NorthTec's sliding into red

FUNDING DECLINE: NorthTec chief executive Paul Binney says a decrease in government funding over the last four years has hit the polytechnic hard. PHOTO/JOHN STONE

Northland's largest tertiary provider ran $1.25 million over budget last year due to reduced government funding and falling short on enrolment targets.

NorthTec chief executive Paul Binney said while they had a deficit for the first time since 2008, the quality of education was not compromised.

"The message is, yes, it's unfortunate but in the long-run scheme of things, we don't think it's a big issue," Mr Binney said.

The $451,000 deficit was revealed in the polytechnic's annual report for 2014, tabled in parliament earlier this month. NorthTec had planned for a $800,000 surplus.

A combination of factors led to the deficit, Mr Binney said. These included a decline in government funding, lower than anticipated enrolments, a high number of young people not engaged in education and the region's geographic make-up.

NorthTec has seven campuses and 47 delivery sites throughout the region.

While NorthTec had kept its head above water in recent years, "last year it just got too much", Mr Binney said.

In 2008, it posted a deficit of $1.13m, which it managed to come back from with a surplus of $1.9 millionin 2009.

The volume of the surplus steadily declined since then to just $600,000 in 2013 but because there was enough money in the bank to cover the deficit, Mr Binney said.

"Clearly, if we continue to make deficits it will continue to be an issue," he said. "Two thirds of our funding comes through the government so we're obviously quite effected if things happen to that funding."

While the polytechnic received $27.3 million in government funding last year, that was about $4 million less than in 2010.

The number of full time equivalent students fluctuated over the last decade, though last year's 3500 students was lower than the 2005 high of 4118.

Another issue was how to engage with the high number of young people - in Northland about one in five - not in employment or education, Mr Binney said.

Last year NorthTec started to push for ways to make education more attractive to this group. That included the sports academy set up in partnership with the Graham Lowe Foundation and the partnership with the Te Matarau Education Trust to provide trades training for Maori and Pasifika.

This year, NorthTec was about $1 million better off than last year.

"I'm feeling personally a lot more comfortable at where we're at than this time last year," Mr Binney said. "My view is that if you actually do a good job educationally then the financial side of the business with take care of itself."