Some Te Pūkenga staff have told RNZ they doubt returning to locally-managed polytechnics, as demanded by the new government, will improve the situation. Photo: supplied
Falling enrolments and a skewed funding system are behind Te Pūkenga's looming, biggest-ever deficit, a briefing obtained by RNZ shows.
The document, a briefing prepared in November, showed the super-institute was expecting to lose about $93-million this year thanks to $100m profit from work-place learning, a $185m loss from its 16 polytechnics, and costs from its head office.
But it also said the institute was about to make savings from restructuring and had a two-year plan for moving from high to low financial risk.
"We have a significant effort underway to address financial sustainability including increasing international enrolments, property rationalisation, tight management of vacancies and savings through attrition, greater efficiencies, reducing duplication, rationalising procurement, implementing the structural changes confirmed in September 2023, and right-sizing face-to-face delivery for 2024," the document said.
The document said the polytechnics that joined the institute at the end of last year came with pre-existing financial problems.
"ITPs (institutes of technology and polytechnics) as a group were underperforming financially over several years prior to their integration into Te Pūkenga. Staff costs were not reduced as a consequence of declining student revenue over many years, and administrative costs in fact increased. This, together with a failure to align programmes with national skills needs, as well as bloated property portfolios added to cost pressures for most ITPs. Covid-19, prevailing economic conditions, and the impact of UFS [unified funding system] has exacerbated this downtrend in revenue."
Te Pūkenga CEO Peter Winder Photo: Supplied/ Te Pūkenga
It also said the the UFS introduced this year had rendered some courses unviable and reduced income for on-campus courses 16 percent and distance courses 39 percent.
Some institute staff have told RNZ they doubt returning to locally-managed polytechnics, as demanded by the new government, will improve the situation.
One said the institute was on the path to financial viability, but reinstating local managers would bring massive cost increases.
They said the roll-back of the centralised institution was a lost opportunity and dropping the UFS for the previous tertiary funding system would not be enough to ensure polytechnics were viable.
The briefing obtained by RNZ said the institute was well-positioned to continue its transformation.
It said the institute had already combined communications and finance services across its 25 constituent organisations and restructuring due to take effect next year would save about $18m per year.
The briefing said Te Pūkenga's size enabled better training arrangements with large, national employers as well as standardised pricing and buying power - for example, national contracts for security services saved $1.3m in 2023.
On Monday Te Pūkenga's council announced that chief executive Peter Winder would leave the institute at the end of January after agreeing that his role was redundant.
It also said deputy chief executive academic Megan Gibbons had resigned with effect from 12 January. Prior to joining Te Pūkenga she was chief executive of Otago Polytechnic.