to be upskilled as well as employees. Employers should be able to access Government funded industry training. This would create benefits for employees as well as the businesses. This is particularly important for our smaller owner-manager operations. Horticulture New Zealand

52. Some associations suggested that Government should incentivise and recognise ITOs to respond to industry. They stated that there needs to be a match between government expectations and ensuring ITOs do activities valued by employers. If ITO priorities are Government-led there may need to be specific funding for responding to Government.

53. There is support for retaining employer choice in who to use for training, including the option for the employer to provide theory, or off-job training, on site. There is also support for ITOs having the option to contract an expert, rather than a tertiary provider, for off-job training.

54. Some associations want to see ITOs continue to develop learning materials where ITOs are producing high-quality materials. They support funding for learning material development. However, ITOs should not be able to dictate the learning materials for other programs, even when these other programs use ITO developed unit standards.

55. One industry association asked for flexibility around how this role is performed and by whom. One association suggested that this function be opened up to more training providers, giving industries more options to access training.

We would take the view that this should not be an ‘either or’ situation but rather an option for industry to decide….those industries that are dominated by SMEs, the challenge of individual firms making the arrangements will often prove to be too demanding. In other cases, large employers may be best placed to make these decisions. Flexibility is the key factor here. NZ Shipping Federation

56. Some associations expressed concern that ITOs can be out of touch with industry needs. They are also, at times, seen as being slow to address evolving skills requirements. Additionally, ITOs are sometimes seen as prioritising off-job training at the expense of the on-job training preferred by employers. One association noted that the ITO has not done well with their industry to date. This is largely because they have replicated training and qualifications that industry have developed, rather than building on and supporting industry work.

Risk that the ITO is not always in touch with industry requirements and/or expectations in terms of training. Institute of Quarrying New Zealand

57. Hospitality New Zealand expresses concern about the suitability for small and medium sized enterprises (SMEs) of the current ITO model and its funding arrangements.

The current funding arrangements make it incredibly difficult for SMEs to engage in structured training which delivers national qualifications. That does not mean that the SMEs do not undertake training….What they do not train to is national standards delivered by the ITO. They will be far more likely to do so if the size of the training was more appropriate to the needs of industry, rather than the arbitrary dictates of TEC. Hospitality New Zealand

58. One industry association considers that the ITOs system has major weaknesses. In particular, the ability of ITOs to address high-level technical skills provision in rapidly changing industries is weak. As skill needs outpace the capability of the current workforce, there is a breakdown in the system that expects the trainee to become the trainer when they qualify as a competent tradesperson.

59. A number of industry associations suggested the establishment of an implementation working group to ensure any changes promote performance improvement at a lesser cost. This group would include members from industry.

An implementation working group be established and include members from industry (employers and employees) and others to ensure that change promotes performance and responsiveness to industry needs and preference at the lowest possible of administrative and compliance costs. Business NZ

Industry Training Organisations

60. There is general support among ITOs for retaining the arranging training role. Twenty of 23 submitters support retention. ITOs describe themselves as offering continuity, consistency, quality, tailoring, context-specific knowledge, affordability and accessibility. They see themselves as being the most appropriate organisations to arrange training and meet industry needs. This role and the standard setting role are seen as being intertwined. The importance of on-job training and support for trainees and employers, and the general support for the ITO sector from employers and trainees is reaffirmed.

Cost effective solution for our sectors that is affordable and accessible. Aviation, Tourism and Travel Training Organisation (ATTTO)

Arranging workplace-based training with employers is critical for Careerforce and for the success of our trainees. Careerforce

61. Four ITOs support the clarification of ITOs’ support role and the clarification of the definition of arranging training. ITOs feel that these clarifications, along with increased funding, will decrease the ambiguity between arranging and delivering training, and well therefore decrease tension with tertiary providers. One ITO suggested that these changes would offer increased opportunities for collaboration between ITOs and others in education.

62. Five ITOs also identified a need for improved consistency and increased expectations for ITOs from both Government and employers. In particular, they support working more closely with, and greater accountability to, industry to ensure industry needs are being met.

ITOs should be responsible for establishing and negotiating transparent service expectations for their employers and learners, because they understand the nature of their industries and employer/learner needs. This ensures their accountability and commitment to achieving agreed training outcomes. NZ Motor Industry Training Organisation (MITO)

There must be a match between ensuring ITOs undertake activities that employers value and Government expectations through investment plan guidance. Forest Industry Training and Education Council (FITEC)

63. The Industry Training Federation (ITF), the peak body for ITOs, and some ITOs called for a principles-based approach to outline Government’s expectations of trainees and employers, which would enable increased ITO flexibility to meet industry needs. Such flexibility might include the ability to contract the most appropriate provider, not necessarily a tertiary provider, for delivery. InfraTrain suggest an annual customer satisfaction measure for ITOs. This could be used by the Tertiary Education Commission (TEC) to measure industry engagement and could be used as a funding measure alongside completion rates.

64. The Plumbing, Gasfitting, Drainlaying and Roofing Industry Training Organisation (PGDR ITO) states that the support function should be adequately funded, as it is crucial for trainee progression. Increased costs for off-job training have limited provision of on-job learning support. Clear expectations of services would help determine appropriate funding levels for service functions and performance management of the ITO.

65. New Zealand Hairdressing Industry Training Organisation (HITO) supports the proposals to provide feedback on trainees’ progress and training and mentoring of workplace trainers. They comment that having a funding stream and clear academic outcomes for the latter would be valuable. Service Industries Training Alliance (SITA) stated that they often receive feedback that tutors are ill-prepared for their role.

66. Two ITOs are concerned that a tight definition of the ITO role could stifle innovation and flexibility. Competenz is concerned that increased monitoring of ITOs could increase the cost to Government. ATTTO is concerned that the new definitions could increase tension between ITOs and providers.

