Education Minister Chris Hipkins has scrapped a tertiary education funding model of the previous government, blasting it as a "failed ideological experiment".

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.

"It forced tertiary education providers to bid against each other for a share of funding across two competitive processes and created needless instability in the sector.


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

From 2019 the funding of up to $135 million will return to being based on student enrolments.

"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.

The TEC and the Ministry of Education are working on transition arrangements, which will be confirmed following Budget 2018.

This will assist providers when they develop their Investment Plans for 2019-2020 funding, Hipkins said.

"This is another strong sign of this Government's commitment to a more collaborative approach to tertiary education.


"We are developing a genuine network of provision, funded through investment plans that are developed, consulted and negotiated with tertiary providers.

"This will ensure we better meet the needs of our regions' learners and employers in a rapidly changing world."