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Hodgson: Polytechnics NZ Speech

13 August 2008

Institutes of Technology and Polytechnics New Zealand Speech

Thank you for the opportunity to speak at your conference. I am delighted to be here.

When I first took up the tertiary education portfolio, I set myself the task of visiting every polytech in the country. There are twenty. I am up to number nineteen. Only EIT to go. Actually, I haven’t visited Otago either because I already know it quite well so that means eighteen visits so far this year.

They have all been too short, often only two or three hours. But they have been eighteen really valuable experiences.

The reason is simply that I am that little more in touch with the sector than I otherwise would be.

Eighteen times the institution in question has put together a programme that has given me a glimpse of the range of education provided, how it is provided, and what each thinks of its future risks and opportunities.

In every case I have been exposed to, even confronted by, pride and assertiveness and a strong sense of identity. In every case I’ve had a chance to sit with a group of councillors and senior management and swap ideas or observations. And in every case I have heard of support for the Tertiary Education Strategy, usually accompanied by this of that condition, but support nonetheless.

I have gained a sense of the road being travelled from a more competitive past to a more co-operative future, of the many bumps on that road but of a desire to get on with the journey.

And of course, I have noticed not just the similarities but the many many differences between polytechnics in size, function, history, balance sheets, modes of delivery and campus arrangements.

So now is the time to say thank you for having me. Thanks to those who put the programme together, thanks to those who gave of their insights. Thanks for all of it. My relationship with the sector is now well underway and I look forward to deepening it further. And I’ll show up at EIT very soon.

But I should have started at the beginning.

This Government seeks a high skilled, high value innovative economy, strongly connected globally. We seek an economy and a society that moves us further and further towards sustainability. Our vision relies on innovation and quality because that is the path to more productive workplaces. Our citizens must be able to operate comfortably in a world that continues to change rapidly.

Believe me or not, I had reached precisely this point in writing this speech when I came across a near final draft of ITP New Zealand’s strategy document, ‘Building Skilled Communities’. Dave Guerin had sent it to me. I flicked it open and read the first paragraph of the executive summary. Here it is:

“Institutes of technology and polytechnics are building skilled communities throughout New Zealand. We do this by providing relevant, high quality and innovative applied professional and vocational education and research. As the largest tertiary providers of education, our work supports the development of a high skill, high productivity, and high wage economy.”

That is like being in an echo chamber.

We can conclude, already, that ITP New Zealand and the present Government are on precisely the same page, at least when it comes to the big picture.

I then read the document right through, and came to the view that it was a good document, and that it was an easy document to support. Here is why:

Firstly, it has a commendable purpose. It has been written for use as a vehicle to have a dialogue, across the country. It says as much. Here is another quote:

“Our next step is to open a conversation about our priorities with our national stakeholders, and continue conversations with our regional stakeholders. ITPs’ links within their regions are superb, but as a sector we need to build closer links with central government, politicians, professional bodies, industry associations, registration boards, unions and national representatives of Māori, students, Crown Research Institutes, local government, communities, tertiary education organisations and others.”

Good. ITPs and ITP New Zealand will be busy. That is a lot of conversations. But the underlying aim to put the sector, as a sector, in front of national stakeholders and say, “we’re here, we’re good, we’re getting still better, we know how to flex, what do you want?”

The next reason is I found it an easy document to support is that it is future focused, assertive and it is devoid of any unhelpful agenda.

It is written, as it must be, for stakeholders. It pays attention to ITPs’ core roles. It places emphasis on quality, on productivity, on foundation learning, on ‘ensuring regional impact’, on the international dimension, and closes with a well worded piece called “balancing autonomy and accountability.”

The third reason is that it is honest. It has lots of challenges and lists them as such. Some of them are challenges for the Government and some are challenges for the sector and many of them are challenges for us both.

The fourth reason I like it is because it is responsive to government policy – to the skills strategy, to schools plus, and to the tertiary education strategy itself.

