Cuts and changes for industry training sector

Funding cuts and operational changes for the industry training sector are about getting more accountability and better use of taxpayer money, says Tertiary Education Minister Steven Joyce.

Announcing changes to funding policy today, the Tertiary Education Commission (TEC) said about 35,000 National Certificate completions were achieved through industry training each year, but average completion rates were only 31%.

The TEC has been reviewing industry training organisations (ITOs) and last year began a programme of work aimed at improving their educational and financial performance.

"This process has identified areas that require improvement and we are modifying funding rules governing ITOs' use of funding, improving the systems that track trainees, and strengthening the TEC's own monitoring processes," TEC chief executive Roy Sharp said.

New policies to take effect from January 1 next year included placing annual caps on funding for each trainee, clarifying the need for clear evidence of trainee achievement and ensuring ITOs were funded at rates that reflected the actual progress of trainees.

From March the TEC will introduce the Industry Training Register, giving near real time reporting of trainee progression.

"We are also introducing a regular, in-depth monitoring and review programme of ITOs, alongside governance support and a code of practice to help guide funding decisions in the sector," Dr Sharp said.

He said the TEC was confident the changes would improve the educational and financial performance of the industry training system and ensure more effective use of money.

Mr Joyce said modelling of the new rules and current conditions showed they could result in annual funding to ITOs decreasing by as much as $20 million in 2011.

"This reduction in funding is in addition to a short-term decline in demand for industry training as a result of current economic conditions," Mr Joyce said.

"The TEC is currently estimating that ITOs will under-spend their allowable budget by around $16 million in 2010."

He said the TEC had identified poor practices under the existing rules, including some examples where funding was claimed for trainees who were not actively engaged in training.

Between 1999 and 2009 the number of employees receiving industry training more than doubled from 49,580 to almost 126,000, Mr Joyce said.

Government funding for industry training had more than kept pace with the growth and nearly trebled in the last 10 years from $62 million to $180 million.

Mr Joyce said the changes would bring ITOs into closer alignment with other taxpayer-funded tertiary institutions and would have no impact on the funding for modern apprenticeship schemes.