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Single funding rate for industry training


Single funding rate for industry training announced

28 May 2003

The Associate Minister of Education (Tertiary Education) today announced that a single Standard Training Measure (STM) rate for all Industry Training Organisations (ITOs) will be introduced.

A Working Group was constituted by the Minister in 2002 to provide advice to officials on the scope of an officials' review. Matters to be investigated were those that impede or have the potential to impede the growth of industry training, with a particular focus on STM relativities.

"The key part of the Minister's announcement today was that the complex and inter-related issues around funding rates will continue to be worked through with ITOs", said Marilyn Brady Chairperson of the Industry Training Federation.

"The key issues are the price level of STMs whether there is one or many rates, any transition period, such that industry strategic training plans are not disrupted, and the issue of overlapping provision where some providers receive two to three times the government subsidy for similar outcomes."

"The Minister today stated that he has a November time frame for these key issues and wants to continue to have dialogue with ITOs - which have a range of views on the best way to advance a training culture in New Zealand."

"A review of overlapping provision has begun to be scoped; this is encouraging as such a review is part of the overall set of recommendations from the scoping group."

"It is unlikely that major changes will occur in 2004 given the timeframe for detailed decisions. The most likely approach will be the continuation of current policy to apply some funding to lifting the lowest STM rates, and to negotiate price-volume trade-offs with ITOs at higher STM rates. This process has Federation support".

"The Federation will continue to ensure that the Minister and officials are exposed to the variety of opinion on these matters", said Ms Brady.


Details of the Scoping Report

The group identified three key STM funding issues warranting further and urgent investigation. These were:

i) The implications and efficacy of moving to a single STM price;

ii) Establishing an appropriate level for that price and a mechanism for adjusting it over time;

iii) Establishing a transition path from the current range of prices to a single price with minimum disruption including clearly articulating the transition path well in advance signalling to ITOs their likely STM rate in future years.

It was noted that a high degree of certainty is necessary for ITOs and industry planning if the target of 150,000 trainees by 2005 is to be achieved. Further, the Working Group was strongly of the view that the current freeze on STM rates could not be continued beyond 2003.

In addition, the group advised that a complementary Strategic Development Fund for ITOs should be available from 2003/04 to meet identified Government priorities, including

* ITO/industry capability and capacity building to promote and support growth targets;

* responding to emerging skill and qualifications needs;

* extending the reach of industry training amongst, for example, SMEs, particular trainee populations, regional development

The group emphasised that issues of 'overlapping provision' be urgently investigated by the Tertiary Education Commission and the Ministry of Education.

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