No sooner than it arrived Te Pūkenga is gone for good

Te Pūkenga has been in operation for less than four years. It was announced in February 2019 by the government of the day, and was established on 1 April 2020. It was a merger of New Zealand’s sixteen Institutes of Technology and Polytechnics (ITPs), and the nine industry training organisations (ITOs) that were responsible for industry and apprenticeship training.

The government’s plans for the future of Te Pūkenga remain unclear. While they have indicated their intention to move away from the current structure, details about a potential replacement are scarce. One possibility mentioned is the creation of eight to ten smaller, independent institutions – a significant reduction from the sixteen ITPs and nine ITOs that merged to form Te Pūkenga .

Te Pūkenga was initially set up to solve a number of problems, at both the macro and micro levels. At a micro level, it was first supposed to support the 25 entities to become more financially stable. A larger integrated system was thought to be a means of cost savings. Before these entities merged, many were running a deficit, and according to leaked documents that were sent to Newshub in December 2023, none of the 16 ITPs were financially viable, with a combined deficit of $185 million. 

Secondly, the merger would encourage greater coordination between employers, students, and the institutions that provide skills. Before the merger, these institutions were all competing with each other and running deficits. The theory was that bringing them together would create efficiencies and reduce competition. For example, construction firms like Fletchers would now only need to deal with one institution instead of sixteen. 

Te Pūkenga was part of a cog in the much larger sector reform called the Reform of Vocational Education (RoVE). RoVE included several interlinked initiatives that each plugged into Te Pūkenga and were to play a role in its intended success. These included Workforce Development Councils (WDCs), Taumata Aronui, Centres of Vocational Excellence (CoVEs), and Regional Skills Leadership Groups (RSLGs). All were designed to increase coordination between industry, employers, those seeking to gain skills, and those providing skills. 

It was understood that Te Pūkenga, as part of RoVE, would in turn provide better outcomes for students, and reduce geographical challenges in accessing skills provision. Te Pūkenga was expected to be more, rather than less, responsive to local demand. A big part of the RSLG work was to help these institutions identify future demand for skills at a regional level. 

At a macro level, Te Pūkenga was intended to support effective skills acquisition, which would improve New Zealand's productivity problem. It would also help facilitate lifelong learning by making skills easier to access across the country, all of which would reap rewards in terms of higher GDP growth and lower unemployment.

The demise of Te Pūkenga is two-fold. Firstly, COVID-19. Te Pūkenga was established in April 2020 and therefore bore the brunt of the pandemic response. During this giant tertiary transformation programme, COVID-19 disrupted entities' ability to teach courses. The challenge facing them was a huge loss of demand for places at the same time as they were gearing up to provide extra places, and the financial viability of many of the providers became questionable.

Secondly, the efficiencies associated with moving to a single provider never seemed to emerge, and Te Pūkenga faced hostility from the regions that felt the merger meant institutions were losing their local identity. For example, the Southern Institute of Technology (SIT) is the home of the Zero Fees Scheme, however, under Te Pūkenga, they were required to start charging as of 2024. 

The government has yet to decide what will replace Te Pūkenga or its former 25 entities. Fundamentally, with rising unemployment, we are likely to see a return in demand for the skills training provided by Te Pūkenga. Additionally, our long-running chronic labour productivity problem and skills shortages in many areas, such as construction, persist.

With Te Pūkenga dismantled, the vocational education and training landscape faces significant uncertainty. While not a complete return to 2020, the lack of clear direction raises some serious concerns about the sector's future trajectory.