Education, Training and investment: Unlocking the future potential of Australia’s workforce

This week the ACTU held their National Community Summit: Creating Secure Jobs & a Better Society.  Pat Forward, the AEU Federal TAFE Secretary spoke about TAFE.  This is the edited version of her speech.

The vocational education sector in Australia has undergone significant change over the past twenty years. During that period, government recurrent expenditure per hour of training has declined by 15.4% between 2004 and 2009—part of a longer term trend that has seen funding per hour decline by about 25.7% from 1997.

Government funding for TAFE has declined both because of the decline in recurrent public VET expenditure per hour and because of a shift of government recurrent funding away from the TAFE sector. This is a result of policy settings consistent across both state and federal governments which have focussed on the creation of an open market for training, and the shifting of resourcing in the sector away from governments and directly onto individual students.

Victoria has led the way. Since the introduction of full competition for government funding through a student or voucher in 2006, TAFEs’ share of this artificially created market declined from an already comparatively low 66% in 2008, to only 45% in early 2012. During this same period, the private provider share of the market grew from 14% in 2008 to 46% in 2012. This is an increase of 370%. For the first time in Australia’s history, TAFE has become a minority provider in one state. This has resulted in the proliferation of fly by night private providers, delivering training in a fraction of the time it takes in reputable institutions, and the growth of high volume, low cost training (ie Fitness Instructors) in areas of the economy which are distinguished by their reliance on insecure work, and which are have no connection with skills shortages, or the medium and long term needs of the economy or society. It has seen costs of training for individual students, often the most disadvantaged in society, rise by many thousand percentages points, with a whole generation of young and mature age workers forced to incur debt for qualifications which are of dubious quality, and which have no certain currency in the current or any future economic environment.

The activities of a small Victorian private provider called the Vocational Training Group in November deserve special mention. VTG was running a scheme which involved enticing students to enrol in a government-funded outdoor recreation course by promising kickbacks of up to $1500 per student. Students could complete the free Certificate IV in Outdoor Recreation which typically requires between 6 and 24 months study at TAFE in as little as ten 90-minute sessions. Each student was promised $500 – described by VTG as an “education scholarship” – and an additional $1000 “donation” for his or her club. These payments were to be made by the Supreme Athlete Foundation, a “charitable project” registered at the same address as VTG. At least seven suburban sport clubs and the Royal Yacht Club became involved in VTG’s recruitment drive.

VTG stood to gain government funding of around $2500 to $5000 profit per student under Victoria’s Training Guarantee. The scheme could have netted it somewhere between $20,000 and $70,000 per group of students for about 15 hours of training, delivered at club premises. Cash-strapped suburban clubs also stood to gain thousands of dollars.  No one knows how long the scheme had been running or how much VTG had already made from this scam.

In early 2012, the VTG was deregistered by the Victorian regulator because it was not financially viable. The regulator said that the provider had not been able to demonstrate a viable financial model.

The Victorian regulator did not, and could not deregister VTG for offering thousands of dollars of inducements to students and sporting clubs or for delivering a year long course in 10 x 90 minute sessions. Under the Victorian Training Guarantee, there is apparently nothing wrong with private providers doing this. Just to repeat – VTG was deregistered because it was not financially viable.

The impact of these policy settings are not confined to Victoria.  In Australia in 2008, TAFE share of the market was almost 80%, and private provider share 11%. By 2011, TAFE share nationally had fallen to 66%, and private provider share had risen to 26%. While the effect of the Victorian experiment is reflected in the national figures, there is no way of escaping the impact of policies to increase allocation of public funds to the private sector in each state and territory.

This shift in market share is predicated on a policy consensus amongst all governments that the costs of vocational education should now be shifted to students irrespective of whether it takes place in a high quality TAFE institution, or a dodgy for-profit private provider. At the same time, almost $1b of federal funding annually is paid directly to employers through government subsidies for training, and one of the consequences of the opening up of government funding for training through the creation of a “market” has been an increase in the number of employers accessing freely available government funding for training which they used to pay for themselves.

But the real losers in the current hiatus in the vocational education sector are TAFE and VET students – including, for example, those in NSW. In 2012, students studying a government subsidised TAFE Advanced Diploma in NSW paid either a concession fee of around $50, or a maximum of about $1570. Under the new arrangements agreed to by the Federal and NSW governments, these fees stand to increase initially to $4000 and $5000 when the policy is fully implemented. This is because the both governments have agreed to set an “average price” for these student loans – and this means effectively that training providers, TAFEs or private, will be able to charge students much more for their training – and students will need to take out loans to pay for it.

On top of this, the COAG VET agreement requires state and territory governments to offer an “entitlement” to VET training for qualifications up to certificate 3 – but only for the first qualification. This means that students across Australia, as in Victoria and now SA, may now only get one chance to study at TAFE in these courses, after which they will be required to pay full fees – often thousands of dollars – for any qualifications up to this level. For people who have been retrenched, or who are unemployed, for those returning to the workforce with qualifications which may be decades old – this would be an absolute disaster. It would put TAFE training out of the reach of many people, denying them the second chance of education that TAFE has always provided.

This “one chance” at a qualification has been roundly condemned in Victoria, where many students have been enticed by poorly regulated private providers and the offer of financial inducements and IPads into worthless qualifications.

Louise Watson is one of a number of researchers who are sceptical about the  effects of vouchers or student entitlements:

In education … some clients are cheaper to serve than others, so providers have an incentive to attract concentrations of the easy-to-serve clients.[1]

Watson argues that no voucher scheme has yet been able to solve the problem of thin markets for services.  Denise Bradley was frank in her report about the risk to smaller outer metropolitan and regional university campuses of a voucher or student entitlement system.

