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National | Education

Govt acts as polytechs face 'financial crisis'

The Government will scrap what it says is the “widely disliked” competitive funding process for some areas of tertiary education. It comes on the same day as polytech leaders held a crisis meeting to discuss falling enrolments and rising costs.

Education Minister Chris Hipkins says next year the up to $135mil of funding will return to the basis of student enrolments.

"We've got to do a much better job of this," says Hipkins, "At the moment we've got critical skill shortages and we've got a group of polytechs who are bordering on the edge of serious financial difficulties- we've got to do something about that."

National leader Simon Bridges says, "It's unambitious and it's regrettable because ultimately what it looks like is they're getting rid of the competitive aspect of this and the problem with that is when you do that you're stifling innovation."

Some in the sector are referring to it as a "financial crisis".

Cabinet heard yesterday that half of New Zealand's sixteen polytechnics will be in deficit in two years and eighty percent will face losses in the next four years.

Hipkins says funding is not the only problem because the system itself is disjointed.

“There is a lot of overhead in the system, a lot of administration within the system.  We've got to look at whether or not a small country like New Zealand can sustain sixteen different organisations- all of those things are on the table."

The government will end all competitive allocations of funding at New Zealand Qualification Framework levels 1 to 4.  Providers have welcomed the change.

Bridges says “as I say it's a bad step for businesses, for tertiary students and in that regard for New Zealand."

Mr Hipkins would not discuss polytech closures but said the system might look different moving forward.

He will report to cabinet about the next steps this month.