Government reform dashes hope for industry: Competenz reacts to today's reform announcement

Cabinet paper a disappointing response to employers

Industry training organisation (ITO) Competenz has three years to hand over its 20,000 apprentices and trainees and the 3,500 New Zealand employers it currently works alongside to training providers such as the NZ Institute of Skills and Technology (NZIST), the centralised polytechnic being formed by the Ministry of Education, according to the Government’s cabinet paper released today.

Fiona Kingsford, Competenz CEO says both her organisation and its employers and industry leaders are disappointed that today’s announcement means that the industry-centric ITO sector will be phased out of workplace-based training.

“We surveyed more than 1,000 of our employers this year who told us that ITOs perform a critical function and need more funding, not disestablishing.

"The fundamental risk our industries face is the time involved and significant disruption of establishing a new NZIST and transitioning the workplace based training to the new system. It could mean being even less responsive to the fast-changing nature of work, which weakens the country’s ability to recruit, innovate and compete,” says Fiona.

She concedes that phasing out ITOs over three years to 2022 is a positive change from the Government’s original proposal.

“Extending the length of time that we can support our new and existing apprentices and trainees through the transition will ensure stability of their needs.

“But we also know that any changes and uncertainty in this sector could mean a downturn in the number of people engaged in the entire vocational education system, so we will be working hard to ensure we continue to support our employers and learners throughout this period to make sure this doesn’t happen,” she said.

Competenz has supported an increase of apprenticeships year on year, particularly in the engineering industry, which has seen 16 per cent growth in apprentices over the past few years, and a 20 per cent hike in employers engaged in training.  

“It is bittersweet that our success is now compromised. We cannot afford to lose this momentum at a time of critical skills shortages and industry growth,”

Fiona admits there is much about the current system that needs to change to meet the needs of a rapidly changing world of work, and was pleased the ITO’s recommendation to align the new framework across six vocational pathways had been reflected in today’s paper.

“We support the development of the four to seven new industry-governed Workforce Development Councils (WDCs), as it’s critical that on-the-job training meets the needs of industry and is fit for purpose.

“Having greater opportunities on investment decisions, strengthened standard setting, skills leadership and employer brokerage is also welcomed. We are not yet clear on how this will be executed however, we believe that the relationship with employers is a critical role of the WDCs, so this is also positive,” said Fiona.

The paper confirmed a new funding model but did not give details.

“A new funding model is well overdue as the existing system is broken. We look forward to being part of the design of the new model that enables innovation, agility and greater incentives for employers.”

But the ITO is focusing on its people first.

“Our focus is to support our staff, employers and learners through the transition to keep upskilling the New Zealand workforce. We are still digesting today’s announcements and have plenty of work to do to ensure we keep our sectors engaged in training.

“It is more important than ever that New Zealanders can get worthwhile qualifications, learners can be recognised for their skills, and industry can be confident in the quality of the workforce.”

Further information on the Reform of Vocational Education decision

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