Watson makes the link between what she calls ‘simplistic market solution(s)’, and working and employment conditions for teachers:

The introduction of voucher schemes can affect the quality and supply of staff who deliver services. Private for-profit providers … have a strong incentive to keep wages and training costs to a minimum. [2]

The risk is not confined to private providers, who already enjoy the advantage of Modern Award conditions and pay which gives them a huge competitive advantage over TAFE. Salaries at private providers are often half those of staff in TAFE institutes, there are no requirements for permanency, and Modern Award conditions sanction teachings hours which are 50% greater than those required at TAFE institutes. It is no surprise that the Queensland, NSW and Victorian governments have declared war on TAFE teachers’ salaries and conditions, condemning an already highly casualised sector to much greater uncertainty. All this is in the name of competitive neutrality, and a level playing field. It is teachers’ salary and on costs which are the major budget item for TAFE institutes.

Most commentators and key industry figures acknowledge the crucial role of the public TAFE sector both in delivering vocational education to meet the needs of the economy and society, but also as an incubator and repository of high quality teaching skills within the VET sector itself.

Most commentators also acknowledge the key role played by TAFE in regional and rural areas, amongst disadvantaged students, and amongst workers who have been retrenched or who are seeking improved employment and work outcomes. TAFE has built its role and its reputation as an institution which offers students and young workers a much broader vocational education – one which prepares people not just for jobs for today, but for a future vocation where they are able to navigate and negotiate in an environment where jobs are increasingly insecure and where they will need to change jobs many times during their working life.

But the role of TAFE institutes is under significant attack, as the very recently released Victorian Taskforce Review of the training reforms in Victoria shows:

TAFE institutes should no longer assume that they are required to deliver community service obligations that are not explicitly required and funded by government.

Current policy settings in the sector are undermining high quality, innovative and effective vocational education in a highly regarded, and responsive public education provider. The Victorian government has recast its TAFE institutes as just another provider in an undifferentiated market. Other state governments, emboldened by the Victorian experiment, are set to do the same.

Increasing competition for scarce government funds is about creating or extending market organisation of the sector. Making the sector demand-driven through a student entitlement model is code for further competition. We need to be clear that this remains a policy driver in all governments in Australia at the moment. And if the focus of policy is the design of markets, it leads us inevitably to ask the wrong questions, to argue over the wrong things – and to come up with the wrong answers.

There is a great deal to be learnt from the ongoing crisis amongst private providers in the international and domestic education market in Australia.

First, once you create a market, gaining profit becomes the point of the activity, not education.

Second, the actions of a few lead to penalties for all as society’s trust in our vocational education system is eroded.

Third, the market will flood the lower-cost end of provision.

And fourth, more and more regulation is required leading to compliance cultures.

TAFEs are public institutions. They play a number of complex and sophisticated roles in the community. They already have, often directly through the networks of teachers who work with them, fine relationships with their local industry and community groups. TAFEs need to be properly supported in this role. Their role needs to be expanded, and they themselves can help break down the silos of different layers of government and different departments within government. If their role in industry planning was expanded, they could play a much more useful role in assisting local communities to investigate the development of new industries. If they were supported adequately, the strength of the relationships which they currently have could be built upon and developed. Their interest would be with communities, not just with businesses. They are social institutions, and they belong to the communities they serve.


[1] Louise Watson, CR 19/8/08

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The crisis in TAFE is spreading

don'twreckA lot has happened since our last post!

On 30 January, Prime Minister Julia Gillard announced that the Federal Election would be held on 14 September.

On 2 February, the Minister for Higher Education, Skills, Science & Research, Senator Chris Evans resigned.  The new minister is Chris Bowen.

On Wednesday night, Ted Baillieu resigned as the Premier of Victoria, and was replaced by Denis Napthine.

TAFE SA has announced a restructure which involves collapsing the three institutes in SA into one, with the loss of 150 jobs.  TAFE SA acting chief executive David Royle, has blamed this on the push for “efficiency” and the need to compete for public funds caused by “Skills for All” reforms.

The crisis in TAFE is spreading.

Chris Bowen has  yet to make any clear statement about TAFE.

TAFE is universally regarded as a high quality educational institution, with effective links into industries and communities. It is a cherished institution in Australia. The magnitude of the community response to TAFE cuts across the country are very clear evidence of this. It is essential we continue to highlight the damage being done to TAFE.  We must continue to promote TAFE, and its successes.  We must continue to urge the Federal Government to intervene in states where misguided policy, cuts and closures in the name of “reform” are destroying a much loved, public asset.

We hope you will help us! 

  • Click the contribute button at the top of the page and share your TAFE story.  We’d love to hear from TAFE teachers and students.
  • Whether it’s a union rally, a student event, or just the daily life of your TAFE institute we love to see photos of TAFE teachers and students in action!
  • Find us on Facebook & Twitter to stay updated on what’s happening to TAFE around the country.  Share our social media updates with colleagues and friends.
  • Write a letter to your local newspaper about the attack on TAFE, and why it is too important to lose.
  • We welcome feedback!  Leave a comment on the blog about what you’d like to see in this space!

World-class

ed miliband

At TDA’s National Conference in September last year, Senator Chris Evans described the TAFE network as “world-class and something we should be very proud of.”  “World-class” is a word that regularly, and unsurprisingly, gets attached to Australia’s TAFE system.  However, the continued attacks on TAFE, right across Australia, have the potential to destroy this valuable asset.

In the same speech in September, Senator Evans revealed that the questions he is most often asked about while overseas, relate to our TAFE system, and vocational education and training.  The world, is rightly very envious of Australian TAFE!

While pondering our world-class system, we started exploring what other countries around the world are saying and thinking about vocational education and training.

Ed Miliband, Leader of the British Labour Party, dedicated a large portion of his speech to the British Labour Conference last year to themes around vocational education and training.  On ensuring there is a robust and quality vocational education system in Britain, Miliband said something that really resonated with us at the Invest in Quality, Invest in TAFE campaign:

“It’s not just that it’s socially right, it is absolutely essential for our economy for the future.”

We encourage Australian governments, both federal and state, to think about the sentiments of this statement.

The TAFE system we have is world-class.  It is an asset that will continue to reinvest into the development of Australia- both socially and economically.  We must not let the destruction continue.