67. There is support for the ITF proposal to establish a Vocational Education and Training (VET) working party to work through the suggested changes with many ITOs indicating they would like to be part of such a process. Competenz also suggests a strategy and vision for the overall VET Sector be developed. The Communications and Media Industry Training Organisation (CMITO) state that it is important that TEC, the New Zealand Qualifications Authority (NZQA), Ministry of Education (MoE) and Ministry of Business Innovation and Employment (MBIE) adopt an all-of-Government approach to industry training.

68. Two ITOs comment on the importance of getting SMEs involved in the training process and the difficulties in ensuring this under current funding. The ITOs describe how they are currently offering non-credentialed training to SMEs to engage and support them to progress to national qualifications.

69. Some ITOs comment on employer experience within the ITO process. The Building and Construction Industry Training Organisation (BCITO) says that employers are opposed to an off-site theory/practice split. Electricity Supply Industry Training Organisation (ESITO) supports employers having the right to choose providers independently of the ITO. CMITO supports company-wide training plans for large companies.

70. ITO mergers received some comment. Competenz supports the idea of fewer ITOs and for current ITOs to be rationally grouped together. InfraTrain supports ITO mergers that are based on industry need. For example, InfraTrain would support a broad-based infrastructure ITO.

71. The Skills Organisation (TSO) asked whether the requirement to have a union representative on the ITO board has been superseded by how ITOs have developed and whether this requirement could be removed from legislation.

72. EMQUAL states it has serious concerns about the proposals. It states that many of the recommendations are inappropriate for organisations setting standards across sectors where public good is the focus rather than increased productivity. EMQUAL wishes to cease being an ITO and become simply a standard setting body.

Tertiary Providers

73. Feedback on ITOs retaining their arranging training role was mixed. Some training providers, such as Jupiter Training Resources, which is a trainer within the food and manufacturing industry, strongly support the role of its ITO. Other providers question the quality of ITOs in training arranged by ITOs. Some providers make the point that ITOs prioritise revenue generation and sales over the quality of training. The hairdressing department of Waiariki Institute of Technology notes that once a trainee is placed with an employer by a salesperson of HITO, there are no qualified subject specialists from HITO setting up training plans to suit trainee and employer needs.

ITOs receive one (main) stream of funding and split this between internal (standard setting, quality management, leadership, etc) roles and the purchasing of training and assessment from external agents (PTEs, etc). In our experience, they will always service their internal needs first. Tectra

74. There was general consensus among providers that there should be a clearer boundary between arranging and delivering training. The New Zealand Association of Private Education Providers (NZAPEP), the Waikato Institute for Leisure and Sport Studies (WISS), and Training Systems and Solutions make the point that competition between ITOs and tertiary providers has created tension and hindered outcomes and this is due to the blurred boundary between arranging and delivering training. Independent Tertiary Institutions (ITI) contends there are a number of instances of “industry assessors” being used by ITOs to circumvent the ban on delivering training. Seven providers thought performance would improve if ITOs focus more on what they do best, arranging training.

Is not the development of learning materials, supporting apprentices, and assessing apprentices actually the delivery of training? Unitec

75. ITI questions whether a clearer definition between arranging and delivering training will make a difference, as ITOs simply ignore the restrictions on delivering training.

Independent Modern Apprenticeship Coordinators

76. Independent MACs were vocal in their criticism of the quality of training that ITOs arrange. In a similar fashion to providers, they are concerned that a focus on profitability and minimising costs comes at the expense of the quality of training.

Competenz’s main engineering certificate (Mechanical engineering general engineering; nominally 270 credits) was at inception roughly one third night-class, one third block-course and the rest workplace assessed. Currently 197 credits are workplace assessed (employer delivered) and around 80 are off job delivered. The ITO therefore is only “arranging” about 30% of the whole cert. Whangarei Education and Business Services

The ITO double fees justifying it by claiming they will provide all manner of additional services some of which their staff can’t provide because they are not trade qualified or don’t have the necessary trade experience or knowledge, and much of this additional compulsory service is of little, if any, use to us. Southern Group Training Trust

77. MACs question whether ITOs should retain their arranging training role given their poor communication with relevant stakeholders, disorganisation and general ineffectiveness in arranging high quality training. MACs claim ITOs usually arrange training at their convenience and the timing of training is sometimes inconvenient for the apprentice and out of synch with industry labour demands.

A painting MA [Modern Apprentice] being scheduled to attend the only relevant block course at CPIT [Christchurch Polytechnic Institute of Technology] only to have the MA turn up and be told it had been cancelled. The ITO forgot to let the employer or the apprentice know, and the MA had travelled to Christchurch to attend it. The same MA is now scheduled to attend his final block course which has foolishly been scheduled for early December, a prime time for painters to be out on the job…while we raised our concern about the timing with the ITO it was ignored. Smart Careers and Southern Group Training Trust

This year while we had advised that there would be at least 24 new first year engineering apprentices the ITO saw fit to provide only three Training Manuals which meant the first evening class was a waste of time and effort for all those involved, some of whom travel two hours return to attend. Smart Careers and Southern Group Training Trust

78. Despite these problems with poor performance, Southern Group concedes the arranging training role of ITOs might have to continue because the geographic isolation of trainees and the range of trainees’ needs make it necessary.

Other submitters

79. Only fourteen submitters commented on this question. Several submitters noted that ITOs are best placed to continue in this role, as the current system works well. Increased clarity for employers and trainees about what is expected is welcomed. One submitter hopes that new expectations will be developed with ITOs and industry bodies and be evidence-based. They also note that new definitions, in terms of what support should be provided to learners, would be useful to any organisation that includes a work-based component in their qualification.

ITOs are the best organisations to arrange training as they have the contacts with industry and can broker where training should best take place to meet an employer’s needs. NQF Solutions

80. One submitter suggests that the role needs to be strengthened to complement the sector. Another submitter commented that the ITOs are currently underfunded to perform tasks associated with this role.

