Staff from the Tertiary Education Commission and the Ministry of Education are working together to design and implement a new Unified Funding System (UFS) for vocational education and training. The UFS will cover all provider-based and work-integrated learning (i.e.SAC-funded) at certificate and diploma qualification levels 3 to 7 (excluding degree study) and all industry training. The UFS will fund all provider types - including IST, wānanga, private training establishments, and universities - delivering learning and training defined above.

According to the design principles agreed by Cabinet, the UFS will:

• Reward and encourage the delivery of high-quality education and training that meets the needs of all learners, communities and employers
• Support access to on-the-job education and training and encourage the growth of work-integrated delivery and support models
• Supply strategically important delivery to meet national priorities, address regional labour-market demand, and be highly responsive to employer skill needs
• Allocate funding through simple and transparent funding mechanisms which ensure provider accountability, and provide for greater stability as a platform to invest in innovation and growth.

The UFS offers an exciting opportunity to create a more flexible and effective investment lever. It will help to cultivate a vocational education system that supports all learners to succeed - no matter who they are or where they live - while delivering the skills and knowledge that communities and employers need to thrive.

It has also been agreed that the design of the new funding system will be based on three components:

• A new funding category system based on fields of study and delivery modes (e.g. online, work-integrated, campus-based) that better recognise different cost structures and promote more fit for purpose delivery.
• A learner-based component to support those for whom the system isn’t currently working.
• A strategic component that will give TEC new levers to support strategically important delivery and innovative programme design.

Building on their work and engagement from last year, the UFS project team is currently focused on high-level policy design and implementation planning, and is working towards rolling out the UFS from 2023. It’s important to take the necessary time to get the details right in a complex project like this, and it could add extra complications introducing a new funding system before the structural changes and organisational design of the new vocational education system are in place.

If you have questions about the Unified Funding System project, you can contact the team by emailing rove@tec.govt.nz.