The polytechnic sector is an unsual part of the economy, expanding when other industries are contracting and jobs are scarce, struggling when the rest of the economy is expanding.

For the past six years the economy has been growing and polytechnic rolls have been dropping to the point that their accounts are in deficit and some have needed financial bail-outs.

These are the state-owned training institutes, the sector also has subsidised private training establishments that go out of business if they cannot adjust to the needs of industries and trainees when jobs are plentiful.

And there are also providers of on-the-job training who do well in times such as this.
The Government has now decided to take direct control of the entire sector.

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It blames competition for the plight of the state-owned polytechs of late and it intends to put all of them, including private training establishments and apprenticeships under the direction of a central body, to be called the NZ Institute of Skills & Technology.

The 16 polytechs around the country will become campuses of the central institute. The private training establishments and on-the-job apprenticeships will have to conform to the policies and direction of the central body to get subsidies.

The private sector's industry training organisations will no longer be able to choose the providers of the industry's training courses.

That will be done by the Government's Tertiary Education Commission which also oversees universities. Nor will the industry organisations set standards of skills and assessment in their trades.

Those will be set by the providers with the industry organisation reduced to an advisory role.

Announcing this regime yesterday, Education Minister Chris Hipkins expected it would result in more on-the-job vocational training rather than institionalised education but it is hard to share that confidence. He insists there will be no polytech jobs cut and none of the financially failing institutes faces closure.

The structure he has described will be run by a supreme institute and it will set up "regional leadership groups" to assess the local workforce skill requirements and suggest the courses that should be offered in that region.

In these groups local industry would be just one voice, along with iwi, schools and local government.

Currently 140,000 people are engaged in apprenticeships or other on-the-job training in New Zealand, more than the 110,000 enrolled in polytechs.

On-the-job training provides people with an income as well as skills they can apply as they learn. Institutional learning tends to be more theoretical and unduly long. Courses can run for years and turn out graduates who employers find still have much to learn when they start a job.

It does institutions no harm to struggle to fill their courses when jobs are plentiful.

It forces them to pare their courses to the essentials and not waste students' time.

They will become more responsive to industry's practical needs if their survival depends on it.

This regime replaces competitive forces with "collaborative" talk.