Returning to regional model not enough to fix polytech funding — union

All polytechnics in New Zealand, including Otago and Southern Institute of Technology, would have run at a loss next year, according to figures provided to the Otago Daily Times.

The Tertiary Education Union, which compiled the data, said it showed the funding model was "broken" and returning to a regional model would not be enough to fix it.

New Tertiary Education Minister Penny Simmonds acknowledged this.

Ms Simmonds provided the ODT with a statement:

"The current unified funding system has made it almost impossible for individual polytechnics to be financially viable and we will be addressing this for 2025," she said.

The previous government merged all 16 polytechnics and nine industry training organisations under the banner of mega-polytechnic Te Pukenga.

Ms Simmonds criticised this model, and recently announced she would be looking to devolve the responsibilities to "eight to 10" separate institutions.

The changes should be complete by the end of 2024, she said.

But Tertiary Education Union organiser Daniel Benson-Guiu said under the existing funding regime, all 16 polytechnics would have run at significant deficits for 2024 if they existed as autonomous entities.

The figures were based on breaking down the finances of the mega-entity down to the 16 former polytechnic regions, he said.

This included Otago Polytechnic region, which would have posted a deficit of about $8.4 million, and the Southern Institute of Technology region, which would have posted a deficit of about $10.07m.

Using the calculations, Whitieria and Weltec would have run up the largest projected deficits, with close to $29m.

This showed the government funding model for on-campus learning for vocational education was "broken", Mr Benson-Guiu said.

"Even if the minister wants to return to a regional-based polytechnic model, at the moment, the financial situation for them is not great.

"Our members don’t really have an opinion on the preferred model for delivering vocational education, but what is clear is how it is funded is broken."

There needed to be a frank discussion about how to fund vocational education, he said.

"Clearly, there are skills shortages across the board.

"There is no doubt that training is necessary, but it needs to be done in a way that is sustainable for staff and students."

Mr Benson-Guiu said Ms Simmonds’s statement was "encouraging".

"We would like to sit down with the minister and work together on addressing this issue," he said.