Our Views - Public Funding Based on Performance

QTI supports public funding that is based on performance, rather than ownership. The government is a major funder of tertiary education in New Zealand and that funding should be used in a way that maximises the economic and social outcomes for the country.

QTI supports demand-driven funding systems such as the Student Component/EFTS funding system because providers are paid for what they do. Such systems have to include benchmarks for student completion and graduate outcomes, though, to avoid abuse.

Graduate outcomes are an important way to measure tertiary education i.e. do students get a job, go on to a higher course or achieve other relevant outcomes after their course? QTI requires high student outcomes in its membership criteria. It is also important that students stay in and pass the course, to measure whether entry criteria are set at the right level and teaching is effective. When these measures are reported publicly, they provide students and the government with crucial information for study and funding decisions.

Simple and useful benchmarks need to be matched with audits that can look at more complex elements of tertiary education i.e. are courses well designed, is assessment fair and are facilities adequate? QTI broadly supports NZQA's audit approach and requires its members to have at least a two year audit cycle. Audits are useful in maintaining and improving quality across organisations.

While performance measurements and audits provide clear assurance of quality, the current government continues to fund on the basis of ownership, rather than performance. There are clear quality differences within the public and private sectors, but average quality in each sector is much the same. Unfortunately, the major differences in funding relate to ownership and not performance.

QTI's members currently face many restrictions on their contribution to New Zealand tertiary education. They face an absolute cap on the number of students they will be funded for, while public providers can grow at 15% or 1000 EFTS pa, whichever is greater. Public providers get about 10% extra funding for each student, as well as access to a range of specialist funds. The difference in government funding is about 20%.

The fee maxima policy limits what can be charged in each subject area. This restricts QTI's members from making up for the lower funding that they receive from the government and makes it difficult to provide niche, high cost courses.

QTI supports a shift towards funding on the basis of performance. Good providers should be able to grow, increasing their contribution to the country, regardless of ownership.


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