ThinkEd: Funding Going Going Gone!

EdTalkNZ
Stuart Middleton
22 October 2010

There is always a robust debate around the issue of whether numbers of students in the tertiary system should be capped or allowed to float to meet demand. Australia takes a more permissive approach from that of New Zealand where tertiary institutions work within allocations with a 3% plus or minus margin. Penalties apply to institutions that fall below or go above this margin. Australia tends to let the market run it’s course.

The issue in New Zealand seems largely to be driven by the subsequential impact of student loans and allowances on total expenditure. The loans are interest free and the rate at which students repay them is greatly slower than the rate at which they take them out. A previous government made the loans interest free, introduced a benign repayment regime and despite the calls for financial literacy education in the schools, students have demonstrated a capacity to smell a bargain when they see one. The level of outstanding student debt is approaching $NZ10 billion.

The New Zealand Minister of Tertiary Education this week announced that he was taking a little over $NZ50 million from the industry training sector and putting it into the university sector in order to increase the numbers of student places in that sector. There was the usual brouhaha with the industry training people pointing out the severe damage to the future of the country if this was done and the university sector, in welcoming the Minister’s insight, foresight and courage, pointed out that the future of the country was not assured.

The universities had been conducting a not so subtle campaign for a long time and the threat of having to “turn students away” while perhaps being in reality quite hollow, started to have quite a ring to it. Beating hollowing things tends to get quite noisy even if they are only threats. The untested assumption that increasing the numbers of students entering the university sector with no no guarantees that increased proportions of them will get their qualification is good the for country is blindly accepted it seems on both sides of the Tasman.

But perhaps the real issue was that the $NZ50 million taken out of the industry training sector was apparently sitting there unspent, money which was available to them but not used. That this was not the subject of inquiry beggars belief. Business, industry and commerce are continually vocal about the shortage of skilled people in their sector and yet it appears that a key brake on industry based training is the willingness of industry itself to offer places for that training to take place. There has to be a reason for this.

At the top of the list is probably the fact that industries and businesses simply see no incentive in being involved. The costs are perceived to greatly outweigh the advantages. This in the traditional technical areas that lead to apprenticeships is certainly a reflection of their perceptions of the quality of young people available for such positions. As the K-12 education system has increasingly turned its back on technical and applied education, young people present themselves at the apprenticeship starting gate without the basic skills that enable them to be of much use to the employer.

In light of this the model needs to be changed. An interesting programme at a polytechnic in New Zealand sees a group of young people come out of their school for a day a week. They simply miss whatever the programme in school has on their timetable for that day in favour of a one-day-each-week course in engineering. I recently attended the “graduation” of the group at the end of the two year programme. They had all through this programme completed Year 1 of an engineering apprenticeship and in 2011 will start on Year 2 and they will all be in full-time employment. Industry has no issue in being involved with industry training when there is a clear advantage rather than a clear cost to them. These young people will enter their employment able to contribute to the productivity of the enterprise. Mentoring throughout the programme is a key part of its success as has been the work experience component that in many cases has led to the offer of employment. The funding is a mix of industry training money, school funding, polytechnic funding and privately source funding for the mentoring and support. This will be the way of the future – trying to continue to spend education money in the silos of the past will simply produce the levels of success that we currently have.

That sectors within education think that competing for funding between them is smart is simply old-fashioned behaviour. Funding models should be based on what works for students not what seems best for the structures and institutions that serve us less well as time moves on.

The co-operative advantage will serve us so much better than the competitive one.