Education Brokers and the Facebook scenario

Firstly this is not an attack on the Educational Brokerages in Australia, it is more of an explanation and discussion on how the system works and why.

Everyone complains about Facebook, almost all of the time.  They complain about changes to the interface, the way it deals with what turns up in the news feed, how many ads they see, what the company does with all of the data it collects and who actually owns that data (I will give you a hint it’s not you).  The problem is that all of these complaints and issues grow from a mistaken belief about the place of Facebook users in the grand scheme of things.  As a lot of people often suggest if you want to find out why things are being done in the way they are being done, follow the money.  So if we follow the money in relation to Facebook, we quickly realise that Facebook users are not in any real sense of the word Facebook clients, they are in fact simple objects within a data set and consumers to be advertised to.  Facebook’s real clients and the people who they are really trying to keep happy are their advertisers who generate all of the income for the site and their shareholders.  Now while it is true that if you have happy consumers you are probably more likely to generate better income, when you have a billion users a lot of people have to not only complain, but stop using the system before the company would take notice.

So if we apply the same logic to the Educational Brokerage sector in Australia we can quickly see what is happening.  In fact all we have to do to find out who is important to these organisations is to ask a really simple question, which is of course, who pays them?  The answer, of course, is equally simple, they are paid by training providers to provide them with students.  So the income stream for brokers is tied completely to the continuing recruitment of students for their client RTOs.  If there client RTOs are unhappy or there are not enough students, or the costs are to high, or compliance issues start to impact and they leave the relationship, then the broker either has to find other clients or increase the number of students being recruited for the clients it still has to address the income shortfall.

Make no mistake however, as is the case with Facebook users, potential students are not the clients of brokers, they are simply the consumers of the service they provide.  They are in reality very little more than a product with a certain value attached to it, which is generated when they are ‘sold’ to a provider.  The value of a can of beans to Woolworths is that someone will pay money for it.  The value of a potential student to a Broker is that someone (a training provider) will pay money for them.  The more money a provider is willing to pay for a student the more value that student has to broker.

Now to be fair this should not be taken to suggest that potential cash value is the only driving motive for brokers nor it is to suggest that potential students don’t have a cash value for RTOs who don’t use brokerage services because they certainly do.  It simply suggests that as with Facebook the person who does not pay for the ‘service’ in this case the student is always going to be a secondary concern to the needs of the person who pays the bills, in this case the training provider.  When we add to this the concepts of the Brokers themselves being independent contractors, and or working either entirely or partially for commissions, we can easily identify the pain points within the system.

Is someone working on commission going to recommend a Cert III or IV course to a student which might generate $600 worth of income or is there the temptation to recommend the diploma level course which will generate $3,000, particularly when the RTOs (who remember are the ones paying the bills) might make $15,000 from the Diploma course as opposed to $3,000 for the Certificate IV.  Again it is important to note that I am not saying that this is the driving force behind all of these operations, but when we start looking at the money we can see why people might prefer to recommend a Diploma over a Certificate IV or even utilising VET-FEE HELP over accessing direct government funding.  As someone from a brokerage said to me a while ago, ‘our business is recruiting diploma students, it is up to the individual to decide if it is the right option’.  Now while this is true, I would suggest it is also true that even for people who are deeply involved in the VET sector funding arrangements can be complicated to say the least, and for a potential student having a ‘personal learning consultant’ recommend undertaking a Dual Diploma of counselling and community services, which they don’t have to pay anything for up front, becomes an easy thing to agree to because well it sounds good and seems much easier than trying to figure out the morass of funding available.

So here is a question for everyone to ponder.  What would the role of the broker be if the person who was paying them was the student, if their income was generated by creating the right result for a potential student rather than being driven by the training provider?

