On Newshub Nation: Simon Shepherd interviews Education Minister Chris Hipkins

Simon Shepherd: He’s described it as a new dawn for vocational training. One mega polytech to educate them all. So what does it mean for regional polytechs, and how will it affect the apprenticeships? Education Minister Chris Hipkins joins me now. Thank you for your time this morning. In your own briefing papers this has been described as ‘high risk’ and ‘extremely complex’. Why do it?

Hipkins: There’s no risk-free option here. The reality is leaving things as they are would be high-risk as well. We know that without significant intervention, a number of our polytechs were teetering on the edge of not being there. We can’t afford for that to happen. And, of course, we know we’ve got critical skill shortages as well, so the system’s not delivering the skills that New Zealand needs in order to be able to thrive as a country.

Is it like an ideological point, though, to centralise everything?

No, this isn’t about centralising everything. It’s about making the system work more efficiently and more effectively as a whole. We don’t need to have 19 different qualifications and 19 different programmes to teach someone how to be a truck driver. We don’t need a plethora of qualifications and programmes around the country that are delivering the same things. With all of the resource that goes into developing those things over and over again — we’re reinventing the wheel up and down the country all of the time at the moment. We don’t need to do that.

So the point of the reform is to boost student numbers and train our workforce for the future, but the Cabinet documents say that this change could lead to a drop in student numbers of 18,000 in the short terms. So that’s not going to address the immediate skill shortage.

One of the things that we did when we went out and consulted on the reform proposal, we then looked very carefully over the last six or seven months about how we can manage the transition so that that’s the worst-case scenario. We’re obviously aiming to not lose students along the way, and in fact, we want to keep growing the number of people in apprenticeships and on-job training, who are doing courses through polytechs—

And those numbers are growing. In terms of apprenticeships, at the moment, they already are growing, aren’t they?

In apprenticeships, they’ve been growing. In industry training, they’ve been decreasing. Across the board the polytech system has been losing numbers for a number of years now, so this is not a new trend. It’s been happening for a while. We’ve got to turn that around.

The fees-free university policy — or actually the tertiary education policy — hasn’t boosted numbers. And you’re just giving money away there. So you’re going to use the money saved there to fund this policy. What makes you think that this one’s going to work?

Look, I think we’re doing pretty comprehensive set of reforms. We haven’t just found one silver bullet and said, ‘We’ll do this, and everything will be right.’ We know we’ve also got to make trades training and vocational training a more attractive career option for young people. Actually, a lot of young New Zealanders don’t know that they can earn more money going into the trades than they might be able to earn if they go and get a university degree. I think schools for too long have worked on the basis that the ultimate goal for a secondary school is to get all of their kids to go to university. In fact, fewer than a third of their kids are going to university. So we’ve got to actually focus on saying to young people that trades are really good career options, that there are good jobs out there and we really want them to get into them.

So let’s go back to the fees-free, then. I mean, that was the silver bullet of first year free tertiary education. The Cabinet papers said that you may get even more money from that because it’s underperforming more than expected — more than the provisions. Is that policy just not working?

It’s not that fees-free is underperforming. In fact, in the university space it’s delivering about the numbers that we expected it to. So where are the savings in fees-free coming from then? Because we’ve got fewer people going into the vocational education — into the polytechs than what we need there to be. Fees-free applies to them, and fees-free also applies to people who are doing on-job learning like apprenticeships. And actually, that’s where we need to see the growth. We’ve got to get more people into those areas.

All right. This is going to see 16 polytechs become one mega polytech to provide the training. Is that playing into criticism that you’re going to have one big bureaucracy looking after the whole country?

No, because there will devolved decision-making within that. And that’s one of the jobs. The transition board — they’ve got to design the system to make sure that there’s devolved decision-making within that. But we’ve also been really clear, and actually, we’ve had strong support from around the country from the polytechs about this — that we don’t need everybody to be replicating what everybody else is doing and competing with one another, basically in a race to the bottom. We’ve actually got to get a system that’s collaborative, where they’re sharing what they’re doing well. Where each region is playing to its strengths. You look at the system now, every part of the country has got something where they’ve got a natural area of strength. We need to draw that out, rather than trying to get them all competing with each other.

So you’re going to have the head office, and it’s not going to be in Auckland or Wellington. Where is it going to be?

Well, the transition board will be based in Christchurch. Their job is going to be to determine where the head office ultimately ends up being. It may not even be in Christchurch. It could be in one of the other regions. Regions are going to have to put their pitch as to why they think the head office should be based there.

It’s going to have to be somewhere with decent transport links, as quite a critical mass of workers, so Christchurch makes a logical decision.

Yeah, and the head office doesn’t actually need to be that big either. A lot of the head office function can be spread throughout different regions. So it might be your student management system’s based one area, your HR systems is somewhere else and your finance system is somewhere else.

