One of the challenges the government faced in thinking about the future of New Zealand’s vocational education system was the state of the polytechnic network.  Modelling for the TEC showed that the polytechnic network recorded a collective financial deficit in 2017, with more than half the polytechnics likely to record deficits in 2018.   At the same time, the strong employment market meant that polytechnic enrolments had fallen and were expected to fall further – cramping opportunities for institutions to trade their way out of financial problems.

The viability of the polytechnics got in the way of the reform of vocational education. The wider review of vocational education (RoVE) had been signaled as part of the government’s education conversation, a set of 16 major workstreams that aim to transform many features of the education system.  Eventually, in December 2018, the government decided to integrate work on improving the polytechnics with the broader review of vocational education.  But the sustainability of the polytechnics became an important part of the context for RoVE.

Following the RoVE consultation, the government has confirmed its proposal to merge all 16 polytechnics into a single national institution, the New Zealand Institute of Skills and Technology (NZIST).  That was a big call – which the minister made despite officials’ preference for a less radical option. This article comments on the design for the NZIST set out in the RoVE decision document.

What will change

Day one for NZIST is planned for 1 April 2020.  That day, the public, students, employers won’t notice much difference. The government has signaled a lengthy transition, with the 16 individual polytechnics becoming subsidiaries of NZIST during the transition.  Even as the change winds through the organisation, some things will appear the same – NZIST will still deliver from all the major polytechnic campuses, it will still provide foundation education and degree-level programmes alongside vocational tertiary education.  But, behind the scenes, the change will be significant.

The government’s decision document states that NZIST will have a duty under its charter to maintain a regional delivery network, meaning NZIST will set up a network or system of provision.  The plan is that NZIST will have a corporate HQ, a single strategy, a single governing council and a single academic board.  There will be delegations to regional management to enable each regional division to operate its own affairs within the centrally-set strategy, budgets, policies and capital investment plan.  The HQ will likely work towards common systems for student admission and student services, HR, budgeting, performance measurement, procurement and other matters.

There are many successful examples of this sort of network.  Most polytechnics currently manage campus networks.  SIT, for instance, has a home campus in Invercargill, regional campuses in Queenstown and Gore, a substantial trades campus in Christchurch and a campus pitched to international students in Auckland.  It has also taken over the running of Telford (formerly part of Taratahi and before that, of Lincoln University but originally autonomous as the Telford Rural Polytechnic) and it inherited the two campuses of MAINZ (the Music and Audio Institute of NZ) when the former owner (Tai Poutini Polytechnic) ran into difficulties.  As well, SIT runs a distance learning network.  That makes eight locations in all, plus distance learning.  And three of those campuses – Telford and the two MAINZ sites – have their own branding, while clearly identified as part of the SIT network.  Ara has six delivery sites, UCOL four, Northtec six, …

The SIT network is an interesting case study because it is something of a small-scale version of what is planned with NZIST – its components have differing levels of autonomy; it pitches to distinct markets; its delivery spans foundation-level programmes to masters degrees and everything in between; it has a small applied research programme; it has common policies; and the network runs common programmes, underpinned by a distance learning network.  And it’s been successful.  Over the last ten years, SIT has made a financial surplus in every year.  It achieved that performance despite a variable student market, with strong international enrolment growth offsetting up-and-down domestic student numbers.

There are many advantages in the NZIST plan …

There are many potential advantages from this consolidation of the polytechnics.  It creates economies of scale.  It allows the centre – the corporate HQ – to set a single strategy for the network that can inform the capital priorities and determine where in the network to invest and divest.  It can establish common policies and processes, for instance in corporate affairs (such as HR, procurement and IT) and, with a single academic board, common quality assurance, a common programme development and a common set of programmes.  It would enable the NZIST to reduce unnecessary duplication and ensure the maintenance of nationally important but marginal or uneconomic programmes.

… but there are many risks …

Those are all good things.  Listed like that, it might sound obvious, even easy.  But it will be devilishly difficult – striking the right balance between central control and regional autonomy.  We know that the 16 current polytechnics will operate from April 2020 as subsidiaries of NZIST, with their own current identities, their own current programme set, their own current locations, their own policies.  But to achieve the advantages of consolidation, the HQ will need to rationalise.  As those central policies are created, aspects of the autonomy of the regional divisions will be reduced – inevitably. The trick will be to get the balance right, creating efficiencies while developing clear delegations that don’t tie up the organisation in bureaucracy and that allow regional managers to act swiftly.

