A government funding snub will cost UCOL dozens of jobs, one sixth of its training programmes and millions of dollars in revenue for next year.

The polytechnic's 2013 prospectus is hot off the press but stands to lose a few pages as UCOL announces sweeping course and staffing changes after a funding rejection forced management to undertake urgent reviews.

UCOL staff last night were told 33 jobs were on the line, chief executive Paul McElroy said.

"That's pretty hard and what we now have to do is cut our cloth to suit, it's as simple as that," he said. "We had been negotiating for two months and it's only in the last week our numbers have hardened."

UCOL's exclusion from a pool of $40 million in contestable government funding for entry-level courses had left its management disappointed.

The snub will cost UCOL $2.6m in revenue and will affect 19 training programmes.

"The country is in hard financial times and we have had to make hard choices. But I really don't like closing courses when we've got students to enrol in them. I want them to have the opportunity to change their lives at UCOL, that's what we're here for."

UCOL students union president Kylie Jefferies said some students would be confused about whether they could continue in programmes proposed to be cut, though the changes wouldn't affect existing students.

"It's just ultimately pretty disappointing and sad to see we have to make cuts like that, not just to staff and student numbers but also to the courses themselves."

There was also talk the Whanganui-based School of Fine Arts would be "scaled back".

The loss of the Tertiary Education Commission-tendered Student Achievement Funding (SAC) for level one and two courses means UCOL will offer training to 375 fewer fulltime equivalent students across its Palmerston North, Whanganui and Wairarapa campuses next year.

UCOL has confirmed 19 programmes, or 17 per cent of UCOL's programmes, including entry-level Certificate in Fashion and Beauty and Certificate in Tertiary Study Skills, both of which are designed to help school-leavers access higher education and employment, are among the courses likely to be cut.

However, Mr McElroy said higher-level beauty courses would still be on offer, although school-leavers would have to look elsewhere for entry-level training.

UCOL was among several polytechnics nationwide that missed out on a slice of $40m in SAC. The funding was this year offered for tender for the first time to private training providers offering level one and two programmes.

Of the 24 providers nationwide that will receive SAC funding in 2013 - only six of them are institutes of technology or polytechnics. One is a wananga and 17 are private training establishments (PTEs).

Tertiary Education Union president Sandra Grey said the Government was abandoning learners when they most needed help.

"The Government's policy is driving first-time learners, second-chance learners and people in regional communities out of our publicly owned polytechnics where they have a clear pathway to lifelong learning and job skills.

"It is asset-stripping by another name, because the Government is taking away the very thing which makes our public tertiary system so strong - its students and staff - and giving them away to private companies."

In a statement, Tertiary Education Minister Steven Joyce Ms Grey's comments were "not correct" and indicated a bias.

"My main concern lies with getting the best results for all tertiary students. I have been advised that UCOL will still be retaining over $1.7 million to deliver foundation education in 2013 versus around $3 million in 2012.

Mr Joyce said UCOL has had year-on-year declines in enrolments in some areas. "It would not be fair to taxpayers to ask them to keep funding particular areas of provision if there is no on-going demand."

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