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Source: Tertiary Education Commission

The delivery component is one of three funding components in the new unified funding system (UFS) for vocational education and training. For information on the other two, see learner component and strategic component.
About the delivery component
The delivery component comprises the bulk of the new funding system. It will replace SAC funding for levels 3-7 (non-degree) and all funding from the Industry Training Fund.
This component will support education delivery in a new way. It will be volume-based and consider not only the subject of the delivery but also how it is delivered – that is, in a classroom, in the workplace or online.
This component seeks to enable and encourage providers to grow work-integrated learning pathways which meet learner, employer and community needs. This means provider-based learners should be able to easily access work-based training as part of their programmes, and employers and work-based learners will receive greater support from providers.
How will funding be calculated?
Funding will be allocated for all education and training at levels 3-7 (non-degree) and industry training based on the subject, how delivery occurs (mode of delivery), and the amount of learning (common across all modes). See below for more information on these three key factors.
Subject funding rates will be simplified and consolidated. There will be five subject-rate groupings and these will apply to both provider-based and work-based learning. Different funding for different subjects for work-based learning will be new, and will recognise the different cost structures of different types of training. The proposed groupings are:
Humanities, business and social service subjects
Te reo and tikanga Māori
Trades, creative, IT-based and general healthcare and community support subjects
Engineering, specialist health, primary industry and science-based subjects
Specialist low-volume, high-cost subjects.
There will be five modes of delivery that reflect where and how a learner is receiving learning. A programme can be made up of one or more modes. This is to allow learners and employers to access learning opportunities in the way that is best for them and to move seamlessly between ways of learning. The five modes are:
Work-based learning
Work-based learning – pathway to work
Assessment and verification.
This diagram (PDF, 792 Kb) provides more information on what activities are expected in each mode.
Amount of learning
In 2023, we will continue to use EFTS and STMs to link funding to learning undertaken.
We are currently developing a new shared unit of funding across industry training and provider-based study. We will work closely with the sector to ensure this is workable, understandable and fair.
What does the delivery component support?
The delivery component supports the delivery of education and training both in provider-based settings and in the workplace.
Who will be eligible for funding under the delivery component?
We are making learners’ eligibility for tuition subsidies consistent across all of the UFS. The current provider-based eligibility rules will apply to all learners. For other modes, this means there will be two key changes to eligibility.
The two changes are:
Adding self-employed, contractors and volunteers: We are extending funding for work-based training beyond employees to include others in the workplace, such as the self-employed, contractors and volunteers. This aligns with the Reform of Vocational Education outcomes by promoting flexible and ongoing lifelong learning
A domestic focus: We are removing eligibility for training subsidies for legally employed individuals who are not citizens, residence class visa holders, or otherwise classified as domestic tertiary students. Employers can still access training for these individuals but the cost of this training is no longer government subsidised. This change aligns with the current approach to immigration, incentivising employers to develop local workforces before seeking to source labour from overseas.
There will be an exemption scheme to allow some non-domestic learners to be eligible for funding for work-based learning in specific training areas. The details for this will be confirmed in 2022.
These changes mainly affect the delivery and learner components of funding.
Interim arrangements
The current work-based eligibility for tuition subsidies will be continued for those learners with a training agreement on 1 January 2023 for the remainder of their study.
Why is te reo and tikanga covered?  
The UFS covers all provision at levels 3-7 and all industry training which includes te reo and tikanga Māori at these levels. Officials are currently undertaking a review of funding for te reo Māori across tertiary education. In the delivery component, tuition subsidy funding rates for te reo and tikanga Māori provision will be maintained at no less than their current funding rate, regardless of the mode of delivery. This approach recognises the Crown’s Te Tiriti o Waitangi/Treaty of Waitangi obligations to actively protect te reo and tikanga Māori as taonga and the importance of developing any substantive changes to the funding system for these subjects in partnership with Māori.
When will the delivery component funding be available?
From 2023, funding allocations will be calculated using the new delivery modes and categories.
We expect the funding rates will be released in May 2022.
Modes of delivery
Delivery component Q&As