81. Three submissions from unions note that there could be greater specification and guidance around this role, while still allowing for a degree of diversity in how ITOs meet these goals. One submitter stated that there is a need for a mechanism to clarify the distinction between arranging and delivering training. They added that ITOs should not deliver courses and instead remain focused on their core roles.

82. One submitter notes that it is important not to mistake the voice of the ITO for the voice of industry. They are concerned that industry voice will be subsumed as ITOs fight for survival in any amalgamations.

‘Industry view’, is not synonymous or representative of ITO views. Plant & Food Research

83. The Tertiary Education Union comments that ITOs should work more closely with ITPs and other providers to meet this role. It suggests that ITOs should not direct how and what is taught, but focus on standard setting and moderation. It states that a distinction between theory and practice is unhelpful. It also comments that ultimately ITOs and providers have the same goals meeting industry and learners’ needs, and the economic goals of the country.

84. Two submitters support the establishment of an implementation working group and signalled their willingness to be involved in it.

QUESTION 3 Increasing Expectations of Completions

What are the benefits and risks for employers and trainees in your industry of increasing the expectations for ITOs of qualification and programme completions?

Employers

85. The majority of employers did not comment on this proposal. Those that did recognise that qualification completions are important, both for trainees and employers. Completions are one way to improve the returns on investment of industry training for the Government and employers.

86. The benefits of qualification completion for trainees were widely acknowledged including trainee confidence, an increased likelihood of pursuing further training and higher skill levels. However, submitters commented that it is important that learners develop commercial competence and the quality of qualifications is maintained.

87. Employers commented that a close partnership is required between employers, ITOs, training providers and trainees to facilitate successful completions. Employers acknowledge that there has been success in increasing completion rates in recent years.

With the help of our ITO, Careerforce, we are achieving more training completions than ever before. Presbyterian Support South Canterbury

88. However, a large employer said that the increased onus for completions has fallen on industry, rather than ITOs even though ITO funding has increased.

89. The timing of provision was identified as important to supporting qualification completions. Skyline Enterprises and Framework suggested courses should be timed to suit job or industry requirements, rather than scheduling in accordance with the academic year. Additionally, employers suggested that there needs to be improved recognition of changing labour demands such as seasonal work in the dairy industry. It was noted changing labour demands can affect the incentive and availability of workers to train. To mitigate this, one employer said funding needs to be committed over a five year time period.

Comments from some industries in the Ministry review suggests that ITOs and industry have difficulty dealing with the impacts of seasonal peaks and troughs because trainees are not always available to progress and be assessed against the competency requirements. Although we operate within a seasonal industry, it would appear that the TEC operational policy settings should offer sufficient flexibility for trainees to be put “on hold” to mitigate duration issues. Fonterra

90. Some employers argue poor qualification completions is the result of funding settings. They claim too much emphasis is placed on course enrolments, rather than course completions. Also, funding for training organisations recognises the number of courses on offer and their duration instead of the trainees’ skills.

91. There is a concern that training organisations focus on providing courses that are profitable, rather than what trainees or industry require. Qualifications must reflect employment opportunity, for the trainee’s benefit as much as that of industry.

92. Increased completion targets may be above industry or trainee needs and a widespread concern is that trainees who have only completed low level courses may be excluded from funding. These trainees have skills that are valuable to industry. In this vein, one employer called for fewer rules around qualification completions.

93. There was little feedback on the sharing of standards. However, cost efficiency was welcomed and some employers anticipated using ITO standards. Submitters identified a risk that inconsistency may result if tertiary providers and other ITOs use ITO standards without using standardised learning materials developed by the same ITO who set the standard. Two employers added that ongoing support for adequate literacy and numeracy is important.

94. Two employers said the availability of resources and training providers can inhibit progress, and another called for ITOs to address the lack of training providers outside the main centres.

95. In the experience of the regulated maritime industry, training and certification is mandatory to employment so completion rates are very high. Two employers suggested funding be paid per trainee rather than per qualification, and another stressed that the primary purpose of the MAC should be qualification completion.

Industry Associations

96. Industry Associations are supportive of increasing expectations for ITOs of qualification and programme completion. Twenty-four of thirty-nine associations who answered this question agreed with this proposal. Industry Associations stated that this proposal would maintain and enhance completion rates and raise skill level and performance over time.

97. Some associations stated that meeting revised goals will require adequate resourcing and incentives. A focus on outcomes instead of inputs is seen as valuable, but it was suggested that it may be helpful to focus on smaller units rather than whole qualifications. Targets need to be set at an appropriate level.

98. There is concern that higher completions should not be at the expense of lower level qualifications. Level 2 skills are viewed as particularly valuable. This is because they provide foundation skills, pathways and transitions, an entry point for unskilled workers, and access to literacy and numeracy skills. One association stated that they strongly supported achievement-based funding, but only with mandated pre-requisites in lower level skills including literacy and numeracy.

While EMA supports the need for a higher skilled workforce, it feels equal emphasis should be placed on the value to industry of level 3 and 4 qualifications as they contribute significantly to productivity improvement, innovation and provide employees with lifelong skills. Employers and Manufacturers Association (EMA)

99. There is also concern that an emphasis on quality should not be lost in favour of quantity. All qualifications must remain high quality.

Performance linked funding can drive achievement but can also drive standards downwards. Past unethical activity reflects a tendency for organisations to act primarily for their own survival, not necessarily in the best interests of trainees or the industries they are supposed to serve. In principle trainees should be pushed to complete, but not at the expense of standards. New Zealand Outdoor Instructors Association (NZOIA)

100. Additionally, there is a view that the circumstances of industry may have to be accommodated and that any system must firmly reflect industry and business need. Different industries have different needs and these will change over time so the system cannot be too inflexible.

The completion targets for industry training will have to be tempered with the realities around commodity markets and business priorities. Forest Owners Association (FOA)

101. There is concern that these targets may influence ITOs to see themselves as responsible to Government rather than industry. There is also support for the idea that quantitative measures should be linked to industry and not compared with other types of providers. Some industry associations expressed concern about how completions will be measured. There is concern that certain industries could be disadvantaged because of the nature of the work cycle. It is noted training cycles based on calendar years, rather than work cycles may disadvantage the trainees.

