Vote Tertiary Education - Vol 2 Education Sector - the Estimates of Appropriations 2016/17

Vote Tertiary Education

Overview of the Vote

The Minister for Tertiary Education, Skills and Employment is responsible for appropriations in Vote Tertiary Education for the 2016/17 financial year covering the following:

a total of just over $12 million for services from the Ministry of Education

a total of just under $2,968 million for tuition and industry training subsidies and research funding provided to tertiary education organisations, educational services from the Tertiary Education Commission and services from the adult and community education sector and other non-departmental providers including Education NewZealand

a total of just over $22 million for tertiary scholarships, international education and other grants, and

a total of nearly $16 million for capital grants to the sector.

Following a review of Vote Tertiary Education appropriations, a number of changes have been made to the Vote. Two new multi-category appropriations have been established, three non-departmental output expense appropriations have been combined into a single appropriation for Tertiary Education Commission operations, and another non-departmental output expense appropriation has been split into two new appropriations. Minor technical changes have also been made that were identified in the review. These changes take effect from 2016/17 and are detailed in Part 1.4 - Reconciliation of Changes in Appropriation Structure.

Details of these appropriations are set out in Parts 2-4.

Details of Appropriations and Capital Injections

Annual and Permanent Appropriations

2015/16 / 2016/17
Titles and Scopes of Appropriations by Appropriation Type / Final
Budgeted
$000 / Estimated
Actual
$000 / Budget
$000
Departmental Output Expenses
Policy Advice (M14)
This appropriation is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on Tertiary Education related matters. / 4,856 / 4,856 / -
Stewardship of the Tertiary System (M14)
This appropriation is limited to services (other than policy advice) provided by the Ministry of Education in its role as steward of the tertiary education system. It includes services to support Ministers in discharging their portfolio responsibilities (other than policy decision-making). / 7,985 / 7,985 / -
Total Departmental Output Expenses / 12,841 / 12,841 / -
Non-Departmental Output Expenses
Access to Tertiary Education (M14)
This appropriation is limited to improving access to tertiary education and training. / - / - / 25,116
Administration of and Support for the Tertiary Sector (M14)
This appropriation is limited to giving effect to the Tertiary Education Strategy by investing in tertiary education, monitoring and maintaining the Government's ownership interest in tertiary education institutions, and advice and support to Ministers. / - / - / 47,277
Centres of Research Excellence (M14)
This appropriation is limited to the purchase of cooperative and collaborative tertiary research in areas of research strength in the tertiary education sector through the contestable Centres of Research Excellence Fund. / 50,705 / 50,705 / 49,800
International Education Programmes (M14)
This appropriation is limited to delivery of services in respect of international education, including promotion, information, research and professional development, both in NewZealand and overseas, for the purpose of managing and increasing the flow of international students and promoting international education linkages. / 31,638 / 31,638 / 29,372
Tertiary Education Research and Research-Based Teaching (M14)
This appropriation is limited to funding research and research-based teaching on the basis of measured research quality in tertiary education organisations and supporting Wānanga research capability. / 293,750 / 293,750 / 301,500
Tertiary Sector / Industry Collaboration Projects (M14)
This appropriation is limited to funding activities that improve the relevance to industry of tertiary education provision. / - / - / 23,847
Community Education (M14)
This appropriation is limited to funding for adult and community education and literacy, numeracy and English language provision. / 75,133 / 75,133 / -
Managing the Government's Investment in the Tertiary Education Sector (M14)
This appropriation is limited to developing, implementing and managing an investment system that aligns planning, funding, monitoring and quality assurance of tertiary education in accordance with the provisions of the Education Act 1989 and other relevant legislation. / 40,362 / 40,362 / -
Ownership Monitoring of Tertiary Education Institutions (M14)
This appropriation is limited to monitoring and advisory services - including interventions - on the Government's ownership interest in tertiary education institutions. / 2,567 / 2,567 / -
Non-Departmental Output Expenses - cont’d
Tertiary Education and Training Advice (M14)
