Polytech merger budget cut request ‘unfair’

Polytechnic mega-merger Te Pukenga’s call for southern institutions to cut costs to reduce a projected $110 million national deficit has been dubbed "blatantly unfair".

The merger will unite 16 polytechnics across the country under one umbrella from the start of next year.

However, the organisation is scrambling to minimise costs following a Tertiary Education Commission report warning a drop in enrolments means its latest annual deficit could surge to $110 million, a budget overshoot of $53.5 million.

Penny Simmonds
Penny Simmonds
National tertiary education spokeswoman and Invercargill MP Penny Simmonds, who was chief executive of the Southern Institute of Technology (SIT) for 23 years, said Te Pukenga was asking for polytechnics to reduce their budgets by 3% .

"Forcing top-performing institutes like SIT and Otago Polytechnic to cut costs to prop up the troubled mega-merger structure, including the bloated head office, is blatantly unfair," Ms Simmonds said.

Te Pukenga acting chief executive Peter Winder said the organisation was aiming for an overall 3% savings target.

"Some will be able to achieve more, others less.

"Te Pukenga is not pursuing a blanket across-the-board savings target.

"We are working to find savings across the polytechs that do least harm."

Compared with the corresponding time last year, both SIT and Otago Polytechnic had experienced a drop in their student numbers of 7% and 11% respectively, he said.

Ms Simmonds said cost-cutting added to stress and uncertainty posed by the merger.

"The Southern Institute of Technology will be required to cut about $1.5 million from its budget this year, and Otago Polytechnic about $2.8 million."

Rather than expecting all polytechnics to make sacrifices, the focus should be on those that had not been operating efficiently, she said.

"Why make successful polytechnics like SIT and Otago to pay the price?"

SIT chief executive Onno Mulder said the organisation had not been directed to make a percentage cut to operational costs, but was "working with Te Pukenga to identify areas where savings are able to be made sensibly and not impact on ... delivery."

Otago Polytechnic chief executive Dr Megan Gibbons said the polytechnic was financially prudent and would "continue to be careful with spending and doing everything we can to increase and maximise our revenue".




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