Finally, I liked it, at a personal level, because it was an interesting read. It was interesting to divine how its authors think and it was interesting to dwell on the statistics.

So that’s my view of your document, released last night. I hope it travels well.

If the Tertiary Education Strategy finds the favour that I think it does, then it is best I make some comment on some of the many issues that comprise its further implementation. I will not have time to cover all of them.

Another way of making the same remark is this: If we have moved to a future which has more cooperation and less competition in its character, then we are duty bound to hunt out and exploit the various benefits that cooperation offers. And in some areas we need to be pretty hard-nosed about it. The first investment in a plan round is behind us. The progress is rather impressive. Let’s lift the momentum further on implementation. Let’s get embedding.

Benchmarking will do for starters.

I have seen benchmarking put to good use in the health system and I have no doubt it will be of considerable value in the ITP sector. No doubt whatever. It will be most valuable if it is used as a management tool and not as a new form of whispered judgement. It will be most valuable if the data becomes more and more available over time because learning will be more easily shared. We need an ongoing benchmarking capability in New Zealand. Benchmarking must become normal practice and not be allowed to be something we did once, back in 2008.

The signs are that this sector has taken to benchmarking like a duck to water. Of course there are differences in the speed of uptake, but I think that we are close to the point where not benchmarking is straight forwardly not ok.

So, congratulations on progress to date.

Another example is the awkward issue of overlapping provision. That’s code of course and I initially had no idea what people were talking about. Then I had a look at the differing costs in providing trade training and became very interested. Then I plumbed the various views around education philosophies, and the differing needs of students and completion rate arguments and on it went. Then on the aforementioned regional tour of polytechs I came across every variant of the issue possible. Then one foolish day I said to myself, roughly, “I don’t know how to solve this, so let’s try”.

Well the response of the ITP sector and the ITO Sector and of the TEC, and then more recently of NZQA (and soon we will fold in the Ministry), has been remarkable. We’ve had two meetings to date.

Even before the first one the key players, ITP New Zealand amongst them, had met in my absence and got to work with solutions on their mind. Solutions not problems, was their apparent kaupapa.

Before the second meeting smart people presented me with an agenda that had four items on it, none of which was called overlapping provision, all of which were nonetheless helpful in progressing the relationship between ITPs and ITOs in general and the overlapping provision issue in particular. The four items were: strategic relationships, information, qualifications and money. Needless to say the titles were somewhat more subtly cast than that, but that’s what they meant.

We now have the ITPs and ITOs engaged, along with relevant officials, on forging a future for the interface between them.

We have no results yet. We have only just started. I know that this issue a long-standing one and will require commitment and compromise from all parties. But I also know I’m dealing with motivated people and I know that there is willing. And I am feeling very optimistic that we will secure the momentum needed to deliver sensible outcomes.

So, again congratulations on progress to date. I understand that Dave Guerin and Jeremy Baker will be leading the way with a presentation tomorrow. I acknowledge their considerable leadership.

Here is a another hard one. It sounds easy but it isn’t. Procurement. Here I am talking about polytechs clubbing to buy. To buy anything really. To buy cars or insurance or computers or consumables. It’s hard because it requires institutions to collaborate on a mere detail in return for a lower price. But there is money to be saved. Electricity will do. Why not go into the market and ask the power companies to bid for all 20 of you. Why don’t you decide to empower the ITP New Zealand folk to explore that one possibility. You are a billion dollar outfit after all. But only if you agree to club. What I am asking of you is to hunt out and exploit the various benefits that cooperation offers. There are dollars to be saved.

Similarly, there are back office savings. If polytechs are not determinedly amalgamating their payroll functions or similar, they should be. My catch cry, remember, is to hunt out and exploit the opportunities that cooperation offers. Cooperation is much more than a change in attitude. If cooperation is the more effective future then how about securing its cost effectiveness too?

