A year in limbo since disestablishment of Te Pūkenga announced

Saturday, 21 December 2024

**On December 7, 2023, the newly elected Government announced it would be disestablishing megapolytechnic Te Pūkenga. A much awaited announcement landed 379 days later on the last business day of the year, only to confirm the disestablishment and more will be announced next year. *Hanna McCallum reports.***

Craig West has been in the polytech sector for more than 20 years but by far, this year has been “the worst”.

The sector has been no stranger to change, but the uncertainty hanging over people’s heads since the Government’s announcement to disestablish Aotearoa’s megapolytechnic Te Pūkenga last December has been taxing.

As campuses closed for the summer, no more certainty had been provided. Staff had already lost jobs following a number of “harsh reviews” and courses for the new year have been cut at Otago Polytechnic where West is a principal lecturer.

“We've reached the end of this year and that was the worst, simply the worst,” he says.

West, who is the Tertiary Education Union (TEU) branch president of Otago Polytechnic, says the “horror stories” from cost-cutting exercises by the business division to prove its financial viability had left the end of year with a sense of “doom and gloom”.

The Government’s announcement on December 7 last year ticked a box in its 100-day plan.

In July, Prime Minister Christopher Luxon proclaimed success (with one caveat) at ticking off the 36 objectives of the second quarter plan.

The incomplete? To consult on a new model to replace Te Pūkenga – New Zealand Institute of Skills and Technology. “It just genuinely has been really complex,” Luxon said at the time.

Any mention of Te Pūkenga has since gone missing in the third and fourth quarter plans.

In the meantime, the council of Te Pūkenga, formed four-and-a-half years ago to run the country’s 16 polytechnics and nine ITOs (industry training organisations) – was asked to stop any activities that were inconsistent with disestablishment.

It included recruitment and staff restructuring activity because it was no longer a priority for the Government to have a centralised organisation for delivering vocational education and training, Minister for Tertiary Education Penny Simmonds said in her letter of expectations to the organisation.

Te Pūkenga had been beset with financial problems‒ reporting an $80 million deficit in 2022 ‒ and high profile senior resignations, with five executive members leaving less than two years into their roles.

Simmonds described the mega-merger as “nothing but an abject disaster”, pointing to its $250 million deficit in August when she announced the start of consultation for vocational education reform.

Feedback was sought on three parts: a redesigned Institute of Technology and Polytechnic (ITP) network that retained access to tertiary training in the regions, through a combination of stand-alone and federated ITPs; options for an industry-led system for standards-setting and industry training; and changes to vocational education funding from 2026 to better support the reformed system.

It would likely require legislative change and there would be “lot of work ahead” to restore the damage done by forming Te Pūkenga, she said.

But despite its financial problems, its 2023 annual report, also released in August, showed an operating deficit of $37.9m at the end of 2023 which was a significant reduction on the forecast deficit of $93.4m for the year.

It was the first year of reporting with all its polytechnics and work-based training organisations under the one entity.

As of this month, it had reduced its deficit to less than a million dollars – $800,000, Te Pūkenga chief executive Gus Gilmore says.

It was the result of an intensive cost savings exercise, which included consolidation to reduce duplication, structural efficiencies, vacancy management, lease reduction, property sales and programme rationalisation.

A strong push for revenue growth, particularly in international enrolments, he says, also played a role. The annual report showed an 86% growth of international students on the previous year’s numbers – 5315 full-time students.

As of December, that had gone up 30% on the same time last year, sitting at 6,885.

Domestic campus-based delivery was up 4.4% while in total, ITP divisions were seeing a 7% increase overall in enrolments. Work-based delivery was down 14% but varied throughout the year.

“When unemployment is higher, the number of learners in work-based delivery tends to drop,” Gilmore says.

Learner satisfaction was 93%, up 3% on 2023 while learner wellbeing sat at 92% and a course completion rate of 82%, up 3% on last year.

The focus, as Te Pūkenga awaited the Government’s decision on the future direction of the sector, had been to improve learner outcomes and the financial viability of its divisions, so they were better able to meet New Zealand’s skills needs, Gilmore says.

“We have also reduced the size of our national office and devolved a range of functions to our divisions in anticipation of the Government’s desire to have standalone regional entities in the future.”

A Government announcement did finally land on Friday – on the last working day of the year for many offices, and 379 days since its initial disestablishment was announced. It said the Government had decided to amend the Education and Training Act 2020 to disestablish Te Pūkenga and allow ITPs to be established as autonomous entities, either standalone or as part of a federation – likely under Open Polytechnic.

Decisions on which polytechnics will be established, and in which form, will be taken in the first half of next year, Simmonds said in a press release.

“It is important for the sustainability of the sector for this work to be undertaken prior to the re-establishment of individual polytechnics.

“It is my intention that the new system will start to be implemented from 2025, with the first standalone polytechnics in place on January 1, 2026.”

In Julie Douglas’ eyes – national president of the TEU ‒ almost irreversible damage has already been done.