This appropriation is limited to providing advice and support to Ministers on the tertiary sector and tertiary education and training issues. / 3,837 / 3,837 / -
Tertiary Education Grants and Other Funding (M14)
This appropriation is limited to providing contestable funding and miscellaneous funding to tertiary education organisations. / 31,083 / 31,083 / -
Tertiary Education: Student Achievement Component (M14)
This appropriation is limited to funding for teaching and learning services for enrolled students in approved courses at tertiary education organisations to achieve recognised tertiary qualifications. / 2,074,916 / 2,074,916 / -
Training for Designated Groups (M14)
This appropriation is limited to the purchasing and arranging of training linked to the NewZealand Qualifications Framework and the purchase of both on-job and off-job training places, including delivery of fully or partially funded training places and other industry-training related projects. / 314,929 / 314,929 / -
Total Non-Departmental Output Expenses / 2,918,920 / 2,918,920 / 476,912
Benefits or Related Expenses
Awards for Outbound NewZealand Students (M14)
This appropriation is limited to awards granted to provide assistance to scholars, researchers and teachers to undertake placements abroad and to participate in reciprocal education exchange arrangements with partner countries in selected areas of priority study, teaching and research. / 1,290 / 1,290 / 4,790
Scholarships for Inbound International Students (M14)
This appropriation is limited to scholarships available to international students wishing to study in NewZealand. / 800 / 800 / 800
Support to Apprentices (M14)
This appropriation is limited to payments to NewZealand Apprentices and other participants in workplace-based training, including Māori and Pasifika Trades Trainees, towards their tools and other training related costs. / 2,595 / 2,595 / 2,190
Tertiary Scholarships and Awards (M14)
This appropriation is limited to providing scholarships for tertiary students and other awards in the tertiary sector, and the provision of scholarships and bursaries to Māori and Pasifika students. It includes training assistance under Queen Elizabeth II Study Awards and recognition of outstanding tertiary education teachers. / 15,943 / 15,943 / 14,447
Total Benefits or Related Expenses / 20,628 / 20,628 / 22,227
Non-Departmental Capital Expenditure
Literacy and Numeracy Assessment Tool (M14)
This appropriation is limited to development of online assessment tools for adult and youth literacy and numeracy. / 825 / 825 / 500
Support for the University of Canterbury (M14)
This appropriation is limited to the rebuild of the Science and Engineering Facilities at the University of Canterbury. / 85,000 / 85,000 / 15,000
Total Non-Departmental Capital Expenditure / 85,825 / 85,825 / 15,500
Multi-Category Expenses and Capital Expenditure
Stewardship of the Tertiary Education System MCA (M14)
The single overarching purpose of this appropriation is to provide services that contribute towards a well-functioning tertiary education system. / - / - / 12,141
Departmental Output Expenses
Policy Advice
This category is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on Tertiary Education and international education related matters. / - / - / 4,856
Research, Data Analysis and Monitoring
This category is limited to the production and dissemination of research and data analysis, monitoring and reporting on tertiary education at a system-wide level, and the provision of services (other than policy advice) to support the work of other agencies and Ministers in discharging their responsibilities for tertiary education and international education related matters. / - / - / 7,285
Tertiary Tuition and Training MCA (M14)
The overarching purpose of this appropriation is to fund tertiary tuition and training that leads to improvements in NewZealanders' skill levels. / - / - / 2,491,002
Non-Departmental Output Expenses
Community Education
This category is limited to funding for adult and community education and literacy, numeracy and English language provision. / - / - / 73,651
Tertiary Education: Student Achievement Component
This category is limited to funding for teaching and learning services for enrolled students in approved courses at tertiary education organisations to achieve recognised tertiary qualifications. / - / - / 2,100,205
Training for Designated Groups
This category is limited to the purchasing and arranging of training linked to the NewZealand Qualifications Framework and the purchase of both on-job and off-job training places, including delivery of fully or partially funded training places and other industry-training related projects. / - / - / 317,146
Total Multi-Category Expenses and Capital Expenditure / - / - / 2,503,143
Total Annual and Permanent Appropriations / 3,038,214 / 3,038,214 / 3,017,782

