In the 2012 Budget the government took one-third of the money it normally uses to fund foundation level tertiary education (level 1 and 2 courses) and put it up for tender – $38 million out of $115 million.

At the time TEU warned that this could have two perverse consequences:

Public money would move away from public 1. providers, such as our polytechnics with their long-standing record of high quality regional education, towards private for-profit companies.Public providers, like our polytechnics, would 2. respond to the competitive funding model by acting like private businesses. They would be forced to cut courses, offer the cheapest possible courses so that they could win the tender, and focus less on giving student and communities’ life-long learning paths and more on passing students through short one-year courses.

Before knowing the outcome of this experiment the Minister for Tertiary Education Steven Joyce is already talking about expanding it so all Level 1-2 funding becomes competitively tendered.

When the minister announced the results of the tender process, two-thirds of our polytechnics had missed out on funding, as had other large public foundation studies providers like Lincoln University.

Table 1: funding allocation by sub-sector

Institution type

Percentage of allocation Equivalent full-time students

Wānanga 58 percent 3204

PTEs 27 percent 1473

Polytechnics 15 percent 833

The foundation studies funding experiment The Tertiary Education Commission allocated $38m of an available $40m. The remaining funds will be allocated during investment plan negotiations. The $38m will fund about 5,500 Equivalent Full-time Students (EFTS), for $6,909 per EFTS.

Te Wānanga o Aotearoa was the only wānanga to receive funding - 58 percent of all student places awarded in the tender. Only six publicly owned polytechnics received funding. Seventeen private training establishments (PTEs) also received funding.

7 out of 18 polytechnics have announced how they will respond to budget cuts:

So far over $11 million lost fundingfrom public polytechnics.

Over

2000 student places

gone

At least

26 courses closed

97 possible

redundancies

TEU is campaigning against this competitive funding model

because we believe it is an ideological experiment in privatisation that will fail. Public money should continue to go to local public institutions that belong to and are committed to their

communities in the long-term.

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Table 3: Allocation of EFTs by region

Region EFTs allocation

Auckland 37%

Wellington 10%

Bay of Plenty 9%

Waikato 9%

National 8%

Northland 6%

Canterbury 5%

Taranaki 5%

Southland 4%

Gisborne 2%

Whanganui/Manawatu 2%

Hawkes Bay 1%

Otago 1%

Nelson/Tasman 0%

Good experienced staff from foundation programmes are losing their jobs – a personal loss for them, a financial cost to the institution, a likely loss to their communities, as these people and their families leave to find employment elsewhere. Good teachers, tutors, support staff and lecturers should not lose their jobs because of short-term funding decisions that undermine our high quality sustainable public tertiary education system.

Government funding has been shifted from its public institutions to private providers with price being the final consideration in some cases. In many instances private providers (and Te Wānanga o Aotearoa) are able to compete on price because they pay their staff less and often have less infrastructure to support learning. Staff in these institutions are also less likely to have important employment conditions such as research and study leave and professional development leave, which contribute to ensuring learners have the best possible learning experience.

A cyclical contestable funding model limits the ability of providers to plan for their delivery in the longer term.

Contestable funding models also tend to have high compliance costs (for tendering, monitoring outcomes and so forth) that are seldom included in the real costs of implementing the model.

The Tertiary Education Commission (which is the government funding agency responsible for the tender process) has acknowledged that where two providers were equivalent in the tender on quality and other criteria, a final decision was made on the basis of price. The cost of closing down courses, paying redundancies and disposing of plant and equipment and other taxpayer-provided infrastructure has not been considered in the overall costs for the implementation of the policy. Therefore the real cost of the Minister’s ‘experiment’ is difficult to quantify.

Regional opportunities goneOnce the minister and the commission announced the successful tenders, the unsuccessful polytechnics began the process to close courses, and a number of possible redundancies have already been announced. The range of course closures suggests that students in some communities will no longer be able to access the courses they want without moving to another centre or region.

2012 = $38mPolytechnic funding for level 1-2

2013 = $6mPolytechnic funding for level 1-2

Students who need opportunities the most are

having their opportunities limited (particularly those in communities

outside of the main centres).

FOR MORE INFORMATION

teu.ac.nz/level-1-2-funding

teu@teu.ac.nz

0800 278 348