Te Pukenga chief executive Peter Winder took redundancy in December.
OPINION
The Public Purse is a fortnightly Herald column focused on the public sector and how taxpayer money is spent.
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.
The Government’s intent to reverse the four-year effort at merging the country’s 16 technology institutes and polytechnics and nine Industry Training Organisations made Peter Winder redundant, according to the Crown entity’s governing council.
To be clear, the organisation still needs a chief executive. Deputy chief executive Gus Gilmore took the top job on February 19, though this was never publicly announced. He’s on a salary band of $560,000 to $590,000 for a fixed term, until formal disestablishment.
But it appears that Winder’s employment contract was sufficiently tightly drawn that orchestrating a dissolution, rather than furthering consolidation of the entity, triggered redundancy.
In response to the Herald’s Official Information Act (OIA) request, Gilmore confirmed that Winder received a redundancy payment. However, he claimed that the amount is private and “subject to an obligation of confidence, where the making available of the information would be likely to otherwise damage the public interest”.
The matter is now awaiting the Ombudsman’s determination - likely to take six to 12 months - which will hinge on the weight his office gives to other considerations of public interest, including the public’s right to transparency in how its money is spent, especially in the case of public sector chief executives, whom the Ombudsman has long held should be subject to greater pay transparency than other officials.
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.
“Consolidation of corporate functions” and “national unification programmes” were incomplete, and measures like integrating work-based learning with campus-based teaching were “problematic”, the report found.
Winder, of course, only shares responsibility for these shortcomings. But he was chief executive from July 2022 (initially in an interim capacity) until December 2023, and before he took up that role was a member of the governing council.
It was Winder as chief executive, and more particularly Murray Strong as council chair, who presided over the 10-month battle through the second half of 2022 and the first half of 2023 to hide the $195,075 payment Te Pūkenga agreed to pay former chief executive Stephen Town upon his departure. The organisation ultimately described the sum as “three months’ payment in lieu of notice upon resignation”.
If Winder’s leadership has been underwhelming, his shortcomings were certainly outdone by his predecessor Town, who disappeared from his duties in mid-2022 following the public release of a damning assessment of Te Pūkenga’s progress and finances by Tertiary Education Commission deputy chief executive Gillian Dudgeon.
Strong approved “discretionary leave” for Town, starting on July 9, and Town remained on leave, on full pay of $689,000 per year ($13,250 per week), until a negotiated exit, including the lump sum payment, was finalised on August 16.
Despite several OIA requests for the details of the payment and the heavy weighting the law accords to the public’s right to know details of public sector chief executive pay – cases which prioritise the individual’s right to privacy typically relate to performance pay – Te Pūkenga held its defensive crouch, refusing disclosure, until the Ombudsman’s office forced its hand last June.
Through that period, even as Te Pūkenga thumbed its nose at the public interest in knowing details of its spending, it concurrently petitioned the Government for more taxpayer funds.
Strong resigned as chair in December, following his first meeting with new Minister for Tertiary Education and Skills Penny Simmonds, whose aim was to disestablish Te Pūkenga by January 2024, although the details are very scant and there has not yet been a Cabinet decision on the matter.
What’s surprising is that the organisation, under its new chief executive and the acting chair, Sue McCormack, is prepared to follow what appears to be almost exactly the same course in the matter of obscuring Winder’s payout.
Meanwhile, the backdrop to that decision-making, of financial underperformance and deficits that outstrip projections appears unchanged. In 2022 the agency’s deficit was $11m deeper than budgeted, and its 2023 deficit is again expected to outstrip its forecast (the figures will be released in the agency’s annual report, likely to be published in late April or May).
The failures of Te Pūkenga have many fathers (to turn an aphorism on its head). But the chief executives - the make-it-happen men, and all four have been men - have been the best-paid among those responsible.
The highest salary actually went to the first, interim chief executive, Christopher Collins, who made $202,000 for work that spanned just 13 weeks and five days in 2020. That works out to $15,000 per week. It was a short-term agreement, but it was also nearly double the salary Colins previously earned as head of the Eastern Institute of Technology ($410,000 per annum in the 2018/2019 financial year).
But Collins is only the highest-paid Te Pukenga boss if you ignore the additional lump-sum payments successive executives received to stop offering their services.
Town, we now know, drew $251,000 after his last day of actually doing the job. His earnings totalled, and rendered as a weekly sum ($15,600), outstrip Collins’. How Winder’s earnings ultimately compare remains to be seen.
Auditors PwC: Cited disruptions to operations from that IT upgrade.