Since a few months ago, the minister had given a “very clear message” that business divisions, or former ITPs, needed to “right size” to become financially sustainable. It led to courses and staff being cut and the union was aware of a “raft of change proposals on the go” which could lead to further job losses.

Douglas calls the cost-cutting exercises a “knee jerk reaction” and did not feel the sector was in any more of a knowledgeable place than this time last year.

“That is a long time for the staff and the other stakeholders in the sector to be living with that level of uncertainty.”

As a consequence, some had chosen to leave the sector, leading to its “degradation” with no one able to replace the vacancies they left.

Cuts were on their way across the country including Otago Polytechnic, Waikato Institute of Technology (Wintec), Whitireia and WelTec, NorthTec, and Western Institute of Technology at Taranaki (WITT).

The impacts would be long reaching and it would be difficult to set courses up again once they were gone, she says.

On a student level, it posed issues including not everyone being able to move cities just to be able to access their desired course option; online learning not always being as simple because of limited internet and cellphone coverage in areas – also it was not appropriate for some courses; as well as no assurance that every student had quiet spaces to study at home.

“If we can't be supplying good, decent education accessible to all students in this country, then we're going to see a two-tiered system, and that's not in anybody's interest,” Douglas says.

“We have to make sure that we're delivering what is needed in a way that is best suited for the learners in that space and it may well be a mix of those things, but we can't just rely on remote delivery.“

For some regions, the former polytechs were the only option for tertiary education and training and also one of the biggest employers for the region, with close connections to its community.

“It is a concern that is much bigger than just the students going in there for a course. It's got the impact on communities, on local economies, and long term, on jobs and economic growth.”

Daniel Benson-Guiu, assistant national secretary for the Tertiary Education Union, says it is fair to describe 2024 as “a horrible year for staff in the sector”.

“There's been an axe looming over the heads of staff who have been in limbo for so many months,” he says.

A change to the system will require investment, he says. “It can’t come out of nothing.”

For Megan Pōtiki, executive director of Otago Polytechnic, it was necessary and a “worthwhile process” to bring back its annual sustainability review of each programme.

Otago Polytechnic had been in debt and had a fall in student enrolments this year.

It completed its first review of its programmes and 19 of the 30 would be shut down from January, she says, though students halfway through courses will be able to complete them.

The courses being cut include English language level two, a health and wellbeing course, early childhood, brewery and stone masonry.

Its arborist course will continue because it is one of two in the country and the only course in the South Island, she says.

It was still working through some projects with Deloitte which could affect full-time staff further.

“It's not to say that down the track, we might not review those again if they made sense to open them but when you've got really no full-time students and a high number of full-time employees, they don't really make sense – if they're weighing us down as we're trying to stand ourselves up.”

Its focus was on nursing, “the jewel in our crown for Otago”, where 80% of its revenue came from.

She did not believe the cuts were jumping the gun and were necessary to focus on the long-term sustainability of the business as a standalone entity. “That has to be sorted, whether we like it or not”.

She recalls feeling disappointment when the disestablishment was announced. It was yet another change amid “constant change” and she admits “change costs money”.

“I felt like damn, you know, if we'd just gone a little bit quicker with the roll-out of Te Pūkenga then perhaps we would have been in a different position.”

She is hopeful for a more stable period in the sector.

“If there's a change again in a new government, it's a little bit of a concern.”

Next year will be another challenging year, she says, but is confident in the future of the polytech and that it will be in a “good position” by 2026.

Before Te Pūkenga was established, Otago Polytechnic was one of few former polytechs running at a surplus. Still, there were high hopes for the merger, West says.

But once the funding wasn’t forthcoming to support the change, that was when “the wheels on the bus started to fall off”, he says.

“People are feeling fairly angry that all these years of setting something up and putting it together is now being torn apart, and here we are, five years down the track, in a worse position than what we were before and feeling as though everything we've done has been a total waste of time.”

With a turn around in Te Pūkenga’s finances, perhaps it could have been something people could live with, he says – “made some cuts, got everything sort of back on track so to speak, and picked yourself up, dusted yourself off, and carried on.”

“But, you know, Penny Simmonds did not come up with that agenda.”

The review felt like “a numbers game”, with what felt like little focus on the community’s needs.

It was “heartbreaking” because they were not given a chance to wait until true enrolment numbers were made clear in early February, “programmes were just cut”.

Great efforts were made to deploy staff but as one of the early childhood teachers said to him, the only job available was automotive. “They said, ‘how do you think I’d go fixing a car?’.”

“Again, it’s that presumption that people will be able to just pack up and move somewhere else in the country.”

Sharlene Nelson, TEU co-branch president at NorthTec and co-pathway manager for construction, says the union successfully pushed back on any cuts until March but they were coming and the impact “will be huge”.

Potential cuts include hospitality, primary industry such as farming and forestry, as well as courses such as business moving online.

“We don't have many options here in Northland anyway, so if you keep taking people's options away, we will be left with nothing.”

She worried about people having to leave the region and few coming back, leaving it under-resourced, uneducated, and a lack of job opportunity leading to high unemployment rates.

“I don't want to pick up my family and leave Whangārei when I've set roots down and everything.”