Further Reading:

Market models won’t fix the problems in vocational education

Jones Beach Umbrella © 2009 Joe Shlabotnik , used under a Creative Commons Attribution-Noncommercial-ShareAlike license http://creativecommons.org/licenses/by-nc-sa/2.0/deed.en

 

Over the summer holidays, we are revisiting some of our favourite articles from The Australian TAFE Teacher magazine.

The severity of the cuts to TAFE funding in the recent Victorian budget on May 1 2012 has focused the attention of many outside the sector on the unravelling of vocational education in Australia. The sector has been calling for an informed debate about vocational education policy for a long time. The attention is welcome and the debate essential.

The dismantling of TAFE did not start on May 1 in Victoria, when the Baillieu government slashed $300m and an estimated 2,000 jobs from TAFEs. TAFE has endured endless funding cuts over the years, and it is by any measure the worst funded education sector in Australia – a 25.7% reduction in funding since 1997. These cuts to funding have resulted in the neglect of teacher qualifications and professional development, and decline in student support. TAFE has become one of the most highly casualised sectors in education. TAFE has scrimped and saved and adapted and struggled for more than a decade, only to be reminded by government bureaucrats on an annual basis that funding cuts are, in Orwellian terms – “efficiencies”.

Twenty years ago the training marketeers gave us a competency based training (CBT) and competition. A few years later, courtesy of New Labour, they gave us “market design” and the development of a competitive market in vocational education and training. In the middle, the sector endured “growth through efficiencies”. It has taken twenty years, but the current debacle in Victoria is as much the result of this twenty year reform process as the May 1st Baillieu budget.

It is true that the Baillieu government has gone further than the previous Labor state government in directly cutting funds from TAFE. However, the Baillieu government has taken reforms bequeathed to it by the previous Victorian Labor government and driven them to their logical conclusion. The Victorian State Labor opposition has struggled in the last month to articulate a response to the cuts.  As the architects of Victoria’s “skills reform” they are responsible for the fragmentation and decline in TAFE funding that resulted. The harshness of the budget cuts is undeniable – so is Labor’s complicity in creating this situation.

Much the same can be said of the Federal ALP. The recent intervention by Minister for Tertiary Education Senator Chris Evans is timely and welcome.  He has, and he must continue to call this Victorian government to account for what it is doing to TAFE. But Federal Labor must walk away from the policy that it has devised and promoted, which it has funded, which bureaucrats have shamelessly and uncritically promoted and which the Victorian government implemented three years ago.

The truth is this: market models won’t fix the problems in vocational education.

The poverty and austerity of market design as an organizing principle for the sector is being revealed for what it is in Victoria – a poor cover for destroying public institutions in vocational education. All stakeholders must call for a rigorous public debate that contributes to the development of policy that would shape the future of the sector. TAFEs and unions have done this and some industry groups have broken ranks and joined TAFE. These are positive signs.

The crisis in TAFE sparked by Victorian budget cuts can only be addressed if all stakeholders declare their hands – governments who want to shift the costs of vocational education from themselves onto students (through income contingent loans), industry and unions who profit from government VET funding, consultants who benefit from the subcontracting out by government departments of research, and universities who continue to prey on the sector in order to maintain their student numbers.

Markets are not the way to organize social goods like education. Advocates of market design cannot point to a single piece of research that shows that it works in education.

Markets are neither good masters, nor good servants. The problem in Victoria is not that the market has failed, but that it has done exactly what is was designed to do – deliver profits to entrepreneurial private providers who work often within the parameters set for them – 5 day diplomas, qualifications delivered in hours – these are the currency of the current VET system. The regulators are powerless to stop providers from offering these qualifications at cut price in a fraction of the time it takes, because in the current VET market in Australia, they are not doing anything wrong.

Some commentators have already called the game. The severity of the Victorian budget cuts has surprised many, and there has been a collective shake of the head, as many seek to save what they can from the wreckage. In an attempt to persuade other states not to go down the Victorian route, we are encouraged to consider the as yet untested SA model – caps and incentives associated with access to entitlements. There has been an almost universal call to upgrade quality requirements among training providers.

Neither looking to SA, nor attempting to increase quality requirements will work in the current environment. There is little more than a whisker between the architecture of the SA Skills for all, and the Victorian Training Guarantee. I have studied both closely – they are in large part indistinguishable, and each lends itself admirably to the gutting of the TAFE budget as happened in Victoria on May 1. Indeed, the ridiculous complexity of the SA model – a level of complexity which makes the Victorian model look simple in comparison – will lead to the same confusion and despair as is evident in Victoria.

A call for increased quality will not work either because quality is hard to define in a market-driven, fragmented, CBT system. The problem with CBT is that it severs the link between learning and assessment. According to CBT, learning happens anywhere anytime, and can be assessed in any place. This trivialises vocational education because in the end curriculum and structured teaching and learning don’t matter, and nor do teachers or institutions. In vocational education, as in all education, quality centres on the learning process, which young apprentices and all vocational education students engage in when they “go to TAFE”. Learning is a social process linked to an educational institution, even where a part of that learning is on the job. In the current debate, the advocates of a VET market see TAFE as just another training provider, indistinguishable except for the additional costs to governments, a problem which the Victorian government has remedied by effectively cutting all Victorian TAFEs “full service delivery” funding. Indeed, the current focus of quality is the outcomes of learning. It is an impoverished learning experience which can be conflated narrowly with outcomes.

The call for increased quality in a market system will not work because the current batch of government bureaucrats have no idea how to define quality, and because governments refuse to resource the level of increased scrutiny required in a low trust, high surveillance system. Witness the “increases” in funding to ASQA in the recent Federal Budget. They were illusory – the increases in actual funding were minimal – around $3m. The Federal Budget merely allowed ASQA to set higher fees.

Reports of the death of TAFE are premature, but the fight to defend it is going on in earnest.

There has never been a greater need for vocational and further education in publicly funded educational institutions, with highly qualified teachers. In working with students at these institutions (whether in classrooms, workplaces, or online), the focus must be on contemporary industry skills, but it must also be on further education, and on citizenship and on building the capacity of this and future generations to participate powerfully in society.

