Penny Simmonds. Photo: RNZ / Angus Dreaver
The government has unveiled plans to group the weakest polytechnics together and let the strongest stand alone.
A consultation document published on Thursday said a federation of small polytechnics would be supported by the Open Polytechnic.
It did not say which polytechnics might be able to stand alone and which might be included in the federation.
It said standards for industry training would be overseen by eight boards, which might also have the power to arrange and offer training.
The Ministry of Education's regulatory impact statement warned the option carried risks, and it recommended instead forming four regional groups of polytechnics.
It said creating the federation would be complex and there was a risk it and the standalone institutions could fail. However, it also said it did not have a strong view on which option was preferable.
"Given the degree of change that the sector has been through over the past four years, we would previously have erred on the side of giving the status quo more time to bed in, allowing Te Pūkenga an opportunity to fully implement its transformation programme," the ministry said.
"However, this option has become less viable over time as the central capacity and capability of Te Pūkenga is reduced to reflect government expectations. This approach would still have come with risks and costs (as outlined in the problem definition), and there are no guarantees that the new operating model would have been successful."
Tertiary Education and Skills Minister Penny Simmonds said the changes were needed because the creation of Te Pūkenga had failed.
The government has unveiled plans to group the weakest polytechnics together and let the strongest stand alone. Photo: Te Pukenga
"We propose to replace Te Pūkenga with a network of regional institutes of technology and polytechnics (ITPs) and an industry training system that is closer to industry. ITPs that have a clear pathway to financial sustainability as stand-alone institutions will be given greater autonomy under Te Pūkenga from 1 January 2025 and would be re-established as autonomous entities from 1 January 2026.
"We are proposing grouping the remaining ITPs into a federation, anchored by the Open Polytechnic of New Zealand. This would preserve ITPs' local identities and maintain regional access while using educational programmes, academic and back-office support from the Open Polytechnic so they do not have to do everything themselves."
For industry training the consultation document said one option was to create eight boards similar to the former industry training organisations.
"Under this model, 'industry training boards' (a provisional name) would be responsible for industry standards-setting and arranging industry training. Industry training boards would take responsibility for existing work-based programmes offered by Te Pūkenga's work-based learning division," it said.
The other option was to replace workforce development councils, which had been set up as standard-setting bodies, with eight industry boards.
"Under this model, standalone industry-led bodies would be responsible for standards-setting, including qualification development, workforce forecasting, and ensuring that provision meets industry needs," the document said.
"They would have a clearer and more directly industry-relevant remit than Workforce Development Councils and would likely cover a narrower range of industry areas."
The consultation document said responsibility for setting standards for some small industries could be transferred to the Qualifications Authority.
Changes to funding
The document also proposed changes to the funding system which distributes $900 million a year for vocational education and training for about 280,000 learners.
It said previous funding rates would be restored, replacing decreases to funding rates for campus-based and online courses and increases to workplace training funding rates.
The government would also ensure funding was set aside for standard-setting.
"The overall impact of these changes would be to increase funding for provider-based vocational education, offset by reductions in targeted learner component funding and in funding rates for work-based delivery," it said.
The document indicated some polytechnics would need to make cuts.
"All ITPs need to reduce costs to become financially sustainable. However, for many, this requires addressing some longstanding and fundamental issues with their delivery and operating models rather than simply adjusting expenditure.
"This highlights the extent of changes that must be made to return the sector to a financially sustainable position while delivering a range of quality education offerings in the regions."
It also said the creation of Te Pūkenga was only one reason for polytechnics' poor performance in recent years.
"Since 2017, the ITP sector as a whole has reported a deficit every year. There are several causes for this:
- Domestic full-time equivalent enrolments at ITPs fell by around 30 percent between 2010 and 2023
- International full-time equivalent enrolments have fallen by around 60 percent between 2016 and 2023
- Tuition subsidy rates have been reduced or have not kept pace with inflation
- Te Pūkenga has failed to right-size ITPs' costs to reflect lower enrolments
- Poor governance and management investment decisions have lowered available cash (or increased debt) and increased ongoing operating costs."
Tertiary Education Union assistant national secretary - industrial Daniel Benson-Guiu said it was optimistic about the proposals but feared there would be cuts.
"We fear 'pathways to sustainability' translates as cuts to courses, programmes and provision of education to students - especially in the regions."
"It also looks as though the government's vision for sustainability in the regions is largely based on increased online delivery in places where access to technology and good internet is not a given," he said.