102. Some associations stated that completions are not an end in themselves. It is more important that employer and trainee are getting what they need. Outcomes should be tailored to industry needs, rather than simply ensuring high completion rates.

It is important that we don’t fall into the trap that completions become an end in themselves. There are many cases when trainees (and employers) may regard completions of qualifications as unnecessary….The principle measure of success in this regard should not be whether or not a particular box (e.g completions) is ticked but rather are the trainee and employer getting what they need? NZ Shipping Federation

103. Various associations noted that Government needed to realise that there were many reasons for non-completion. Those listed included a transient workforce, people only undertaking training to meet regulatory requirements, and the qualification not being fit for purpose. One association noted that cutting funding should not be the only incentive and that there may be more effective ways to incentivise completions. They suggest that funding could be based on the number of unit standards completed rather than an “all-or-nothing” approach. They also suggest a staggered funding approach where funding is received at various points in the apprentice’s training journey.

104. There is support for further consideration of how people in vocational training get their qualifications to ensure training models reflect workplace reality.

…thought needs to be given to how apprentices attain their standards. As this may not be a straight line process the funding mechanism will need to align so as to not disadvantage either the ITO or apprentice. Registered Master Builders Federation

There needs to be short course off job training to provide key technical skills that cannot be attained in the workplace. Courses must be modular to provide the trainee with the specific skills and the employers with productivity gains and value. Modular courses can staircase to qualifications. Pipfruit New Zealand

105. Some industry associations noted that a major risk is over or under qualifying the employee pool. There should be a close match between skill levels and the labour market. One association suggested that it may be necessary to incentivise completing higher level qualifications if these are not directly job related.

We are concerned to ensure that there is a good match between the skills levels acquired through vocational training and those required in the labour market. A responsive vocational system should enable improved matching… Business NZ

Industry Training Organisations

106. Twelve of twenty-three ITOs agree with the proposal to increase expectations for ITOs around qualification and programme completions. The benefits are seen as:

· better support for trainees

· better results monitoring

· the creation of clear pathways for learners

· better value for money

· increased numbers of qualified people

· meeting industry requirements for increased completions

· improved educational performance.

107. Five ITOs noted that there may need to be some flexibility in the targets to reflect the realities of work flow and industry training itself. This includes addressing different learning situations and learner groups. This is especially the case if any comparison with institution-based providers is to be attempted. For industry to buy-in to targets there may need to be incentives to complete higher qualifications, which are not directly job related.

The ITF believes that Government’s focus on progression to higher qualification levels needs to be balanced with the realities of training at different levels and across different industries. ITF

The very different (compared to institutional education) circumstances and requirements of industry training must be fully taken into account, including seasonal employment and impacts of commodity market trends. FITEC

There needs to be a degree of flexibility to enable trainees at all levels to have their needs met, which reflects the complexity and nature of the environments and circumstances in which our trainees learn. InfraTrain

108. There is concern from four ITOs that higher level qualifications should not be pursued at the cost of lower level training including literacy and numeracy training. Entry level qualifications should still be funded as on-job learning and pathways from levels 2 to 4 should be encouraged. Competenz suggested that too much emphasis on completion at higher levels might devalue level 2 and 3 qualifications.

109. Five ITOs stated that completion and progression should not be ends in themselves. These measures could over-emphasise complete qualifications at the expense of usefulness to the sector and learner. This model does not value employment and skill utilisation outcomes. ITOs should not be judged solely on academic outcomes as competence involves learning, practice and experience. There is a risk that quantity is valued over quality.

Achieving the qualification or completing the programme becomes more important than spending the time learning and applying the learning in a way that benefits both the learner and the business. ATTTO

110. There is concern about how completions would be measured. BCITO suggest that the targets should be based on numbers enrolling, not the numbers in training. Three ITOs suggested that completion rates and progression should be negotiated with each ITO to reflect the diversity of sectors. Two ITOs also noted that staircasing through different qualifications is not necessarily linear. People should be able to access qualifications at the level that is needed. TSO suggested rewards linked to performance above a base level and relative improvement over time. Not reflecting the different starting points of sectors in training could, over time, reduce some sub-sector and sector access to training.

111. EMQUAL suggested they won’t be able to meet Government requirements and performance criteria for future funding because their trainees are largely volunteers. Additionally, the 40 credit requirement for funding as well as the expected credit and qualification completion rates poses significant barriers to volunteer engagement with higher levels of training. This will in turn impact the quality and coordination of emergency management.

Tertiary Providers

112. Overall, providers support higher expectations of qualification and programme completions for ITOs. Three submissions stated that a benefit of this proposal would be more qualified staff with greater skills. However, this may also result in staff retention issues as better qualified staff may be more likely to leave.

113. Blueprint for Learning proposed key performance indicators should be set and related to funding to facilitate completions.

114. NZAPEP and WILSS thought more focus on completions would force ITOs to work with providers, rather than compete.

115. The School of Applied Technology for the Bay of Plenty Polytechnic emphasised that completion rates must be coupled with transparency and accountability by the ITOs. They also stressed that the quantity of completions gained must not be to the detriment of quality.

116. Another risk identified was that a focus on completions might result in marginalisation of learners at lower levels. It was also possible that ITOs may pass on the increased onus for completions to employers.

Independent Modern Apprenticeship Coordinators

117. Regent Training Centre agreed that more emphasis on completions would lead to more qualified staff with greater skills. They see this as having a positive impact on productivity, rising returns on investment for taxpayers and increasing consistency. However, they also pointed out there is the potential for ITOs to ‘fudge’ results or ‘dumb down’ qualifications.

118. Southern Group Training Trust stated that the content, timing and quality of qualifications must reflect the needs of industry and not be influenced by the ITOs short-term performance pressures.

