Slowly, as more facts emerge, it appears that the mega polytech, Te Pukenga, is one of the Government’s big delivery embarrassments.
A Select Committee heard yesterday how profligacy at the new body reached a point where, even though it was a Government entity, it paid $35,000 to belong to the private sector lobby group, Business New Zealand.
But most revealing of all was the unwillingness of the Chair, Murray Strong, to answer a series of direct questions about why the $689,000 a year CEO, Stephen Town, was on “personal leave” (at $13,000 a week).
All this is set against a background of the Tertiary Education Commission, having found that Te Pukenga’s programme as currently configured would not meet the Minister’s expectations for January 1 2023,
The proposal to merge the country’s 16 Polytechs emerged in 2018 after some started to get into financial difficulties.
In 2017 the Government had to inject $3.6 million into The West Coast polytech, Ta Poutini, which had only 300 students, to keep it going.
A year later, the Western Institute of Technology in the Taranaki was headed in the same direction.
“We can do a quick fix there; wipe off their debt, pour some more money in, but we’ll be back in a year’s time looking at it again because the model is just not sustainable,” Education Minister Chris Hipkins told POLITIK in 2018.
Hipkins himself had worked in the oil and gas industry, managing apprenticeships and training for Shell Todd.
He compared the Polytech system with its duplications and inefficiencies with the ability of the private sector to move much more quickly to deliver relevant training.
He was impressed with the New South Wales Technical and Further Education (TAFE) model as a way of getting greater efficiencies, spending less money on programme administration and development and more money on the programme delivery side by merging the various institutions into one body..
“They put it all into one but with a devolved structure within that one,” he said.
Ironically, the current Secretary of the Treasury, Caralee McLiesh, was the Chief Executive of TAFE before she came to her Wellington job.
The legislation to establish the new merged polytech, called Te Pukenga, was passed in Parliament in February 2020.
Chris Hipkins was enthusiastic about its prospects.
“Today is the day we start to bring our vocational education and training systems back together, where we create a unified nationally consistent system of vocational education and training that will meet the needs of New Zealanders,” he said.
“It will meet the needs of New Zealand employers.
“It will ensure that we can plug the very serious skill shortages that we have in New Zealand and that we can rise to the challenges of the future.”
Covid delayed the merger, which was supposed to be ready to go in 2021. Now the start date is January 1 next year.
But the Tertiary Education Commission, in a highly critical review in March this year, said, “the programme as currently configured will not meet the Minister’s expectations, as we understand them, for January 1 2023, unless there is a clear intervention of additional resources.”
In a memo shortly after sent to education minister Chris Hipkins, Tertiary Education Commission deputy chief executive Gillian Dudgeon outlined concerns about a forecast $110 million deficit, a lack of progress and declining enrolments.
On July 6, the institution’s board held an extraordinary meeting and excluded the public.
On July 11, board chair, Murray Strong, confirmed that CEO Stephen Town was on personal leave.
At the Select Committee yesterday, National MP, Penny Simmonds, the former Chief Executive of the Southland Institute of Technology who took an aggressive approach to the appearance of Te Kupenga’s chair and acting chief executive, focussed on the fate of Town.
She asked the acting CEO, Peter Winder, whether head office employment agreements had personal leave provisions.
“And if so, how many days per year?”
Winder said he would have to check.
She then asked whether he could confirm that Town was not on annual leave, was not on bereavement leave, was not unwell, his family was not unwell, and he was not dealing with a family emergency.
The chair, Murray Strong, stepped in and said the Chief Executive requested personal leave.
“That is often at the discretion of the chair, and I agreed to it,” he said.
Simmonds: “Mr Town initiated the discussion to go on personal leave?
Strong: “I’m not going to comment any further, obviously.”
Simmonds then asked whether the Minister or anyone from the Minister’s office communicated “in any way with the board or individual board members regarding or leading up to Mr Town going on personal leave?”
Strong: “I understand we have an official information request that’s been lodged. Te Kupenga will answer that question then.”
That left unclear whether Town’s departure was linked to the $110 million deficit, nearly double the forecast $57.5 million deficit.
Winder said that Te Kupenga had already identified $8 million in savings that would be able to be made from the head office budget of $21 million.
“There were a number of a number of savings that were required when the budget was adopted but at that stage no savings plan was identified to go with them,” said Winder.
“So part of the 8 million claws back what would otherwise have been unbudgeted expenditure.”
Some of that head office spending included a $35,000 annual membership fee to Business New Zealand.
Green MP Chloe Swarbrick asked whether it was appropriate for a public institution funded by the public purse to be spending money to belong to Business. New Zealand.
“I know there’s been some concern around other issues that Business New Zealand has been lobbying for,” said Winder.
“Te Kupenga has been very clear that it’s separate to that and the reasons for joining that organisation are quite different to some of those others and other agendas that have been promoted.
Swarbrick: “So you haven’t contemplated leaving on the basis of those other views that you’ve expressed concerns about?”
Winder: “We have contemplated it, and at this stage, the membership is going to be retained.”
The apparently unsatisfactory progress made towards merging the Polytechs, the massive budget over-shoot and deficit, and the mysterious disappearance of the CEO may add up to be one of the more embarrassing Government delivery failure stories since 2017.