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Tertiary Education Sector

Crown entities shape both funding and delivery decisions across the sector.

Under section 203 of the Education Act and section 7 of the Crown Entities Act, tertiary education institutions, such as universities, polytechnics and wānanga[41], are Crown entities. As with the health sector, Crown entities, dominate the delivery of tertiary education services. A Crown entity of a different type (the Tertiary Education Commission, a Crown agent subject to direction) is responsible for the purchase and monitoring of tertiary education services.

Each tertiary education institution is governed by a Council that includes members appointed by the Minister for Tertiary Education, and other members appointed in accordance with the Education Act[42].

The Tertiary Education Commission (TEC) is governed by a board and:

  • manages the Investment Plan and funding process (see below)
  • monitors the performance of tertiary education institutions
  • provides ownership advice on tertiary education institutions.

Funding for tertiary education organisations (including schools and private providers) is allocated by TEC. TEC must fund tertiary education organisations in accordance with determinations issued by the Minister for Tertiary Education. The Minister sets broad parameters for funding but cannot set funding levels for individual providers.

TEC implements the Minister's determinations and allocates a range of funds for tuition, research and other related services.

Most funding is allocated on the basis of Investment Plans. Tertiary education organisations submit Investment Plans to TEC. A plan sets out how an organisation will give effect to the Government's current and medium-term priorities in the tertiary education strategy. This includes describing how it will respond to the needs of its stakeholders, its mission and role, and all programmes and activities for which funding is sought from TEC. TEC then assesses the Plan and may approve it (in whole or in part) for funding for up to three years.

Tertiary education institutions report to the Minister for Tertiary Education and the House after the end of each academic year. TEC helps the Minister assess delivery against Plans and expectations.

TEC also monitors the Crown's ownership interest in tertiary education institutions. Currently, TEC monitors the financial performance of institutions to identify potential risk areas. It operates a graduated framework of interventions (from more intensive monitoring and engagement to statutory interventions[43]) to respond proactively to identified risks. Good performance is rewarded by lighter approaches to monitoring.


  • [41]Wananga are Maori tertiary education institutions defined under section 162 of the Education Act. They are characterised by teaching and research that maintains, advances and disseminates knowledge, develops intellectual independence, and assists in the application of knowledge, regarding ahuatanga Maori (Maori tradition) according to tikanga Maori (Maori custom).
  • [42]University and wananga councils can have between 12 to 20 members, including four ministerial appointees. Polytechnic councils must have eight members, four of which are appointed by the Minister for Tertiary Education.
  • [43]See sections 195A to 195F and sections 222A to 222F of the Education Act.
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