Janice Shiner Chief Executive, TEC Thursday 27 July 2006

1. Industry Training Federation Janice Shiner Chief Executive, TEC Thursday 27 July 2006

2. Overview • The Minister’s comments on the next steps in the Tertiary Reform • The role of ITOs • The role of the TEC • Next steps

3. Five strands of work • Five strands of work that are contained in five Cabinet papers plus Cabinet paper on the transfer of TAMU • Overview paper • Distinctive contributions • Investing in a Plan • A New Tertiary Funding System • Quality Assurance and Monitoring • Relocating the ownership monitoring and related functions for TEIs

4. Your feedback • Industry Training Organisations agree that a focus upon performance and outcomes should form the centre of the new system, and that a focus upon relevance, quality and return on investment should drive funding. They are keen that there is more effective support and use of the strategic leadership role of ITOs within the new system.

5. The ITF told us • ‘The government (should) take a whole of system approach to this stage of the reforms rather than focussing on just one part.’

6. Investing in a plan: Cabinet decisions Stakeholders advise on priorities: Government (STEP), learners, employers, iwi, ITOs, etc Quality assurance of provision and TEOs TEC establishes investment strategy TEC monitors the outcomes TEOs offer plans for investment TECand TEO agree outcomes for the approved plan, areas for capability building TEC assesses plan according to outcomes to date, viability/governance, distinctive contribution, and quality

7. Distinctive Contributions: Cabinet decisions Industry Training Organisations • The role of Industry Training Organisations will continue to be qualifications design and setting standards, arranging for the delivery of training, and providing leadership within the industry on matters relating to skill and training needs

8. ITPs: Cabinet decisions • The Institutes of Technology and Polytechnics will have three roles: • To act as a regional facilitator, building a shared expertise about the tertiary education needs of the region • To provide skills for employment and productivity that contribute to a regional and national network of provision • To provide foundation education, offering entry-level education that builds literacy, language and numeracy and/or staircasing to higher learning

9. Distinctive contributions: further work • By December 2006, we (TEC lead) need to report back on: • The distinctive characteristics of wānanga • The role of PTEs • Designing the regional facilitator role • Further work on the research-based nature of degree level provision

10. New funding system: Cabinet decisions • All tertiary expenditure for teaching and learning is to be constrained • Ministers to set a three year aggregate track of spending on an annual basis • Within the overall amount, Ministers will decide how much to invest in the different parts of the tertiary sector on the basis of sub-sector • To enable the TEC to manage this environment, Ministers will set funding targets on the basis of sub-sector with tolerance bands within which we can operate

11. New funding system: Cabinet decisions • In approving a provider’s plan, the TEC will provide a funding commitment of up to three years • This funding commitment will be subject to a provider’s performance and delivery against their plan

12. New funding system: Cabinet decisions • The student component funding system is to be replaced by a new funding mechanism that has two components: • Student Achievement Component, which provides the government’s contribution to the costs of teaching and learning and other costs driven by student numbers • TEO component which provides the government’s contribution to costs that support each provider to focus on its specific and distinctive role in the network of provision • The new funding system will be implemented from 1 January 2008 with the intention that all components of it will be in place by 2009

13. Further work in 2007 • By March 2007 we need to have investigated the impact that the different subsidy rate for industry training is having and report back with any options for reform

14. QA and monitoring: Cabinet decisions • The new system needs to have: • A focus on outcomes • Consistent and appropriate quality standards for accountability purposes • Common performance indicators and benchmarks, and indicators that relate to the distinctive contribution of sub-sectors • Risk identification, assessment and intervention • Reliable and valid information • Information available to government and the public • Responsibility on tertiary education organisations to assess and report on, quality and performance • On-going external review and validation

15. QA and monitoring: Cabinet decisions • Agreed in principle that a coherent quality assurance and monitoring system be developed that includes: • All tertiary education organisations funded through the TEC be required to undertake self assessment • A system of external validation be developed that includes a regular review cycle as well as scope for reviews when risk or performance issues are identified

16. QA and monitoring: Cabinet decisions • The quality assurance function should be independent from the purchase and monitoring • Monitoring of the performance of tertiary education organisations accessing public funding function remain with the TEC • Existing legislative arrangement that gives New Zealand Vice-Chancellors Committee (NZVCC) independent responsibility for quality assurance in the university sector be maintained

17. QA and monitoring: Cabinet decisions • The TEC is accountable for ensuring that public money is well spent and note that it will discharge this responsibility through a range of mechanisms • Agreed in principle that one such mechanism is that it will ‘commission’ the Qualifications Authority to undertake the quality assurance function for tertiary education organisations apart from universities • A separate relationship would be established with the NZVCC to ensure that the TEC has the information and processes it needs for quality assurance in universities

18. Challenges for the sector and central agencies • Cabinet noted that a fundamental culture shift is required to introduce this system, and that whilst the incentives within this system are aligned to achieve this shift, it will require ongoing intensive engagement from government agencies, as well as other capability development work

19. Challenges for ITO • Sector Leadership role • Workplace learning – pedagogy • Quality Assurance in workplace learning • Working with a network of providers/provision

20. Challenges for the TEC • Pervasive and far reaching changes that need a cohesive and coordinated development and implementation approach • Requires significant changes in capability • A review of the organisational structure • A tough look at some of our business processes

21. A new way of working • High trust/high accountability/low compliance costs • New roles and responsibilities – investment and stakeholder management • Appointment of some key people with experience of the sector • Requires effective working across education agencies and with the sector

22. Programme objectives • To develop and implement a new investment system for tertiary education that: • Aligns planning, funding, and quality assurance and monitoring systems and processes to achieve more strategic investment decisions that support achievement of New Zealand’s development goals • Strengthens the capability of the system and the players within it to operate effective in the new environment • Supports a high-trust, high accountability, low compliance environment • Supports a differentiated approach • Supports continuous improvement and innovation

23. Programme objectives (continued) • To effect change in the sector so that the outcomes sought by government are achieved • To ensure that key stakeholders and providers are informed of the proposed changes and are able to contribute meaningfully to their development and implementation

24. Programme objectives (continued) • To ensure that: • The policy developed through the programme is able to be implemented and achieves the outcomes sought • The implementation of the policy reflects the policy intent • The scale of implementation is appropriate to the outcomes sought • A feasible and phased implementation path is adopted to ensure quality deliverables and outcomes

25. Reminders • Exciting and necessary reform – but not to underestimate challenge • Transition period will need to be managed carefully • Ensure that change moves forward across the whole sector in concert • That consultation continues to inform process • That change of this nature takes time, commitment, resilience and trust • Its as much about culture change as it is about implementation

26. Next steps • Range of report backs – end of this year and early next year • Consultation process to reflect timetable – so some funding issues first • Today is the start of that consultation process • Working towards 2008 start • TES and STEP later this year to inform priorities