NorthTec's latest financial woes highlight a need for further reform of tertiary education.

The new Government's plan to offer three years of education free, phased in next year, is a start, but more sweeping changes are required.

Tertiary education is still operating under a myth that a competitive market will deliver the best outcomes for students and the country.

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While many education providers do good things, including NorthTec, intense competition in the sector, combined with declining government funding, has led to some dubious practices.

There's widespread acknowledgement that there are too many low-quality courses, as tertiary providers chase easy money, at the expense of educational merit or relevance to jobs or careers for students.

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And as any staff member will privately tell you, there's pressure to accept students on to programmes who don't have the necessary academic skills, or sufficient English language ability when it comes to overseas students. This is unfair to students and tutors.

Across the country, there are stories of courses skimping on teaching hours and inadequate research and preparation time for degree-level teachers.

The shortcuts taken with educational quality have, unsurprisingly, been more common at smaller institutions.

The reason being, that as with all competitive markets the strong get stronger, while the weak and the small struggle. A regional polytechnic like NorthTec can't compete on the same playing field as Auckland University, Massey or AUT.

Though this hasn't stopped NorthTec embracing a corporate culture, exemplified by the recently departed CEO receiving an annual salary of $260,000 plus.

NorthTec's situation could be compared to a corner dairy trying to compete with a supermarket across the road, with the added problem that the owner of the corner dairy has delusions of paying himself nearly as much as the supermarket boss.

If current CEO, Mark Ewen, and his senior management team took a 50 per cent pay cut, NorthTec would be well under way to achieving a better financial situation.

This won't happen. But why shouldn't it? Why have we come to accept such high salaries in the public sector? A wage freeze at the top is something this Government could implement.

Any increase in per-student funding of tertiary institutions must go to where it's needed, to frontline teachers and support staff.

While you can't keep offering courses that not enough students want to do, it's essential that once a decision is made to run a programme it's resourced properly.

Reacting to a dip in student numbers by cutting teaching hours or overburdening academic staff with too much classroom time - both common practices at NorthTec - is a path to mediocrity. That's like McDonald's responding to selling fewer hamburgers by giving customers only half a bun.

NorthTec must commit to quality education delivery that earns the long-term respect of the community. Word of mouth, from both happy staff and students, is worth far more than any flashy corporate marketing.

Part of the problem is in the hands of Government to fix. If it's serious about supporting the regions, then NorthTec needs to receive funding above and beyond what the big institutions receive per student.

Call it a regional investment in the people of Northland.