So you’re going to regionalise the head office in several locations?

Look, I think that there’s no reason to say that we need to have a particularly big head office. We need more leadership, we need the system to operate more cohesively and coherently as a whole, but that does not mean that everything needs to be centralised.

Okay. You are saying that you want more collaboration and less replication.

That’s right.

So there’s 16 current institutions around the country, so which of those are going to close?

There will be no closures. This is not about closures.

So all the existing polytechs will exist under the new — in one form or the other — under the new mega campus?

That’s right. So all of those campuses that are operating now will keep operating, but what we do know is that some of those polytechs have been closing down their smaller campuses now because they’re not financially viable. Part of what we’re trying to achieve here is to turn that around so that we can make sure that in those smaller areas we’re offering a greater range of options.

By smaller campuses are you talking about in the regions though?

In the regions, that’s right. If we do nothing, we’ll see a lot of those smaller campuses continuing to be closed because they’re not financially viable, and that’s one of the things we want to stop.

Okay, but a lot of them have city campuses. The Southern Institute has a campus in Auckland and so does Otago to get the money coming through. So what’s going to happen to those city campuses, those buildings on Queen Street?

Look, if you look at the drive to recruit international students into Auckland, where all the polytechs — not all of them, but a number of them — are setting up campuses on Queen Street to compete with one another to bring international students in. That is an inefficient system. It’s not good for the regions. We want more international students—

Right, so in other words, some of those campuses are going to close, aren’t they?

In central Auckland, there may well be fewer campuses delivering for international students.

All right. In the regions, this is upsetting one particular polytech, and that’s the Southern Institute. They’ve been very vocal. Do you think it’s going to lose— They’re worried they’re going to lose its special character, regional identity, through this.

No, one of the things we’ve heard really loud and clear — not just from SIT and from Invercargill, but from around the country — is that people want to be able to keep innovating, and they want to still be very responsive to local needs. We need the system to be able to do those things as well.

And this has been a very successful one. They’ve got $36 million in cash reserves, and in your own documents you say, ‘There’s scope to manage some of the new institute’s set-up costs through reprioritisation of leveraging accumulated reserves.’ Does that mean the reserves that that institute’s built up over the years is going to be used to set up the new one?

No, we have been absolutely clear that those institutions that have got significant cash reserves, they will be ring-fenced and they will be spent for that region, in that region for that region’s benefit.

So the Southern Institute can hang on to that $36 million?

We’ve been very, very clear about that.

Otherwise they’re hinting at a legal challenge. You don’t want that, do you?

We’ll cross that bridge, if we come to it, but my message to the community of Invercargill — there are a couple of others who have got reasonably significant cash reserves — those are going to be ring-fenced. They’re going to be preserved for their community.

All right. Let’s move on to jobs. National says 1300 will go, and that’s roughly the number of the independent training organisations. Will 1300 jobs go?

No, absolutely not. That’s just absolute scare-mongering hogwash, quite frankly.

But you have said to us that it could be a significant number.

That works on the basis that every person who is currently supporting on-job learning, an apprenticeship or an industry trainee, would lose their job. Those apprentices, those industry trainees, are still going to be there, and in fact, we’re aiming to grow the number of them. So the number of people supporting them is likely to grow, not decrease. So that’s just absolutely ridiculous.

Let’s move on, then, to the overall reorganisation. Will jobs go? Because the Cabinet papers say they probably will.

In the short term, there will be no change. So in the next six or seven months, as we head towards the starting of the transition, there will be no change. In the first few years, as the current polytechs operate as subsidiaries of the new institute, there will be next to no change there. Any changes that affect people’s jobs will be well worked through. The people who may be involved will be well consulted—

So is it too early to forecast any numbers?

Absolutely too early but this isn’t about job losses. Some people’s job may change, but they’ll be well-supported through that process, and that will be over a longer period.

Okay, one last quick question. New Zealand’s been ranked as number one in the OECD for its on-the-job training, the apprentices. So that’s been a successful format. Is there a risk by reforming all of that that businesses are going to lose confidence in the education sector, and we’re not going to have the apprentices that we need for the building and skills shortage?

No, because if you look at the way that we’ve designed the transition, what we’re aiming to do here is provide stability and certainty during the transition period. But we want to leverage off that strength. We have got a strength around on-job training. We want to leverage off that strength to improve what’s happening in the polytech system. One of the things that employers have been telling us for a long time is that the skills that are being delivered, by polytechs, by PTEs and others, aren’t giving them the skilled workers that they need. There’s often a mismatch between what’s being delivered and what their skill needs are. Employers have got a good degree of influence over the on-job training part. We’re giving them much more influence over the off-job training part, so that they can get the skills that they need.

All right. Chris Hipkins, thank you very much for your time this morning.

Thank you.

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