As polytechnics stare down their 2023 deadline to fully transition into mega entity Te Pūkenga, National says the Government was warned from the start the reforms were not going to work.
It comes as Hamilton-headquartered Te Pūkenga, which began merging the country's 16 polytechnics and institutes of technology in 2020, continued to be plagued by a raft of budget and leadership problems.
National’s tertiary education spokesperson Penny Simmonds told Breakfast the merger model was "fundamentally flawed" because the Government couldn't just join everything together to fix the sector's challenges.
She told Breakfast the actual issue was that a handful of polytechnics were facing deficits, with the sector estimating a $48 million shortfall at the end of 2019, before the reforms.
Three years and $200 million on for the merger, the result was a $110 million deficit, Simmonds said.
She said giving targeted support to the six to seven polytechnics that were struggling would have been the better solution.
"When you merge them all and you take the decision-making away from the front line, away from those delivering the education and the services, and you pull that into a head office made up of primarily people who have never run a polytechnic… you get perverse decisions being made that aren't necessarily good for either students or staff or the industries we should be serving."
Simmonds was the chief executive of the Southern Institute of Technology for 23 years until she was elected as the MP for Invercargill in 2020.
She said when the Government was taking submissions ahead of the reform programme, those in the sector had already warned them a merger wasn't going to achieve the efficiencies they wanted.
"I don't think it is the right thing to keep throwing money into it. You need to get back to the basics to where there are fundamentally wrong business models and they need to be targeted and fixed," she said.
"I don't think we should just get on with it at all because to pull back that kind of deficit, you are talking hundreds of redundancies. That's the only way you can pull back a deficit like that."
'We continue to be concerned'
It's been anything but smooth sailing for Te Pūkenga, the entity the Government hoped would help New Zealand resolve its ongoing skills shortages.
The path to change began in 2018 after Education Minister Chris Hipkins announced a review of the education sector. After consultation, Hipkins released the proposal to amalgamate the polytechnics and institutes of technology in 2019.
By April 2021, a year into the merger, half of the bosses at the 16 polytechnics around the country had resigned as roles were consolidated.
A March 2022 review found the programme to transition all polytechs into Te Pūkenga from January 1, 2023 wouldn't meet the Education Minister's expectations "unless there is a clear intervention of additional resources with an appropriate mandate".
The review noted a deficit of robust governance and management structures with key staff leaving, a lack of direction given to the sector, and highlighted the risk the proposed transition wouldn't be financially viable.
Then, a May memo from Tertiary Education Commission to Hipkins said that a $110 million annual deficit was forecast for 2022 because of lower-than-expected enrolments domestically. That was $53.5 million worse than budget.
"If achieved, this would be larger than any deficit recorded across the ITP [institutes of technology and polytechnic] sector," the Tertiary Education Commission's deputy chief executive of delivery Gillian Dudgeon wrote in the memo published on the commission's website earlier this month.
"We continue to be concerned that little work has been undertaken to improve Te Pūkenga’s financial position and a strategy to improve its long-term sustainability has yet to be put in place."
Dudgeon said provider-based enrolments in 2022 were down by 12% from 2021. Te Pūkenga’s 2022 budget had assumed a 4% increase.
On Friday, it was announced Te Pūkenga's chief executive Stephen Town had requested leave for personal reasons. Further details about Town's decision and how long he would be on leave weren't given. Te Pūkenga noted no complaints had been raised about the conduct of the former Auckland Council chief executive.
Hipkins wasn't available for an interview with Breakfast.
In a statement, Hipkins said he had made his expectations of Te Pūkenga clear and that he knew they were "working hard to achieve the outcomes we all want".
"I've also been clear the projected deficit was too high and that more work needed to be done there."
He said any questions about Town were for Te Pūkenga to answer.
Hipkins said the old model was unsustainable and that was why the sector needed change.
"National's approach would lock in deficits and not fix the underlying issues. Under the old model, long-term deficits were projected, rising to up to $156 million in 2022.
"When Labour came into government we had to pump around $100 million into a number of polytechnics just to keep the lights on."
As for the lack of enrolments, Hipkins said that "with record low unemployment, it's accepted that demand for funded places decreases" at tertiary providers while work-based enrolment - such as apprenticeships - increased.
"The Government has worked hard to address skills shortages with the successful Apprenticeship Boost programme that has sustained apprenticeships during Covid and the targeted [free trades training] programme that was set up to encourage people to take up courses where skills were most needed," he said.
"However, it's worth noting that enrolments in 2022 have come off a near-unprecedented high in 2021."
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