This is TAFE, and the ferocity of the community response to the Victorian cuts should send a warning to governments that while they might act carelessly with the asset that they hold in trust for their communities, the communities themselves know the value of TAFE.

-Pat Forward is the Federal TAFE Secretary of the Australian Education Union

Empirical Barriers

Over the summer holidays, we are revisiting some of our favourite articles from The Australian TAFE Teacher magazine.

At the request of the Council of Australian Governments, the Productivity Commission (PC) recently undertook an examination of the publicly funded VET system and VET workforce. The draft report made many recommendations that, if followed, will dramatically alter the funding mechanisms for VET, the working conditions of its employees and the economic incentives affecting teachers, TAFEs and private VET providers.

The key economic issues are first, the PC endorsement of current moves to extend competitive tendering of publicly funded VET and, second, the shift to an ‘outcomes’ based funding model.

These changes are based on a fundamentally flawed understanding of the economics of publicly funded VET. They will arguably result in reduced quality of training provision, more costly and burdensome VET regulation, and taxpayer exposure to significant financial risk.

The central problem with the PC endorsement of competitive tendering of publicly funded VET is that the two minimum conditions required for efficient contracting out do not exist.

Efficient market pricing relies on accurate information on the characteristics of the good or service being transacted and the quantities demanded and supplied. The PC’s own analysis in the draft report explicitly states that there are, as yet, no robust measures of “productivity, efficiency, effectiveness and quality” in publicly funded VET services available either in Australia or globally. The PC notes economists and statisticians have over the last 50 years failed to develop such metrics for intangible services such as ‘education’. (It recommends ‘more work’ be done to develop these indicators.)

This problem is compounded by the fact that there are multiple and, indeed, conflicting objectives imposed on the publicly funded VET system.

This makes it impossible to precisely relate VET inputs to VET outputs.

According to the PC the publicly funded VET system has three objectives: provide workforce skills, encourage maximum participation of the population in training, and promote social inclusion. Surely it is simple to assess whether the VET system is meeting workforce skills and for government to pay private providers to meet these skills? Not so. The PC notes that only 30 per cent of VET graduates are employed in an occupation directly related to their qualification. Is this evidence of skills mismatch or broadly skilled, flexible workers? Without precisely specifying the quantities of VET outputs and their quality, there is simply no basis – in economic theory or empirically – for arguing that contracting-out publicly funded VET will result in better or more efficient training provision.

The simplest way to cut through these profound theoretical and empirical barriers is to ignore them. The PC does this by proposing to shift from the present system of publicly funded VET, based on payment for hours of teaching delivered, to “outcomes based funding”. Payments are to be made for module or course completions or “number of students passed or firms serviced”.

The use of such crude metrics of VET system performance will create perverse incentives for teachers and training providers, both public and private. The PC notes that this funding model “could lead to some reduction in VET standards, if successful completions are paramount”. These perverse incentives will be intensified by the PC recommendation to introduce performance based pay for VET teachers. In the absence of productivity and quality metrics, VET teacher “performance” is likely to be measured by reductions in unit cost of delivery and increases in student graduations. Both can undermine quality.

There are many high quality and ethical private VET providers but there are also many stark examples of market and ethical failure in private VET provision. These include the recent foreign student debacle and the malfeasance on a grand scale revealed by NSW Independent Commission Against Corruption (ICAC) investigations into private VET training provision for construction equipment operators, residential house builders, structural engineers and the security industry. The ICAC noted corruption had become so extensive as to undermine the integrity of the VET system in the specific fields of training. Because they could not compete against corrupt providers who would guarantee an “outcome”, ethical operators were driven out of the industries.

Deregistration of VET providers by state training regulators are focussed overwhelmingly on private providers. Corruption and malfeasance, of course, do occur in public VET provision but the publicly available evidence suggests these problems reside primarily in private provision. The economics of VET explain why this is so. Many private VET providers are sole operators or have only a few employees, resulting in fewer internal controls and checks. There can be very low barriers to entry and low exit costs for operators. Qualification requirements for operators and teachers are either low or easily circumvented. And quality in VET provision is impossible to measure.

Contracts for private providers to deliver publicly funded VET are very short term with no certainty of renewal. This encourages opportunism and reduces the incentive to invest in the business. Deregistered providers can reappear as ‘phoenix’ operators. And as Bruce Baird observed in his review of the foreign student college debacle, “where profit is a key outcome from delivering education services, the quality of the service will at some point and for some providers come under pressure”.

The risks in extending competitive tendering of publicly funded VET can be reduced to some extent by more intrusive regulation of public and private VET providers. But this is the system chasing its tail – increasing the scale of publicly funded private provision requires imposing ever more stringent controls. The rising cost of regulation undermines the case for contracting-out, and as the PC states, form-filling associated with such monitoring is one of the reasons teachers leave the VET system.

In outsourcing delivery of essential services, such as workforce training, government cannot dissociate itself from the need to guarantee continuity of service supply or from bearing other costs arising from the financial failure of a private supplier. There are many Australian examples of these risks being realised, such as ABC Learning and the ‘renationalisation’ of privatised public transport systems and toll roads. Private agents contracted to supply essential services are aware of this implicit government guarantee. This creates a moral hazard or an incentive for the private agents to increase their risk preference – increasing the probability, and possibly scale, of the liabilities for which government may be responsible.

Publicly funded VET does not meet the minimum conditions required for efficient, competitive tendering. There is profound uncertainty about the quantity and quality of the goods and services being contracted out, and there are significant risks to the quality of the future workforce and public purse.

-Dr Phillip Toner is a senior research fellow with the Centre for Industry and Innovation Studies at the University of Western Sydney.

This article was originally published in the 22 March 2011 edition of Campus Review

VET has too many qualifications and is too complex

Over the summer holidays, we are revisiting some of our favourite articles published in The Australian TAFE Teacher magazine in 2012.  

The Australian vocational education and training system is too complex, too expensive and yet too easy for VET providers to enter.  It has too many qualifications that take a lot of money to develop for too few students.

