Let's run with the truth and get it right

Otago Polytechnic graduands make their way up Moray Place before their graduation ceremonies....
Otago Polytechnic graduands make their way up Moray Place before their graduation ceremonies. PHOTO: GERARD O'BRIEN
As a Cabinet decision about the future of the vocational education sector in New Zealand looms, Otago Polytechnic CEO Phil Ker urges the coalition Government to respect some fundamental truths.We are in the countdown to a Cabinet decision about the future of polytechnics in New Zealand, a key element of the Government's proposed vocational education reforms.

The intended structural reform of the polytechnic sector is predicated on several assumptions that are declared to be truths and seem to have been accepted as truths, but which do not stand up to critical analysis.

On the other hand, there are truths which conveniently seem to have been ignored in the quest for sweeping change based more on political ideology than addressing real problems.

Primarily, the case for structural reform is based largely on the assumption that the polytechnic sector is irretrievably broken, evidenced we are told by financial failure, poor educational quality and falling enrolments. So broken that we have to remove the autonomy of the current providers and downgrade them to branches of a single mega institution, thereby solving all of the alleged problems.

So will the intended structural reform really be fixing a failing sector? There are some inconvenient truths at play here, so let's address them, starting with the falling enrolments, because that is surely the easiest to deal with.

Polytechnics certainly have been losing enrolments over the past five years or so, as have the universities, although the latter have only lost about 5000 enrolments against 12,000 for the polytechnic sector. The decline is unsurprising for two reasons.

First, an increasing number of New Zealand citizens have chosen work ahead of full-time study in the context of a very strong economy. This counter-cyclical market behaviour is normal. What is not normal is that the New Zealand economy has been so strong for so long.

Second, the number of school leavers have been declining as we move through the effects of a lower birth rate in the 1990s, which will not reverse for a few years yet.

Thus, the decline is not a failing of the sector and is definitely not a failing of individual institutions, but the consequence of a combination of demographic and economic factors. It is certainly not a problem that can be fixed through the intended structural changes. How inconvenient are these truths? Very, I suggest, because they are not acknowledged by those with a pre-determined reform agenda.

Otago Polytechnic CEO, Phil Ker. PHOTO: ODT FILES
Otago Polytechnic CEO, Phil Ker. PHOTO: ODT FILES
What the decline in enrolments has exposed, though, is that we do not have a system response for picking up those workplace learners and helping them to gain skills beyond those which their particular employer can provide, and to achieve relevant qualifications through learning at and through work.

Such a system response is what these reforms should be about and this requires investment in curriculum development and infrastructure to meet this market need well beyond the resources of our polytechnics acting individually or collaboratively. Furthermore, this investment does not require an expensive and risky restructuring experiment similar to what has failed in other constituencies, most recently in Australia.

Indeed, we should be celebrating the sustained full employment economy that we have been enjoying rather than criticising and punishing the institutions that have been unable to respond to a significant shift in market conditions which could only ever be addressed by an effective system, the nature of which I address below.

The sector is not broken

Let's now turn to the effectiveness of the polytechnic sector in carrying out its core mission - skilling our workforce. Is the sector broken? Definitely not!

What the polytechnic sector is tasked to do it does very well. Polytechnics train the vast majority of New Zealand's health professionals and the technicians and technologists for a wide range of occupations, as well as pre-employment trades training and apprenticeship training.

Polytechnic graduates are work-ready and fit for purpose - evidenced by employer surveys of satisfaction with graduates and by very high levels of student and graduate satisfaction with their programmes of study.

There is no evidence to the contrary. The norm in the polytechnic sector is good performance educationally - not occasionally, as officials and politicians would have us believe.

The sector is highly regarded internationally for its practical and applied learning leading to work ready graduates. New Zealand hosts several delegations each year from China, Japan and other parts of Southeast Asia, for example, keen to learn about how we do things here.

Learner success overall is high, as measured by overall course completion rates which average 79%-80%. For degrees, polytechnic and university success rates are the same at a commendable 85%-86%.

There is some variability in success rates among polytechnics, for sure, but this is not a system issue, rather a management issue for those institutions. It is certainly not a structural issue i.e. it will not go away nor be better addressed by merging all polytechnics into one.

There is also a success gap for Maori and Pacific learners compared with all other learners - 5% to 10% depending on the level of qualification. This is definitely a systemic issue (and for universities as well as polytechnics) but again, is not a structural issue to be fixed with a mega merger. Rather, it is a resource issue to be addressed with well-targeted investment in higher levels of support and better-designed programmes of learning.

Further, it is essential that solutions are actioned in partnership with mana whenua at a local and regional level which would be almost impossible to execute nationally: which iwi will a national ITP partner with?

Ironically, New Zealand is widely regarded as world-leading in vocational education for indigenous people, both for what and how we educate and for the results we achieve.

However, while the sector is not failing, some institutions certainly have failed - as a consequence of poor management and governance and inadequate monitoring oversight by the Tertiary Education Commission.