119. MACs generally made the point that if focus on ITO completions came at the expense of non-ITO MACs this could be detrimental to outcomes as non-ITO MACs typically have better completion rates. To support their submissions, some independent MACs included letters of support from employers and apprentices supporting the retention of their services.

By not engaging independent Modern Apprenticeship Coordinators, this could be detrimental to levels of support and ultimately completion rates. Regent Training Centre Ltd

Given the choice we would prefer to retain the services of our Modern Apprentice Coordinator…[ITOs] have a poor track record in delivering service directly to industry, and have a record of charging for service they do not deliver. Amtec Engineering

My Modern Apprentice Coordinator is trade qualified, understands what it is like being an apprentice, knows the apprenticeship training system very well, and is there to support me when I need it, not when it suits him. Apprentice

120. The joint submission by Smart Careers and Southern Group Training Trust noted there could be multiple reasons for non-completion unrelated to performance concerns such as relevance of courses to industry, the difficulties created by challenging economic conditions and levels of numeracy and literacy at the beginning of courses.

Other submitters

121. Fourteen submitters commented directly on this proposal. One submitter supported an emphasis on performance.

It’s time ITOs caught up with the rest of the sector. PTEs and more recently polytechnics have been living in the performance world for some time. Plant and Food Research

122. Three submitters commented that improving completions was good, but that Government should be careful not to introduce perverse incentives that prioritised numbers completing over quality of graduates.

123. Two submitters suggested that there was a need to consider pathways from completion. These should include progression onto level 5 and progression into further tertiary training.

124. Three submitters commented that completion targets should be varied by sector and learner to take into account different settings and training histories. One submitter noted the need for shorter and more specific qualifications. One submitter noted that this proposal would make it harder to reach SMEs.

One size does not fit all however the Government as the predominant funder must ensure NZ is getting value for money. Private Individual 5

125. Another submitter commented that the value of level 2 and 3 qualifications should not be lost in pursuing this proposal.

126. Three submitters from unions stated that they accepted the need for increased completions and noted the progress that has been made towards this aim. However, they expressed concern that the proposal may exclude “marginal” or “risky” trainees. They suggested that this will have negative economic and social outcomes and lead to greater exclusion from training. They also stressed the need for a more strategic view of medium term requirements rather than simply one based on completion targets.

QUESTION 4 Skills Leadership

What are the benefits and risks for employers and trainees in your industry of transferring the skills leadership function to industry?

Employers

127. Many employers disagreed with this proposal. However, the strength of this opposition is mitigated by two factors. First, although 115 submitters disagreed with the proposal, 105 of these submissions came from Competenz linked employers, most of who made submissions on a standard form provided by Competenz. Second, the intent of the question may have been misinterpreted by some employers as the proposal never intended to remove ITOs from the skills leadership function, only to open up skills leadership to other organisations.

128. The main reasons employers gave for opposing this proposal are:

· ITOs are best placed to communicate with Government on behalf of the industry as a whole

· different business ability to engage with Government

· many businesses don’t have an industry association to represent them

· large players may dominate communication with Government

· inconsistent and incomplete skill needs analysis

· SMEs lack the resources, time and leadership to effectively identify and quantify upcoming skill shortages.

Industry Associations were not established, nor are they funded, to do the in-depth analysis required to offer sound advice on skills needs. It would be too easy for the loudest voice, or the largest voice, to capture the process leaving the bulk of enterprises, the SMEs, with no avenue to reach government. ITOs have contact with a large number of enterprises and are best placed to represent our skill needs. WYMA Engineering NZ Ltd

129. Downer New Zealand recognise that ITOs are currently undertaking leadership and skills initiatives at the broader industry level, saying:

…ESITO do valuable work promoting vocational career pathways to school students and under-represented groups in our industry, namely women, Maori and Pacific people. We see value in this offering (and don’t have the resource to do this ourselves or collaborate with industry)… Downer New Zealand

130. In contrast, however, Restaurant Brands New Zealand Ltd, KiwiRail Interislander, and Fonterra, three large employers, were all supportive of industry communicating directly with Government. They suggested this offers:

· increased authority and responsibility to industry to champion their skill needs

· a better understanding by Government of industry relevant training approaches

· improved alignment of the training sector with industry requirements

· more relevant assessment.

It is important industry provides the areas of skill shortages, this would remove training institutions providing courses where minimal or no employment opportunities exist. Contact Energy/Mighty River Power

Our industry must take the initiative back from the training organisations and become central players in the process of determining the training and assessment outcomes of our staff. KiwiRail Interislander

131. This proposal would allow ITOs to focus more on standard-setting and arranging training. It would give a clearer role definition to ITOs and ITOs could focus more on the training needs of industry, rather than overall educational objectives. One employer is pleased that a path for communication when their ITO does not perform will be opened up.

132. Submitters suggested that industry may choose to delegate a leadership function to ITOs if there is no other obvious leader. It is also suggested that ITOs might set up industry discussion groups to communicate with Government and facilitate investment in labour market research capability. Some submitters noted that ITOs are owned by industry so direct involvement already exists.

Industry Associations

133. Industry associations are divided over opening up the skills leadership function to industry. Eighteen agreed with the proposal and sixteen disagreed.

134. There is some confusion over what the skills leadership role actually is and there was a suggestion that it requires better definition from both Government and industry. Some associations feel the current system has had mixed results. Industry associations commented that any process should be industry-led, rather than being driven by Government.

135. Some associations are strongly supportive of industry-led skills leadership. These associations stated that ITOs’ current skills leadership role is not sufficiently industry facing. ITOs make decisions about training structures and provision based on their own needs and the needs of providers, rather than consulting with industry.

136. Other associations commented that industry want intimate involvement with the development of standards that demonstrate competence in the workforce and this proposal would reinforce the importance of industry. This proposal would also better align industry directions with Government investment leading to a focus on the sharper end of commercial need. Industry associations stated that successful transfer will require closer alignment of policy across Government.

