Hipkins and the whole Labour government should hang their heads in shame! The squandering of taxpayers’ money to this level is nothing short of scandalous and is illustrative of the incompetence we see across all sectors of government! –Steven Joyce, 23 July 2022

by Jim Cable

The Government’s polytechnic mega-merger is unravelling at pace. In a worrying sign for its whole grand centralisation push, details are emerging of a project with a half-billion-dollar price tag so far achieving less than nothing.

A quarterly report to the minister, Chris Hipkins, revealed a projected $110 million loss for the new nationwide polytech this year. The chief executive, who probably earns north of $670,000, has gone on special leave with pay, and it appears nobody is expecting him back.

The report laments there is no plan to make the new entity financially stable. This is not a surprise. The mega-polytech has so far distinguished itself mostly by setting up an expensive Hamilton-based head office of about 180 people. These folk have yet to achieve much beyond lofty mission statements and a plan to rebrand all the regional polytechs around the country to the new Te Pūkenga name.

One way of looking at the reforms is to consider that we used to have a single agency in Wellington, the Tertiary Education Commission, which funded and monitored the individual polytechs nationwide, alongside other providers.

Now we effectively have a second bureaucracy duplicating that in Hamilton, and in fact a third one, because there is a beast called the ROVE Directorate, which oversees the overseeing of the overseeing. Little wonder a review of all this in March politely suggested the roles and responsibilities of those three should be “clarified”.

This experiment in shuffling the deckchairs and building a bigger bureaucracy has so far cost taxpayers $200 million in extra startup funding, which runs out at the end of this year. At that point the mega-polytech’s deficit will only grow.

I speak as one who has helped smaller polytechs merge with neighbouring ones to improve the quality of training. Those made sense operationally, but even they were hard to execute well. This is next level.

Hipkins justified the reforms by saying the sector as a whole was losing $50m a year. It takes quite a talent to spend $200m more and double the deficit you were seeking to eliminate.

There is further devil in the detail. As well as merging all the polytechs into one, Te Pūkenga inherits the newly nationalised industry training organisations, which used to arrange on-the-job training around the country. Their surpluses propped up Te Pukenga last year, so this year’s $100m loss is worse across the sector as a whole. Quelle surprise.

But wait, there’s more. The other $300m spent on this folly has gone on setting up yet another lattice of make-work bureaucracy. Fifteen new regional skills leadership groups are to advise the new polytech on what skills each region needs, while six workforce development councils have been created to collect industry views on how the mega-polytech should train people.

Each skills leadership group has now written a glossy report explaining in many words how they will collect the views of local employers and tell the workforce development councils what is needed, so they can tell the polytech head office in Hamilton and they can in turn tell the polytech branch in New Plymouth or Invercargill what it needs to do.

This is a Monty Python level of silliness. In pre-Hipkins time, the local employers would just talk to the local polytech or their ITO directly.

You can’t blame the bureaucrats implementing this mess, although I’m sure the minister will try. The problem, as with so many grand schemes of this government, is the muddy thinking that was applied to dreaming it all up.

Nobody, least of all Minister Hipkins, has seen fit to ask one simple question: how will any of this help one single person be trained better and more effectively in their trade than they were before?

It will probably make things worse. A lumbering monopoly is generally a recipe for increasing costs and reducing responsiveness and innovation. The Government hates monopolies when it’s not busy creating one.

The minister has started asking where cuts will be made to bring this thing back on track and avoid more political embarrassment for him. In education, cuts mean people losing jobs. Stand by for your local polytech to feel the brunt of all this extra cost at the centre.

He’s also sucking money away from private providers, who often do a good job with more hard-to-reach learners needing extra help. All providers used to be paid the same to deliver the same course. Now the new polytech will get more, again to help prop it up, while the private sector gets less. This will suit the minister’s ideology but I doubt it will suit the students who miss out.

I have been involved in the vocational education sector, one way or another, for more than a decade. At its heart it is a simple and wonderful personal interaction. People who have current or recent knowledge of their industry pass on their skills to a new generation in a hands-on learn-as-you-go way. It’s a wonderful way of learning.

I’ve seen that magic work all over New Zealand and Australia. The pride and joy in the eyes of the young and not-so-young receiving their diploma proving their skills at joinery, cooking or childcare is something to behold.

The magic isn’t in government agencies, or the wiring diagrams of the revised funding models requiring new hoops be jumped through to keep performing the same service. I used to say to the trainers, don’t listen to us too much — we are just the funders. They are the practitioners.

Just think what could have been done with that half-billion if it had been used to train people rather than rewire the system. Half a billion extra dollars in the tertiary sector could deliver a lot – more chefs, more nursing places, or even a third medical school.

Hipkins has proudly declared these are the biggest reforms in tertiary education in decades, as if on its own that is a worthy goal. It isn’t. A worthy goal is one that allows more magic to happen at the front lines of tertiary education.

The minister has bought some more training places in recent years, but he could have done so much more with this money and the old model. He has little time left to prove that this whole vocational education reform is more than just a political vanity project.