Education Minister Chris Hipkins is saying the "status quo is not an option" in the future of the country's polytech institutions.

Change is on the horizon for our 16 polytech institutions, following the announcement Hipkins will scrap a tertiary education funding model of the previous government.

The Government will end competitive allocations of funding at New Zealand Qualification Framework levels 1 to 4 to give providers greater funding certainty so they can focus more on students.

"The competitive model is another failed ideological experiment of the previous National government," Hipkins said this morning at a Vocational Education and Training Forum in Auckland.

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Questioned further around whether one or more of New Zealand's polytech organisations could be forced to close, Hipkins said this wasn't the case.

"There will be change," he told the Herald by email this afternoon.

"But what it looks like will ultimately be influenced by the process that has started."

Hipkins referenced an article titled "A sustainable future for ITPs" published on the Tertiary Education Commission website, which looked at the financial issues faced by institutions and studied potential ways forward.

The article quotes Tertiary Education Commission (TEC) Chief Executive Tim Fowler talking about changes that have already occurred within the sector.

"The ITP sector has already undergone a lot of structural change over the last two decades, merging or forming partnerships to improve their quality and efficiency," he said.

"New Zealand had 25 ITPs in 1990, and now has 16. So change is normal, and when done well, and with right motivation and focus, can drive better outcomes for everyone."

Following the change announced this morning, funding for organisations would return to being based on student enrolments.

"We don't do competitive funding for schools or university degrees, so why would we do it for non-degree tertiary study?" Hipkins asked.

"It removes uncertainty and will enable providers to properly plan and develop programmes, build tutor capacity and focus on what they do best – improving the quality of outcomes for New Zealand's learners," Hipkins said.

The change affects all Student Achievement Component (SAC) funding at levels 1 and 2, and levels 3 and 4 funding for agriculture, horticulture and viticulture courses.

Funding from 2019 will be allocated by the Tertiary Education Commission (TEC) through the 2018 Investment Plan process.