Strengthening Sector Capability

Governance in the tertiary sector

Education (Polytechnics) Amendment Act 2009

Changes made by the Education (Polytechnics) Amendment Act 2009 reconstituted institute of technology and polytechnics (ITP) councils from their original representative model to a smaller, competency-based governance model. In 2010 this reconstitution of ITP councils introduced 57 new appointments, including ten new council chairs.

Table 2: Demographic breakdown of ITP councils, as at July 2011
Ethnicity Female Male Total
European or other 27% (39) 53% (76) 80% (115)
Māori 7% (10) 11% (16) 18% (26)
Pasifika 1% (1) 1% (2) 2% (3)
Total 35% (50) 65% (94) 100% (144)

The legislation restricts the first tranche of members appointed by the council in 2010 to a term of one year, allowing councils during 2011 to assess the balance of skills and experience they need under the new model. In some cases this led to changes among the four council-appointed members, although most councils opted to retain their existing membership.

Combined councils

Another provision of the Education (Polytechnics) Amendment Act 2009 allows ITPs to combine councils with one or more other institution. Under a combined council, each institution retains a Chief Executive and they remain separate entities but are governed by the combined council. In late 2011, the Minister for Tertiary Education, Skills and Employment agreed to a proposal from the councils of Whitireia Community Polytechnic and Wellington Institute of Technology to combine their councils to provide greater collaboration across the Wellington region and to explore potential efficiencies. This change takes effect from 2012 and alters the constitution so that the council consists of 12 members in total the first year, ten in the second year, and eight in the third year and thereafter.

Council appointments

The Education Act 1989 requires that tertiary institutions are governed by councils of members appointed by the council and members appointed by the Minister for Tertiary Education, Skills and Employment. The Tertiary Education Commission (TEC)  advises the Minister on council appointments.

Wānanga and university councils consist of between 12 and 20 members, four of whom are appointed by the Minister. ITP councils consist of eight members, four appointed by the council and four by the Minister. The Minister also appoints the Chair and the Deputy Chair of ITP councils. Members’ terms are four years on university and wānanga councils, and members may be appointed to ITP councils for terms of no more than four years.

Further information on the appointments process is available on the TEC website.

During 2011 the following new Ministerial appointments were made to councils:

As 2011 was an election year, convention required no appointments be made for a period before the election. This held back appointments to the councils of four universities. The number of appointments was also significantly lower than usual because of the number of new appointments made during the reconstitution of all ITP councils in 2010.


Lincoln University

Lincoln University and Telford Rural Polytechnic merged on 1 January 2011. The merger was in line with the Government’s emphasis on productivity growth and investment in the export sector and on giving young people wider choices in education. The merger also aligned with the intention of both institutions’ councils to collaborate in education and research to support land-based industries.

Both Lincoln and Telford have been specialist providers of tertiary education for the land-based sectors. Lincoln is a teaching and research university based in Canterbury with an international reputation in land-based learning and research outcomes. Telford was a specialist land-based polytechnic, recognised for its practical approach to tertiary education supporting the rural sector. The merged institution continues to offer land-based training, but with an aim of staircasing its students into higher-level study.

More information about the performance of Lincoln University in 2011 can be found in the two-page profile.

Eastern Institute of Technology

The Eastern Institute of Technology and Tairāwhiti Polytechnic merged on 1 January 2011, with the goal of improving tertiary education outcomes of the Hawkes Bay and Tairāwhiti areas by creating a stronger base for vocational education and skills development in the region.

The merged institution is working through its merger implementation plan and provides six-monthly progress reports on the success of the merger and additional financial forecasts. The merged institution met all agreed milestones in the merger implementation plan in 2011.

More information about the performance of EIT in 2011 can be found in its two-page profile.

Industry training organisation mergers

TEC’s audits of industry training organisations (ITOs) in 2010 identified financial and capability issues in parts of the sector. The Government then sought to simplify the vocational training system and gain efficiencies by encouraging ITOs to merge. The mergers that took place in 2011 were largely due to ITOs experiencing financial viability issues.

At the start of 2011, there were 39 recognised ITOs. During 2011 there were a number of mergers:

Further, Creative Trades was dissolved and its coverage was split between the Building and Construction, Flooring, and Communications and the Media Industry Training Organisations. Further mergers were planned for 2012 and 2013. TEC is providing strategic support and guidance as ITOs investigate merger options.

