Unified Funding System

Unified Funding System

Last updated 25 June 2020
Last updated 25 June 2020

A unified funding system (UFS) will apply to all provider-based and work-integrated education at certificate and diploma qualification levels 3 to 7 (excluding degree study) and all industry training.

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.

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 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.

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.

Work to date

Over March and May, the team held a series of workshops and online sessions with sector experts to inform the design of new mode-based funding category classifications for the Category component of the UFS. These discussions were very useful and the information we received will inform policy advice, operational design work, data collection and modelling, prior to final policy decisions. Read the summaries of these workshops to find out more (Workshop One (PDF, 891 Kb), Workshop Two (PDF, 935 Kb)).

Following previous workshops, Ministry of Education officials have also been working hard coming up with proposed ways to create the Strategic and Learner components.

We’ve also been supported and guided by our Funding Reference Group, comprised of experts from across the sector. This group has been helpful in testing our assumptions and giving feedback on our proposals.

The information and feedback gathered will help to inform our work and feed into the initial policy advice being submitted to the Minister in mid-July.

The Funding Reference Group

The Tertiary Education Commission and Ministry of Education have established a Funding Reference Group with 10 external members to support officials to design the unified funding system. The Group, which had its first meeting on 19 September includes an independent Chair and a mix of experts with an operational understanding of how funding influences tertiary education delivery and support for work-based learners, industry experience, and an ability to engage with the strategic goals of the vocational education reforms.

The full list of members is:

Name Current role and organisation
Jeremy Morley (Chair) Jeremy brings significant professional experience and understanding of tertiary education organisations and finances, education delivery and support for work-based learning, Crown monitoring and strategic planning
Lindsay Baxter Tumutaumatua – Executive Director – Strategy, Quality and Performance – Te Wānanga o Aotearoa
Wayne Cook Chief Financial Officer, MITO
Kim Crosland Chief Executive, ITENZ
Phillip Cullen Deputy Chief Executive/Chief Operating Officer, Otago Polytechnic
Nigel Davenport Chief Executive Officer, Aoraki Development Limited
Carolyn Dimond Chief Financial Officer, Massey University
Sean Kirk Chief Financial Officer, Competenz
Michelle Teirney Executive General Manager Strategy and Support Services MiT
Frances Valintine Chief Executive Officer, The Mind Lab

For the Terms of Reference of the Funding Reference Group see the Briefing Note, Unified Funding Work Programme: Progress Update.

This report also sets out the scope and timing for the first phase of work to develop the Unified Funding System. This is a multi-year programme of work.  Initial priorities over the next 2 months include:

  • Data collection and analysis of cost drivers and costs associated with support for work-based learning and education delivery
  • Learner-based analysis of factors for potential inclusion in learner-based funding
  • Workshops with Māori, Pacific and disabled learners.

The first phase of work will inform advice to Minister of Education in November 2019, setting out high-level policy design choices for the Unified Funding System, and a February 2020 Cabinet report seeking approval to consult on high-level policy design proposals for the Unified Funding System.