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Key Messages for Shaping the Funding Framework

Key Messages for Shaping the Funding Framework

Features of the new tertiary education system

Over the course of its four reports, the Commission has developed the policy framework for a new tertiary education system. In formulating this model, the underlying principle of the Commission’s work has been that the tertiary education system should meet the changing needs of New Zealand and support the development of a knowledge society.

The development of this new model has involved extensive and on-going consultation with all stakeholders in tertiary education. Feedback from submissions, hui, fono, roadshows and other fora have been considered by the Commission in the production of all its reports. The incorporation of this input will ensure that the tertiary education system meets the needs of all parts of New Zealand’s society and economy. The Commission would therefore like to thank all those who took the time to prepare submissions, meet with them and sit on its different working groups and supported it in its process.

The tertiary education system envisaged by the Commission has several key features:

The tertiary education system will be learner-focused

The Commission firmly believes that if the tertiary education system is to effectively lead to the development of a knowledge society, then all learners must be given the greatest possible opportunities to succeed and fulfil their potential. Consequently, all those involved in the provision of tertiary education must be appropriately responsive to the needs of those they are seeking to serve, provide courses of an appropriate level, scope and quality, and demonstrate a proper degree of cultural sensitivity. The diverse needs of learners, including those in full-time and part-time study, with different learning styles, and in different locations, must also be a central consideration in the operation of the system.

To this end, the Commission has proposed:

- that learner demand should be the key driver of tuition funding delivered through the Single Funding Formula;

- the inclusion of the Learner Index and Learner Add-on in the Single Funding Formula to reflect the needs of specific learners. The Index is a multiplier applied to the funding category subsidy, while the Add-on is a fixed amount added to the subsidy;

- that there be a more stringent and coherent application of accountability and performance measures across the all parts of tertiary education system;

- targeted initiatives to support learners in specific parts of the system, such as lifting the caps from foundation education and Industry Training;

- a strong emphasis on maintaining and improving quality in the tertiary education system;

- a review of information and guidance systems to ensure that prospective learners have access to high-quality information regarding their future education; and

- the development of the Strategic Development Fund to support the attainment of equity objectives.

The tertiary education system will be an integrated whole

The Commission defines tertiary education broadly: as encompassing all forms of post-compulsory education as well as research conducted in and by tertiary education providers. If the challenges of promoting lifelong learning and effectively supporting a knowledge society are to be met, then all parts of the system must work together and the contribution of each be recognised as equally important. Tertiary education should therefore be treated as a single, integrated system. This does not mean that the differences between the parts of the system are not recognised, but it does mean that the relationship between them needs to be clear.

To this end, the Commission has proposed:

- the establishment of the Tertiary Education Commission to oversee, in partnership with providers and stakeholders, all elements of the tertiary education system;

- the development of the Single Funding Formula to resource most tuition, and dedicated Funds to support other parts of the tertiary education system; and

- the implementation of charters and profiles as a precondition of public funding for all providers and ITOs.

The tertiary education system will support the conduct of high-quality research

In addition to providing tuition, the tertiary education system has a critical role to play in supporting the conduct of research. Tertiary-based research and scholarship underpins the provision of education and training, and the creation, analysis and application of new knowledge. Furthermore, the tertiary education system is key in providing research that the private sector cannot or will not undertake but is important for New Zealand’s social and economic development. For all these reasons, it is vital that the tertiary education system is both supported and encouraged to produce research of a world-class standard.

To this end, the Commission has proposed:

- that much of the funding for basic research in the tertiary education system be provided through a Performance-Based Research Fund;

- a review of funding of post-graduate research programmes; and

- the creation of Funds to support Centres/Networks of Research Excellence.

The government will be able to effectively steer the education system in a strategic manner

The Commission believes that developing a strategic direction for tertiary education is essential if the system is to respond to the challenges facing it. In an environment of limited resources and rapid social, economic and technological change, it is necessary that appropriate goals are identified to guide funding and gauge the performance of the system. The government will need to make decisions regarding the purpose and function of the tertiary education system, its direction, and the means to pursue these aims. It must be stressed, however, that this process should not impinge unduly upon the autonomy of providers and learners.

To this end, the Commission has proposed:

- national strategic goals and tertiary education priorities to guide strategic decision-making;

- the establishment of the Tertiary Education Commission;

- the development of the Tertiary Education Strategy;

- the development of the Tertiary Education Scorecard to measure the performance of the system as a whole;

- the implementation of charters and profiles;

- the introduction of the desirability test;

- the inclusion of the Priority Index within the Single Funding Formula, thus allowing funding levels to reflect national priorities;

- the creation of Funds to support Centres/ Networks of Research Excellence; and

- the creation of the Strategic Development Fund to support innovation and strategic alignment within the tertiary education system.

The tertiary education system will be responsive and flexible

The world is currently experiencing a period of major social, economic and technological change. The tertiary education system must be able to effectively respond to these shifts, as well as changing patterns of learner demand for particular disciplines and programmes. This is as true for small-scale local shifts as it is for such national and global phenomena as the development of new technologies and demographic change.