There are currently 170 registered higher education providers in Australia, and 4900 ‘active’ Vet registered training organisations.  In 2010, the biggest 100 VET providers (that is, 2% of all providers) delivered 86% of teaching, while only 61 VET providers had 1000 or more equivalent full-time students.

In 2012-13 the Australian Government allocated almost $19.5 million to the higher education regulator – the Tertiary Education Quality Standards Authority, while it allocated almost $32.8 million to the VET regulator – the Australian Skills Quality Authority.

Each year, the Australian Government spends millions of dollars to support 11 industry skills councils to develop qualifications for their industries.  Qualifications are part of a ‘training package’ for that industry and providers are required to offer only approved training package qualifications unless there isn’t one in the appropriate area.  In 2010, 70% of VET students undertook training package qualifications compared to 66% in 2009.

In 2010, there were at least 1416 training package qualifications offered by VET providers.  The median number of equivalent full-time students in these qualifications was 34.  That is, half of these qualifications was 34.  That is, half of these qualifications had fewer than 34 equivalent full-time students, and half had more that 34.  This is not the median number of equivalent full-time students in each qualification in each VET provider; it is the median number in each qualification in Australia. In universities, each qualification needs to have at least 25 equivalent full-time students, or management will come hunting.

Some 13% of training package qualifications had no student in 2010, while 56% had fewer than 50 equivalent full-time students.  In contrast, 14% of qualifications had more than 500 equivalent full-time students, showing it is possible to get at least some economies of scale.

There is obviously something very wrong.  We have an expensive edifice that doesn’t work and declining confidence in qualifications.  Quality is a problem which hasn’t been solved by the establishment of ASQA and is unlikely to be fixed for as long as ASQA persists with the flawed framework which it inherited.  Millions are spent creating qualifications that aren’t used effectively which are delivered by thousands of small providers that teach few students.  Moreover, it is some small private providers that have ruined Australia’s reputation amongst international students, and are well on the way to ruining VET’s reputation with domestic students.

Australia needs a new approach to developing and accrediting qualification.  An alternative would be to allow each provider to develop its own qualifications and require them to be accredited by a qualifications authority.  This is the model used in higher education to accredit qualifications offered by non-self accrediting higher education institutions.

This would very quickly reduce the number of VET providers by a couple of thousand.  Only providers that are serious and have the necessary resources and capacity would develop their own qualifications.  It would create a market in qualifications, rather than a market for the price charged for qualifications, which only drives down fees and quality.  This approach should suit serious private providers and TAFE institutes because it would give them the opportunity to distinguish themselves in the market and escape from restrictive training packages.  Our research on other countries shows that when institutions develop their own qualifications, staff have a much greater investment and sense of ownership of those qualifications.

Qualifications would still be nationally portable because they would be developed using simplified core national standards and based on a national assessment framework in which core components are either assessed externally or externally moderated.  Local accreditation committees would include industry representatives, similar to the role professional bodies play in accrediting professional qualification in higher education.  This would give industry far more input into qualifications than is currently the case, because it would influence the structure and design of the qualification, curriculum, syllabus, assessment and requirements for teaching staff.  Representatives from schools and higher education would also be included to support the development of pathways.

Economies of scale would be achieved because providers would only develop and accredit qualifications that attracted sufficient numbers of students to make their investment worthwhile.  Consistency would be maintained and proliferation of different types of qualifications would be avoided by a national assessment framework and simplified standards, just as it is in nursing or engineering.  There will be some areas where it will be impossible to have economies of scale (such as the Certificate III in Sawdoctoring) and alternative arrangements will be needed, just as they are in higher education in similar circumstances.  However, the system should not be organised around these small number of cases.

Increasing the cost of entry by providers (as this approach would do) is needed because we need to imrpvoe the quality of providers and their qualifications.  The point of VET is not to spend millions creating an infrastructure that supports thousands of small providers that contribute minimally to VET, but to create a high quality VET system with qualifications that are trusted.

-Dr Leesa Wheelahan is an associate professor at the LH Martin Institute for Tertiary Education and Management and is the co-ordinator of the Graduate Certificate in Tertiary Teaching at the Melbourne School of Education, University of Melbourne.

Leesa’s latest book is “Why knowledge matters in curriculum: a social realist argument”

Funding Cuts to TAFE: Impacts on GippsTAFE, LaTrobe Valley and Gippsland

summer reading

Over the summer holidays, we are revisiting some of our favourite articles published in The Australian TAFE Teacher magazine in 2012.  

The Victorian TAFE Association values the opportunity to present its views on the impact of funding cuts to TAFEs in Eastern Victoria.  The Association is the peak body for all 14 TAFE Institutes and four Dual Sector Universities across Victoria.

The Government Budget cuts to TAFE across Victoria equate to around $300 million per annum made up of two components:

  • $130 million reduced funding for training delivered
  • $170 million removal of “Full Service Provider” funding for TAFEs community service and statutory obligations.

Looking at the $130 million reduced funding for training delivered, the government hopes that a substantial amount of that $130 million can be recovered in increased student fees.  TAFEs do not share the view that the community, employers or students can bear the sort of fee increases necessary for many courses.  As well as many TAFE course fees increasing substantially, a wide variety of courses will no longer be offered in many TAFEs across Victoria, for example: business administration, hospitality, retail, event management, sport and recreation.  The reduction of the government support funding to $1.50 per student hour for these programs would make the student fee contribution exorbitant at Certificate 1 to Certificate IV program level and impossible for students to fund.

At the Diploma level there is access to a Loan Scheme.  The fees for Diplomas will still have to rise between $5,000 to $8,000 per annum and students will consequently weigh up the options: pay the fees or forgo vocational/applied education and training altogether and not upskill or retrain, or access a university place instead.  For regional Victorians the latter is no easy option and will often mean relocation or distance education.

The $170 million for FSP funding removal is absolutely immoral.  This money equates to about $2.15 for each hour of student training, which has previously funded TAFE’s Community Service Obligations and Full Service Provider facilities, including libraries, cafeterias, counselling service officers, disability services officers and part-funded the statutory obligations of TAFE to comply with the Government’s public sector employment and wages policies.

