Te Pūkenga boss: Polytech merger to keep cutting costs over next six months

Work is under way to disestablish the merger, as it continues to chase down cost savings. Photo / Peter de Graaf

Te Pūkenga chief executive Gus Gilmore is vowing “revenue growth and strong cost control” will continue as the polytechnic merger moves towards disestablishment.

The agency’s 2023 annual report has been tabled, showing a $37.9 million operating deficit - a far cry from a predicted $93.4 million. Taking land and building revaluation into account, the mega-merger saw a $35.6 million surplus in its end-of-year result.

Gilmore said the figures followed “an intensive cost savings exercise,” which removed duplicate roles, managed vacancies, and reduced leases.

The report, the first as an institution of merged polytechnics, confirms Te Pūkenga began to prepare for disestablishment in December 2023, following a letter from Tertiary Education and Skills Minister Penny Simmonds.

After the letter of expectation was received, the agency halted all recruitment for 602 new roles: “At that time, 900 kaimahi had applied for a role/s and approximately 40 people had accepted a role in the new structure. As at 31 December, five kaimahi were unable to find suitable redeployment opportunities and their redundancy was confirmed,” the report stated.

In an interview with NZME, Gilmore suggested financial responsibility would be at the centre of future work. “As we get the business divisions ready to stand alone to become separate entities, making sure that we have strong profit loss and balance sheets is key to setting them up well,” he said.

Te Pūkenga is no longer required to have a statement of intent for 2024-2027 as the agency is being disestablished.

On Tuesday this week, Simmonds confirmed in Parliament the Government had started a six-week consultation process on the proposed reforms to Te Pūkenga.

“We propose to replace the top-heavy, centralised Te Pūkenga with a network of regional institutes of technology and polytechnics and an industry training system that is closer to industry,” Simmonds told the house.

She suggested the changes would “restore accountability and responsibility” to communities and industries, while culling what she sees as bureaucracy.

The annual report details brief shortfalls in Te Pūkenga’s actual results, compared with its targets. The agency failed to meet its target of having 80.5% of all learners complete their courses. In 2023, learners had 79.3% course completion.

On the result, Gilmore said the change process had ensured there had been “very little, if any impact” on students at the merger.

He said work had already begun on de-centralising the agency, “to start ensuring that resource and local decision making is in regions”.

The disestablishment, as laid out in the 2023 annual report, is deemed “future uncertainty”.

“At the current time no decision has been made by government that the entity will be disestablished within the 12-month period from signing and the future state we are moving towards is not known,” the report states.

The agency claims it is building back after pandemic-related impacts, and predicts international enrolments to return back to pre-pandemic levels by the end of 2025.

“We will work pretty hard over the next six months to continue to build our revenue base,” Gilmore added.

Azaria Howell is a Wellington-based multimedia reporter with an eye across the region. She joined NZME in 2022 and has a keen interest in city council decisions, public service agency reform and transport.