An overview of the current tertiary education environment

The important contribution tertiary education makes to New Zealand’s economic and cultural development is reflected in the Government’s $2.9 billion investment in the sector and a further $1.1 billion for student support.  A wide range of TEOs provide high quality, relevant tertiary education that responds to the needs of learners, communities, industry and employees.

For the most part, the public funding of tertiary provision is driven by students’ choices about what and where they want to study.  The Government’s Tertiary Education Strategy (TES) guides the tertiary system to deliver the best results for New Zealanders and the best return on the taxpayers’ investment. 

Most of the Government’s contribution to funding is allocated based on the agreement of Plans with individual TEOs. 

The 2011-2013 planning environment

The 2011-13 planning period has a focus on improving performance in the tertiary education sector, increasing accountability for the Government’s investment, and ensuring students can make better-informed choices about their study.

A capped tertiary education funding environment, with limited funding for enrolment volume growth, will continue over the planning period. The TES emphasises the importance of sustainable financial performance for TEOs, which means that managing costs within existing funding streams and continuing to seek efficiency gains are essential.

TEOs’ proposed Plans will need to demonstrate how they will make use of existing resources, rather than Government funding increases, to deliver on their core roles, meet Government expectations about improved performance, and contribute to achieving the TES priorities.

The impacts of the February 2011 earthquake will be significant and ongoing.  The TEC will work with the sector to adapt to the changing needs of tertiary education stakeholders in the region and support both providers and students.

A performance-based approach

A focus on performance creates incentives for providers to improve the quality and relevance of their provision and achieve better outcomes for learners.

Actual performance, as measured by performance commitments and indicators set out in Plans, continues to play an important role in the TEC’s funding decisions and is used as a key indicator of how well a TEO is performing.

Actual and past performance against Plan commitments may affect eligibility for future funding where new funding becomes available or when a Plan is being considered for funding approval.

As with previous years, current or previous funding levels do not create any automatic entitlement to future funding at any level from the TEC.  Providers with a history of poor performance may not receive any further funding.

In developing proposed Plans, TEOs will need to focus on improving their overall educational performance.  Similarly, they will need to consider the educational and financial consequences of expanding programmes of study delivered that currently have low educational performance. 

Performance linked funding

From 2011, a proportion of both Student Achievement Component and industry training funding will be linked to the educational performance of TEOs.

Publicly available performance information

In 2011, the TEC will again make publicly available educational performance information.