To this end, the Commission has proposed:

- that the autonomy of tertiary education providers be preserved wherever practical;

- the establishment of the Tertiary Education Commission;

- the use of charters and profiles to identify the unique characteristics and target communities of providers;

- that funding for tuition be tied to learner demand through the Single Funding Formula;

- the removal of caps from foundation education and Industry Training;

- the creation of the Strategic Development Fund to support the pursuit of innovation and equity goals; and

- The review of cost and funding categories, including a review of academic staff salaries and conditions, and the introduction of the Tertiary Education Price Index.

The tertiary education system will operate according to a partnership model

The tertiary education system cannot stand apart from the society and economy which it seeks to support. If it is to build a knowledge society and economy, and effectively address the problems, challenges and opportunities it faces, the system will need to be actively engaged with business, industry, communities, hapu, iwi and Maori, local and regional government, crown research institutes, and other groups with a stake in the successful provision of tertiary education.

To this end, the Commission has proposed:

- the establishment of the Tertiary Education Commission to foster partnership in decision-making;

- the creation of a Fund to support Model B Centres/Networks of Research Excellence;

- the establishment of the Strategic Development Fund;

- a review of governance structures; and

- ensuring that the Treaty of Waitangi is an integral part of decision-making throughout the system.

The tertiary education system will embody principles of differentiation and specialisation

While the Commission has taken a holistic view of tertiary education, it also believes it vital that the distinctive purposes and roles of specific programmes and providers are recognised and supported in the tertiary education system. Furthermore, the Commission believes that reducing duplication and encouraging specialisation amongst providers and programmes will both ensure more effective allocation of government resources and promote quality in areas of focus.

To this end, the Commission has proposed:

- the implementation of functional classifications;

- the implementation of charters and profiles, which will allow providers to identify their unique character and areas of specialisation;

- the implementation of the desirability test to reduce duplication;

- the inclusion of the Statutory Role Add-on to the Single Funding Formula;

- the creation of Funds to support Centres/Networks of Research Excellence;

- the creation of the Strategic Development Fund; and

- the creation of the Performance-Based Research Fund.

The tertiary education system will be characterised by intelligent decision-making and expenditure

The tertiary education system operates within an environment of limited resources. In this context, it is vital that decisions regarding the allocation of government funding are made in an effective and intelligent manner.

To this end, the Commission has proposed:

- the establishment of the Tertiary Education Commission;

- a review of cost/funding categories ;

- introducing the Tertiary Education Price Index to ensure that funding levels accurately reflect changing economic conditions;

- the revision of policies regarding student financial support;

- the improvement of accountability and performance measures; and

- the implementation of the quality and desirability tests as the basis of funding decisions.

The needs of Maori will be reflected in the tertiary education system

The Commission is concerned at the generally low levels of participation and achievement by Maori in the tertiary education system. Not only does this represent an issue with regard to social equity, but the special place of Maori as tangata whenua means that the government has an obligation to ensure that the specific requirements of Maori learners are reflected in all parts of the tertiary education system.

Measures proposed by the Commission to support this include:

- the formulation of national strategic goals and priorities for the tertiary education system;

- the development of the Tertiary Education Scorecard, including specific targets for Maori learners;

- the development within the Tertiary Education Commission of a body specifically concerned with the educational needs of Maori;

- the development of the Learner Index and Learner Add-on to reflect the needs of specific learners, including Maori;

- the ring-fencing of part of the Strategic Development Fund to support initiatives for Maori learners;

- ensuring that the Treaty of Waitangi is an integral part of decision-making in the system;

- the review of governance structures;

- inclusion of akoranga Maori as a functional classification; and

- legislative protection for the term “whare wananga’.

The tertiary education system will contribute to the achievement of National Strategic Goals and tertiary education priorities

In its third report, Shaping the Strategy, the Commission identified National Strategic Goals to guide the formulation of tertiary education policy. These goals are: innovation, economic and social development, environmental sustainability and fulfilling Treaty of Waitangi obligations. Three important priorities for the tertiary education system were also identified in this report, each of which is addressed by specific proposals. These are:

1. Improving quality through:

- increased incentives for quality, such as the PBRF and Centres/Networks of Research Excellence;

- higher merit-entry to under-graduate degrees; and

- the implementation of the quality test and improved accountability measures.

2. Focusing on the two ends of the tertiary education system, including:

i. building stronger bridges into tertiary education through:

- removing caps on foundation education and Industry Training;

- Cost and Funding category review would include review of cost of foundation education and industry training;

- developing an integrated funding framework for the tertiary education system

ii. enhancing tertiary research quality, capacity and linkages through:

- the review of scholarship arrangements;

- review of funding for research based programmes;

- requirements for research degree providers to meet performance thresholds on the PBRF before funding would be allocated; and

- the creation of Funds to support Centres/ Networks of Research Excellence

3. Creating the skills and attributes for a knowledge society, which has been the ultimate aim of all the Commission’s recommendations.


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