Newshub Nation: National polytechnic merger Te Pūkenga buckling as it asks for more money and fails students, staff

There are serious concerns about the management of Te Pūkenga as it asks for more money for I.T. systems while course completions are plummeting and some enrolments are down.

January 1st, 2023, marked the official start of Te Pūkenga, the new national polytech and institute of technology conglomerate. 

In 2019, then-Education Minister Chris Hipkins said the merger would be "transformational," but as it unfolded, it did not meet the Minister’s expectations.

Four years after the merger began, and three months into the fully formed crown entity, Te Pūkenga has been chewing through funds, shedding staff, and has poor provisional results for Māori and Pacific students. 

Newshub Nation: National polytechnic merger Te Pūkenga buckling as it asks for more money and fails students, staff

Two former polytech CEOs and a current staffer and union representative spoke to Newshub Nation about their concerns. 

"I'm fearful that we've put all of our eggs into the Te Pūkenga basket,” former co-leader of Unitec and Waiariki Polytechnics Keith Ikin said.  

“I'm fearful that students don't have a choice." 

Ikin was involved with Te Pūkenga until the end of last year. He dreads "the ongoing carnage of non-achievement and non-delivery just continues on,” and if it got worse, it would be a travesty, he said.

Merran Davis, who was CEO of Auckland’s Unitec Institute of Technology before joining Te Pūkenga in September 2020, said things were getting worse in terms of enrollments, equity, staff morale and student morale.

"That will continue to happen because the trust and credibility is gone," Davis said.

Steve McCabe, a senior lecturer at MIT who also functions as MIT's TEU (Tertiary Education Union) Branch President, said people would start pulling out.

“It’s going to be a death spiral,” he warned.

"If we continue to operate in this way, we are going to see the entire edifice just collapse.”

In 2019, Te Pūkenga was formed after intense consultation with the vocational education sector.

Hipkins acknowledged at the time that the system was “unsustainable”.

"Last year alone the government had to put an extra $100 million into the polytech sector simply to keep it afloat, even though the number of students was declining."

Official advice provided to Hipkins at the time around whether money could be saved said mergers were “subject to execution risks”.

Advice listed the main risks as "very high and extended costs of change”, "a lack of regional responsiveness", and "the risk of systemic failure."

$200 million was then spent on the transition costs to merge the 16 polytechs and institutes of technology with the nine industry training organisations to form Te Pūkenga.

Four years on McCabe was still waiting to see any benefits in his day-to-day experience as a lecturer, in a sector that was promised transformation.

"Twice a month now on my bank statement, my salary comes from Te Pūkenga and not from M.I.T," he said. 

"That's about the most profound change I've seen."

Many current staff Newshub Nation spoke to reported that stress levels were high and people were struggling.

Davis said they've "just spent millions on establishing councils and groups and disestablishing and establishing executive leadership teams and disestablishing and appointing all of these head office staff without a clear plan."

Hipkins penned his thoughts on a March 2022 quarterly update - saying a focus on how many new people are joining the head office “isn’t that helpful.” 

He was more interested in “what they’re achieving.”

National's Tertiary Spokesperson Penny Simmonds said, "it would be reasonable to expect that lots of things were happening much better than they were.

"Better services for students, that things were going better for staff, that it was breaking even or running a surplus,” she said.

"But of course, none of those things have happened and it's running a big deficit."

At the end of last year, Te Pūkenga forecast a $110 million deficit. That was revised down to $63 million, closer to the budgeted deficit of $59 million.

Education Minister Jan Tinetti said that was not good enough.

She told Newshub Nation, "I've basically said we need to see this turning around and now."

However, last week a leak revealed Te Pūkenga had sought $330 million more from 2023's Budget.

"That money is only to get the I.T. systems talking to each other, essentially, and it's only to make redundancies for more staff," said Simmonds.

487 redundancies were forecast over the next three years, despite official advice before the merger recommending it incurred “all the pain and costs of redundancies upfront, to be able to move into the rebuild as quickly as possible."

Simmonds said the additional $330 million it was seeking was not going to get the institution to a stage were it would be sustainable.

"That was version 15 of the business case," Simmonds said. 

"We know that some of the early requests were for nearly a billion dollars over ten years.”

"They will be coming back asking for more money," Simmonds said. 

Despite asking for more money, running at a deficit, and being in its fourth year, Te Pūkenga still did not have an operating model. 

Ikin said without one it was unclear how centralisation would be achieved.

"What are the timelines… what are the critical components within that? What are the costs?”

"It should all be set out in a clear well-articulated overall plan or operating model," Ikin said. 

When asked why Te Pūkenga did not have an operating model, Tinetti said there was one.

After she was pressed on where it was Tinetti conceded Te Pukenga was “developing it as we're going along".

"We've got to bring together 24 different organizations," Tinetti said. 

"It is a complex undertaking which will take a wee bit of time to get right."

With no operating model clear to staff, and with jobs on the chopping block, McCabe said staff were on edge. 

"The sense that people have is the cuts are coming, my job might be next," he said.

"This does not put people in a good frame of mind when they show up to work on a Monday morning."

It's not only staff that were struggling - provisional data provided to Newshub Nation revealed fewer students were completing their courses each year since 2019, with Māori and Pacific students suffering the most. 

The figures were going in the wrong direction, according to Hipkins' initial letter of expectations for Te Pūkenga, which emphasised the need for success amongst Māori and Pacific learners. 

Provisional results show course completion for Māori has fallen from 72 percent in 2021 to 65 percent in 2022 and for Pacific students, it has fallen from 70 percent in 2021 to 57 percent in 2022.
Provisional results show course completion for Māori has fallen from 72 percent in 2021 to 65 percent in 2022 and for Pacific students, it has fallen from 70 percent in 2021 to 57 percent in 2022. Photo credit: Newshub Nation

Tinetti said that would change.

"I've been very strong about this in the last few weeks since I've come in as Education Minister," said Tinetti.

"They need to solve that," she said.

The path forward for Te Pūkenga is unclear. 

Davis has begun a petition with parliament to remove the CEO Peter Winder and the board, Chaired by Murray Strong. 

Petition of Merran Davis: Remove Te Pūkenga’s board and chief executive
Petition of Merran Davis: Remove Te Pūkenga’s board and chief executive Photo credit: New Zealand Parliament Website

"The madness needs to stop and it needs to be sanity checked," Davis said. 

If Labour win this year’s election, Tinetti said Te Pukenga would be here to stay.

National would scrap it and consolidate the 16 polytechs down to around 10, with specialised support for those that need it, Simmonds said.

"We would centralise the things that make sense to be centralised." 

Te Pukenga CEO Peter Winder would not be interviewed for this story.

Watch the full video for more. 

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