The $32 million in operational funding granted to Otago Polytechnic for next year is "not even enough to keep operations going the way they are, let alone to develop", its chief executive, Phil Ker, says.
Mr Ker had estimated an extra $3 million was required annually from next year to ensure the institution's long-term financial viability, but said yesterday the indicative funding confirmed from the Tertiary Education Commission (TEC) for 2009 was almost exactly what the institution received this year, plus a 2.6% inflation adjustment.
The figure still has to be signed off by the TEC board but is unlikely to change.
The TEC had made it clear there was "no possibility whatsoever" of additional funding, which meant the polytechnic was already reworking its 2009 budget to ensure it did not run at a loss, he said.
Cost-cutting and improving efficiencies had been going on for five years, he said. That included regularly reviewing all expenditure and not replacing some staff who left.
In August, 7.9 positions were disestablished after enrolments declined in the applied business and automotive studies departments.
But Mr Ker said there was a limit to the cost-cutting which could be done without affecting the institution's obligations to provide quality education and training throughout its region.
"We run a bloody good polytechnic which is performing extraordinarily well, but that performance is not valued by the Government or TEC. It's disappointing."
Staff had gone "above and beyond the call of duty" to ensure the institution was running efficiently without compromising educational outcomes for students.
"The staff deserve better. They deserve to be valued by the people who run our sector."
Otago Polytechnic's financial woes were shared by most other polytechnics, Mr Ker said.
He was "extraordinarily frustrated" about the lack of movement in funding for the sector, particularly as the previous TEC head, Janice Shiner, had acknowledged some years ago the TEC was aware of systemic underfunding and said extra funding would be forthcoming to enable polytechnics to return a surplus on turnover of 3%-5%.
The reality was most polytechnics only broke even, and those recording surpluses did so because of interest from investments, Mr Ker said.
TEC staff "preferred not to be reminded" of Ms Shiner's comment, he said.
"It is disappointing to have a central funding agency in a 'no responsibility' mode. I would like to say their view is all care and no responsibility, but I'm afraid it is more like no care and no responsibility."
However, the future was not all bleak for Otago Polytechnic, Mr Ker said.
No courses had been cut next year and there were no plans for further redundancies unless enrolments fell below expectations.
Two significant one-off grants had also been obtained from the TEC this year for building projects - $5.9 million to extend the art school and relocate hospitality and catering classrooms, and $12.5 million to establish the Otago Institute of Design.