Sustaining the unsustainable Part 2 – What the hell is happening in South Australia

So as most of you are aware a little while ago I posted about the Victorian Governments $320 million TAFE rescue package and asked why they were going down this path, how it could be justified and what was it that they were actually supporting with this ‘rescue package’.  Now yet again we see a similar, thought to be fair not exactly the same, thing occur in South Australia.  We are seeing the government not only cut subsidies to more than 200 vocational training courses, but handing 90% of the available funded places, some 46,000 out of 51,000 to TAFESA.  It is a decision which seems to have come with very little warning or consultation and has been roundly criticised by employers, business groups and the training sector.  It appears to neither take into account the capacity of TAFESA to deliver these programs nor the vast amount of training, particularly in the trades sector that in SA is done by high quality non-public providers such as PEER VEET.  It also seems to ignore the hidden ramifications like students having to travel over 300km to undertake training at a TAFESA campus, rather than with a high quality local provider or the job loses that this will cause in the non-public training market, primarily in the small and medium provider end of the market.  It situation is so dire that the Federal assistance minister for education and training, who is responsible for vocational education is consider investigating whether the SA government has breached their agreement in terms skills training.

So why would the South Australian government go down this path which has everyone, except for perhaps for TAFE, although if I was involved in the management of a TAFE in SA at the moment I would be really worried about our capacity to actually deliver the outcomes that the government wants, shaking their heads.  It can’t be because they want to save money because a subsidised place at TAFESA costs about 2.5 times more than the same place at a non-public provider.

It seems that the real reason may have far more to do with South Australia trying to balance its overall budget and to find some ways of utilising the white elephant of Tonsely campus or their $38 million mining, engineering and transport  hub, set up to service an industry (mining) which is rapidly contracting and not taking on trainees.  It is an awesome idea to allow unlimited numbers of people to be trained in trades for which there is little or no demand at the moment, while limiting training in disability support (one of the biggest growth areas in the country) to 200 places.

This decision is at its heart one based on political ideology and protectionism, at the cost of student and employer choices and outcomes.  It is a truly backwards thinking decision which is even more disturbing than the Victorian rescue package and even less based in any kind of rational thought processes.

Anyway that’s just my opinion.

Education Brokers still up to their old tricks

I have just watched for the last 20 minutes or so, two people wearing T-shirts from one of the large education brokers, standing outside of the Strathpine Centrelink, both on the footpath and in the car park, going up to people entering and leaving the offices and attempting to sign them up in courses and being very unclear about what the details of  VET-FEE HELP were, how it worked and what the costs were. I know this because I spoke with them as they approached me while I was walking into the offices for a meeting I had there.

This is absolutely appalling behavior, particularly from a broker who, when there marketing activities were called into question in a number of forums last year, vigorously defended themselves and stated publicly that their staff did not do things like that. So in my mind there are only two things that can possibly be happening;

1. Management has absolutely no idea of what their staff are doing, or
2. Management endorse these kinds of activities privately but refuse to admit to them publicily.

Both are equally abhorrent. I find it particularly abhorrent when a number of the the providers listed on their website are members of ACPET, who have also been vocal about this activity not occurring.

This needs to be addressed.

Could Private RTOs replace TAFE

So for a while now I have been tossing this idea around in my head as, in the great tradition of philosopher’s everywhere, a thought experiment and I just wanted to put some of that thinking down on paper to hopefully garner the opinions of others.  Firstly it needs to be said that I am a believer in equality of educational opportunity, everyone should have the same opportunity to receive the best education and that, within some boundaries, that education should be available at little or no cost to them.  I will talk about boundaries and co-contributions in a later piece, but any structure or framework for the delivery of educational outcomes need to meet the equality of educational opportunity position.  Now it has often been suggested that it is the equality of educational opportunity proviso which creates the need for public educational institutions to deliver such outcomes.  I would posit, that this is not necessarily the case, that at least theoretically one could construct a system where public education was replaced by private providers, particularly if we are able to let go of ideological positions.  Now before we go on, while I think I could probably make a case across the entire realm of education I am going to in this instance restrict myself to considering the delivery of Vocational Education and training.