Supporting Information

Part 1 - Vote as a Whole

1.1 - New Policy Initiatives

Policy Initiative / Appropriation / 2015/16
Final Budgeted
$000 / 2016/17
Budget
$000 / 2017/18
Estimated
$000 / 2018/19
Estimated
$000 / 2019/20
Estimated
$000
New Funding for Targeted Tuition Subsidy Increases
(see Notes 1 and 2) / Tertiary Tuition and Training MCA
Tertiary Education: Student Achievement Component / - / 5,000 / 5,000 / 5,000 / 5,000
Non-Departmental Output Expense
More NewZealand Apprentices
(see Note 2) / Tertiary Tuition and Training MCA
Training for Designated Groups / - / 900 / 2,700 / 4,500 / 6,300
Non-Departmental Output Expense
International Connections for NewZealanders
(see also Vote Social Development in the Social Development and Housing Sector)
(see Note 2) / Administration of and Support for the Tertiary Sector / - / 750 / - / 125 / -
Non-Departmental Output Expense
Tertiary Sector / Industry Collaboration Projects / - / 3,750 / 10,000 / 9,875 / 10,000
Non-Departmental Output Expense
Awards for Outbound NewZealand Students / - / 1,500 / 2,000 / 2,500 / 2,500
Benefits or Related Expenses
Engineering Education to Employment
(see Note 2) / Tertiary Tuition and Training MCA
Tertiary Education: Student Achievement Component
Non-Departmental Output Expense / (1,600) / - / - / - / -
Administration of and Support for the Tertiary Sector / - / 400 / 400 / 400 / 400
Non-Departmental Output Expense
Māori and Pasifika Trades Training Contingency Funding Drawdown / Access to Tertiary Education / - / 2,400 / 2,400 / 2,400 / 2,400
Non-Departmental Output Expense
Delivering Support to Graduate-Entry Students Affected by the 7 EFTS Limit to Complete Long Undergraduate Programmes / Tertiary Scholarships and Awards / 2,007 / 3 / 40 / 144 / 1
Benefits or Related Expenses
Flexible Funding Allocation within Tertiary Education / Tertiary Tuition and Training MCA
Tertiary Education: Student Achievement Component / - / 15,000 / - / - / -
Non-Departmental Output Expense
Funding for Additional Trades Academy Places
(see also Vote Education in the Education Sector) / Tertiary Tuition and Training MCA
Training for Designated Groups / (7,326) / (2,305) / (4,610) / (4,610) / (4,610)
Non-Departmental Output Expense
Enabling Further Growth of Māori and Pasifika Trades Training / Tertiary Sector / Industry Collaboration Projects
Non-Departmental Output Expense / 405 / 810 / 810 / 810 / 810
Support to Apprentices / (405) / (810) / (810) / (810) / (810)
Benefits or Related Expenses
International Education Development / International Education Programmes / 1,516 / 1,250 / - / - / -
Non-Departmental Output Expense
Response to Syrian Refugee Crisis: Implementation
(see also Vote Education in the Education Sector, Vote Labour Market in the Economic Development and Infrastructure Sector, Vote Social Development in the Social Development and Housing Sector, Vote Health in the Health Sector and Vote Revenue in the Finance and Government Administration Sector) / Tertiary Tuition and Training MCA
Community Education
Non-Departmental Output Expense / 210 / 1,053 / 1,513 / 757 / 379
Share of Costs for Budget 2015 Whole-of-Government Initiatives / Stewardship of the Tertiary Education System MCA
Research, Data Analysis and Monitoring
Departmental Output Expense / (7) / (5) / (5) / (5) / (4)
Administration of and Support for the Tertiary Sector / (102) / (101) / (75) / (54) / (54)
Non-Departmental Output Expense
Total Initiatives / (5,302) / 29,595 / 19,363 / 21,032 / 22,312

Note 1 - the total cost of targeted tuition subsidy increases in Budget 2016 is $123 million over four years: $20 million of new funding and $103 million from reprioritisation and re-phasing of the existing baseline.

Note 2 - the gross cost of Tertiary Education initiatives in Budget 2016 is $221.529 million over four years: $89.029 million of new funding and $132.500 million of existing funding. These figures include funding for the Annual Maximum Fee Movement, which is appropriated to Votes Social Development and Revenue, and $500,000 funding in 2016/17 for the International Connections for NewZealanders initiative in Vote Social Development.

