21 Jun 2019

Polytech sector's $34m deficit likely to grow further

11:48 am on 21 June 2019

The polytechnic sector lost millions of dollars amid falling student enrolments last year, annual reports show.

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Unitec in Auckland. Photo: Supplied

Of the 16 institutes of technology and polytechnics, 10 have confirmed that they made deficits in 2018.

The net result from the 13 annual reports published to date was a deficit for the sector of $34 million, a figure that would grow further after Whitireia, Weltec and Tai Poutini announced their results.

The figures were in line with a Cabinet paper that last year warned the government 10 of the institutes were likely to make deficits in 2018 and seven were considered high financial risks.

Unitec in Auckland recorded a total deficit of $8.3 million after full-time student numbers fell by about 500 students and it spent $8.9 million on "transformation costs" and $3.3 million on restructuring.

However, if only core operating income and costs were considered the institute made an operating surplus of $3.6 million.

Toi Ohomai in Rotorua and Tauranga made a deficit of $5.7m including merger and restructuring costs and Northtec's deficit was $3.7m following a 25 percent fall in foreign student enrolments.

Only six institutes reported surpluses. They were Ara, EIT, the Open Polytechnic, Otago, SIT and Ucol.

Meanwhile the Education Ministry forecast further enrolment drops for polytechnics this year and next.

It forecast the sector's full-time equivalent domestic enrolments at qualification levels 3 and above would fall from 50,140 last year to 48,520 this year and 48,190 next year.

However, it said enrolments in the sector were expected to start increasing in 2021.

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