Part 2: The reforms of vocational education and training

Tertiary education institutions: 2021 audit results and what we saw in 2022.

2.1
In this Part, we discuss the reforms of vocational education and training (the reforms), including what they set out to achieve and expectations and leadership.

2.2
After the Education (Vocational Education and Training Reform) Amendment Act was passed in early 2020, the Minister of Education noted that:

… [the law change formalised] the process of creating a strong, unified, sustainable system to set us up to respond to skills shortages and prepare for the future of work.3

2.3
The Minister also noted that the country has faced serious skills shortages across many industries for many years, and that the changes to vocational education and training would bring together all parts of the system for the first time in 30 years.

2.4
The reforms envisage the creation of a unified vocational education system that will:

  • meet the unique needs of all learners, including those who have been traditionally under-served, such as Māori, Pasifika, and disabled people;
  • be relevant to the changing needs of employers;
  • be collaborative, innovative, and sustainable for all regions; and
  • uphold and enhance Māori-Crown partnerships.

2.5
The reforms have made several important changes, including:

  • establishing Workforce Development Councils, which are six industry-led bodies that will give the industry greater leadership across vocational education;
  • establishing Regional Skills Leadership Groups, which provide advice to the Tertiary Education Commission (TEC), Workforce Development Councils, and local vocational education providers about the skill needs in their regions;
  • establishing Taumata Aronui, which will help ensure that the reforms reflect the Government's commitment to Māori-Crown partnerships;
  • establishing Te Pūkenga, which is a sustainable, public network of regionally accessible vocational education that brought together the former 16 institutes of technology and polytechnics;
  • shifting the role of supporting workplace learning from industry training organisations to providers – Te Pūkenga and other providers will support workplace-based, on-the-job training and deliver education and training in provider-based, off-the-job settings to achieve seamless integration between the settings and be well connected with the needs of industry;
  • establishing Centres of Vocational Excellence, which will bring together Te Pūkenga, other providers, Workforce Development Councils, industry experts, and leading researchers to grow excellent vocational education provision and share high-quality curriculum and programme design across the system; and
  • unifying the vocational education funding system, which will affect all provider-based and work-integrated education at certificate and diploma qualification levels 3 to 7 (excluding degree study) and all industry training.

Progress to date

2.6
We acknowledge the considerable amount of significant work that has been done so far. The establishment of Te Pūkenga, in particular, saw the creation of the country's largest tertiary education provider and the 35th largest provider of vocational education in the world.4 In 2021, Te Pūkenga had more than 200,000 learners, across 234 unique delivery sites and more than 8000 full-time equivalent employees.5

2.7
Figure 1 provides a brief summary of what has been achieved as part of the reforms since April 2022, when we last reported on progress. Figure 2 provides a summary of what has been achieved as part of the reforms between April 2022 and January 2023.

Figure 1
Progress of the reforms up to April 2022

Te Pūkenga Broader reform programme
Establishment of:
  • Te Pūkenga and its subsidiary companies; and
  • an additional subsidiary of Te Pūkenga focused on work based learning (Te Pūkenga – Work Based Learning Limited). Its role is to help move the Transitional Industry Training Organisations (those that opt to do so) to Te Pūkenga.
Four Transitional Industry Training Organisations moved to Te Pūkenga and one became a private training establishment.		 Establishment of:
  • 15 Regional Skills Leadership Groups;
  • Taumata Aronui, an advisory group formed to ensure that the tertiary education system reflects the Government's commitment to Māori–Crown partnerships;
  • six Workforce Development Councils; and
  • two Centres of Vocational Excellence.
In addition:
  • the design of the unified funding system was approved; and
  • the qualifications and standard setting functions of 11 Transitional Industry Training Organisations were moved to Workforce Development Councils.

Figure 2
Progress of the reforms between April 2022 and January 2023

Te Pūkenga Broader reform programme
  • A further five Transitional Industry Training Organisations moved to Te Pūkenga, and an additional one has remained in private ownership – 85% of work-based training is now managed within Te Pūkenga.
  • A $40m capital investment in Te Pūkenga (over two years) for high priority buildings was announced as part of Budget 2022.
  • Te Pūkenga released the outcome of a strategic review.
  • Te Pūkenga confirmed its high-level business group structure.
  • Transition of Crown entity subsidiaries into Te Pūkenga, as business divisions.
  • Transition of Te Pūkenga – Work Based Learning Limited into Te Pūkenga.
  • Appointment of a permanent Chief Executive and new executive team.
  • As part of the unified funding system, Tertiary Education Organisations (public and private) received funding allocations for 2023.
  • Taumata Aronui released its first report – Manu Kōkiri – Māori Success and Tertiary Education: Towards a Comprehensive Vision.
  • The Regional Skills Leadership Groups began publicly releasing their regional workforce plans for current and future workforce skills development.
  • The Workforce Development Councils produced their inaugural workforce development plans and provided advice to TEC to inform investment priorities for 2023.
  • First funding round for the Private Training Establishment Strategic Fund was run.*
  • Commencement of the Unified Funding System from 1 January 2023.
  • The arranging training functions of all eleven Transitional Industry Training Organisations was completed three months before the 31 December 2022 legislative deadline. The arranging training responsibilities now reside with training providers (Te Pūkenga or private training establishments).

