New Fund Supports Transformation Of Tertiary Sector

A new $35m fund is being established to assist public tertiary providers to adapt to the changing tertiary environment, Associate Education (Tertiary Education) Minister Steve Maharey announced today.

The Tertiary Education Strategic Change Fund will support initiatives taken by tertiary institutions, individually or collectively, to adapt during the establishment of the Tertiary Education Commission (TEC) and ahead of the implementation of the new funding and regulatory system. It will operate during the 2002 calendar year and totals $34.7m (comprising $18.1m in operating expenditure and $16.6m for capital expenditure).

Mr Maharey said the fund would enable tertiary institutions to determine how they intend to operate within the new strategically-focused tertiary education sector and to define the unique contribution they wish to make within that environment.

"Tertiary education and research are powerful tools which we must harness effectively if we are to achieve economic and social transformation in New Zealand.

"New Zealand's tertiary education sector has been through a difficult decade of declining public investment and a single-minded focus on student enrolments. The time has long since come to get some strategy back into the system.

"The Tertiary Education Strategic Change Fund demonstrates that the Government is prepared to back this objective with significant additional investment.

"Public tertiary institutions will be eligible for funding from 1 July 2002, the intended date of the formal establishment of the TEC. In order to access funding institutions will need to demonstrate how they are preparing to operate in the new environment," Steve Maharey said.

Fact sheet: Tertiary Education Strategic Change Fund

What is it for?

The Strategic Change Fund has been developed to assist public tertiary providers to adapt to the post Tertiary Education Advisory Commission (TEAC) environment.

The government intends to ensure that the contribution of the tertiary education sector towards New Zealand’s economic and social development is, as much as possible, maximised. This will involve setting a tertiary education strategy, prioritising and concentrating effort in the tertiary sector where appropriate, and ensuring that teaching and research effort within tertiary providers contributes to the tertiary education strategy.

In order to achieve a more coordinated and coherent tertiary sector, change will be required. Both capital and operating funding is necessary to effect this change.

What can the money be spent on?

Certain activities are fundamental to ensuring that providers are appropriately prepared to fully contribute to the new tertiary education environment. These include ensuring that providers clearly identify their strengths and weaknesses, and that their strategic/business planning is sound. Proposals must include activities to ensure that each provider has a clear strategic direction as a pre-requisite to accessing the fund. It is not, however, proposed that the bulk of the fund be used for strategic/business planning and the like. The fund is designed primarily for actions and developments.

There are a set of activities that may be regarded as worthwhile to fund from the strategic change fund. These include:

- Strategic planning;

- Business planning;

- Identification of provider strengths and weaknesses;

- Developing charters and profiles;

- Programme development;

- Risk management planning;

- Long term capital works planning and activities;

- Joint ventures and/or restructurings;

- Infra-structural and/or human capability development; and

- Governance and management development.

Who can access it?

Public institutions will be able to access the Fund. There will be a role for private training establishments (PTEs) in the new tertiary environment. Currently, however, the role of individual PTEs with the Government has not yet been agreed and formalised. Access to the fund will therefore be limited to public Universities, Polytechnics, Colleges of Education and Wananga.

How much is involved?

The total amount involved is $18.142 million operating, and $16.615 million capital. Each institution will receive an allocation determined by their proportion of total Government equivalent full-time student (EFTS) income for 2001 . The Crown will confirm that each institution’s proposed use of the funding meets the agreed criteria for the Strategic Change Fund, and will balance back to the total operating and capital allocations.

Funding will be a one-off grant available in the 2002/03 financial year only.

How will the Fund be allocated?

The fund will be allocated by the Minister of Finance, the Minister of Education and the Associate Minister of Education (Tertiary Education).

The fund will be administered by the Ministry of Education, with input from Transition TEC (TTEC). Once the TEC is fully established and operational, responsibilities will transfer to TEC. In order to allocate the funding for the 2002/03 financial year the Ministry of Education and Transition TEC will report to Ministers on the applications.

Where proposals appear not to meet with the objectives of the fund Ministers will ask institutions to revise proposals. Proposals from groups of institutions will be encouraged.

What criteria will institutions’ bids be assessed against?

Criteria for assessment of bids to the Strategic Change Fund are likely to include whether the proposal:

- Contributes to New Zealand’s social and economic development and fits with the tertiary education strategy;

- Will assist institutions to adapt to the new environment;

- Is achievable, and the success of which is measurable;

- Is consistent with strategic direction of the provider;

- Adds to the institution’s current capability;

- Is complementary to other sector developments; and

- Is supported by a clear business plan.

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