HealthEd Trust (HET), the major health care private training establishment (PTE), has fallen out with Careerforce, the health care industry training organisation (ITO) following ITO funding changes made by the Tertiary Education Commission (TEC).

Six months’ of negotiation are about to end in stalemate as HET has indicated it does not wish to proceed with an amalgamation with Careerforce.

The fall out follows the government’s directive to reduce the number of ITOs, which saw the Tertiary Education Commission mandate a number of changes, including the expectation for employers to pay approximately 30% of fees in order to balance the allocation of the Industry Training Fund to ITOs.

In light of this reduced funding, Careerforce, who merged with the Social Services ITO last year, maintains it cannot continue to provide HET with a different funding model than that offered to other training providers (INsite understands HET was being paid $12 for a level 3 credit last year when all other employers were only receiving $8/credit to support internal or external training).

HET had been left with two options – either to merge with Careerforce or to continue on their own.

Chairman John Ryder recently recommended to the HET board for HET to pursue the latter option. However, a final decision won’t be reached until the HET board meet tomorrow, Wednesday 29th February.

Ryder describes the so called “amalgamation” as a “takeover”; he says there was a considerable amount of money offered to the trust to sell the ITO its business. However, they were then told that HET material would be withdrawn from the market within two years.

Careerforce CEO Ray Lind paints a different picture: “HET suggested to us that a merger may be the best way forward because they didn’t think they had ongoing sustainable funds. We would have been very willing to carry on with the merger but the promised due diligence processes were no longer occurring.”

Ryder says HET has received a lot of resistance from the industry at Careerforce’s proposal. “They are concerned at the lack of choice from a monopoly organisation. HET runs a low cost operation to encourage widespread education in the sector – based on a subscription paid by employers (and a small servicing charge). In comparison, the ITO charges on a per student basis … and (if a monopoly) have a significant potential to increase costs to staff.”

Arising from the fall out, INsite understands Careerforce has written to employers and certain industry stakeholders to invite them to deal directly with them, bypassing HET altogether.

“We were already being approached by a large number of employers and trainees asking us what is going to happen. That is because HET staff have been telling employers and employees that they won’t be dealing with Careerforce in the future and that they will be registering credits etc. directly with NZQA,” Lind says.

“We needed to act quickly because of the misinformation occurring in the marketplace.”

Careerforce’s letter to employers and HET subscribers – just one day before HET’s formal decision on the merger is to be made – has brought relations between the two organisations to a head, although Lind believes the timing is justified.

“We have a legislated obligation to be in touch with all employers in our five sectors. Many people we wrote to are Careerforce shareholders. We have a perfect entitlement to communicate directly with employers in our five sectors. We have not in the past done so out of consideration for HET, but now we’re in a situation where HET doesn’t want to continue to work with Careerforce, apparently,” Lind says.

The news reflects a changing relationship between the two parties. HET, the owner and provider of ACE (Aged Care Education) programmes, has been contracted by Careerforce to support training in credits being reported. The nature of the contract has changed over the years as the TEC requirements have changed.

It seems this was maybe one change too many for the existing arrangement to remain intact.

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