* This is a key part of the strategic component of the unified funding system. It allows private training establishments to seek funding to progress strategic priorities that respond to identified national and regional skills needs, and support programme development and maintenance.

Leadership and governance of the reforms

2.8
TEC is responsible for leading the reforms in collaboration with other agencies, including the Ministry of Education, New Zealand Qualifications Authority, and the Ministry of Business, Innovation and Employment.

2.9
TEC's 2019/20-2022/23 Statement of Intent also notes that one of its priorities is "implementing the outcomes of the Reform of Vocational Education" to achieve the strategic goal of "building provider capability and monitoring performance". In its 2022/23 Statement of Intent, one of TEC's three strategic priorities is to "unify the vocational education and training system".

2.10
The Ministry of Education leads the policy and regulatory strands of the reforms and works closely with TEC to carry out its respective responsibilities.

2.11
One of the key changes of the reforms was the establishment of Te Pūkenga. The Te Pūkenga Council is accountable for the performance of Te Pūkenga and the delivery of its part of the reforms.

2.12
Established through the Education and Training Act 2020, Te Pūkenga is legislatively required through its Charter to:

  • be responsive to the needs of regions throughout New Zealand;
  • operate in a way that allows it to empower learners and staff;
  • develop meaningful partnerships;
  • develop and provide vocational education and training;
  • reflect Māori-Crown partnerships;
  • hold inclusivity and equity as core principles;
  • meet the needs of all its learners, in particular those who are under-served by the education system;
  • promote equitable access;
  • have culturally responsive delivery approaches; and
  • work collaboratively with schools, wānanga, and other tertiary education organisations.

2.13
In April 2020, shortly after Te Pūkenga was established, the Minister of Education wrote to the chairperson of the Te Pūkenga Council outlining his expectations. These expectations include "striking the right balance" between delivering transformative change, core business, and being accountable to all stakeholders.

2.14
In 2019, TEC's chief executive (who is the programme sponsor of the reforms) established the Reform of Vocational Education Programme Board (the RoVE Board) to govern the reforms. The RoVE Board comprises leaders from TEC, Te Pūkenga, the Ministry of Education, the New Zealand Qualifications Authority, Taumata Aronui (joined in October 2022), the chairperson of TEC's Audit and Risk Committee, and two independent members.

2.15
Figure 3 shows the three-phase change approach the reforms have adopted to implement the reform's structural changes.

Figure 3
Phases of the vocational education reforms

Infographic showing the three phases of the vocational education reforms. Phase 1, which was from 1 July 2019 to 30 June 2020, was called Design and Amalgamation. It involved passing legislation and creating Te Pūkenga. Phase 2, which was from 1 July 2020 to 31 December 2022, was called transition and integration. It involved the Te Pūkenga operating model, workforce development councils operating, transitional industry training organisations transitioning, and regional skills leadership groups operating. Phase 3, which is 1 January 2023 onwards, is called unification. It involves reform benefits emerging, unified funding system, and Te Pūkenga maturing.

Source: Adapted from a graphic by the Tertiary Education Commission.

2.16
The RoVE Board's primary focus, as noted in its terms of reference, is to deliver the reforms' expected outcomes and benefits.

2.17
The terms of reference also note that, in relation to structural changes, the RoVE Board:

… will be the home for governance and control – such as quality standards, approvals, budget monitoring, risk and issue management, schedule management, and change control.

2.18
The terms of reference also state that the RoVE Board will:

… [o]versee the overall success of the programme, noting that the New Zealand Institute of Skills and Technology [Te Pūkenga] Council holds accountability for the New Zealand Institute of Skills and Technology transformation work (which will continue to report into the overall programme).

2.19
In his 2020 Letter of Expectations to the chairperson of the Te Pūkenga Council, the Minister of Education noted his expectation that Te Pūkenga keep the RoVE Board informed of progress and ensure alignment in the design of major deliverables. The Minister also expected the RoVE Programme Director to work with Te Pūkenga on an integrated transformation "road map" for the reforms that maps out several years.

2.20
Alongside its partners, TEC helped develop an integrated plan for the overall reform programme along with a set of associated outcomes. The integrated plan included disestablishing the subsidiaries of Te Pūkenga by 31 December 2022 and transitioning them into Te Pūkenga, and establishing the Te Pūkenga Executive Leadership Team in December 2022. The plan will end in June 2023 because the RoVE Board will be disestablished at that point. We understand that the RoVE Board is currently considering arrangements to ensure ongoing stewardship of the vocational education sector, including a focus on progress toward achieving the reforms' agreed outcomes.

3: Media release (2020), "New era for vocational education" at beehive.govt.nz.

4: Te Pūkenga (2020), 2020: Te Pūrongo ā-Tau Annual Report, page 8, at tepūkenga.ac.nz.

5: Te Pūkenga (2021), 2021: Te Pūrongo ā-Tau Annual Report, page 5, at tepūkenga.ac.nz.