Te Pūkenga Faces Urgent Overhaul to Address Financial Issues

• Tertiary Education Minister Penny Simmonds emphasised the need for urgent financial reforms at Te Pūkenga.
• Simmonds’ second letter signals more changes, aiming for regional decision-making and sustainability.
• Staff and unions express concern over further cuts and the impact on vocational training.

Tertiary Education Minister Penny Simmonds has highlighted the unsustainable financial situation of the national model currently in place, necessitating “difficult choices.” In her second letter of expectations to mega-polytechnic Te Pūkenga, Simmonds urged immediate action to maintain vocational training in regional areas.

Te Pūkenga was formed about four years ago by merging the country’s 16 Institutes of Technology and Polytechnics (ITPs) and nine industry training organisations. However, Simmonds has signaled a return to a more regional-based model.

The second letter, issued last month, hinted at more shake-ups. Simmonds noted that “some difficult choices may need to be made to ‘right-size’ operations and their associated capital assets.” She emphasised the need for significant changes in certain business divisions to ensure they continue to serve their communities effectively.

Simmonds reiterated her commitment to “support as much regional decision-making as possible,” but pointed out that many former ITP business divisions are not financially sustainable. Urgent work is required to preserve the viability of regional vocational training.

Daniel Benson-Guiu, Tertiary Education Union assistant national secretary, criticised the use of staff as a “political football.” He expressed confusion over the second letter, which appeared to “signal an entirely different direction.” Benson-Guiu stressed the importance of considering both the short-term financial health of individual institutes and the long-term contribution of the sector to the national economy. He also voiced concerns about the future of public campuses and their role as community hubs.

Former Otago Polytechnic chief executive Phil Ker remarked that the letter was a “rark-up” for Te Pūkenga management but failed to address fundamental issues. Ker argued that historical underfunding and mismanagement had left the polytechnic sector struggling. He criticised the allocation of funds to establish head offices rather than improving the sector. Ker highlighted that Otago Polytechnic, with around 3000 full-time students, relied heavily on attracting students from outside the region to remain viable.

Simmonds confirmed her commitment to disestablishing Te Pūkenga and consulting on a new model for the vocational education and training system. She stressed the importance of industry input in designing a sustainable system that meets the needs of learners, industry, and communities.

In a briefing to Simmonds, the Tertiary Education Commission identified Te Pūkenga as being at “high risk” financially. The government has instructed Te Pūkenga to resume cost-cutting and asset sales to improve its financial position. Simmonds’ letter expected Te Pūkenga to decentralise decision-making while continuing to provide education and training. She acknowledged the severe financial challenges faced by former ITP business divisions and stressed the need for urgent measures to ensure regional provision remains viable.

Simmonds noted that parts of the polytechnic sector have been in financial distress for nearly a decade. She criticised Te Pūkenga’s failure to establish a pathway to financial sustainability, leading to increased costs.