Industry Training Reforms – Frequently Asked Questions

What is the Review of Vocational Education’s (Industry Training) consultation paper all about?

The Government has been reviewing Polytechs for the last year. As a result, they’ve now proposed a new system for industry training. The proposal includes:

  • Redefined roles for Polytechs and Industry Training Organisations (like Skills).
  • The merger of the 16 existing ITPs into one Mega-Polytech called the New Zealand Institute of Skills and Technology. The current Polytechs will become regional campuses for the new national entity.
  • A new vocational education funding system.

The Government has allocated 7 weeks (until the 27 March) for public consultation on their proposal before a final decision is made.

Why is the Government doing this?

You may have seen recently in the media that a number of Polytechnics are facing financial problems.

What are the key changes proposed for industry training?

The document proposes three key changes to the vocational education system (i.e. industry training).

  • Industry Training Organisations will be replaced by new entities called Industry Skills Bodies (ISBs). The ISBs would provide skills leadership, set standards / end of study assessment, and approve programmes. They would not provide support apprentices in the workplace with their learning and assessments, the way that ITOs do currently.
  • The establishment of one nationwide polytechnic organisation – the NZ Institute of Skills and Technology. This new entity would have responsibility for all off-job (classroom) and on-job work-based learning programmes, such as trade apprenticeships. (Private Training Enterprises and Wānanga will still take on apprentices)
  • A review of how the government invests into apprenticeships, i.e. the funding system. It is not completely clear how this will work
What does this mean for employers?

There are a lot of unanswered questions. The Government has not shared any detail around whether:

  • There will be more or less choice for employers in terms of vocational education providers.
  • It will cost more or less for employers to train
  • It will be easier or more difficult to train.
When could the changes come into effect?

It is proposed that the new system would come into effect on 1 January 2020.  This is a hard-line. From this date onwards ITO’s would no longer provide direct support to apprentices in training or their employers.

The Government has not provided detail on the plan for thousands of apprentices and employers who would be affected.

How will employers train apprentices?

Under the new system, apprentices and employers would first enrol with a centralised Mega-Polytech, not through an ITO like Skills.

This Mega-Polytech would manage all training through a mix of classroom-based learning and workplace training.

Organisations will always play to their strengths. Polytechnics are very good at class room based theoretical learning. Polytech’s are not experienced in managing workplace training.  As a result, we could see the amount of classroom-based learning increase as a consequence of the change.

Will employers have more choice on the training programme for apprentices?

The Government has said that “industry will have more choice.”  There is no detail on how employers and industry would have more choice. A centralised Mega-Polytech delivery system does not seem to go hand-in-hand with providing choice and flexibility to businesses all over New Zealand.

Will the new system involve employers in the development of training programmes?

Increased employer engagement is proposed by the Government through new Regional Leadership Committees.  These committees will be made up of community, iwi, local government and employers. They will serve in a purely advisory capacity. How they are funded and the control and influence they will have is unclear.  The committees are likely to be appointed by officials centrally. 

ITO’s are owned by industry for industry. Our relationship with thousands of employers across the country ensures that employers have influence in training programmes.

In the current system, employers have the ability to provide feedback on a daily basis via their dedicated account managers across a range of issues – ranging from apprentice learning difficulties, to looking for new talent.

Will the new system be easier for employers?

As an employer your time is precious. The proposed reforms suggest that employers would need to invest more time sorting out training for apprentices.  Employers will need to establish new and direct relationships with providers, participate in Regional Leadership Committees and adhere to a new centralised system of on-job learning. 

There is also the potential for classroom time to increase with the new Mega-Polytec controlling the off-job / on-job split.  This could impact your business operations.

Does the proposal significantly impact the current apprenticeship model?

Yes. From the 1 January 2020, you will no longer be able to arrange training for your apprentice through Skills. 

Employers will have to manage training for their apprentice through the new centralised Mega-Polytech all pastoral care, on and off-job learning and assessments.

The employer’s ability to influence and control how workplace training occurs may be reduced.  Availability to services that currently support your apprentices could be compromised. 

Polytechs are well placed to deliver classroom-based learning but do not have the same experience as ITO’s in proving support for on-job learning.   This may impact the level/type of on-job learning apprentices receive.

A new centralised Mega-Polytech based system could exert more control and compliance and offer reduced flexibility for businesses.

Will there be a change in the cost of training?

There is no detail on what the costs of training would be under a new centralised Mega-Polytech.

We know that Government funds Polytechs at a higher rate than ITOs to manage training for students.  Our concern is that the higher costs of a Polytec-led industry training system would be passed on to employers and apprentices.

How would your role as a work place trainer change?

The proposals do not acknowledge the role of the employer as a workplace trainer. 

Within the ITO system currently, there are 25,000 employers providing workplace-based learning opportunities for people in apprenticeships. 

Currently employers make the decisions about whether their apprentice is competent at a certain skill.  It is possible that this will change and that the new system will determine apprentice competency.

Does consultation on the options mean the Government has already made up its mind?

The Government has spent the last 12 months consulting with 16 government owned Polytechnics on the proposed changes.  The Government has only set a 7-week window to receive feedback, and genuinely respond to, 25,000 employers and 140,000 apprentices.

Skills believes that this is not enough time to respectively engage employer and apprentices in the development of a system that would directly impact them.

Should I give feedback on the proposed changes?

Absolutely! Every voice counts.

Please visit the website here for a variety of options to let the Government your view.

What is Skills doing to ensure the voice of industry, employers and apprentices is being heard?

We are actively working with member organisations, regulators and government officials to communicate the risks and opportunities in the changes proposed.

But, it’s the voice of employers and apprentices that makes the difference.

There are a range of ways you can engage in this public consultation and make sure that your views are heard. Please visit the website here

Does the current industry training system need a wholesale overhaul?

ITOs (like Skills) are owned by the industries they serve. This means that they are mandated and legislated to set standards and arrange training for their industries that are fit for purpose and meet employer needs.

Industry training is unique because it empowers industry and businesses to provide apprentices with the right skills that add immediate value to a business. 

Industry training delivers skills that businesses need and enables them to capitalise on those skills without waiting for an individual to complete a course or formal class room learning before they start getting an ROI on that investment.

Under the current system, employers decide whether an individual is competent and ensure that the individual is delivering services in a way that meet their business needs.

This a proven model that has operated with the support and trust from industry for over 25 years.  All of this being put at risk with the proposed reforms.