IT training providers, headed by AMES Academy, are to consider a group action against the Tertiary Education Commission (TEC), claiming restrictive practices favouring government polytechnics threaten their businesses.
AMES CEO George Marr says if implemented as currently written, recent law changes affecting the funding of training providers would “effectively halve the number of students that we can train and ultimately affect the fiscal viability of the company and the jobs of 40 staff.”
Marr claims “many providers are afraid to speak out for fear of reprisals” from the TEC, saying it is TEC’s “unofficial policy” to reduce the number of trainers receiving government funding to under 100.
In a complaint to the Commerce Commission in July, Marr claimed several breaches of the Commerce Act, accusing TEC of “blatant price fixing” and restricting trade in favour of polytechnics.
In the complaint, Marr said such “restrictive trade practices” breached the Commerce Act on resale price maintenance, how the Crown engages in trade, and exclusionary provision.
However, on August 8 the Commerce Commission replied that Marr’s letter was “unlikely to raise concerns” under the Commerce Act. There was “unlikely to be a breach of the Act and that the Commission will not be pursuing this matter further.”
It cited “a distinction between market power and statutory power,” saying TEC has statutory power.
But the Commission said Marr could take legal action — a move he says he will raise at a September conference of private trainers in Auckland.
Following controversies over some courses receiving funding, the government has progressively introduced measures aiming for “greater certainty” over funding and a better mix of courses.
TEC appointed polytechnics as “regional facilitators” to help determine what courses can be taught — a move Marr likens to “putting the fox as head of security at a poultry farm”.
Limits on the subjects students can study and receive loans for, along with loan numbers, were also imposed. After initial approval, AMES was then refused NZQA approval to teach two courses.
“TEC is restricting anything that can allow for growth, what a school can teach and better fiscal viability,” Marr told Computerworld.
Until January 2007, Ames could offer introductory IT courses, for which students would receive a loan and living allowance. Many would then move up to a more senior course, sometimes with AMES offering a scholarship.
“In 2005, where more than one-third of AMES students were either studying the introductory course and had staircased with a scholarship up to the next level to where in 2007 not one student can do this. This has meant that three staff have been made redundant with the possibility of more to follow,” Marr says.
Further changes for 2008 are planned, though TEC hasn’t detailed them, which Marr says is creating uncertainty among providers.
However, “the most blatant breach of fair trading that the government undertakes” is setting a maximum fee that providers can charge, say $3,000, which might work for polytechnics with large classes, but not the more technical and tutor-focussed courses PTEs might offer.
From 2005, the government allowed exemptions to the Fee Maxima Policy, which includes most AMES taught courses. But under it, PTEs must reduce their fees by 5% a year, while universities and polytechnics can raise theirs by 5%.
Marr says this can be exempted too, by introducing new courses but seeking NZQA-approval is costly and you can only charge 75% of what your competitors charge for undefined “similar courses.”