So the question then for me becomes could non-public RTOs replace public providers (TAFE)?  Now there are in my opinion some areas where we have and also probably should have seen the vast majority of vocational education being delivered by non-public RTOs.  Take for example the community services sector, an enormous amount of training in the community services sector is already outside of the public provider system and of that training, a significant proportion is done by organisations (mostly not for profits) who are already service providers themselves and who hold RTO status to either simply train their own staff or their own staff and other people who want to enter the sector.  We see disability support providers delivering disability training, aged care providers delivering aged care, and despite some arguments to the contrary doing it quite well and meeting the needs of their own sectors.

So could this concept be translated to other areas?  One of the arguments raised by the public sector against the proliferation of non-public providers is that non-public providers play in the low delivery cost, high student number areas (often referred to as low hanging fruit), which leaves the public providers with having to deliver high cost, both in terms of delivery and infrastructure, programs and programs which may have very small intake numbers, which makes them less financially viable therefore requiring more support.  However, and here for me is the nub of the question, are for example trades, such as plumbing and electrical, delivered by organisations other than public providers?  The answer is, of course they are, they are delivered by industry associations, employers, and other non-public providers.  So if and again I would posit that this is the case, non-public RTOs are just as capable of delivery training and assessment programs across the range of qualifications within the VET system, given that they have or have access to the appropriate resources and infrastructure, the argument, if we ignore ideological commitments, is simply one about funding and structure.  If we ignore ideological positions, there seems to be no fundamental reason why public institutions need to be involved in the delivery of vocational education.  It appears that we could develop a framework where all of vocational education and training was delivered by non-public providers and that we could still meet the proviso for equality of educational opportunity.

Bear in mind here I am looking solely at the delivery and assessment of vocational education, I am not considering the other social contributions it is often suggested public providers make to communities, however as I have suggested in other places at least a significant proportion of these social contributions may be able to be achieved through other means.  Also it is important to note that I am not suggesting that this is what we need to do, as I said at the beginning I am simply tossing an idea around in my head to see where it leads me, and it seems, that it is possible to hold a position that says there should be equality of educational opportunity and at the same time hold the position that there is no requirement for the public provision of Vocational Education.  It appears that the basis for the public provision of vocational education is at its heart an ideological one and that equality of educational opportunity could be met through non-public provision given the right regulation, structures and funding.  There seems in my view no fundamental reason why public provision is required.

Anyway, as I said I am just playing with some ideas here and my thinking is still very early on a lot of this, but I would appreciate any input that others might have about this.  I would ask though that as I am particularly  focusing here on structural and theoretical ideas and not on an ideology that prefaces on viewpoint or another, that if we could keep ideological positions out of the mix that would be useful.  At least in the first instance I am simply interested in whether or not it is possible to create a structure of non-public provision which could meet an equality of  educational opportunity proviso and achieve outcomes similar to what are currently being achieved.

The Australian Industry and Skills Committee – Some Commentary

So as I am sure everyone is aware, last Friday Senator Birmingham (@Birmo) released the make up of the new Australian Industry And Skills Committee which as you may be aware forms part of the new structure for the development of training products within the VET sector, an outline of which can be seen in the graphic below.



There was some criticism raised very quickly by the Shadow Minister for Education Sharon Bird  around there being no voice for students or workers and unions on the new committee.  So lets take a look at the committee, its purpose,  its make up and how it relates to the rest of the new arrangements.

So essentially, and I think this is a really easy way of thinking about how the new structure works, the AISC replaces and takes on that kind of role that was done by the old NSSC.  So it does things like endorse training packages, provide advice and input as to the general direction of VET, assess cases for review of packages and provide advice and input to government.  This is essentially a strategic level group and given the Governments ( in my opinion solid) focus on making sure that the training packages and their content strongly meet the needs of industry (it is as I have said before vocational training after all) I would have expected to see quite a large representation from industry within this committee.  When we look at the make up of the committee, we see at least in my opinion a group of people who have both very strong industry experience as well as very strong VET industry experience, at least in a substantial number of cases.  .