The performance of the ITO sector improved from 2010 to 2011 as a result of the impact of new operational policies and a focus of ITOs on core business. This has been reflected in an indicative cross-sector rise in credit achievement, credit-weighted programme completions and industry’s cash contribution towards the costs of training.

The New Zealand Benchmarking Tool

The New Zealand Benchmarking Tool (NZBT) was developed to support tertiary education institutions to measure their performance against various educational and financial performance benchmarks. The objectives were to enhance institutional capability, performance and sustainability in the sector. The benchmarking information also allows TEC to develop a more accurate system view of the ITP sector, leading to more informed policy development. ITPs were the initial users of the NZBT from its development in 2007, later joined by two wānanga and five universities, giving a total of 26 users in 2011.

An evaluation was carried out in 2011 to examine whether and to what extent the intended outcomes of the NZBT have been achieved, and the current and potential utility of the system for its users. The evaluation showed that the planned objectives and achievements of the NZBT have been largely achieved for ITPs, but did not establish that it achieved similar objectives for universities and wānanga. This may be because these two groups have used NZBT more recently and thus are in a different stage of the benchmarking lifecycle. Further work is planned to enhance the value of the tool to its users.

Performance initiatives

Performance-Based Research Fund

The Performance-Based Research Fund (PBRF) is a TEC-administered fund designed to encourage and reward excellent research in the tertiary education sector. The PBRF is allocated by assessing the research performance of tertiary education organisations (TEOs) and then funding them accordingly. PBRF funding is based on three elements: quality evaluation, research degree completions, and external research income.

The quality evaluation is a peer-review process that determines the quality of research at the level of an individual researcher at TEOs. This measure accounts for 60 percent of the funding pool and provides the basis of funding for a period following each quality evaluation. TEOs that do not participate in the quality evaluation cannot access funding through the other two measures.

A focus in 2011 was planning, developing systems and appointing panels to conduct the quality evaluation in 2012. TEOs will submit information, and peer-review panels and expert advisory groups will assess evidence portfolios. Decisions will be made at the end of 2012, with the results released to the sector and other stakeholders early in 2013.

Tertiary Information Future State Programme

TEC, the Ministry of Education, the New Zealand Qualifications Authority (NZQA) and StudyLink are collaborating to improve the collection and management of information to improve decision-making and thus the value for money from tertiary education.

Specific objectives of this Tertiary Information Future State Programme are to provide more accurate, timely and accessible information that enables the tracking of individual student progress through the tertiary education system; strengthens the performance monitoring of tertiary education organisations and programmes; and supports and enables the implementation of new operational policy and funding arrangements.

Performance-linked funding

Performance-linked funding is one of a number of approaches intended to improve educational outcomes for students and employers and improve value for taxpayers’ money.

Performance-linked funding is targeted to encourage all tertiary education organisations to reach an acceptable standard of educational performance. From 2012 a maximum of five percent of a TEO's total Student Achievement Component or Industry Training funding will be at risk, based on an organisation’s educational performance in the previous year.

TEC has developed a performance-linked funding calculator and has modelled 2009 and 2010 performance information accordingly. Organisations have been provided with the results of these performance-linked funding calculations so they can plan for implementation in 2012.

Capital Asset Management

The high-level aim of Capital Asset Management (CAM) is to deliver services in the most cost-effective manner through the management of assets for present and future customers.

CAM follows the guidelines in Cabinet Office Circular: Capital Asset Management in Departments and Crown Entities: Expectations CO(10)2, which sets out policy expectations on asset management in departments and Crown agencies, including tertiary education institutions (TEIs).

TEIs own and manage net assets valued around $7.8 billion in total, which makes tertiary assets the fourth-largest social-asset portfolio across government.1 The majority of assets are held by universities ($5.89 billion), followed by ITPs ($1.66 billion) and wānanga ($0.26 billion).2 The size and importance of these assets to the social, cultural and economic wellbeing of New Zealand reinforces the need for TEC and TEIs to set high standards for managing them.

In June 2011 the Minister for Tertiary Education, Skills and Employment wrote to all TEIs to convey his expectations for how CAM should apply in the tertiary education sector.

