Rotorua's Toi Ohomai is welcoming an announcement to try fix the underfunding of institutes of technology and polytechnics around the country.

Education Minister Chris Hipkins announced a programme of work to reform the polytechnic sector to ensure providers are sustainable and delivering for the regions.

The reform would see the Tertiary Education Commission work on the Institutes of Technology and Polytechnic (ITP) Road Map 2020 project over the next six months.

"A strong, modern and dynamic polytechnic sector is crucial to achieving a world-class skills system across all of New Zealand's regions," Hipkins said.

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Toi Ohomai Institute of Technology has welcomed the announcement. Photo / File
Toi Ohomai Institute of Technology has welcomed the announcement. Photo / File

Toi Ohomai's executive director of corporate services, Anthony Robertson, said the institute welcomed the announcement.

"We support the review and agree that we need a system that provides resilience for the sector," Robertson said .

"It is good that the minister recognises the underfunding in the sector over the last nine years and we welcome changes to rectify that."

He said institutes of technology and polytechnics had been "extremely successful in terms of education and financial performance" but there needed to be a change in the way the nation's 16 providers were funded.

"The system is not only vulnerable to fluctuating demand but also does not recognise the increased costs for regional delivery and support," he said.

"We believe the review needs to include other factors impacting the sector as well, including image and perception of institutes of technology and polytechnics."

Hipkins' reason for launching the review was, while polytechnics account for 20 per cent of government spending in tertiary teaching and learning, over the past decade domestic student numbers have dropped by a third.

"The Tertiary Education Commission will work with polytechnics, and the broader community, to explore and test different options for change. As part of this process, we're looking at what has been done in other countries and what that might look like in New Zealand," Hipkins said.

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"I have considered whether increased funding, which was reduced in real terms over the last nine years, would solve the issues in the sector.

"While a funding system specifically designed to meet the cost challenges of the sector could help make it less vulnerable to fluctuating demand, it will not be enough on its own."

Robertson said it was important to look at overseas successes and the reasoning behind them, as well as what had not been successful in New Zealand, and why.

Hipkins said the review was also about making sure the sector could respond to changing demands and learner needs and securing a regional presence for polytechnics.

The minister planned to report the findings to Cabinet in December 2018, including options for change and whether policy or legislative change was required.

The Ministry of Education is also conducting a wider review of vocational education and training alongside the polytechnic sector reform.