Debt casts polytech merger into doubt

EDUCATION Minister Chris Hipkins has rejected claims the Government’s polytechnic megamerger is failing to deliver on its promised financial efficiencies.

The merger is widely supported by Otago Polytechnic, but National’s tertiary education spokeswoman and former Southland Institute of Technology (SIT) chief executive Penny Simmonds said in the third year of the amalgamation into Te Pukenga, the 2022 net financial deficit was forecast to be $110 million.

Ms Simmonds said it was more than double the $48 million deficit posted by the country’s institutes of technology and polytechnics (ITP) sector at the end of 2019, before the reforms.

‘‘This is a horrendous waste of taxpayers’ money and it reinforces my concerns that the Labour Government’s plans to merge the polytechnic sector together would not address the financial viability issues.

‘‘In a 2019 cabinet paper, Education Minister Chris Hipkins claimed that these reforms would ‘address the ITP sector’s current financial issues’.

‘‘But instead, what we have seen is $120 million in spending, huge increases in bureaucracy and 149 new bureaucrats added at head office on top of a $110 million deficit forecast.’’

Ms Simmonds said there had been ‘‘a total lack of accountability’’ and the Tertiary Education Commission had expressed concern to the minister that Te Pukenga was not meeting the expectations ‘‘to improve efficiency and effectiveness’’.

‘‘We have already heard concerns from the Auditorgeneral that Te Pukenga is not addressing the underlying problems around the financial viability of its network.

‘‘This is clear evidence that Labour’s attempts to restructure New Zealand’s polytechnics and technical institutes are failing.’’

Mr Hipkins rejected the claims and said when the Labour Government first came into power, more than $90 million had to be put into the existing ITPs to stop them going under; and deficits, without reform, were projected to be as high as $156 million in 2022.

“Last year, Te Pukenga forecast a deficit of $46 million but actually delivered a small surplus. Te Pukenga has only been in existence for a relatively short period of time, and they inherited a sector that was in a great deal of difficulty.

‘‘So we do have to give them time and support to make sure they are getting to the bottom of the structural problems that they inherited from the 16 component organisations that make up Te Pukenga to make sure we get the sector back into a viable state.

‘‘I expect that we will see the delivery of a significantly better sector, but that is going to take some time.’’

Otago Polytechnic chief executive Dr Megan Gibbons said the polytechnic was deeply involved and invested in the transition with Te Pukenga.

‘‘What is overlooked in some of the political rhetoric is the fact that the focus is now on the learner, including lifting up those who may have had poor experiences within educational settings.

‘‘Putting learners at the forefront is to be applauded — as is the focus on strengthening our commitments to the Treaty of Waitangi and our partnerships with iwi.

‘‘I believe the highly collaborative approach Te Pukenga has taken to engage closely with the sector is creating strong building blocks.’’