Download a PDF version of Our investment framework for learner (delivery) funds (PDF 186 KB)

What is our investment framework?

At the Tertiary Education Commission (TEC) our investment framework guides all our investment decisions about tertiary education and training. It does not cover research funds.

This page describes the framework and what goes into our decision-making, and gives two examples of how this works in practice.

Context

Many factors influence tertiary education investment, including TEC decisions. Ultimately, learner choice drives the system and TEC can be most influential when learner demand is high. Learner demand is, in turn, affected by external factors such as economic shocks, labour market strength, pandemics, climate change and other disruptors.

Fundamental to our decision-making are our Te Tiriti obligations. These include responding to the needs and aspirations of iwi, hapū and whānau, supporting Māori learners to succeed as Māori, and honouring and protecting taonga.

How we make investment decisions

Our decisions are informed by:

• Government priorities and strategic context
• advice from stakeholders, iwi, industries, regions and agencies on investment priorities
• information and data about and from tertiary education providers, including investment plans.

We make investment decisions through:

Informing

We tell tertiary education organisations (TEOs) and the wider tertiary sector what we want to fund and what we need to know from them to make funding decisions.

Engaging

We partner with TEOs and let them know what we expect from them.

Investing

We decide what to fund, in what regions, how much, and from which TEOs.

Our decision-making always involves trade-offs, for example:

• when to favour one priority area of provision over another
• when to favour delivery of a priority area of investment over delivery for a priority group
• when to support existing provision over new provision.

These trade-offs reflect tensions inherent in the system. We must constantly balance stability of funding with changing needs and the agility to respond to those needs. We carefully consider all aspects of provision and performance in the context of varying needs and alternatives.

The outputs we seek from our decisions are to:

• use funding to grow high performance
• allocate funding towards high-priority provision
• increase equity of access and outcomes across the system
• reduce investment in areas of low performance
• manage levels of lower-priority provision
• shape and sustain an appropriate network of provision across foundation, vocational and higher education.

The outcome we aim for:

A tertiary education system that supports learners to succeed and ensures they have the skills industries, regions and communities need.

Key principles underpin every investment decision

Evidence-based

We make decisions based on best available data and information. We understand and apply knowledge of the sector, learner demand, stakeholder needs, and best practice.

Fair, transparent and consistent

Our methods and processes offer predictability, build trust and confidence in the system. They recognise the diversity of tertiary education (sub-)sectors. They balance costs and risks in proportion to outcomes.

Learners at the centre

We incentivise, promote and enable equitable outcomes for all learners by making providers accountable for how they deliver education and the outcomes they achieve. We support providers to recognise learner diversity and meet learners’ needs and aspirations.

Continuously improving the system

We improve the system’s effectiveness through reviewing and updating internal processes for investment decision-making, as necessary. We improve the system through the tools and guidance we provide to the sector.

Examples of investment decision-making for learner (delivery) funds

Example 1

How we allocate funding places to high-priority provision (ie, strategically significant provision that supports long-term economic, societal and cultural goals)

Our decisions are informed by:

• Tertiary Education Strategy
• Providers’ Investment Plans
• Tau Mai Te Reo and Ka Hikitia
• Pacific Education Action Plan
• Health Workforce Plan
• Industry Transformation Plans
• advice from other agencies
• iwi aspirations
• advice from Workforce Development Councils (WDCs)
• information about regional needs
• Educational Performance Indicators in priority subject areas
• learner outcomes in priority areas
• provider commitments to levels and mixes of provision in priority areas
• previous delivery in priority areas.

We make investment decisions through:

Informing

• We develop and publish targeted investment priorities, ie, specific areas of provision where higher enrolments or more types of enrolment are desired (eg, te reo Māori, clinical psychology, construction).

Engaging

• We engage with providers about any barriers to increasing enrolments in priority areas.
• We engage with agencies about responses from providers to their identified priorities.

Investing

• We prioritise allocating funding places to areas of priority provision.
• We invest in new initiatives and/or fund new providers in priority areas.

The trade-offs we make in decisions about funding high-priority provision tend to:

• favour agility over stability, shifting the mix of provision offered by providers
• respond to industry demand for certain skills by incentivising learner demand (through providers)
• at times, reflect changing levels of regulation (eg, our legislative requirement to give effect to advice from WDCs).

The output we seek through our decisions:

Allocating funding places to high-priority provision, to the extent that learner demand allows.

Recent examples include health, te reo Māori and construction.

The outcome we aim for:

A tertiary education system that supports learners to succeed and ensures they have the skills industries, regions and communities need.

Example 2

How we support high performance (ie, positive outcomes in areas such as learner success, industry responsiveness and/or financial sustainability)

Our decisions are informed by:

• Tertiary Education Strategy
• information from providers, iwi, communities, industry and learners
• Learner Success Plans and Disability Action Plans from providers
• other provider submissions for funding (eg, applications for the PTE Strategic Fund)
• educational performance indicator data
• learner outcome data
• external evaluation and review (EER) ratings
• academic audits.

We make investment decisions through:

Informing

• We publish eligibility requirements and assessment criteria for performance-related funding (eg, the performance element of the learner component).

Engaging

• We engage with industry about how well providers listened to their needs.
• We engage with providers about performance milestones (eg, for learner success).

Investing

We allocate funding based on submissions from providers and evidence of their performance.

The trade-offs we make in decisions to support high performance can:

• favour established quality over support to improve quality (eg, only providers with high EER ratings are eligible for the PTE Strategic Fund)
• sometimes emphasise accountability (eg, using milestones and commitments in Learner Success Plans). Others favour autonomy (eg, supporting providers to develop new programmes, or offering funding that is not tied to enrolment numbers).

The output we seek through our decisions:

Supporting providers who show evidence of high performance in certain areas to grow or maintain their areas of strength.

The outcome we aim for:

A tertiary education system that supports learners to succeed and ensures they have the skills industries, regions and communities need.