Are these further inconvenient truths? Fixing these issues requires performance management, not restructuring. A responsible monitoring agency would be proactive in using its powers to intervene at an early stage, providing educational and/or financial expertise and support where that is patently required.

Fix the funding system

Let's be clear, though, that only a couple of polytechnics have failed because of poor management and governance. The several more that currently are in a parlous financial state are mostly well managed, yet simply underfunded.

Yes, the funding system has failed and continues to fail. It is not fit for purpose, having been deliberately designed to ignore the complexities of educational delivery to New Zealand's highly diverse regions and to ignore the real cost drivers of vocational education which have accelerated costs dramatically over the last decade. As well, a funding system in which Government has, for well over a decade, controlled volumes, subsidy rates and the fees paid by learners, leaving polytechnic providers with few options.

Worse, the previous National government consciously ran down its vocational education assets - a negligent owner of our vocational system. No inflation adjustments were applied generally to the sector for some eight years, leaving nearly all polytechnics with little or no room to move. Small declines in enrolments then, logically, result in material losses and sustained declines lead to disaster.

The current government agrees that the funding system is seriously broken and has acknowledged the need for reform but has yet to do anything to address urgent sector-wide funding issues - choosing instead to bail out the first of the inevitably failing institutions and then to leverage these bail-outs to justify an ill-advised restructuring agenda.

So, let's be clear: the truth is there is no crisis of finances in the polytechnic sector other than the crisis created by the previous government and perpetuated by the inaction to date of the current government - the crisis of inadequate funding.

Let's also be clear, if the current government was to inject a one-off catch up increase in funding rates equivalent to the CPI for the period from 2009-2017 most if not all of the current institutions would return a surplus rather than the accumulated deficit of $34million recently announced. That money is already budgeted and available! It has suited officials and government alike to blame institutions for failing to manage their finances, conveniently forgetting that they are failing in large part because of the neglect of their owners.

However, let's note also that the real cost drivers of the polytechnic sector are in no way related to the CPI.

A responsible owner of this crucial driver of economic prosperity would be funding for the realities which face vocational providers: significantly increased costs to support a large and increasing number of students with mental health issues; significantly increased costs for enhanced pastoral care and support for Maori and Pacific learners in order to boost achievement; significant increases in labour costs driven by the broader market for skills, noting that polytechnics, unlike universities, must recruit their talent from the relevant skills market. It will not at all help for the future that nurse and teacher salaries are increasing by double digits over the next two or three years.

Invest, please

The funding model is broken. Equally, there has been no investment in the capacity or capability of the polytechnic sector for more than a decade, resulting in facilities in many regions which are not fit for purpose, in a lack of depth in leadership and management and in denying New Zealand the technological networks and services essential for a country with such a widely dispersed population.

Arguably, more important has been a failure to invest in the very curriculum development needed to ensure that the right programmes of learning are available for workers to qualify in their workplaces, i.e. those workers lost to the polytechnic sector whose qualifications are at higher levels than the traditional apprenticeships.

Should not the individual institutions themselves have made these investments? Perhaps, but none have had the financial means to do so, and in any event it is in areas like these that we do need reform. We need an overarching agency to drive system-wide planning, behaviour and investment where system-wide outcomes are needed.

A leading example

So, you might ask, is this article simply a self-serving plea from a self-interested CEO of a polytechnic that does not want to change - a dinosaur, or perhaps an ostrich?

Well ... yes - to the self-serving bit, that is. Though not for the author, as his career is in its twilight. Rather, for Otago Polytechnic which has been a stellar performer on all fronts, that serves its region and New Zealand exceptionally well, which has been innovative second to none and which is an exemplar of what every institution in the polytechnic sector in New Zealand could and can be.

And certainly not an ostrich. There is a definite need for reform. There has been for a long time, but the reform needs to preserve the best of what we have and to put in place mechanisms that guide and support all polytechnics to become stellar performers.

This does not require rocket science but simply strong and effective leadership, a dedication to excellence, relentlessly doing the basics well and proper care and attention from the owners of this crucial public asset.

There needs to be a high accountability regime which rewards high performance with high levels of autonomy. We do not need centralised control and decision making because that brings with it inevitable bureaucracy and standardisation - enemies of agility, responsiveness and innovation.

We most definitely need strong and empowered regional providers, key enablers of regional economic activity, which are better able to represent local needs than a central body will ever be, are more agile and better able to innovate. These are simple truths, not political ideologies.

We must also have a polytechnic sector that behaves as a networked and collaborative system. We do need a new central agency, not to replace individual providers but in addition to, with a mandate to foster system behaviour, to plan strategically for the system as a whole, to set and monitor system-wide standards and to provide shared services where these make sense - such as the curriculum development for work-based learning mentioned earlier. And for leadership development, tertiary teacher training and encouraging and supporting innovation.

Most of all, we must invest to modernise a highly neglected sector initially by putting in place urgently a fit-for-purpose funding regime, followed immediately by investments in new systems, processes and services to make the sector more effective in a rapidly changing world, which individual providers can realistically never do.

We can get this right - we simply need our coalition government to respect some fundamental truths and to reform that which needs reform, not that which is not broken.

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