Many if not all of these obligations remain but the Government is removing the funding in total from January 1, 2013.  In effect the Government is defunding what is has required in retrospective obligations on TAFEs.  The obligations will continue, the funding to support those obligations will not, which is why the cuts about to be experienced are so hard hitting.

The rationale for the cut is based on inaccuracies.  The Treasurer Kim Wells has stated that the:

‘TAFE system was clearly unsustainable’. (Hansard 7 June)

The leader of the National Party Peter Ryan stated on Jon Faine’s 774 radio program on June 8:

‘On the issue of TAFE, it is unsustainable; we were told by Labor in 2008 that by 2011 the growth would have been from $800 million to $900 million, it’s gone to $1.3 billion, you just can’t have that continue.’

However, the facts demonstrate that TAFE has not grown unsustainably.  We accept that the Government has experienced a blow-out in training spending, which we predicted; a prediction shared with the then Labor Government in 2008.  We also told Minister Hall throughout 2011 that the growth in training spending was unsustainable, as all the quarterly figures indicated a major cost blow out.  However, it was not caused by TAFE.

The cause was a huge expansion in the number of private RTOs from 200 to 411 providers delivering training.  Provision of training exploded in many areas, particularly focussed in metropolitan Melbourne and in courses such as Business, Fitness, Sport and Recreation.  If we take an average across Victoria the growth in training by student enrolments 2008 to 2011 was 308% in private RTOs and in the last year alone March 2011 to March 2012 there was a 97% growth.  TAFE’s growth in the same period was 4% and 5% respectively.

From 2008 to March 2012 private RTOs market share of training delivered rose from 14% to 46%.  In the same time public TAFEs was down from near 70% to 45%.  Thus there was a huge blowout in training provision, some in skill shortage areas, some excessive and arguably unnecessary and some certainly and proven to be very poor quality and involving disreputable and fraudulent activity by some private RTOs.

Gippsland TAFE and its students and the local employers and community are being punished by a Government and bureaucracy that did not heed warnings and take measured pre-emptive action, as they were constantly advised and pressed to do, to avoid the obviously evolving blowout in costs.

All the figures I am quoting are from the Minister’s own department’s quarterly statistical collections.  They are their figures – not ours – figures that they have made openly available on their website over the past 18 months.  (Latest figures are from ‘Victorian Training Market Quarterly Report Q1 2012).

The Gippsland trend is completely at odds with the state-wide figures.  As mentioned, the explosion was in metropolitan areas where training by private RTOs increased between 2008 and 2011.  Relevant figures include increases of 447% in the Southern Metropolitan region and 364% in the Western Metropolitan region.  In the last 12 months Southern Metropolitan has seen growth of 109% and Western Metropolitan region $124%.

TAFE in comparison in these Metropolitan areas actually had reductions in enrolments.

An examination of the figures as they relate to Gippsland reveal that from 2008 to 2011 private RTOs’ student enrolments in the region declined by 5% from 2008 to 2011.  In the last 12 months private RTOs’ student enrolments grew by 46% but off quite low numbers of 1,051 to 1,533.

There is no evidence of unsustainable growth in Gippsland as a whole by all education and training providers.  It in fact declined in 2008 to 2011 by 23% and the grew marginally in the last 12 months by 7%.  people in Gippsland are now limited to enroling in no more than two government-supported programs in a calendar year.  Pathway programs from diploma to higher education have now become unviable.  Contrary to stated government policy objectives many programs that relate to Gippsland’s regional skill shortage requirements will no longer be offered.

The Government has got it very wrong.  It needs to immediately reinstate the $170 million TAFE Full Service Provider funding and to review the exceedingly low funding rate to courses such as Business and Hospitality to ensure they are still able to be offered.

The Government must review the needs of regional Victorians, as well as ensuring that a diverse range of programs and pathway programs to higher education are able to be offered in regional Victoria without astronomical fee increases to students.

The Government is aware that these has not been unsustainable growth in training in Gippsland and should be made to answer why they are ruthlessly slashing funding to training in the region.

-David Williams is the Executive Director of the Victoria TAFE Association.  This piece is an edited version of a speech given to Latrobe City Council on June 26, 2012. 

Adult and Community Education in Australia

Over the summer holidays, we are revisiting some of our favourite articles published in The Australian TAFE Teacher magazine in 2012.  

In Australian policy and practice terms, there are as many definitions of Adult and Community Education as there are states and territories. Nationally, ACE has two quite distinct meanings. In some states it refers to non-vocational programs delivered by almost anyone and in many instances by TAFE. In other states, ACE refers specifically to a sector of not-for-profit community organisations who deliver both non-vocational programs but who increasingly form part of the Vocational Education and Training system.

While many TAFE teachers have an appreciation of ACE and may have even worked in the sector, others see the growth of larger VET focused ACE providers alongside VET reform in many states as yet another tool to undermine the pay and conditions of TAFE teachers; a veritable Trojan Horse, being used by policy makers to put a more palatable face on a privatisation race to the bottom.

I would argue that ACE, at its best, transforms lives and transforms communities and complements the work of publicly funded TAFEs. Further, that a greater understanding of the history and potential of ACE is essential for ACE and TAFE practitioners to work together towards their many common goals.

ACE is an extraordinarily broad church that has developed organically as a result of a number of waves of social movements. The first of these was the Mechanics Institutes, Schools of Mines, Schools of Arts and Circulating Libraries that developed in the second half of the eighteenth century. The aim of these largely worker-based movements was to enrich the lives of working men and women and to allow them to participate more effectively in civic life. These were joined at the turn of the century by Workers Education Associations; learning organisations which originated in the UK and continue today in Adelaide and parts of NSW. Post World War 2 the CAE in Melbourne opened along with a series of regionally based branches, and Community Colleges in NSW were developed.

The Neighbourhood House Movement with its emphasis on providing new educational options for women gave new energy to ACE in the 1970s and early eighties, and the early nineties “recession we had to have” added a series of Skillshares with a strong focus on the long-term unemployed. At the moment, other movements such as the Men’s Sheds movement and the Social Enterprise Movement (often modernised and rethought supported employment services for people with a disability), are flirting at the edges of the sector.