Industry have businesses to run but are very interested in ensuring we are involved in having our needs heard directly and not via any ‘filtering’ systems. Waikato Engineering Careers Association (WECA)

137. Some associations suggested that Government is currently difficult for small industries to negotiate and this proposal should improve this. It would also serve to remove duplication between industry and ITO work that currently occurs. One association stated that they want the same level of engagement with TEC and MBIE as they currently have with ITOs. Other associations suggested that industry will need funding to undertake this role. The level of funding would be dependent on the level of involvement required from industry.

138. There are questions raised by associations about how industry consultation would actually function in practice. One association questioned whether Government is open to industry needs given that there is conflict with ITOs on National Qualification Framework (NQF) processes and qualifications.

The details of how this will work are quite sketchy with more clarification needed. Print NZ

139. Some industry associations commented that industry should be tasked with identifying its own training needs and then working with ITOs to meet them.

Industry, through their advisory group, can independently determine its training needs and then work together with the ITO to agree on how and what training will be delivered. The ITO needs to be seen as an agent for industry, acting on their behalf in its interactions with TEC and NZQA. Scaffolding Access and Rigging NZ (SARNZ)

140. Industry associations view themselves as critical to the successful implementation of this proposal. In some cases, associations see themselves as more representative and better versed in the skills requirements of the sector than ITOs.

141. Some industry associations stated that industry groups should be involved with skills leadership, but ITOs should not be precluded from participating. Others indicated that they would like to communicate skills needs in conjunction with their ITO. Others suggested that ITO involvement should be optional for industry. One association suggested that ITOs should be monitored to ensure they are undertaking sufficient industry consultation. One association stated that TEC should ensure that ITOs are delivering the skills leadership role and hold them contractually accountable for this.

We have long been of the opinion that leadership needed to come from industry and that whilst the ITO has a role to play, they should be a participant – not a leader. Master Plumbers, Gasfitters & Drainlayers NZ

142. Several industry associations commented that ITOs should retain their skills leadership role, arguing that ITOs are best placed to investigate future skill requirements, are well placed to communicate with Government and are experienced, effective and efficient at this role. They also suggested that removing the skills leadership role removes ITOs from engaging with the sector.

The proposed changes are an unnecessary lengthening of the industry training supply chain. Northland Wood Council

CETANZ see this proposal as a huge step backwards. We would prefer that ITOs continue to carry out this function as they are experienced and currently perform this task well. Civil Engineering Testing Association of New Zealand (CETANZ)

We think transferring leadership to industry is a very dangerous and counterproductive suggestion…. As an industry organisation, we are part owner of the ITO and therefore we already have a direct involvement in skills leadership through the ITO. There seems no reason to change this system that is working for us. Fitness New Zealand

143. Three associations stated that industry will expect ITOs to continue this role.

The Associations operating in this sector believe they have ownership of the ITO and will continue to expect the ITO to provide a leadership role in the labour market and skills needs of the hospitality industry. Hospitality New Zealand

There is considerable concern from associations about how any new process would capture all industry voices adequately and fairly. Associations identified risks around:

· capacity of industry

· businesses’ desire to have this role

· financial costs for industry

· ‘large budgets’ and ‘loud voices’ dominating consultation

· industry fragmentation making concerted engagement hard

· variable quality of skills intelligence produced, particularly on long term skill requirements

· possibility that the proposal may transfer rather than resolve problems identified with skills leadership.

One association asked what the consequences would be if no industry skills leadership occurred. There is particular uneasiness about how SMEs would engage with Government.

We are concerned that if industry is at all fragmented then problems will arise that will impact standard setting, arranging training, and increase cost to industry as a result. The Electrical Contractors Association of New Zealand (ECANZ)

144. There was also some discussion of how MBIE, TEC and other Government agencies would build their own capability and capacity to undertake formal and robust dialogue with industry.

Industry Training Organisations

145. ITOs generally agree that greater involvement between Government and industry is desirable. However, how this will be managed is questioned by a number of them.

146. ITOs stated that improved links between Government and industry would benefit all stakeholders in industry training and indicate that skills leadership is being taken seriously. There is a need for a clear mechanism for industry to communicate skills needs to all those with an interest in skills and industry training. ITOs are aware that direct consultation is already taking place in some sectors and attempts to extend and systemise this would benefit industry. ITOs also see that this proposal may also clarify and refine the definition of skills leadership.

147. ITOs identified a number of barriers to achieving the transfer of skills leadership. Eight ITOs expressed concern about the capacity and capability of SMEs to engage in skills leadership. They identified SMEs as tending to lack resources and be highly fragmented. It is suggested that ITOs coordinate these disparate voices.

It is believed that without using JITO as a conduit, the small size of the sectors and fragmentation of businesses, possibly due to the large number of SMEs, skill leadership for them may be a “non event”. Joinery Industry Training Organisation (JITO)

148. A number of other barriers were also identified including:

· Government being unable to replicate the penetration into industry that ITOs have

· the lack of clear definition of skills leadership

· industry participation requiring funding

· the potential for decreased collaboration between ITOs, sectors and providers

· the muddying of where the key responsibility for skills leadership lies; difficulty in mobilising leadership and difficulty in developing processes to ensure skills needs are adequately conveyed

· identifying representative voices within an industry or sector; a potential lack of flexibility and responsiveness to meet industry requirements

· difficulties for industry in conveying skill need clearly

· how ITOs would access skill needs information to inform standards and qualification development.

149. ITOs stated that they should not be precluded from the skill leadership process. Four ITOs said that ITOs have a role to play and this should be recognised, funded and harnessed. They commented that industry is unlikely to take the lead in skills leadership and will look to ITOs to do this. The New Zealand Industry Training Organisation (NZITO) suggested that it may be desirable to allow industry to delegate this role to the ITO if there is no industry led coordination available. InfraTrain stated that industry associations and ITOs should collaborate in the skills leadership role.

