- The government is preparing to dismantle Te Pūkenga, with more job losses expected.
- Some institutions will stand alone, while others join a federated model supported by the Open Polytechnic.
- Institutions with financial challenges may sell assets, and further job cuts are likely due to cost issues.
The Minister for Tertiary Education and Skills has warned of more job losses as the government continues to reform Te Pūkenga, the country’s tertiary education network. Penny Simmonds stated that “pain” was inevitable in the sector, with further cuts expected as institutes either stand alone or join a federated system.
The government’s plan involves a mix of approaches, with some institutes standing independently, while others are brought into a federation supported by the Open Polytechnic. Simmonds anticipates that five or six institutes will be ready to go solo by January, with more to follow by the end of next year. She emphasised that current students would experience minimal disruption during the transition, assuring that “they will still be engaging with the individual tutors, lecturers, [and] industry organisations.”
However, for institutes that cannot stand on their own, there will be a “blended delivery” model, maintaining a physical presence but with an increased focus on online courses and resources. Simmonds added that without Te Pūkenga, many institutions would face insolvency, forcing them to sell assets to manage debt. She pointed out that some institutions have land or buildings that are “under-utilised” and need to be sold to reduce maintenance costs.
While some institutions face insolvency, others are struggling with unsustainable operating models, particularly those in Wellington, where no surplus has been recorded for over a decade. Simmonds stated that “70 percent of the costs are people,” meaning further job losses are likely as cost-saving measures continue.
Simmonds also stood by her claim that Te Pūkenga has $250m in debt, although the organisation’s annual report lists the figure as $50m. She explained that this figure includes various forms of debt, including “commercial debt to the bank, debt to the Crown, and internal debt.” She stressed that these obligations must be repaid, including reserves from some institutions that helped cover the debts of others.