Polytech troubles bode ill for Labour’s other reforms
The road to political change may be paved with the best of intentions but in its way lie ineptitude, mismanagement, and financial potholes aplenty.
Take Te Pu¯ kenga, the newly merged organisation due to take over the country’s polytechnics in January 2023.
Several arresting stories this week revealed that Te Pu¯ kenga is in a huge financial hole while failing to deliver, with its leader missing in action.
Te Pu¯ kenga announced on July 8 that its CEO, Stephen Town, was on ‘‘personal leave’’ for an unspecified timeframe. The term, which has morphed into a crutch of crisis management (think TVNZ’s ham-fisted attempt to cover up the Kamahl Santamaria debacle), has now become a red-flag phrase.
The fact that Town, who’s paid somewhere north of $670,000 a year, has gone on leave two months after a damning report from the Tertiary Education Commission and just a week before it appeared publicly, may explain why.
The March 2022 quarterly monitoring report sent to Education Minister Chris Hipkins, and signed by deputy chief executive Gillian Dudgeon, eschews the usual bureaucratic double-talk, opting instead for frank language.
The report noted that Te
Pu¯ kenga had a 2021 draft surplus of $7.6 million, but it was now forecasting a deficit of $110m due to enrolments being down by 10%.
Concerned about a lack of progress, the TEC and Te Pu¯ kenga initiated a strategic review.
The review team, led by Murray Jack, made seven recommendations prioritising its operational model, network collaboration and its financial performance, the last of which was deemed high-risk and had worsened since the previous quarter. The report noted that ‘‘we consider there is ongoing risk surrounding Te Pu¯ kenga’s ability to develop a critical path, plan and implement a new organisation design’’.
Then there’s the fact that the organisational structure has just gone out for staff consultation, less than six months before the organisation transitions into a centralised model, that a CFO has only just been appointed and a PwC partner has been hired in a deputy chief executive position, in charge of transformation, but it hasn’t been publicly disclosed, and it’s easy to see how good intentions can become subverted.
Hipkins would rightly argue he had good enough reason for the change; in 2018 he presented to Cabinet a paper revealing that seven polytechnics and institutes of technology were at high financial risk, with 10 expected to have deficits.
The fact that the sector reported an average deficit of $60m between 2017 and 2019 and its replacement is forecasting a 2022 $108m deficit supports National’s view that Te Pukenga is the wrong model and brings ‘‘the whole sector down to the lowest common denominator’’, as tertiary education spokesperson Penny Simmonds claims.
What Hipkins will be trying to avoid at all costs is Te Pu¯ kenga becoming Labour’s canary-in-the-coal-mine of transformational change. With the canary not quite having karked it, but still crook, the pressure is on Hipkins to deliver.
If he doesn’t – and failure could be defined as anything from pushing back its January 1, 2023, start date to even more financial troubles – it will be seen as a harbinger for the Government’s other major reforms, such as Three Waters and health.
What’s more, the health reforms have arrived at a time when its workforce is in despair and at risk of ‘‘catastrophic collapse’’.
That’s what 923 doctors this week told the Government in a signed letter to the prime minister, with an attached survey outlining a ‘‘system beyond crisis’’ with many considering leaving.
Desperate to avoid any C words, Health Minister Andrew Little has used the crisis to explain the need for the reforms, without adequately explaining what they’ll achieve.
In again centralising power in Wellington with Health New Zealand, Little should remember the effect the 2013 NHS reforms had on England’s health system. The creation of NHS England gave it the task of overseeing local health services, leaving the Department of Health to focus on public health and policy matters, in much the same way that the New Zealand reforms have been structured.
The results? Long surgical waiting lists, continuing postcode inequality and emergency departments bursting at the seams. Plus ca change.
For centralisation to arrive now, when escalating needs in hospitals around the country are so great, shows the Government is not focusing on the immediate problem at hand, thereby making the reforms merely distracting and disruptive.
If, like the 2013 reforms in England, the Government’s health reforms are deemed a failure, it will deliver two Fs on its report card; not only did it not seem to address Kiwis’ inflationary struggles, but it couldn’t even deliver on what it was focusing on – its big transformational reforms.
Which makes Te Pu¯ kenga, with its inception date looming and the TEC’s dire March report tracking its lack of progress, certain to be Labour’s canary in the coalmine.
What Hipkins will be trying to avoid at all costs is Te Pu¯kenga becoming Labour’s canary-in-the-coalmine of transformational change.