THE ESTIMATES OF APPROPRIATIONS 2016/17 - EDUCATION SECTOR B.5 Vol.2  1

1.2 - Trends in the Vote

Summary of Financial Activity

2011/12 / 2012/13 / 2013/14 / 2014/15 / 2015/16 / 2016/17 / 2017/18 / 2018/19 / 2019/20
Actual
$000 / Actual
$000 / Actual
$000 / Actual
$000 / Final Budgeted
$000 / Estimated
Actual
$000 / Departmental
Transactions
Budget
$000 / Non-
Departmental
Transactions
Budget
$000 / Total
Budget
$000 / Estimated
$000 / Estimated
$000 / Estimated
$000
Appropriations
Output Expenses / 371,579 / 383,588 / 403,077 / 423,599 / 453,942 / 453,942 / - / 476,912 / 476,912 / 479,309 / 476,197 / 475,635
Benefits or Related Expenses / 14,948 / 14,362 / 31,522 / 35,913 / 20,628 / 20,628 / N/A / 22,227 / 22,227 / 23,012 / 24,348 / 24,665
Borrowing Expenses / - / - / - / - / - / - / - / - / - / - / - / -
Other Expenses / 127 / 3,450 / 2,895 / 1,377 / - / - / - / - / - / - / - / -
Capital Expenditure / - / 250 / 19,700 / 117,870 / 85,825 / 85,825 / - / 15,500 / 15,500 / - / 50,000 / -
Intelligence and Security Department Expenses and Capital Expenditure / - / - / - / - / - / - / - / N/A / - / - / - / -
Multi-Category Expenses and Capital Expenditure (MCA)
Output Expenses / 2,317,579 / 2,335,011 / 2,397,376 / 2,421,020 / 2,477,819 / 2,477,819 / 12,141 / 2,491,002 / 2,503,143 / 2,478,460 / 2,480,675 / 2,483,762
Other Expenses / - / - / - / - / - / - / - / - / - / - / - / -
Capital Expenditure / - / - / - / - / - / - / N/A / - / - / - / - / -
Total Appropriations / 2,704,233 / 2,736,661 / 2,854,570 / 2,999,779 / 3,038,214 / 3,038,214 / 12,141 / 3,005,641 / 3,017,782 / 2,980,781 / 3,031,220 / 2,984,062
Crown Revenue and Capital Receipts
Tax Revenue / - / - / - / - / - / - / N/A / - / - / - / - / -
Non-Tax Revenue / 11,055 / 7,382 / 8,932 / 14,736 / 15,600 / 15,600 / N/A / 1,250 / 1,250 / - / - / -
Capital Receipts / - / 276 / - / - / - / - / N/A / - / - / - / - / -
Total Crown Revenue and Capital Receipts / 11,055 / 7,658 / 8,932 / 14,736 / 15,600 / 15,600 / N/A / 1,250 / 1,250 / - / - / -

Note - where restructuring of the vote has occurred then, to the extent practicable, prior years information has been restated as if the restructuring had occurred before the beginning of the period covered. In this instance Total Appropriations for the Budgeted and Estimated Actual year may not equal Total Appropriations in the Details of Appropriations and Capital Injections.

Vote Tertiary Education

Adjustments to the Summary of Financial Activity Table Due to Vote Restructuring

2011/12
Adjustments
$000 / 2012/13
Adjustments
$000 / 2013/14
Adjustments
$000 / 2014/15
Adjustments
$000 / 2015/16
Final Budgeted
Adjustments
$000 / 2015/16
Estimated
Actual
Adjustments
$000
Appropriations
Output Expenses / (2,317,579) / (2,335,011) / (2,398,376) / (2,423,020) / (2,479,819) / (2,479,819)
Benefits or Related Expenses / - / - / 1,000 / 2,000 / 2,000 / 2,000
Borrowing Expenses / - / - / - / - / - / -
Other Expenses / - / - / - / - / - / -
Capital Expenditure / - / - / - / - / - / -
Intelligence and Security Department Expenses and Capital Expenditure / - / - / - / - / - / -
Multi-Category Expenses and Capital Expenditure (MCA)
Output Expenses / 2,317,579 / 2,335,011 / 2,397,376 / 2,421,020 / 2,477,819 / 2,477,819
Other Expenses / - / - / - / - / - / -
Capital Expenditure / - / - / - / - / - / -
Total Appropriations / - / - / - / - / - / -
Crown Revenue and Capital Receipts
Tax Revenue / - / - / - / - / - / -
Non-Tax Revenue / - / - / - / - / - / -
Capital Receipts / - / - / - / - / - / -
Total Crown Revenue and Capital Receipts / - / - / - / - / - / -

