The operating model should precede the decision

The Herald reports: The chief executive of the sprawling, partially amalgamated polytechnic and training institute Te Pūkenga (the New Zealand Institute of Skills and Technology) left the organisation in January with a golden handshake. After all, the experiment in centralising vocational education and training has not been cheap for taxpayers. There was a $121 million appropriation […]

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The Herald reports:

The chief executive of the sprawling, partially amalgamated polytechnic and training institute Te Pūkenga (the New Zealand Institute of Skills and Technology) left the organisation in January with a golden handshake.

After all, the experiment in centralising vocational education and training has not been cheap for taxpayers. There was a $121 million appropriation in Budget 2020 to establish the entity; another $40m appropriation for investment in buildings in Budget 2022, and in last year’s Budget there was a concessionary Crown loan of $220m (bearing no interest), to pay to integrate IT systems.

Not all of that money has been spent, but at least part of any that’s left over is likely to be used to fund the coming disaggregation into constituent parts.

And, of course, the Crown otherwise pays the bulk of the entity’s revenue through such measures as enrolment-based transfers under the “unified funding system”.

It’s worth noting that Winder has been paid a considerable $640,000 a year to lead the organisation for the last 18 months through some pretty lacklustre performance.

Indeed, by many measures, the centralising experiment has been an abject failure. In the bloodless parlance of a 2023 Treasury report, “the benefits from the establishment of Te Pūkenga have yet to be fully realised”.

The Auditor-General was more bald, when, this time last year, he said he was concerned over the lack of progress Te Pūkenga had made on a financial strategy and on finalising its operating model.

On January 1, 2023, the agency failed to meet “minimum viable product” benchmarks, and it still hadn’t met this bare minimum standard in June, when the Department of Prime Minister and Cabinet’s “Implementation Unit” provided a stocktake to then Minister of Finance, Grant Robertson.

The fault doesn’t so much lie with the four Chief Executives, as with the former Minister Chris Hipkins. A key aspect I have bolded is there was no operating model.

What does that mean you might wonder? Well at its most basic it is working out what functions would be done centrally, and what would be done locally by existing polytechnics. This is something that should have been investigated and decided prior to any decision on merging them. It would have identified whether or not the merger would save or cost money, and be practical.

Instead what happened is the Minister ignored the advice of officials, and insisted on a full merger, despite the lack of an operating model for it. It was basically let’s just do it, and hope it works.

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