Tertiary shake-up lifts quality and protects regions

18 July 2005
Ministry of Education

Education Minister Trevor Mallard today announced a shake-up in tertiary education aimed at supporting and strengthening regional provision, and shifting funding to high quality courses that are good value for taxpayers and students.

"This is a significant shake-up of tertiary provision of diploma and certificate programmes and adult and community education, and flows from a policy review of these areas that began at the start of the year," Trevor Mallard said.

"As a result, the government is taking action to shift funding from low quality courses of little value to students, taxpayers and employers, to courses that are relevant, of high quality and that meet the needs of communities and the economy.

"The changes will also ensure strong viable networks of tertiary education provision in the regions so students and the wider community get good access to top quality courses.

"All savings from the review will be reinvested in tertiary provision. Funding will go towards strengthening regional provision, more apprentices and industry training, into more foundation skills education including literacy and numeracy for adults, and into a new streamlined pool for adult and community education.

"A Quality Reinvestment Fund worth $177.8 million (GST excl) over five years will support providers as they shift to new provision and strengthen existing provision across the country.

"Institutions that have problems due to location, high cost courses, small class or regional population sizes will be supported and be able to access this Quality Reinvestment Fund.

"These changes will give people confidence in the type of education provision within some polytechnics and wananga, that has given us concerns due to rapid growth. It will also allow institutions to build on and develop the good certificate and diploma level education that is already provided.

"I am also announcing today the results of the education sector review into the three central education agencies and their dealings with secondary schools and tertiary education (see separate statement). These changes are aimed at lifting quality in the sector so they also link in with the other changes being made.

"The sector review did not recommend structural change because of the cost and risks involved, but recommended the agencies work together much more strategically - under the oversight of the Secretary for Education - to ensure their activities are more outwardly focused, and delivering high quality results for everyone involved," Trevor Mallard said.

The package of decisions, resulting from ongoing full year funding shifts of over $160 million, includes:

A Quality Reinvestment Fund of $177.8 million over five years for polytechnics and wananga to help them align with core priorities;

An extra $46 million over four years to increase opportunities for adults to improve their standards of literacy and numeracy (see also separate statement);

Increase in targets for industry trainees and Modern Apprenticeships;

Flexibility to make further investments in out years (ie beyond 2005-06);

Changes to the way Adult and Community Education is funded so the same rules are generally applied to all providers (see also separate statement);

Tighter and enhanced quality assurance and monitoring systems in government agencies to ensure that both new and existing provision is quality and relevant;

A limit on growth in individual qualifications, so that no certificate or diploma level qualification can grow by more than 200 EFTS (Equivalent Full Time Student places) in any 12-month period unless approved by the Tertiary Education Commission (TEC);

Teams of experts, including government education experts and others from outside government, will go into the regions and work closely with institutions during the transition.

"The Statement of Tertiary Education Priorities (STEP) released earlier this year also sets out our goal of lifting quality in the sector. It states that a key role of polytechnics is to provide applied and vocational education and training at certificate and diploma level to their regional communities," said Trevor Mallard.

"It also states that for wananga, their role is to provide quality Maori-centred tertiary education.

"Polytechnics and wananga should not be trying to maintain their viability through low cost, low value education. The new Quality Reinvestment Fund will help these providers to build quality and relevant education and training that reflects their roles."

Over the next few weeks, the Tertiary Education Commission will consult with the sector on processes around allocating the new fund. The TEC and Ministry of Education’s Tertiary Advisory Monitoring Unit will work closely with polytechnics and wananga to assist them through the changes, most of which are likely to take effect next year.

"What we have announced today will also ensure new programmes and qualifications are properly vetted before students start to enrol in them, and before the government begins to fund them," Trevor Mallard said.

FACT SHEET: OVERVIEW OF THE CHANGES

Background

This policy review began at the start of the year and looked at the policy on funding for certificates and diplomas and areas of adult and community education provision. These areas were identified for review because they have grown significantly over the past five years, and the government wanted to ensure that it was getting value for money.

Growth in student numbers

Whilst student numbers at certificate and diploma level grew by 116 per cent from 2000 to 2004, degree level education grew by only 6 per cent. Community education in polytechnics, wananga and other institutions ("the 5.1 funding") grew by 546 per cent over the same period.

Key Changes

The work has led to a package of changes to improve the quality, relevance, and value-for-money of certificate and diploma level education.

The review has identified the need for better ways of working with polytechnics and wananga to help enhance the quality and relevance of their educational provision. A new Quality Reinvestment Fund providing $177.8 million over five years has been established to support this.

A range of changes will be introduced including stronger quality assurance and administration of Student Component funding, and a common approach to Adult and Community Education funding (i.e. all ACE at Tertiary Education Institutions, schools and other community providers to be funded from a single pool).

To make sure that the rapid growth of the past three years does not happen again, an overall fiscal constraint is to be introduced for certificate and diploma level tertiary education and training funded through the student component.

This will be supported by tighter monitoring and accountability arrangements by the TEC, including a limit on growth in individual qualifications. This will mean that no certificate or diploma level qualification can grow by more than 200 EFTS (Equivalent Full Time Student places) in any 12-month period unless approved in advance by the TEC.