The adjustments in the table above reflect the new multi-category appropriations set up forStewardship of the Tertiary Education System and Tertiary Tuition and Training and the transfer of the Prime Minister's Scholarships for Asia fund from output expenses to benefits or related expenses.

The prior year information in the Summary of Financial Activity table has been restated to reflect the current Vote structure.The table shows how past expenditure would have changed if the restructured appropriations had been in place.

1.3 - Analysis of Significant Trends

Significant changes in departmental and non-departmental appropriations related to tertiary and international education between 2011/12 and 2019/20 are discussed briefly below.

Departmental Output Expenses

Movements in departmental output expenses largely relate to:

international education initiatives, including the establishment of a new Crown entity - Education NewZealand - from 2011/12 and transferring administration of the code of practice for the pastoral care of international students to NewZealand Qualifications Authority

research and information technology system build activities that are one-off in nature and have funding streams which vary according to planned activities (eg, Programme for International Assessment of Adult Competencies and Tertiary Information Future State), and

the transfer of some activities between the Ministry of Education and the Tertiary Education Commission.

The departmental output expenses have been transferred to a multi-category appropriation from 2016/17.

Non-Departmental Output Expenses

Most tertiary education funding is through non-departmental output expenses. The major changes to these appropriations over the trend period are principally owing to:

funding for increases in demand for tertiary provision during the effects of the global financial crisis at the start of the period (which levels off in 2012), which supports increases in the proportion of young people with higher-level qualifications to meet the Better Public Services 2017 target

the implementation and expansion of the Youth Guarantee programme, including provision of fees-free places at tertiary institutions and the transfer of funding from 2012/13 onwards into the new Secondary-Tertiary Interface appropriation in Vote Education to fund trades academies

the removal of regulatory compliance training from 2012 and further reducing industry training funding to align with estimated demand in 2013

initiatives to revitalise the industry training system, introduce NewZealand Apprenticeships in 2014 and expand Māori and Pasifika trades training between 2013/14 and 2019/20

ensuring the country's skills base supports the needs of industry and encourages innovation - strengthening provision in areas of specific priority, such as engineering, science, agriculture and health sciences, with targeted increases in related tuition subsidies, the establishment of Information and Communication Technology (ICT) graduate schools from mid-2015, and closing the gap in funding between private training and public providers in 2013 and 2014

funding to deliver foundation-level programmes to meet the needs of beneficiaries and for them to be referred to specialist English for Speakers of Other Languages providers or to address intensive literacy and numeracy needs (transferred from another Vote from 2013/14)

additional funding for research, including increasing the Performance-Based Research Fund to $300million by 2016, increasing the number of Centres of Research Excellence (CoRE) from 2016, improving the performance of the fund, and establishing a CoRE focused on Māori research, and

increased funding for international education, including promotions.

Three significant non-departmental output expenses have been transferred to a multi-category appropriation from 2016/17.

Benefits or Related Expenses

Changes in benefits or relatedexpenses are largely related to:

an apprenticeships ‘re-boot' between 2013/14 and 2014/15 and support for other apprentices

addressing pressures on Medical Trainee Intern Grants (TIGs) from 2015/16, and

phasing out of tertiary doctoral and enterprise scholarships and doctoral research and undergraduate international student scholarships.

Non-Departmental Other Expenses

Significant changes in these appropriations mainly reflect:

Tertiary Education Institutions Merger Support funding that ceased in 2013/14, and

University of Auckland Starpath Project funding that ceased in 2014/15.

Non-Departmental Capital Expenditure

The major changes in non-departmental capital expenditure relate mainly to assisting Christchurch tertiary education institutions to recover from the impact of the 2010 and 2011 earthquakes.