The ITF is committed to working with MBIE, industry and other organisations to develop and implement an approach to industry skills leadership that represents value for money for both Government and industry; facilitates representative and industry-led discussions between Government and industry; and that recognises the skills leadership that ITOs will provide their industries through their arranging-training and standard setting functions. ITF

150. Five ITOs suggested that the skills leadership role of ITOs should be retained. They see removing it as being at odds with the strengthening of other areas of ITOs’ responsibilities. They also see losing responsibility for skills leadership as reducing ITOs ability to respond quickly to industry skill need. HITO suggested that retention should come with clear guidelines about the necessity for industry liaison and consultation. Six ITOs stated they will continue their skills leadership support irrespective of where responsibility for it ends up as it is necessary for other roles and it is what industry wants. Three ITOs stated that this will result in duplication of effort as ITOs will still be required to undertake skills analysis.

151. NZITO said that it is presumptuous of ITOs to assume that they are skill leaders for industry. They also suggested that Government’s abilities to access data and analyse labour and economic data at a macro level are important components of its participation. Careerforce queried whether the skills leadership role would be a conflict of interest for ITOs who work with Government contracts. ATTTO commented that removing this role would free ITOs to concentrate on their standard setting and arranging training roles. Three ITOs stated that it is crucial that skills leadership is driven by industry rather than Government.

152. Two ITOs are concerned about ensuring ITO work that has been undertaken in the secondary-tertiary transition space is not lost.

Tertiary Providers

153. Providers welcome this proposal. Four providers suggest that this will increase the voice of industry and in doing so ensure training is more relevant. Tectra suggests closer involvement in skills leadership by industry could assist productivity as there would be a close relationship between the skills required to be developed and training.

154. Another benefit identified was to reduce conflict of interest for ITOs from their roles in skills leadership and arranging training.

155. There were important issues raised about how this proposal would work in practice and what the future role of ITOs in skills leadership would be. One of the main concerns was that it might be difficult for small organisations or sectors to be heard if skills leadership is “industry led”. Five providers specified that industry associations were not established or funded to perform skills leadership. However, another provider stated there are 70 industry associations in New Zealand and these organisations provide a coordinated communication path. Eight providers also felt that ITOs were better set-up to reflect all the voices of industry and skill needs, rather than industry representatives.

156. The Waikato School of Hairdressing raised the concern that industry led skills leadership might lead to too much focus on individual business interests, rather than system wide concerns.

157. Providers suggest broad consultation was necessary for this proposal to work in practice given the lack of detail over how industry-led skills leadership would be implemented.

Independent Modern Apprenticeship Coordinators

158. Most independent MACs were supportive of this proposal. Some MACs viewed this as a better approach to skills leadership than the status quo due to problems with ITOs connectedness to industry.

159. Advantages of opening up skills leadership to other participants included more transparency and accountability for ITOs from industry, enabling ITOs to focus more on their core roles of arranging training and standard setting, and lower costs.

160. Whether this worked in practice, however, did depend very much on broad consultation prior to implementation.

161. The main concerns raised by MACs were the costs and time this would take for industry to perform this function and uncertainties regarding how industry leadership would be facilitated. Indeed, the prominence of industry in this process could be reduced if this significantly increases training costs or involves a large time commitment.

Other submitters

162. Fifteen submitters commented directly on this proposal. Four submitters noted that the role is currently ill-defined and a clearer definition would be helpful. The New Zealand Council of Trade Unions (NZCTU) commented that there is a risk that skills leadership will “fall between the stones” and that an already inadequate situation will not be improved. They stated that a template around the questions that a strategic approach to skills must address should be developed. They also stated that some ITOs remain well placed to carry out this role.

163. Three submitters advocated ITOs retaining the skills leadership function with appropriate reporting and monitoring work carried out annually to ensure that it is being done well. One submitter noted that a well-run ITO would do this anyway. One submitter noted that ITOs are not separate to industry, but a part of it so ITOs working with Government is industry working with Government. Two submitters noted that whatever happens some of the skills leadership role is tied to the standard setting function and would remain within ITOs’ sphere. Three submitters commented that any transfer would be inefficient, complicate the system and have limited impact on the workload of ITOs.

The industry needs to dictate what is best for their sector, however with so many different focuses within each industry we believe ITOs are well placed to take on that function on behalf of industry. Competency International

When the ITO system of consultation with the industry and the ITOs are accountable to their industry the present system works well. Governments only role should be to fund and audit ITOs to insure they are working and listening to their industry trainers. Gisborne Development

164. Two submitters stated that ITOs are used to addressing the strategic challenges of industry. They commented that ITOs have experience in industry and education. In consequence, they can think strategically about issues facing industry and how skills can address those issues. On the other hand, it was argued industry bodies are much more likely to focus on immediate need. One submitter noted that it was possible that this would lead to skills needs of certain jobs being more narrowly defined and therefore decrease the range of skills a trainee learns. However, submitters also noted ITOs do not have a monopoly on this and it may be necessary to get other stakeholders, including providers, involved.

165. Three submitters identified issues around SME capability and capacity to engage with the proposed process. They identified the risk that smaller or more specialist employer voices could be lost. One suggested that MBIE and TEC would need significantly increased capability and capacity to engage meaningfully with all industry bodies. Another submitter stated that it would be interesting to see whether industry bothered engaging in the process. One submitter asked “why does the Government want this information and what will they do with it?”.

166. Two submitters from unions noted that this proposal will need an “all-of-Government approach”, not just vague expectations. This will include roles in resourcing, consolidation of expertise and methodology of strategic leadership. They also noted that TEC and MoE have a role in ensuring cooperation across the VET sector and that there must be clear lines of communication for all stakeholders. They suggested that the Minister should meet with all stakeholders regularly. They asked for more detail on proposed Government support for the implementation of this proposal. They noted that any definition of industry must include organisations representing the workforce.

3. Apprenticeships and traineeships: definitions and funding

Proposals

A more sustainable funding regime that increases the subsidy rate for traineeships and introduces a higher subsidy rate for apprenticeships.

