Poly’s new deficit forecast doubted

TE Pukenga has shaved as much as $47 million from its forecast annual deficit, but Invercargill MP Penny Simmonds has criticised the megapolytechnic’s plan to reduce its overshoot as ‘‘creative at best’’.

The Te Pukenga Council approved an updated financial forecast earlier this week, predicting an annual deficit of $63 million, notably lower than earlier predictions.

A March forecast warned a drop in enrolments could cause the annual deficit to surge to $110 million, while a Tertiary Education Commission (TEC) report written in June and published last week put the figure at $90.8 million.

Te Pukenga acting chief executive Peter Winder said the newest figure was ‘‘not without risk’’.

“It includes potential revenue from two land sales that we expect to be completed by the end of year, but they may not be.”

Other factors were holding vacancies, ‘‘expenditure controls’’, the reprioritisation of work in head office and a largerthanbudgeted operating surplus from workbased learning.

The figure was close to the budgeted deficit of $59 million it began the year with.

“The revised forecast is a significant shift, considering that revenue from domestic ITP enrolments is down $50.9 million on last year.’’

The TEC report from June said no improvement in the overall quality of financial reporting from Te Pukenga had been seen.

Ms Simmonds, who was chief executive of the Southern Institute of Technology for 23 years, said she shared concerns about the robustness of financial forecasting.

The newest figure relied on a high staff turnover exacerbated by staff anxiety, which was not sustainable, she said.

The land sales, if completed by the end of the year, were a oneoff akin to ‘‘selling the family silver’’.

‘‘I think that they have moved figures around to try and please [Education Minister Chris Hipkins], but whether it becomes real is another thing entirely, and certainly selling of land and putting that into your operating revenue is creative at best.’’

Mr Winder acknowledged the changes had an impact on staff wellbeing, and said Te Pukenga was trying to minimise this.

The earlier forecast was always going to be uncertain, he said.

‘‘We’ve been working closely across our network to better understand our financial situation and we believe the $63 million deficit is a more accurate reflection of where we are currently.’’

The organisation must respond to the changing needs of New Zealand, including more learning onthejob rather than going to traditional campuses, he said.

Te Pukenga did not respond to questioning on the land sales, citing commercial sensitivity.

Otago Polytechnic chief executive Dr Megan Gibbons said the polytechnic had been carefully managing its finances and welcomed the revised forecast.