Our Views - The Role of Private Tertiary Education

Private tertiary education makes a contribution in almost every sector of New Zealand's economy and community and has done so for over 150 years. Their role is simply to serve the needs of students, employers, community groups and the wider public.

PTEs developed rapidly in the 1980s and 1990s, shifting from 1-2% of enrolments to 10-15% of enrolments. Many PTEs developed into large, multi-site organisations meeting mainstream education. ITI's members were at the front of that charge, matching high growth with excellent student outcomes.

Many ITI members operate on a similar or larger scale than the public sector in their specialist area, so while they do not have the corporate overheads of a polytechnic, they have more focus on their specialist area.

The government's Statement of Tertiary Education Priorities states that the role of PTEs is to offer niche education and training that augments or complements the provision of the public providers'. The government has limited the PTE sector, first implementing a moratorium on new courses or sites, and then replacing it with caps on enrolments. The government has also set tougher standards for the private sector than for the public sector. PTEs have to justify the quality and relevance of every qualification over 2005-07 if they wish to retain their funding, while public providers only face the same rigour for a few courses.

ITI wants to ensure that when our members demonstrate their quality and relevance, they have a chance to grow on the same basis as any other organisation. With every PTE qualification being checked for quality and relevance over 2005-07, the successful providers expect a fair hearing from the government.

By supporting the role of the private sector, New Zealand will benefit from the innovation that diverse providers can produce. While economies of scale are important in some subjects (such as medicine), the value delivered by diversity more than offsets the smaller size of some ITI members. They will continue to focus on innovation and excellence in tertiary education well into the future.

Maximising PTEs’ Role
April 2007

ITI’s major project at the moment is to maximise the role of PTEs. In a world where Ministers have limited the PTE role through the TES/STEP and the TEC has limited it through their investment guidance, we have to make the most of what we have got.

PTEs do have an ongoing role in the tertiary education system, but there are now few reasons why a policy adviser would include PTEs in a new policy paper – as a subsector, PTEs do not clearly fulfil any of the government’s strategic goals (many individual PTEs do fulfil the government's goals, but policies are generally writen for subsectors). This was reinforced by a recent paper on equity funding prepared by the Ministry of Education. After presenting it to PTE peak bodies and saying how valuable our opinion was, we had to point out that the paper only referred to public institutions!

While such episodes can raise a smile they do present a real problem. Since PTEs are not included in the early stages of discussion, they start several steps behind when it comes to consultation – if you are trying to get “PTE” into a paper, you can’t focus on something more useful.

This environment presents a major challenge to PTEs: if PTEs are to have such a limited role in new initiatives in tertiary education, how will they continue to attract talent, capital and students? If PTEs are prevented from being the innovative organisations that they can be, then their vitality will be sapped.

The challenge is a long term one and reinforced by Dr Cullen’s pre-Budget announcement today on funding for ITPs, wananga and ITOs. They received $127m between them in new funding, which is only a little less than was spent last year on PTE student subsidies. With comparative organisations getting progressively more funding than PTEs (while fees remain capped at the same level for all sectors) PTEs will have to be at their innovative best.

That brings us back to our project. If we want to maximise the role that the government has set for government-funded PTEs, then we have to focus our efforts. The bright spot is that there is now a dedicated investment team in the TEC dealing with PTEs, which will give an opportunity for improved continuity and expertise. Our aim is to work with them and others in the PTE sector to get a combined approach in the spirit of the reforms.

We are currently discussing our approach with our members before putting a proposal to the TEC and other PTE peak bodies. We’ll publish more details in future newsletters.