The devil is in the details for the new 'mega-polytechnic'

6:12 am on 15 February 2019

Analysis - The government's plan for a monster merger of all 16 polytechnics and institutes of technology has taken everyone by surprise, but some might say they had it coming.

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After nearly $100 million in bailouts last year and the possibility of more to come, the government has eschewed half-measures and complex policy solutions for the relatively simple option of rolling all institutes into one.

For good measure it has also decided to strip the job of organising on-the-job training and apprenticeships from industry training organisations (ITOs) and give it to the proposed new mega-polytechnic, the New Zealand Institute of Skills and Technology.

Critics will say the plan takes centralisation too far and will result in an organisation that is too big and unwieldy to ensure each region is getting the skills training and courses it needs.

Others might say it provides a single solution to a range of long-standing and complex problems, and tensions in vocational education and training.

Either way, the government can't be accused of tinkering around the edges.

So, what are the problems the government is trying to solve with its plan for a mega-poly?

Number one is the viability and stability of the 16 polytechnics and institutes of technology.

Right now, the institutions are going through difficult times. The previous government froze their funding for most of its tenure and they have suffered falling enrolments as high employment encourages people to get jobs instead of qualifications. Some have been badly burned in the collapse of the market for Indian foreign students.

Those stresses are showing in their balance sheets. Collectively, the sector made a deficit of more than $50 million in 2017, at least one institution - the West Coast's Tai Poutini Polytechnic - appears unviable as a stand-alone institution, and the biggest of the 16 polytechnics, Unitec, is expected to have losses worth $100 million over the four years to the end of this year.

Polytechnic bosses and staff have long argued that the institutions just need a bit more government funding. Penny Simmonds from Southern Institute of Technology told RNZ $45m would probably be enough to fix most of the sector's problems, while the Tertiary Education Union estimates more like $200m is required.

But the government wants greater efficiencies and when it sees practically every polytechnic operating campuses in Auckland, it doesn't see nimble competition, it sees wasteful duplication.

In addition, mergers have long been seen as the road to stability in the polytechnic sector. Government briefing papers say Manukau Institute of Technology and Unitec were last year discussing amalgamating, as were the all-but-merged Whitiriea in Porirua and Weltec in Wellington.

A national merger follows to its conclusion the logic that big institutions are more stable and ensures there are no Cinderellas left out of the picture because their small size or large debts make them unattractive partners.

That's not a conclusion everyone will agree with. The debacle at Unitec - the country's largest polytechnic - proves size is no protection from disaster and some modest-sized regional polytechnics have long track records of financial stability and success.

Last year, the Ministry of Education told the government the option of a single national polytechnic offered the greatest potential savings, but that was outweighed by the potential risks. The ministry and the Tertiary Education Commission warned that the government risked putting all of its eggs in one basket; if the leaders of the new mega-polytechnic get it wrong, it goes wrong for every polytechnic in the country.

'The government's proposal would eliminate the long-standing overlap'

The other significant problems the government's proposal tackles are long-standing tensions between industry training and polytechnics.

ITOs are industry-run bodies charged with setting standards and organising training for about 140,000 workplace-based trainees and apprentices a year.

The training is paid for in part by industry and in part by the government through subsidies that are worth about half to a third of the value of the subsidies paid for students enrolled in tertiary courses at polytechnics.

ITOs are not allowed to provide training themselves. However, some critics argue some are blurring the fine line between contracting others to provide training and being in the business of providing it themselves.

Further complicating the picture are polytechnics offering their own version of apprenticeships and receiving a higher rate of government funding for what many say is essentially the same thing.

ITOs argue they are best-connected to industry and its skill requirements, while polytechnics say they are the experts in educating adults.

The government's proposal would eliminate the long-standing overlap between industry training and polytechnic training and focus industry training organisations on a core role of setting and monitoring standards.

Polytechnic leaders say they are ready to take over responsibility for industry training, but it will be a hard sell for the business community with ITOs warning that the government risks undermining the entire system of workplace training and apprenticeships.

To date the only clear enthusiasm for the government's plan has come from the union for polytechnic staff, the Tertiary Education Union, which says the proposal of a single national polytechnic will eliminate competition that contributes to endless restructuring and job cuts at individual institutions.

Winning over polytechnic bosses and industry leaders will be harder.

ITOs and their industries will want a firm role in standard-setting and course design, while polytechnic leaders will be seeking a high degree of autonomy for the institutes that make up the national polytechnic.

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