Four out of five polytechnics face losses by 2022
Eighty per cent of New Zealand’s polytechnics face losses within four years on current trends, Cabinet ministers have been told.
A Cabinet paper released yesterday after a $33 million bailout of the West Coast’s bankrupt Tai Poutini Polytechnic says half of the country’s 16 polytechnics and institutes of technology will be in deficit by 2020, and 80 per cent by 2022, based on current funding formulas adjusted for expected consumer prices.
About 100 sector leaders will meet at Manukau Institute of Technology tomorrow in a crisis meeting to map possible changes to rescue the sector.
Education Minister Chris Hipkins, who will address the meeting, said in the Cabinet paper “widespread business change is necessary” to ensure the sector’s survival.
He announced yesterday an $8.5m capital injection for Greymouthbased Tai Poutini Polytechnic, on top of writing off a $24.9m debt owed to the Crown arising from the polytechnic overstating its funded teaching hours from 2010 to 2016.
The paper says Tai Poutini was cross-subsidising its courses on the West Coast by running courses in specialist fields such as mining, scaffolding and search and rescue in Auckland, Manukau, Waikato, Christchurch, Wanaka and Southland.
Ministry of Education data shows that its domestic equivalent fulltime students dropped by a quarter, from 2245 in 2010 to 1715 in 2016.
The Cabinet paper says the Government is now funding only 750 equivalent fulltime students at the polytechnic — 350 on the West Coast and 400 elsewhere.
A Deloittes audit, dated last April but released yesterday, found that the polytechnic was actually delivering only between 10 per cent and 40 per cent of the number of hours for which it was claiming government funding in nine courses including scaffolding, quarrying, loadlifting, crane use and occupational health and safety.
Altogether, the audit found “significant under-delivery of learning hours” in 13 of the 14 programmes it examined.
Tertiary Education Union president Dr Sandra Grey said the polytechnic’s managers appeared to be charging for more hours than they should have in a desperate effort to keep the institution afloat.
The Cabinet paper says Tai Poutini’s over-charging has now been stopped — but that has made its financial position even worse.
The paper provides two options — either transferring Tai Poutini into joint ownership by the Crown and “local stakeholders”, or merging it with another polytechnic, possibly Invercargill’s Southern Institute of Technology which has already taken over Tai Poutini’s Music and Audio Institute of NZ.
Hipkins has deferred a decision on its future pending a wider “programme of change” for the whole sector which he will take to Cabinet in the coming month.
Tomorrow’s meeting in Manukau has been organised by the Tertiary Education Union, the NZ Union of Students’ Association and Manukau Institute of Technology.
Grey said the current funding system based purely on equivalent fulltime student numbers clearly needed to change if the polytechnic sector was to survive.