Analysing tertiary spending - Bucks and bangs ...

March 2011

 

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The government applied $4.3 billion in operating expenditure to providers and students in the tertiary sector in 2009. About a quarter of that was spent on supporting students through loans and allowances.

The government applied $4.3 billion in operating expenditure to providers and students in the tertiary sector in 2009. About a quarter of that was spent on supporting students through loans and allowances.

The Ministry of Education’s Tertiary Sector Performance Analysis and Reporting team, under manager Roger Smyth, measures the money going in, and, as far as possible, the results coming out.

The team has published a report detailing enrolments and spending, together with ‘outcomes and outputs’ taken across the period 2005 to 2009, in eight key funds.

Smyth says an example of an ‘output’ is a university qualification, while ‘outcomes’ are more complex to measure. “We can say a measurable output is the student obtaining a degree, say. The ‘outcome’ from that is, for example, that student’s place in the labour market over two, three or five years.”

Key findings of the report

Student Achievement Component (SAC) commonly known as EFTS funding:

  • $1831 million in 2009.
  • In 2009, the value of successful course-level study per dollar of government expenditure was higher than in 2005. This result was mainly due to the level of over-delivery in 2009.
  • Between 2005 and 2009, an increasing proportion of SAC-funded qualifications awarded were to students aged under 25 and studying at level 4 or higher. Also, an increasing proportion of Māori or Pasifika students completing SAC-funded qualifications were studying at level 4 or higher.
  • People with tertiary qualifications continued to enjoy higher earnings premiums and a higher likelihood of employment than people with school-level or no qualifications.

Performance-Based Research Fund (PBRF)

  • $239 million in 2009.
  • There was a substantial increase in PBRF funding (including research top-ups) from 2005 to 2009 in real terms.
  • Postgraduate qualification completion rates rose.
  • The rate of citation of indexed publications by authors from New Zealand tertiary education institutions improved.

Industry Training Fund

  • $158 million in 2009.
  • There was a substantial increase in funding from 2005 to 2009 in real terms, which allowed a substantial increase in the number of trainees.
  • The number of credits attained by trainees increased in total between 2005 and 2009, although the number of credits attained per standard training measure (STM) fell.
  • Programme and qualification completion rates generally increased between 2005 and 2009.

Modern Apprenticeships

  • $43 million in 2009.
  • The total amount of funding increased by almost 50 per cent from 2005 to 2009, which allowed a significant increase in trainee numbers.
  • The number of new trainees starting a Modern Apprenticeship declined sharply in 2009, reflecting the impact of the recession.
  • The number of credits attained per STM was slightly higher in 2009 than in 2005.

Training Opportunities

  • $85 million in 2009.
  • Total funding decreased slightly in real terms from 2005 to 2009. The number of placements also decreased, as the employment market changed and as the criteria for acceptance into the programme changed.
  • The number of credits attained fell from 2005 to 2009. Although trainee numbers also fell, the number of credits attained per $1000 of real government expenditure was also lower in 2009 compared with 2005.
  • The two-month post-study outcomes for placements saw the proportion of students who did not find employment or undergo further training remain relatively constant at around one in five. However, with the onset of the recession there was a decrease in the proportion of trainees in employment and an increase in the proportion of trainees in further training.

Youth Training

  • $58 million in 2009.
  • Total funding fell in real terms from 2005 to 2009. There was a decrease in the number of placements between 2005 and 2009. This decrease in placements was due, in part, to a strengthening labour market up to 2008 and a tightening up in 2007 of the criteria for granting early school leaver exemptions.
  • The number of credits attained per $1000 of real government expenditure was higher in 2009 than in 2005.
  • Between 2005 and 2009, the proportion of placements resulting in a trainee not being in further study or in employment two months post-study remained relatively constant at around 16 per cent. However, with the onset of the recession, there was a fall in the number of placements resulting in employment, while the number of placements resulting in further study increased.

Student loans and student allowances

$1389 million of capital spending on student loans and $515 million allocated to student allowances in 2009.

There were substantial increases in government expenditure on student loans and student allowances between 2005 and 2009.

There were significant increases in student loan borrowers and student allowance recipients between 2005 and 2009. Part of this increase was a result of increased participation during the recession, but changes to eligibility criteria also had an impact.

The representation of students from low-decile schools in tertiary education was maintained between 2005 and 2009.

The report is available on Education Counts, http://wiki.tertiary.govt.nz/~TertiaryAnalysis

... and bang for the buck

The Ministry of Education has released a brief analytical paper on how tertiary education can deliver better value to the economy. It was released by the Ministry of Education late last year.

Based on a presentation given at the New Zealand conference of the Association of Tertiary Education Management in Auckland in July 2010, the paper summarises New Zealand and international research.

Key findings

  • There is good evidence for a link between improved education and improved economic performance – but the quality of learning is more important than the amount of time spent in education or the qualifications gained.
  • New Zealand is well educated compared with other developed countries – but New Zealand’s labour productivity has been low relative to the level of educational attainment. This has been due to a range of factors.
  • There is little evidence of general qualification shortages in New Zealand. The key issue is the quality of education people receive, and whether it equips them with the skills they need and is relevant to their future life and work.
  • Tertiary education has both direct and indirect influences on innovation. The indirect influences are more widespread, with the skills of graduates being one of the most common indirect influences.
  • Overall, tertiary education makes a small, but important, contribution to driving economic growth. The quality of the skills graduates bring to their work is more important than simply the number of people in the workforce holding qualifications.

The paper is available on the Education Counts website: http://wiki.tertiary.govt.nz/~TertiaryAnalysis

Going forward - Impacts on the strategy for the nation’s tertiary learners.

The Ministry of Education’s 2010 monitoring report for the Tertiary Education Strategy is called Facing the challenge: Tertiary Education Strategy monitoring 2010.

The report provides baseline data to monitor progress against the 2010-15 Strategy, and is framed around the seven priority areas of the Strategy. Each section discusses key indicators relating to the priority, includes a summary of key points and identifies key challenges for achieving the goals of the Strategy.

The report is accompanied by a set of cross-strategy indicators with what the Ministry’s Tertiary Sector analysis team says are “enduring measures of the overall health of the tertiary education system”.

In general, the report reinforces the messages in the Tertiary Education Strategy document. Areas where the messages are further developed include:

Vocational education

More young people are staying at school longer. However, in tertiary education, increased participation by school leavers has only been at degree level and in level 1 to 3 certificates. There has been no increase in participation by school leavers in level 4 to 7 vocational qualifications.

Completion of degrees

While the number of 18 to 19-year-olds starting degrees increased by 7.6 per cent from 2003 to 2005, the number of these students who completed within five years increased by only 2.9 per cent.

Māori achievement

More Māori students are achieving university entrance, but at a proportionally lower rate than non-Māori. Completion rates for young Māori in bachelor degrees are lower than for non-Māori.

Te reo Māori

A very large number of people have gone through te reo Māori courses over the last decade. However, only 8 per cent of those have successfully completed courses that represent a year’s full-time study in the language. This is the minimum level required to develop basic proficiency in the language.

Supporting Pasifika

There has been a substantial increase in Pasifika students completing level 2 NCEA, though this is not resulting in a similarly large increase in achievement of university entrance. The completion rates for young Pasifika in bachelor degrees are lower than for non-Pasifika.

Links

Understanding the link between tertiary education research and innovation remains a challenge. Indicators of research quality and academic impact show steady improvement, however there is limited consistent information available on how tertiary education research contributes to innovation.

The report and the indicators are available on the Education Counts website: http://wiki.tertiary.govt.nz/~TertiaryAnalysis