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Te Wananga o Aotearoa - Restructuring Consultation

Te Wananga o Aotearoa

Restructuring Consultation

Te Wananga o Aotearoa this week began a further consultation round with staff about its restructuring process.

All staff will receive briefings setting out the current position and how Te Wananga o Aotearoa is addressing the problems management has identified. The primary issue remains the need for the Wananga to live within its income and become a more efficient organisation while continuing to deliver innovative, effective and valued educational options for our students.

The first consultation document released in October 2005 proposed a new management and organizational structure for the Wananga. The second consultation document released today provides more detail on how the new structure will work, how it will address identified issues, and the potential impact on staff.

Staff will have until 21 April to provide feedback to management on the second consultation document, Final decisions on the details of restructuring will be made after this feedback has been reviewed by the Tumuaki and Executive Directorate.

The consultation document identifies the need to reduce costs significantly – currently the cost structure for Te Wananga o Aotearoa is based on 30,000 Equivalent Full Time Students (EFTS) enrolled. In 2005 the Wananga enrolled 27,000 EFTS and this year it is forecast that it will enroll between 18,000 and 21,500 EFTS.

The fall in student numbers reflects:

- Maturing demand for some of the larger courses offered by Te Wananga o Aotearoa

- Falling numbers in the tertiary sector generally with tertiary enrolments an estimated 16% down overall.

At the same time, changes in the policy framework for the tertiary sector will preclude a return to the period of high growth in student numbers experienced between 2000 and 2003.

In the last decade Te Wananga o Aotearoa has clearly demonstrated that many New Zealanders had not previously had their educational needs met by the tertiary sector. At the same time, the rapid growth of Te Wananga o Aotearoa placed the organisation under severe strain. The proposals presented to staff today represent what we have learned from both of these facts.

The Council and management believe the new structure will allow the Wananga to:

- Attract and retain students by developing innovative programmes while ensuring existing programmes are of high quality and relevance

- Deliver a cost structure that will achieve a financial surplus with 18,000 EFTS from 2007 onwards.

Cost reductions will come in many areas, with significant savings to be made in property, general procurement, security, vehicles, information technology and asset replacement.

Staff numbers are also expected to fall by 300 full time equivalents. It is proposed this reduction will be achieved through a mix of voluntary redundancy and a contraction in the number of jobs available in the new structure.

The Council and management are convinced that the changes set out in the second consultation document are essential. Once implemented, they will allow the Wananga to recover quickly from the current financial position and to build on our important role in the tertiary sector.

Without change, the current cost structure combined with forecast enrolments would generate an operating deficit of between $13m and $27m. With change, the operating deficit will not exceed $13m (before restructuring costs). Most of the latter will be incurred in the first half of the financial year and the Wananga is forecasting a $1m surplus for the latter half of 2006. Te Wananga o Aotearoa should achieve a modest surplus, in line with Ministry of Education guidelines, in 2007 and thereafter.

The precise cost of the restructuring will not be known until later next month. Te Wananga o Aotearoa will use its own resources and the existing arrangements with the Crown and others to meet these costs as they arise.

ENDS


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