Amalgamating all apprenticeships into the Modern Apprenticeship Scheme to enable the same level of support to be available for all apprentices, regardless of age.

Consider whether to incorporate the modern apprenticeship coordinator fee into the training rate for apprentices or keep it as a separate fee.

Overall

167. There is widespread support among most submitters for a higher subsidy rate for apprentices and for amalgamating all apprenticeships into the modern apprenticeship scheme.

168. The higher subsidy rate would encourage the uptake of more apprenticeships and recognise the higher costs of apprenticeship training. ITOs also suggested a higher rate could possibly decrease tensions between ITOs and providers as this would be mutually beneficial to both groups. However, some MACs questioned whether higher funding rates would necessarily lead to more apprentices.

169. One problem in increasing subsidies for apprenticeships, according to industry associations and ITOs, would be that it might devalue traineeships by creating a two-tier system with apprenticeships more highly valued than traineeships.

170. Even more important were issues around how to define an apprenticeship. ITOs and providers think this should include competency and theoretical knowledge as a core competency, while employers thought it was impractical to define apprenticeships solely by the number of credits. In addition, employers and ITOs suggested that employer in-kind contribution to the cost of training should be recognised.

171. As with the higher subsidy rate, extending equal support to all age ranges would encourage more apprentices. This proposal would also increase flexibility and perhaps positively impact on completions due to higher quality staff as this would grant equal support to more mature trainees who are often regarded by employers as more reliable.

172. The main risks identified by submitters in extending support were the reduced opportunity for youth and that it may penalise seasonal industries.

173. For the modern apprenticeship coordination fee, there is more support for incorporating the fee into the apprenticeship rate over having two separate fees. In general, most of the different groups supported the first option, as it was considered a simpler system, with lower costs. However, MACs were strongly opposed to both options on the basis that it would provide ITOs a monopoly over modern apprenticeship coordination, which would eliminate independent MACs.

174. There is some concern among employers, providers, MACS and other submitters that ITOs would use these funds for their own purposes, rather than on training.

QUESTION 5 Higher Subsidies for Apprenticeships

What are the benefits and risks for employers and trainees in your industry of introducing a higher subsidy rate for apprenticeship training?

Employers

175. This proposal is widely supported; only four submitters expressed negative or neutral views. Employers stated that the cost of training apprentices is high and they believe that they would benefit from a higher subsidy rate.

A first year apprentice cost can include the following – four weeks holiday pay, approximately one week sick leave, three weeks trade school, Competenz [ITO] fees [of] about $1,000. A second year apprentice usually costs about the same as a first year but they start to break even. Third and fourth year apprentices then start to be productive. These costs do not include the cost of our time that we invest in training apprentices on the job. WM Ross Engineering Ltd

The cost to train an apprentice can be very high and any proposal to reduce costs and duplication, and provide extra funding, would be welcomed if it meant more money was available to support companies to take on apprentices. SEC Group Ltd

176. Employers support increased subsidy rates because apprenticeships have higher costs than traineeships, require substantially more theoretical knowledge and are highly valued by employers. The proposal would support New Zealand’s production of high-quality trades-people. In turn, this would support succession planning and reach segments of the population with historically low achievement rates.

Investment in trades and training apprentices is vital for the future of the development of trade skills and industry in NZ. IVE Group Ltd

Succession planning within roading is difficult for all companies. It is evident a 15 to 20 year gap has emerged, and encouraging our young people to join the industry training towards qualifications, which provide a variety of lifelong skill opportunities is crucial. Our industry encourages youth to work for us, an area of society which lacks recruitment opportunity in many other areas. Higgins Group Holdings Ltd

177. Employers want funding focussed on training provision, not on ITOs overheads. They are also concerned higher funding for apprenticeships might incentivise training providers to rebrand training schemes lacking industry relevance as apprenticeships to increase their revenues.

…ensure all apprentice funding is directed in a way that drives industry outcomes (productivity, safety, effectiveness) and not as an incentive to establish sub-standard training institutions seeking a revenue stream… Genesis Energy

178. Some employers say that it is impractical to distinguish funding rates through credits and instead industry conditions should be used to guide funding levels. Downer New Zealand requested consistent subsidy rates across ITOs because they are confusing and at times out of proportion.

Industry Associations

179. Industry associations are largely supportive of introducing a higher subsidy rate for apprenticeship training. Twenty-four submitters agree with the proposal and one disagrees.

180. In general, associations see improved funding as positive, offering better support to apprentices and incentivising faster completions. They also suggested that the increase might incentivise uptake of apprenticeships. However, a higher subsidy must come with targets and be used to improve training outcomes.

This proposal is welcome. It will encourage the revitalisation of this important mode of training. NZ Shipping Federation

181. There is concern from industry associations about the two-tiered funding system and a perceived decrease in levels of funding for trainees. They stated that the support needs of trainees are not less than apprentices and that decreasing funding for traineeships devalues them. There should instead be equal service to all regardless of the qualification being undertaken. They suggested complexity of qualification delivery, in the form of a high level of theory or off-job training, not its size should dictate funding. Some industry associations stated that this proposal is a limited change, which is not flexible enough to meet the often changing needs of different industries. It is also suggested that a higher subsidy rate does not meet the needs of vocational occupations. One industry association expressed concern that the increased funding targets off-job providers.

We do not support any system that de-values the learning path of some trainees. CCANZ would prefer to see a system that strives to provide equal service levels to all trainees regardless of the qualification being pursued. Cement and Concrete Association of New Zealand (CCANZ)

182. There is also concern expressed by industry associations around the definition of an apprenticeship. They suggested industry should determine any definitions used. This is an area that several industry associations suggested could be addressed by the proposed implementation working group. Industry associations are particularly concerned that their current qualifications will not meet the credit threshold for apprenticeships and would lose funding.

We are concerned with the proposed definitions of “trainee” and “apprentice” and want these definitions to have meaning for industry. Industry should be able to determine the level and length