Let me stick with money a little longer. Some polytechs face fiscal pressures, and each for a different set of reasons – perhaps campus configuration, perhaps transitional issues, perhaps a modest balance sheet, perhaps the size of the region being served. Other polytechs don’t, or don’t to the same extent.

Solutions come in a variety of forms – benchmarking, procurement, progressive changes to the way the TEOC is managed, new opportunities such as the skills strategy, and the possibility of the government acknowledging that there are areas of systemic under funding. Note how I say possibility because it is simply too early, now, to know.

I suppose I am trying to leave you with a sense of shared ownership of fiscal pressures. Polytechs have work to do and so does the government. We need to ensure adequate funding and you need to ensure efficient use of that funding.

One recent change will be helpful. It is the new capital fund currently of $95 million over the next four years. It is available to all TEIs. It will require an interested institution to look first to its own balance sheet or surplus assets. The process will be managed by a panel which will be announced, I hope, next month. As you will know the panel idea is derived from the health system and is designed to ensure that capital investments needing some central funding component are managed according to need and according to fit with the network of provision. We will be able to move away from the current somewhat ad hoc approach towards an orderly queue. My job is to fund the process so the queue keeps moving. Recent announcements for NMIT and Northtec are funded from earlier underspends and were made prior to the new process simply because they could not wait. The queue has started to move already.

Related to the capital funding is the issue of disposal of surplus Crown land that an institution may have access to at a peppercorn rental. I wish to change policy, so that that becomes easier. The essence of the problem is that the process for determining whether or not an institution can deploy the proceeds of any land sale is too onerous and takes too long. Institutions therefore might tend not to bother and the end result is inefficient use of assets. That isn’t acceptable. I’m wanting Cabinet decisions on that soon.

Educationally, the bigger news is this year’s budget was not the capital fund, nor the fact that tertiary funding will now be indexed against inflation, but the Skills Strategy and the new funding attached to it, especially in the language literacy and numeracy component of it. We are moving to implement the strategy as quickly as is practicable.

Last month, the Prime Minister launched the Action Plan at the ITF conference and it is anticipated that $37 million dollars over the next four years will be invested through the ITP and wananga sectors, particularly through certificate level programmes.

Then there is Schools Plus which is on a later track because Helen Clark announced this major policy change only in February of this year.

Unlike the New Zealand Skills Strategy which focuses on the existing workforce, Schools Plus is about secondary schooling, about 16 and 17 year olds in particular and about the transition from school to tertiary education or to work. In essence it says that our economy will be more productive, and our wages higher over time, if our students continue in some form of formal learning until they turn 18.

Again, the role of ITPs in delivering part of this policy change will be significant. We announce the next layer of detail soon.

Meantime, I am aware of some ITPs who are already very active in this area and I want to acknowledge both their innovation and their presence. We can expect an expansion to the Gateway programme, to STAR funding, the roll out of Youth Apprenticeships and to locally generated programmes that form part of the mix of the future. We can also expect the proportion of young people who leave school without NCEA level 2 to fall markedly.

Finally, I want to acknowledge, even a little hastily because it is time for me to stop, the role of ITPs and of ITP New Zealand in the development of joint qualifications and joint curriculum development. To my eye, progress in these areas needs to quicken further. I am in no doubt that the sector has the capability to do just that, and if I can help, let me know how.

Ladies and gentlemen, it has been a pleasure to have my first opportunity to speak at your conference. Excuse the tiny wee bit of politics when I say that, polls notwithstanding, I am determined that it will not be my last. The ITP sector has been a delight to engage with to date. I have thoroughly engaged seeing artisanship at work, to see the role you play in lifting the nation’s technical competencies, to begin to understand how you effect technology transfer to industry.

I think there is still much unrealised potential in the ITP sector. You are a key agent of innovative change, both in the people whose skills and aptitudes you develop and in the firms where they work, or will work. I look forward to witnessing the further realisation of that potential.

Or in the words of last night’s document, I look forward to you “building skilled communities.”

Thank you.


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