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Industry Training Opportunity Missed

Industry Training Opportunity Missed

19 May 2006

"The Budget announcement of an additional $4.44 million a year for the Industry Training Fund will not increase the ability of Industry Training Organisations to help meet the skill needs of industry", said John Meeuwsen, Chair of the Industry Training Federation (ITF).

"The announcement of $4.44 million a year will also not go close to achieving the Labour Party's target of 250,000 industry trainees, which required an additional $30 million per annum for Industry Training by the end of this term"[1]. The target is important because there are significant industries, such as information technology and health, which are not yet well served by the Industry Training Fund. Raising the skill level of New Zealand's workforce is an essential part of productivity improvement.

"At the same time as industry wants more people in training, the government has asked ITOs to take on a greater role in linking employers and the tertiary education sector. ITOs are increasingly being asked for input by tertiary education providers, economic development agencies and local authorities. This is an important contribution, but it has not been resourced.

"Industry training is also the only major part of the education sector that will not get an inflation adjustment to its funding. If ITOs are to meet the additional responsibilities being asked of them, something will have to give.

"While the ITF was encouraged by Dr Cullen's emphasis on 'increasing the funding of human capital, especially trades and technical skills', we believe all parts of the tertiary education sector need to improve their contribution to meeting industries' skill needs. It is expected that the upcoming tertiary education reforms will refocus tertiary investment towards this goal.

"While the increase to the Industry Training Fund is disappointing, there were some promising initiatives signalled in the Budget.

"The expansion of the Modern Apprentices to 14,000 by 2008, and of Gateway into all state and integrated secondary schools, will give young people another option to make their education relevant to them and will be welcomed by industry.

"Improving literacy and numeracy levels has been identified by industry as a major need and one which is known to make a contribution to productivity improvement. The increased funding for these initiatives is welcomed, as is Dr Cullen's 'intention to expand [the numeracy and literacy] programmes in the medium term'.

"The ITF will be working to ensure that increases to Modern Apprenticeship numbers will allow additional industries to participate, that ITOs start being funded for the resources they are putting into the Gateway programme and that they have a greater influence over ensuring that the providers of tertiary education tailor their services more closely to the changing needs of industry", said John Meeuwsen.



What is the 250,000 target?

Labour's 2002 Industry Training Policy set the goal of having 250,000 people participating in Industry Training by 2007, with 150,000 people by 2005. In 2005 Labour reconfirmed the 250,000 target but did not specify a time frame.

In 2005 161,676 people were involved in Industry Training, far exceeding the 150,000 target.

The ITF believes that the target of 250,000 industry trainees has been a useful proxy for indicating a growth path to meet industry skill needs. ITF research shows that having 250,000 people participating in Industry Training by 2007 is a realistic target.

Are ITOs achieving good results?

The considerable progress achieved is best evidenced by the doubling in the number of trainees over a short period of time. In 2000 there were 81,000 trainees; by 2005 trainee numbers had risen to over 160,000.

The most recent figures show that in 2004, 20,334 National Certificates were completed.

The number of employers involved in Industry Training has also risen significantly, with more than 30,000 businesses and organisations involved in 2005. The value placed by enterprises on Industry Training is also reflected in the steady increase in industries' cash contribution to the cost of training.

Is ITO funding inflation adjusted like other parts of the education sector?

No. Whereas Student Component funding, Schools' Operational funding, and Early Childhood Education funding are adjusted annually for inflation, the Standard Training Measure (STM) rate paid to ITOs is not.

This creates a reduction in the real per learner payment at the same time as expectations from government, industry and learners are increasing.


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