The board of Health Ed Trust (HET), the dominant player in health and aged care training, has voted to reject the merger with the sector’s industry training organisation (ITO), Careerforce, and will forge its own destiny without its major income source.

The HET board’s official decision comes just a day after Careerforce wrote to sector employers (including many Health Ed Trust subscribers) advising them to bypass HET and deal directly with the ITO instead. HET, in turn, wrote to employers seeking their direct support (see www.insitemagazine.co.nz/pages/section/article.php?s=Breaking+News&idArticle=23188).

HET’s decision, which was made at a 5pm board meeting yesterday, cited a belief the charitable trust had a “sustainable model for at least three years”.

HET’s chair John Ryder said in a statement that employers were concerned that a Careerforce monopoly would remove competition and allow the ITO to increase prices at will, HET course graduates would lose their identity if courses disappeared, and that there was a danger education programmes may develop according bureaucratic instructions (under Careerforce) rather than to specific industry needs.

HET, as provider of ACE (Aged Care Education) programmes, currently meets the training needs for about 60% of the aged care sector, according to Ryder. However, the decision to rebuke the Careerforce amalgamation means HET must survive without its primary funding stream, which will require a significant restructure of HET’s business model.

Ryder claimed there had been “overwhelming support” from employers in the sector to ensure HET remained a viable enterprise.

“Employers have offered us premises (including power, IT, and staff assistance). They have also offered to channel credits through to us (from their own education programmes) that they previously put directly through the ITO, thus strengthening our position and market share,” he said.

Competition or monopoly?

Both Ryder and Careerforce CEO Ray Lind agreed competition was important for the aged care sector.

“Competition is important in every sector. We have no objection to people capturing a large market share or even being a monopoly. But there needs to be fair choice. There may be other trainers who might be very keen to deliver training to the aged care sector, and they need a fair and equal opportunity to do so,” Ray Lind said.

When Lind was asked whether Careerforce would pay HET the same amount per training credit if they met the same criteria Careerforce is required to meet with the Tertiary Education Commission, the answer was a firm “no.”

“The payment needs to go to the employer. If HET’s clients choose to take the money we give them and give it to HET, that’s their business. We’re very reluctant to enter into an arrangement with HET that is different to other training providers. It could be argued that if we were to do so, we would be creating a barrier to entry for other training providers,” Lind said.

Worsening relations

The fall out between the ITO and its major partner has been brewing for years, according to Ryder.

“We boxed along with the ITO in a partnership, trying to educate everybody we could. Then the ITO became competitive and political. It would be fair to say, in the last decade, not a single staff member of the ITO has approached our board with any positive suggestions on education apart from wanting to terminate our contract or take us over,” he said.

The final hurdle to the HET/Careerforce fall out could potentially be legal action over Careerforce’s dual roles as ITO and training provider. Ryder claims HET has a QC’s advice claiming Careerforce may contravene sections 10 and 13 of the Industry Training Act.

INsite will follow developments as they arise.

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