The diversity of ACE is both its greatest strength and its greatest weakness. On the strength side, each movement that has built the sector has been a genuine response to a pressing social need. Each centre’s uniqueness reflects the unique needs of its local community, with the mix of programs and courses differing widely between communities. Each centre also includes its own mix of social and community services alongside education offerings, from childcare, to job services, and in some high poverty areas even provision of welfare services such as food vouchers. Many have begun social enterprises and micro-businesses to provide supported work to members of the community such as community cafes, gardening services and recycling ventures.

On the weakness side, the diversity of providers means that public visibility of individual centres within local communities is high but the public sense of a sector is quite poor. Just like small businesses, the small size and geographic spread of ACE organisations makes for few economies of scale and a tough financial environment. ACE’s relationship with the community services sector puts it in the same highly feminised, devalued and poorly paid category as childcare, youth work and community development. All this makes for an industrially weak sector. Also, the very broad definitions of ACE in some states can mean that a small local neighbourhood house focussed on language and literacy can be treated in the same way as a large, multi site not-for-profit enterprise offering only accredited qualifications.

It is in every trade unionist’s interest to guard the definition of and policy approach to ACE and to advocate for adequate funding for the sector. The alternative is to allow ACE to be exploited by state governments as a ‘cheap and cheerful’ alternative to TAFE, forced to move away from the values and traditions that drew people of good will into it in the first place, competing over a shrinking pool of learners and ignoring those who have no relationship with learning at all.

While welcoming the diversity in the sector, ALA’s position is that the definition of an ACE provider has three parts, each of which forms an essential component. These are:

1)      Not for profit.

2)      Place-based community development amongst its core aims.

3)      Providing non-formal learning programs in addition to formal VET programs.

Not for profit requires little explanation. There is little enough investment in education or community services in Australia. Having to return a profit is bound to impact negatively on quality of provision and makes it unlikely that a provider will make the long-term commitment to a community required to reach the most disengaged. Remarkably some states include private RTO’s in their definitions of ACE, spreading the small amounts of funding for building communities even further. Unremarkably these are the states with the weakest ACE provision.

The ‘place-based’ part of the second criteria is crucial and needs to be protected. ACE providers have such a strong reputation in reaching hard to reach and socially excluded learners because they are in it for the long haul. An ACE provider’s long term commitment to a local community means that they remain as a presence whether there is a market case for them being there or not. For example, there are a number of ACE providers known simply as “The Centre”, that is, they are so embedded and well-known within their local community that the rest of their name has dropped off over time. Once a community has this kind of ownership of a learning centre, even the most disengaged adult in the community is likely to know what it does and feel comfortable walking through the door.

Not for profit status alone does not an ACE provider make. In our opinion, a large not-for-profit organisation that drives in and drives out or flies in and flies out of a community when the market is strong and moves camp when it’s not, is not an ACE provider.

Which brings me to the final part of the definition. Non-formal non-vocational learning is an essential part of the ACE tradition. Just like our forbears in the Mechanics Institutes, ALA believes that adults needs to keep learning not only to gain and retain their next job, but also to build functional homes and families, to manage their own health and wellbeing, to be active citizens in a vibrant democracy and to engage in an informed way with the important debates of our times such as moving to a lower carbon society or dealing decently with diversity and immigration.

Anyone who has worked in ACE or TAFE has heard the term ‘basketweaving’ used as a derisive grab bag term for any learning activity that does not include training to atomised narrowly defined competencies for a job that exists today and might not tomorrow. While there is most certainly a debate to be had about public/private benefits of non-vocational learning and who pays for what, a large part of ACE’s appeal nonetheless is that it is open to people who are not seeking work as well as those who are, and to people whose identity is informed as much by being a parent, or grandparent, as by what they do for a living, or whose contribution is made to the non-paid volunteer economy instead of to the paid workforce.

A 2004 – 2006 Longitudinal Study of Victorian ACE learners found that for those surveyed:

  • The unemployment rate declined to one-third from 24% in 2004 to only 8% in 2006
  • The proportion of workers employed full-time more than doubled from 13 percent in 2004 to 28 percent in 2006.

However, it also found that:

  • Overall the main motivations for those studying an ACE course were to “improve well being and confidence” (93% agreement), to “meet new people and share a learning activity” (89% agreement) and to “develop new interest or activity” (82% agreement).

Ironically, the very reason that people value ACE, that is, learning general skills in the company of others, is the least valued by government and the most likely to end up defunded as “basketweaving”.

No one would advocate for non-vocational programs for the middle class to be funded at the expense of support for the unemployed to gain qualifications to enter the workforce or for vulnerable workers to gain qualifications that will increase their capacity to move to high skill, high wage jobs. However, the grab bag of ‘basketweaving’ is too often used to devalue and defund important access, participation and intergenerational literacy initiatives that form an integral part of the ACE tradition.

The 2007 ABS Literacy and Lifeskills Survey caught the public’s attention because of the startling figures of 53% of the public with less than the level of numeracy and 47% with less than the level of literacy required to operate effectively in a modern knowledge based economy and society. A little quoted figure from this survey found that those adults who reported above the required literacy and numeracy levels and who also had the highest formal qualifications, also reported having engaged in large amounts of self funded or workplace funded non-formal learning. On the other hand, those with low literacy and numeracy reported very little engagement in non-formal learning at all.

Those of us in secure employment take part in so much non-formal learning, in the form of seminars, workshops, mentoring, briefings and conferences that we barely notice it. This non-formal learning underpins and informs our pursuit of formal qualifications. Yet for some reason we expect the poorest, least skilled members of our community to spend large amounts of their resources going straight to the formal option, with no access to non-formal learning at all. What does it say about us a society that our government would rather intervene in some of our poorest communities to manage people’s finances for them, rather than teaching them the numeracy and financial management skills to do it themselves?

