Even a Labour MP was asking yesterday whether the country’s polytechnics were still a going concern.
At the Education Select Committee, Deborah Russell asked Jeremy Morley, a Te Pukenga Council member, whether the polytechnics, grouped together as Te Pukenga and which lost $37.9 million in 2022 and are forecast to lose $93.4 million in the 2023 year, said it was a “somewhat challenging assumption” to consider them a going concern.
Morley is an accountant, and Russell is a former accountant and university taxation lecturer.
But Morley was able to assure her that it could pay its bills tomorrow and “we can pay them as and when they fall due in the next 12 to 24 months.”
The Office of the Auditor General had questioned whether it was a going concern.
However, that is related to the new government’sGovernment’s policy to disestablish Te Pukenga and what that might mean.
The formation and now disestablishment of Te Pukenga is highly political and five years of change is beginning to “piss off” its staff and students.
It was originally the brainchild of Labour Leader Christopher Hipkins back in 2018 when he was Education Minister and confronted with ongoing losses at Ta Poutini, the West Coast Polytech.
But when the country’s 16 polytechnics were merged into Te Pukenga, Penny Simmonds, the CEO of the Southland Institute of Technology, one of the country’s more successful polytechnics, stood for National in Invercargill and won.
She is now the Minister for Tertiary Education and Skills and, therefore, responsible for Te Pukenga.
With Simmonds standing in the background, Te Pukenga and its losses became something of a poster child for National Leader Christopher Luxon during the election campaign as an example of Labour’s wasteful spending and urge to centralise.
After the election and after becoming Minister, Simmonds wasted no time putting National’s plans into action.
Russell read from a letter she had obtained under the Official Information Act from the former Te Pukenga chair, Murray Strong, to Simmonds following a meeting with her on November 30 last year.
“A further concern has arisen following your meeting with Tim Fowler, chief executive of TEC (Tertiary Education Commission), Peter Winder, chief executive of Te Pukenga and myself last week. You expressed a lack of confidence in the Council and, by extension, the chief executive of Te Pukenga.
“In addition, the direct instructions issued by you to him on operational matters caused him and me significant concern.”
Almost immediately following that letter, both the chair and then CEO, Peter Winder, resigned, and equally as quickly, Simmonds sent a letter outlining her plans to disestablish the merged entity.
Before Winder left, he brought the senior leadership together to South Auckland and discussed Simmonds’ letter with them.
She confirmed that she would be looking for just eight to ten of the existing institutions to remain.
As the acting CEO, Gus Gilmore accepted that he had to implement Simmonds’ plan, though it was clear from all the Te Pukenga leadership that appeared before the Select Committee that they were sceptical about it.
“We talked through the leader of expectations,” Gilmore said.
“We started to plan for the disestablishment, started to think about what we needed to do to enact the direction our new minister had given us.
“And we commenced that work. I don’t think that’s too much of an issue. We will follow the instructions of the Government of the day to do that in accordance with its direction. Yep.”
Te Pukenga seemed to have expected this and had begun scrapping IT projects designed to strengthen its central administration “shortly after the election”, said Morley.
“We started preparing for options and opportunities.”
Leading up to the election, while Luxon and Simmonds on the campaign trail were accusing Te Pukenga of a “bloated” head office and runaway spending, it had begun to cut costs.
But though the losses were systemic and, in most cases, long-standing, their cause was not quite as straightforward as the politicians claimed.
During 2023, they faced a significant drop in domestic students.
“So what we did during the course of 2023 was try to maximise as much revenue as possible, so get as many enrolments through,” said the interim Chief Financial Officer, Phil O’Callaghan.
He said the team did a really good job across the network, controlling personnel costs and relinquishing some leases.
“We continue to look at our asset divestment and how we can save money,” he said.
“It was a good turnaround, over $50 million, through those different strategies.
“And this year, we continue down that path as well.”
Even so, at the end of last year, only two of the country’s 16 polytechnics were viable: the Open Polytech and the Ara Institute in Canterbury.
Among the non-viable Polytechs was the Southland Institute of Technology at which Simmonds had been the CEO.
One option for polytechs that are losing money might be to adopt a blend of face-to-face and online learning.
Gilmore said, “Some really good work” was happening with blended teaching in Southland, Ucol in Palmerston North, and the Open Polytech.
“Everyone’s got variants of it,” he said.
“The challenge for all of us is not to throw the baby out with the bathwater, but to achieve the structure we move to, let’s keep the good stuff that happened. “
But O’Callaghan was still doubtful about the future.
Asked if every Polytech could be made viable, he said: “We don’t want to speculate on that, but it’s unlikely that every former Institute of Technology can be made viable.”
That raises the central question confronting Te Pukenga: Did it push centralisation too fast and at the expense of other important requirements?
The centralisation involved “unified” teaching programmes for some subjects. In other words, the same curriculum was taught at several polytechs.
Whanganui MP Carl Bates asked why prioritising the nursing degree was prioritised over addressing the financial problems.
“We took the decision to unify programs off the back of conversations with external stakeholders,” said Gilmore.
“Perhaps with the benefit of hindsight, we might have started somewhere else.”
Northland MP Grant McCallum suggested that Te Pukenga could achieve some quite good outcomes by allowing different institutions and campuses the freedom to make their own decisions, reflect the community, and show innovation. ” You could get all sorts of different results, and that could lead to some quite good outcomes. “
“If we can get a mix of much more local decision-making, that’s fantastic,” said Gilmore.
“We support it but also have best practices for sharing across the country and leveraging buying power. So, all of that sort of stuff happens at the same time. That’s the key. “
However, one dark cloud hangs over the polytechs: They are now going through their second substantial restructure in five years.
All the change is imposing a cost.
“We are rebuilding the local management teams, so we’re repopulating leadership teams in the regions and in our base business divisions to give them extra support,” said Gilmore.
“The attrition rates have been high. They have stabilised in the last 12 months, but that’s still unusually high for our sector.
“Look, this hasn’t been going for six months. This has been going on for five years.
“So our people are a bit change fatigued and bit, frankly, pissed off. And so, our focus has been on supporting them as best we can.”
