Tēnā tātou katoa
You will know either through your business division leaders or through the media that we are currently forecasting a $63m deficit for 2022. This is unsustainable. We have been working with Network leaders on our budget for 2023 and the steps we need to take to ensure we are operating within our means.
As part of my commitment to being open and transparent the purpose of this pānui is to provide context for any of the specific local initiatives that will come in order to make the necessary savings for next year.
In 2023 vocational education will be funded differently to reflect new priorities in the way training should be delivered in this sector. We must respond to these new priorities and look hard at our current mix of provision and delivery costs associated with face-to-face and online delivery.
This is not the only reason we must give consideration to our costs. There is high uncertainty around our revenue for 2023 from international student enrolments due to changes in immigration settings and demand. And like everyone else, we are facing mounting cost and inflation pressures. We have commitments to meet, including fair, but affordable, increases in kaimahi (staff) remuneration, demonstrable initiatives to improve support for ākonga (learners) and employers, and delivering programmes that move us closer to achieving equity and upholding Te Tiriti o Waitangi. Any changes to delivery must also reflect our Charter and our obligations to ākonga, iwi, hapū, regions and local communities.
While the budget has not been finalised, it is abundantly clear that we will need to implement a wide range of initiatives now that are designed to:
- realise opportunities to secure additional revenue
- realise savings by using our scale in the way in which we procure goods and services
- reduce expenditure on external professional services and travel
- consider changes to some face-to-face delivery where it is not in high demand by ākonga in advance of the new delivery structure.
You may start to see changes
As a consequence, all of our divisional leaders will be doing more work to find savings now from a wide range of initiatives. This work will, in some areas result in some targeted and formal proposals for changes in staffing. This is unavoidable. The savings in budgeted costs for 2023 that we have identified as necessary are: $10m across WBL divisions, $25m from our ITP divisions as well as prudent savings at national office.
In initiating these changes, we are committed to:
- taking considerable care to ensure that any change is targeted and designed to align our people with the programmes and delivery ākonga demand
- meeting the needs of ākonga, employers, industry and communities
- exercising national oversight to ensure that regionally led proposals consider the expertise we need to retain across our network.
During 2023, Te Pūkenga will be progressing tranches of change as we implement the new organisation structure. The changes will generate both savings and some additional costs, but the full effects won't be felt until the 2024 year.
I acknowledge that this comes at the end of another busy year where you have all been working hard for ākonga success. We have proven ourselves as a resilient, adaptable sector and I am thankful for this as we now work together through this series of change. Please be kind to each other, reach out for assistance from those in support at your divisions and focus on known information by staying connected to your leaders and other trusted information sources, including our union partners.
Aku mihi nui
Acting Chief Executive