Consultations with staff on who will and won’t have jobs when the country’s state-run polytechs merge on Jan 1 next year have been postponed as a new acting head for the troubled reforms does an urgent “reset” to stem mounting projected deficits.

In a note to staff of all 16 polytechs involved in the merger, acting chief executive Peter Winder overturned a July 1 announcement of staff consultations on the merged entity, Te Pūkenga’s, operating model that was to have started in a week.

“We have now decided to postpone the consultation period.” 

It was to have run between July 19 and Aug 16 – a timetable already flagged as being behind schedule in a damningly critical review of Te Pūkenga’s state of unreadiness for its Jan 1 start date.

"The mess just gets messier,” said National party tertiary education spokeswoman Penny Simmonds, who ran the Southern Institute of Technology polytech before entering politics.

“The consultation that was due to start on the operating model for Te Pūkenga and finish in September to enable redundancies to be made September to December, has been postponed while they address the 2022 operating deficit that the Minister is unhappy about,” she said, predicting the delay would not produce an acceptable result.

“Anyone who has run a polytechnic knows that the costs are locked in for the year by the time you get to July. 

“Any reviews and cost saving should have been done end of last year or very early this year. The only way to save costs when enrolments are down is to shed staff." 

That is a three-month timeframe and, even then, there will be two months’ notice and redundancy payments so the budget blowout won’t be pulled back for this year. 

Timetable at risk

A postponed consultation period for the operating model means that they are unlikely to be able to transition fully to a new operating Te Pūkenga model on Jan 1 2023 as scheduled.

The Tertiary Education Commission’s May 16 report warned the new entity was “still very much in the design phase” after three years of work on a national amalgamation that is intended to make provision of trades training more efficient and to lessen unwanted competition and course duplication.

TEC also warned of a $110 million deficit in this financial year, close to twice the average $60m for state polytechs in their current, unreformed state, and the largest deficit ever recorded for the polytech sector.

No new timetable for staff consultation has been set while Winder takes “time for a focused reset that enables us to address our financial position and the concerns that have been raised by the Minister of Education and the Tertiary Education Commission (TEC)”. 

“Those concerns are real and have been the focus of recent media commentary,” said Winder in today’s note, seen by BusinessDesk, which says that “we began the year with a significant budgeted deficit”.

Winder took the reins in recent days following the departure on extended, paid leave by the Te Pūkenga chief executive, Stephen Town. Sources have told BusinessDesk that Town was shocked by the extent of the criticisms in the May 16 TEC report and may not return to the role.

The report was released with minimal redactions under the Official Information Act and included hand-written notes from the education minister, Chris Hipkins, showing a high degree of concern.

When he signed the paper as read on May 29, Hipkins wrote there wasn’t enough emphasis in Te Pūkenga’s planning on “immediate financial sustainability issues”.

“I’d like an urgent update on what Te Pūkenga is doing to cut costs now,” Hipkins wrote. There was insufficient emphasis on creating early network efficiencies from the merger and he was concerned about ongoing poor quality in financial reporting.

In answers to questions from BusinessDesk, Te Pūkenga said today that its transformation plan would happen “over three horizons: Jan 1 2023, 2026, and 2027-33”.