Key successes during 2011 include:

Crown asset-transfer and disposal policy

The Government introduced a new policy on Crown assets (land and buildings) under TEI management in 2010 that enables TEIs to acquire full legal title to assets in Crown title that they have managed since 1990 and which they require for educational purposes, providing there are no over riding reasons to retain the assets in Crown title. The policy also allows TEIs to retain for reinvestment the net proceeds of disposal of Crown-titled assets that they no longer require for educational use, subject to a satisfactory business case for the reinvestment.

In the context of their long-term capital planning, TEIs are being encouraged to submit applications for the transfer and/or disposal and reinvestment of the Crown assets that they manage. As at 31 December 2011, six TEIs had submitted applications and the Minister of Tertiary Education, Skills and Employment and the Minister of Finance had jointly approved the transfer of all Crown-titled assets at one TEI.

Applications are assessed against criteria agreed by the Cabinet, which include demonstrating ongoing educational need and the incorporation of the Government’s capital management expectations into the TEI’s strategic, financial planning and reporting systems. Details of the criteria, the application process and timelines are available on the TEC website.

Targeting priority groups

Māori performance initiatives

‘Māori enjoying education success as Māori’ is the priority for Māori learners in tertiary education under the Tertiary Education Strategy (TES) and the Ministry of Education strategy Ka Hikitia – Managing for Success 2008–2012. The TES also states the government will do this by increasing the number of Māori students enjoying success at higher levels of New Zealand Qualifications Framework (NZQF) study.

In 2011, the mid-term review of Ka Hikitia asked that agencies accelerate progress towards improving the tertiary education performance of Māori. Key actions for tertiary education were identified as:

Pasifika performance initiatives

In 2011 TEC provided a leadership role on lifting system performance for Pasifika learners, and worked closely with the Ministry of Education and other government agencies to:

TEC worked with tertiary providers to:

Literacy, language and numeracy

The tertiary sector is working to increase the number of programmes and courses that include embedded literacy and numeracy at NZQF Levels 1–3. TEC funds the National Centre of Literacy and Numeracy for Adults to provide tertiary providers with professional development support in teaching and embedding literacy and numeracy throughout their provision and their organisations. The Centre’s work is now extending to advisory services to support providers and employers who access the Workplace Literacy Fund.

During 2011 TEOs were required to use the Literacy and Numeracy for Adults Assessment Tool with all learners enrolled in Levels 1–3 provision. The tool records an individual’s progress and is designed to help improve teaching and learning in Levels 1–3 programmes. Indicators will be developed to measure gains in literacy and numeracy based on Assessment Tool data.

Improving pathways

Secondary-Tertiary Partnerships

The first TEC-funded Secondary-Tertiary Partnerships were instigated in 2011. This included five trades academies based at tertiary organisations and the School of Secondary-Tertiary Studies at Manukau Institute of Technology, which provide opportunities for senior secondary school students to achieve credits simultaneously towards secondary and tertiary qualifications.

There are significant variations among the five Secondary-Tertiary Partnership programmes. The largest number of funded places was 150 students and the smallest was 48. Most trades academies are based on two-year programmes, but other models range from one full-time year to part-time programmes of one or more days a week. One programme included block-courses during school-holiday breaks. Some trades academies struggled to get full enrolment at the beginning of the year, and only two trades academies achieved more than 80 percent enrolment. Enrolment levels were expected to increase in the second year of the programme. The average attendance rate of enrolees across all trades academies was 94 percent, compared with the expected 80 percent rate.

Youth Guarantee

The number of fees-free tertiary equivalent full-time students funded as part of the Youth Guarantee initiative increased from 2,000 in 2010 to 2,682 in 2011. The number of tertiary organisations involved in this initiative also increased, from 26 TEOs in 2010 to 35 in 2011. This included the addition of Te Wānanga o Aotearoa and eight private training establishments.

The overall aim of the fund is to provide tertiary education opportunities for disengaged 16 and 17-year-olds. Enrolments were limited to qualifications at NZQF Levels 1–3, with an emphasis on foundation-level skills and vocational training. Course and qualification completions for 2011 were 65 percent and 54 percent respectively (compared with 63% and 45% in 2010). Target-group participation in Youth Guarantee was approximately 35 percent for Māori and 18 percent for Pasifika youth. Educational performance by students involved in the Youth Guarantee initiative has been published and is available on the TEC website.

1The larger social-asset classes are the national highway network (approximately $25 billion), the state housing network ($15 billion) and the national school network ($12 billion). All figures current as at 31 December 2010.
2Figures may not add due to rounding.