… plus four big challenges …

Dealing with duplication and inefficiency

Multiple campuses in one city doesn’t necessarily mean there is duplication.  Nine polytechnics have a presence in Auckland – not unnaturally, given the scale of the city and its growth and given the preference of international students for Auckland as a study destination. Two of those nine are the Auckland-headquartered polytechnics, with the seven others being outposts from out of town.  But some of that isn’t duplication – Tai Poutini Auckland offers a small number of niche programmes (such as scaffolding, rigging, industrial rope access) while SIT’s new subsidiary, MAINZ, has most of its activity in Auckland.  Where there is overlap is in the provision of programmes, mostly in business, pitched to the international student market.  There has to be an opportunity for rationalisation there.

There is also an opportunity to look for efficiency and rationalisation in distance learning, building on the extensive Open Polytechnic system.

One of the tasks of the corporate HQ as the transition period winds on will be to look for opportunities for efficiency through rationalisation and to manage the inevitable HR issues that will result.

Building on regional innovation and high performance in a national system

Some polytechnics have been remarkably innovative.  Look at Otago Polytechnic which has invested in leading-edge practice in the recognition of prior learning, which has championed open educational resources, taken the lead in developing microcredentials and expanded its activity in its broader region.  In the last decade, while investing in innovation, Otago has managed to increase its domestic enrolments by 27% and it has delivered a financial surplus every year.

With the creation of NZIST, some of those innovations can be disseminated across the network.  But in the future, when regional divisions operate within greater constraints, will there be the incentives to create innovation?  In a larger network, when great performance in one region will   offset poor performance elsewhere, will there be the same incentives to lift performance?

The NZIST HQ will need to find mechanisms and incentives to ensure that excellent performance is fostered and rewarded. And disseminated across the network.

Workplace-based industry training

From an educational perspective, the biggest change in the RoVE reforms is the plan for the industry training system, with NZIST (and other providers) taking over the industry training organisation (ITO) role of arranging training and providing support for workplace-based trainees and their employer/trainers.  This appears to reflect government’s view that a greater focus on pedagogy and curriculum design could lift the quality of industry training – and that provides a rationale for locating these functions in an education provider.

During the consultation, ITOs argued that arranging workplace-led training should remain with an industry-led organisation.  They argued that training arrangers need to have close connections with employers and firms in their industry and region so that they understand the industry’s skills profile, and its skills needs, to help employers identify their skill and training needs.  ITOs worried about whether the culture of polytechnics was conducive to this role, and they suggested that there would be risks to employer trust in the industry training approach.

The counter argument is that the vocational qualifications now offered by polytechnics all have a level of industry engagement or experience.  Many polytechnics have offered “managed apprenticeships”, programmes of study modelled on the industry training model, where there is a training agreement between the polytechnic, the employee/apprentice and the employer/trainer, including on-job and off-job elements and leading to a trade qualification.

However, the relatively small scale of the polytechnics’ work of that kind, and the very large number of trainees now working through ITOs, mean that NZIST will need a significant expansion in the numbers of field staff to set up and support training agreements.  There appears to have been an implicit assumption that ITO field staff will apply for NZIST training arranger/learning support roles.  ITOs were sceptical; some suggested that many ITO field staff would opt to return to roles in their industry of specialisation, rather than work for NZIST.

Who knows how this will turn out?  The government and the new Workforce Development Councils (WDCs) will need to monitor the success of this new approach to workplace-led vocational training and intervene if necessary.

Managing in a cluttered landscape

The vocational education system described in the government’s decision document has a complicated architecture.  NZIST will be dealing with complex change management internally, as it works through the transition, creates a strategy and policies, defines the roles of the regional divisions, establishes delegations, grapples with its multiple new roles and develops a new operating model.

At the same time, it will be dealing with the TEC and NZQA, building relationships with new WDCs, Regional Skills Leadership Groups, Te Taumata Aronui and Centres of Vocational Excellence.  All these groups have overlapping and intersecting interests and NZIST has accountabilities to all of them. They will all be staking out their ground.  Managing a large new institution in that environment, meeting its obligations to those groups, working through the challenges described above, and meeting the government’s expectations will be a tough call.

Overall …

The creation of the NZIST is an ambitious move.  In opting for the mega-merger, Minister Chris Hipkins has made a big call.  He has avoided the temptation for a quick fix.  He has taken a long-term view.  Whether one agrees or not, one has to admire his far-sighted approach.

 

View Roger Smyth’s first article on the ROVE focuses on the implications of workplace-led vocational education.

Roger Smyth has 30 years’ experience working in tertiary education – initially in senior management in a university and later in the Ministry of Education.  He now works as an independent advisor on and contractor in tertiary education.

 

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