The strategic component

The strategic component

Last updated 19 May 2022
Last updated 19 May 2022

The strategic component provides funding (non-volume-based) to support providers to respond to key challenges within the system.

The strategic component is one of three funding components in the Unified Funding System (UFS).  For further information on the other two components: Learner component and Delivery component 

About the strategic component

This component seeks to support the VET system to respond to regional and national skills priorities, including supporting Te Pūkenga to build and sustain a national network of provision, and to support programme development and maintenance.

We will make further information available about the application process later in 2022.

Responding to regional and national skills priorities

The first element of the strategic component will fund Te Pūkenga and private training establishments (PTEs) to respond to regional and national skills priorities. TEC will determine regional and national skills priorities, drawing on advice from Workforce Development CouncilsRegional Skills Leadership Groups, and Māori. This will ensure industry has a voice to express their needs and allow decisions on priorities to be informed by a variety of views on skills needs.

We are working with the wānanga on funding matters to recognise their unique role and contribution. This may include support for activities in VET.

Support programme development and maintenance

The second element of the strategic component will provide funding to support the costs of programme development and maintenance, including for extramural programmes. Programmes that are innovative, flexible, and responsive to new elements in the system will be prioritised, aligning with the RoVE objectives and the vision of WDCs. This element will be divided between Te Pūkenga, PTEs and wānanga.

Allocation of funding 

The strategic component will be allocated in a variety of ways. Regarding the first element related to regional and national skills priorities:

  • Te Pūkenga will receive funding as part of the usual investment plan process, with performance expectations agreed through this plan. Te Pūkenga will be expected to use this funding to meet both its charter obligation to create a sustainable national network of vocational education, and to respond to national and regional skills priorities.
  • PTEs will be able to apply to receive funding for innovative projects that respond to national and regional skills priorities. This element will encourage and enable PTEs to trial new approaches to provision or other activities without relying on enrolments to fund the trial, or solely bear the financial risk if it is unsuccessful.

The second element, the programme maintenance and development fund will be allocated as follows: 

  • Te Pūkenga will receive funding as part of the usual investment plan process, based on a negotiated plan, setting out milestones for delivery and payment.
  • PTEs will be invited to submit applications for the development and maintenance of programmes, demonstrating how their proposal aligns with the priorities identified by the WDCs and RSLGs. PTEs may apply for funding that covers the life of the programme’s development, recognising that sometimes a long lead in time is needed. Payments will be tied to milestones identified in the application and through negotiation.
  • We will continue to work with wānanga to design the mechanism for allocating this element.

The implementation processes for the programme development and maintenance fund are still being finalised and we will provide further information on this in 2022.

Strategic component FAQs