The New Zealand Qualifications Authority (NZQA) will exercise greater oversight over quality assurance bodies by way of auditing, monitoring and conditions on approval. The requirement to use external quality assurance, in addition to Academic Boards at individual institutions, will be strengthened.

Additional funding will be provided for industry training and Modern Apprenticeships, and to foundation learning including literacy and numeracy programmes for adults.

Implementation of the changes

The Tertiary Education Commission is responsible for implementing most of the changes in this package, with other initiatives to be implemented by the New Zealand Qualifications Authority and the Ministry of Education.

Most changes will take effect from 1 January 2006, in line with the annual funding cycle for tertiary education. In many cases, this requires new processes for allocating funding or new funding rules to be built into Profiles and the Tertiary Funding Guide. The Tertiary Education Commission will work with the affected providers to explain these changes and their implementation.

The Ministry of Education will convene an overview group to ensure agencies’ implementation work progresses together.

The Quality Reinvestment Fund

The fund will be worth $177.8 million over the next five years and is aimed at ensuring a sustainable network of quality provision throughout the regions that meets the needs of learners and industry.

New Zealand Polytechnics and Institutes of Technology and wananga will be able to make proposals for funding from the TEC. Universities will not be able to access the fund as they do not offer certificate and diploma provision at anything like the volumes offered by these providers.

To receive grants from this fund, Institutes of Technology and wananga must demonstrate that external factors outside their control are making it difficult for them to maintain quality, relevant provision. For instance, they may have a low population base to draw from, and large geographic areas that may require some satellite provision. They may also be sensitive to labour market changes where demand for some tertiary education drops. They may also be running courses that have high cost overheads.

The new fund will sustain a range of activities. In the early stages, while some tertiary education institutions are likely to receive funding to support provision, many will receive funding for capability building. In later years, the funding will be spent to support quality, relevant provision.

The TEC and Ministry of Education will work with institutions that want to access this fund.

General questions on review of diploma and certificate education

What did the review look at?

The review has looked at the policies for funding and quality of certificate and diploma level education. As such, it included funding rules, quality assurance arrangements, monitoring of provision, and inter-agency co-ordination.

What are certificates and diplomas?

"Certificates and diplomas" are qualifications offered at entry and intermediate levels of education. They are below degree level on the National Qualifications Framework. This includes some community education, most trades training, and entry-level qualifications. A large portion of education in wananga and polytechnics is towards certificates and diplomas.

Why were they reviewed?

Most certificates and diplomas are of good value. However, there has been high growth in funding in this area, largely driven by expansion in community education and a few providers. This has exposed some weaknesses in the system – both in terms of accountability to Government, and the need for different ways to fund the positive things that are happening at certificate and diploma level.

What is meant by quality, relevance and value for money?

Broadly speaking, we mean that a programme of learning supports someone in achieving a meaningful improvement in their life – by improving their career, by helping a community develop, or building business.

Specifically, quality relates to the content of a qualification and how it is delivered. A course that is poorly organised, or with teachers that don’t know how to teach, would not be of good quality.

In contrast, relevance relates to the need for a qualification – what ‘use’ will it be to the learner or the community? A course teaching people how to do something they could never use would not be relevant, even if it was very well taught.

A qualification that has both quality and relevance, and is funded at an appropriate rate, will offer value for money. A course that was funded at twice the cost of offering it would be poor value for money, even if it was of excellent quality and relevance.

What does the Government see as the core business of polytechnics?

The Statement of Tertiary Education Priorities for 2005 to 2007 sets out the role for polytechnics. This package of changes is designed to support them in achieving that role.

That role is to:

Provide vocational training and education at certificate and diploma level, especially in trades and other applied areas;

Provide applied degree level education and training;

Offer regional tertiary education, particularly where students and learners are unlikely to travel for training or the training meets a regional need;

Provide pathways into tertiary education for adult students and learners, students and learners with few prior qualifications, and preparing them to achieve at higher levels; and

Provide niche training for particular industries.

What other reviews is the Tertiary Education Commission carrying out?

The TEC is reviewing the quality and relevance of general education, arts and business certificate and diploma-level qualifications (the "A1/J1 review"). This review is due to be completed by the end of August 2005, with final confirmation of the assessment outcomes to be confirmed through the Profile process later in the year.

A review of Private Training Establishment (PTE) provision is ongoing, with a third of provision reviewed this year. Similarly, this is a qualification-by-qualification analysis. The first stage of this review was undertaken in 2005 and the next two stages of the review will happen over the next two years.

A review of dive provision has also being undertaken to ensure a better match between supply and demand for vocational dive skills and qualifications. Final assessments have been made, which will be confirmed through the Profile process by the end of the year.

The purpose of the review of overlapping provision is to avoid duplication of trades-focused training between Industry Training Organisations (ITOs) and Tertiary Education Institutions (TEIs). A set of principles has been drafted that ITOs and TEIs will use to sort out overlapping provision issues. These will be finalised by the start of August.

Other press statements relating to these reviews are at www.beehive.govt.nz/mallard and cabinet papers are at www.tec.govt.nz