I encourage you as unionists and educators not to buy into the notion that all learning outside formal qualifications is basket weaving. Accredited qualifications are important tools for participation in the economy, but short courses, taster program, learning circles and other non-formal approaches are essential too. It is no accident that those countries (mainly the Scandinavian countries) with the highest levels of adult literacy not only have strong VET systems, but also offer opportunities for adults to learn a broad range of life skills in each others company.

In increasingly privatised tertiary education environments, the ACE tradition is not a threat to sustainability of the TAFE sector. I would argue that ACE is an enabler and a provider of pathways and that TAFE can only be strengthened by working cooperatively with community based adult education. However, ACE needs to be funded to do what it does best so that it is not forced to abandon its traditions and compete for the scraps from an already lean table. It is in both our interests to understand the interrelationship between formal education and training and non-formal learning and development and to build a culture and commitment to both lifelong and lifewide learning for all Australians.

– Sally Thompson is the CEO of Adult Learning Australia, the 51-year-old national peak body for adult and community education across Australia

Counting the Costs of Training Reform

summer reading

Over the summer holidays, we will be revisiting some of our favourite articles published in The Australian TAFE Teacher magazine in 2012.  

As consumers, we face a barrage of marketing ploys to attract our attention and encourage us to favour one product over that of a competitor.  For education this is nothing new.  As the dynamic of the training market-place shifts towards increasingly competitiveness, emerging are a host of strategies designed to entice the uninformed into making life altering decisions, often without appropriate disclosure or assurance of quality outcomes.

Vocational training is by no means devoid of commentary on these issues, however the degree of analysis employed in the past may no longer be adequate.  The public training system has had its fair share of critics and has been taken to task for its perceived inflexibility however, while this debate rages, the VET system has been transformed, providing consumers with expanded choice.

Victoria’s demand-driven system has placed industry in the invidious position of steering vocational training while the state government has fundamentally taken a ‘hands off the wheel’ approach, allowing unbridled market forces to shape the sector.  The explosion in enrolments in the fitness sector, as revealed last year, is just one example of where industry’s capacity to truly influence training has been sorely tested.

The explosion in private training provider registrations last year gives some insight into the business opportunities that this shift in government policy unleashed.  While competition within the training system should be seen as a positive development, the flaw that has been exposed is that unrestrained and rapid growth without adequate regulations has already impacted upon training quality.

Interestingly the tone in public debate over these reforms has changed recently from one that focused on access and equity to one that now places quality firmly in the spotlight.  The transformation of training into a commodity that maintains effective quality control is an illusion at best.  While the regulatory authorities will argue standards are in place and enforced, the reality is that even with such controls dubious training continues to be openly promoted.

The Victorian sector continues to attract criticism, raising concerns that the growth in training is nothing more than a statistical charade rather than initiative of any actual substance.  The Victorian model fails to engender confidence that the integrity of the training system can be maintained in an environment of seemingly unfettered opportunism.  Recruitment into courses linked with free iPads, holidays and financial inducements is making a mockery of a system that is designed to deliver skills.

This feeding frenzy is supported by taxpayer fund, purportedly to address growing skill shortages.  Data released by Skills Victoria show a 44% increase in enrolments in the three years to 2011 but the true consequence is a $400 million black hole in the education budget.  On the surface this investment should translate into increased productivity but in reality what has flourished are qualifications with minimal if any economic return.

Accessibility to subsidised training has received much attention, with the Victorian eligibility restrictions being seen by some as a disincentive and barrier to skills attainment.  As was recently announced by Prime Minister Julia Gillard, there is a concerted effort being made in the provision of “…a high-value, high-wage, high-skill employment” and that financial barriers should not act as an impediment to advancing this commitment.

The recently announced HECS style income contingent loan proposal requires closer analysis, particularly in the environment that Victoria has developed.  For public training providers still reeling after the collapse of the international student market and cuts, these announcements have been received positively.  Likewise, private providers may also reap the benefits, as their continuing growth will be buoyed by the expectation that even larger numbers of students will be enticed into training.  Confidence in the training system has been battered in Victoria and industry’s response will be contingent upon policy that places quality and genuine skills-creation front and centre once again.

There is ground for caution, given experience where similar income contingent loan systems have been operating.  Student debt continues to escalate in the United States, amidst concerns that increased bankruptcy applications related to student loans will be the next financial disaster to hit the country.  In 2012 reports from the USA showed credit card debt of $826.5 billion with outstanding student loan debt exceeding $829 billion.  Others have estimated total debt to be closer to $1 trillion.  In the United Kingdom declining enrolments are being attributed to student debt, which are estimated to be £60,000 per student on average.

Student debt is not a new concept for Australia with the Higher Education Contribution Scheme (HECS), and more recently HECS-HELP, which continue to support eligible Commonwealth supported students to pay their student contribution fees.  The expansion of the income contingent loan system to the VET sector, as announced by the Prime Minister purports to open up training opportunities for students undertaking Diploma and Advanced Diploma qualifications.

For VET, caution is justified as the nation prepares to extend student loan arrangements, given there may be salutary lessons to be learnt from overseas.  The potential inflationary impact upon training and cost shifting to students need to be considered in light of TAFEs traditionally servicing the needs of students from disadvantaged groups for whom qualifications translate simply to an employment outcome rather than high wages.  For such risk adverse students the loan arrangement may still not provide a viable option and ongoing skill shortages will remain.  Until the mechanisms and controls that will be enacted are outlined industry would be well advised to take a wait and see approach.

If international trends are a reliable indicator, governments will no longer be carrying the economic burden alone, with industry expected to take an increasingly active role in determining and directing training to service its needs.  Industry has contributed significantly to the Australian training system and demonstrates its support in the employment of a workforce with recognised and credible skills.  A system, however, that fails to reinforce quality will only erode confidence in VET and further exacerbate Australia’s skills shortage.

-Chris Bergemann is a former VET teacher of 23 years

Happy New Year!

Evans3

Happy New Year and welcome to 2013!

Senator Chris Evans’ words, from early December, give us a moment of optimism and hope for 2013.

Our New Year’s resolution here at the Invest in Quality, Invest in TAFE campaign is to keep talking TAFE, and to continue working towards a better future for TAFE and for TAFE teachers, students and communities.