10 Jun 2020

Most institutes in new national polytechnic expect multi-million deficits

10:22 am on 10 June 2020

The new national polytechnic is facing a bleak first year of existence after 11 of its 16-member institutes announced millions of dollars of losses for 2019.

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The impact of no new international student arrivals is expected to be a significant cost on a lot of institutions, NZ Institute of Skills and Technology interim chief executive Chris Collins says. (File image) Photo: RNZ / Richard Tindiller

Collectively, the polytechnics that now make up the New Zealand Institute of Skills and Technology made a multi-million-dollar deficit for the third consecutive year and many are expecting losses again this year.

Some of the bigger institutes were yet to reveal the scale of their losses, but annual reports published to date showed some polytechnics made deficits as large as $4-5 million last year.

The institute's interim chief executive, Chris Collins, said this year would also be challenging.

"Clearly some of the subsidiary polytechnics are going to be in pretty difficult financial situations this year. There's no internationals coming in on top of what might have arrived in February at this point so that means we have to assume the revenue impact across the sector is going to be quite significant for a lot of the institutions," he said.

Collins said despite the difficulties, millions of dollars of government funding for the creation of the new entity would ensure that it got through the year.

"The government are committed to stand up NZIST effectively this year and going through till the end of December '22, so we are confident that we're going to be provided with sufficient funds to ensure that we're able to do that task."

Polytechnic enrolments usually increased during a recession when people retrained in order to find work and inquiries about courses were already rising, Collins said.

Forecasts indicated enrolments could rise by more than 20 percent next year, he said.

Tertiary Education Union president Michael Gilchrist said a significant increase could begin before the end of the year.

"We would be very surprised if there isn't an increase in enrolments in the second half of this year. It may not be dramatic, but it will be soon enough," he said.

Gilchrist said there was also a backlog of work from the lockdown and institutes must not cut back on staff numbers because of this year's looming deficits.

"There does have to be recognition of huge workloads that have both accumulated, that have yet to be discharged from the period of the lockdown, and future work that will be needed just to stay abreast of the demand as it starts to both increase and also change in its nature," he said.

Annual reports showed losses of more than $4m at institutes including Manukau, Northland, Waikato and Toi Ohomai in Rotorua and Bay of Plenty.

Unitec, Wellington, Whitiriea and the Western Institute of Technology at Taranaki were yet to report their results but told RNZ they made deficits in 2019, while Tai Poutini on the West Coast also confirmed a significant deficit.

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