Now a lot has been made by Minister Bird and others about the lack of representation from students, workers and unions and RTOs on the Committe so lets take a look at these criticisms.  What we need to keep in mind though is that most of the hard work around the development of training products and engagement with all of the various stakeholder will be done at the next level down, by the IRCs supported by the SSOs.  So let’s look at the groups who it has been suggested should have had some representation on the committee.  If we start firstly with the RTOs themselves.  To be brutally honest I don’t think RTOs should be on a strategic level committee such as this one.  RTOs be they public or non-public are essential service providers, and generally it would be quite strange to have a ‘vendor’ being involved in and driving strategic level discussion around the the development of the product they are providing.  It would be very easy if RTOs were included at this level for a perception to develop that there may be a conflict of interest.  I also think that if there is a place for RTOs in the development of packages it is at that IRC level where most of the consultation with stakeholders will and should rightly occur.

So what about the workers and unions?  Again I tend to think as with RTOs that the place for the workers and unions is in the IRC space, where they are providing input into what the packages look like, what they contain, and what the delivery requirements are.  In addition isn’t the interaction between workers and the VET system pretty much the same interaction as students with the system.  I might be wrong there but I am not sure of how else ‘workers’ interact with the system.  I am also and I have mentioned this before in relation of a number of the previous ISCs that I was unsure of why there was union representation on the boards of these organisation anyway and to a large extent have never been given a satisfactory answer.  The same goes here, I wonder what is it that a union is going to bring to the table.

That then brings me to the issue of students and whether through some mechanism or other they need to have a voice in a high level strategic committee such as this.  My first question here is how would you include the voice of students at this level, there is no nation union of students for the VET sector (and given the state of the NUS in higher education why would anyone want there to be) or body that represents students in some other form, so finding some way of presenting at unified voice would be difficult.  Also,  students are essentially simply the consumer of Training products (now go and get all offended I know students are more than that really, but in this context that idea of the consumer captures their place quite well I think).  Again as with all of the other groups that have been ‘left out’, it seems to me that the appropriate place for them to have input and be involved in the process is at the level of the IRC groups, where they are far more clearly stakeholders with relevant input.

There is of course another group of people that I was really surprised had not been included in the list of those who should have made up the membership of the committee and that is trainers, assessors, educators, educationalists, whatever the group of people who are involved in the delivery side of the equation, but are not themselves RTOs wants to call themselves (on a side note I have a really interesting discussion about what is group should be called at the recent AITD conference).  Again I would see their place as one of the variety of stakeholders that should be involved at the level of the IRCs, in the actual development of training products and not at the level of strategic direction.

So am I happy with the make of committee?  Yes, at least the people on it have at least in my opinion the skills and backgrounds that they need for the role and there is plenty of space for the other stakeholders in the more hands on development area where the IRCs fit.

Anyway that’s just my opinion.

Sustaining the unsustainable? – A rescue package for Victorian TAFE

So as many of you are aware the Victorian government has handed down its 2015-16 budget and there is a lot being said about skills and training, but also a lot not being said.  Matthew Dale has written a good article on what is not being said, particularly with respect to non-public RTOs here.  I however want to take a different tack from Matthew and focus on one particular part of the budget, namely a TAFE rescue fund worth $320 million.  Now before I go on, and these days I feel like I have to say this all of the time simply because there are so many voices out there who seem to want to jump on anyone who dares to suggest that TAFE needs to change the way it thinks and delivers its services, I am a supporter of publicly funded and supported education, and a robust public sector provider seems to be play a part in the delivery of equitable high quality outcomes which meet the needs of various stakeholders.  It is also the case that the provision of these equitable high quality outcomes can also be achieved through non-public sector means.  We need to have both sides of the equation right and we need to make sure we are maximising the benefits that can be delivered by both public and non-public providers.  That being said however I worry, particularly in the Victorian case, that what we are doing is at least in some cases supporting the unsustainable, encouraging bad management (both fiscal and human resource), and not getting the best possible returns on our investments, be those returns social or financial.

TAFE is primarily a provider of educational services, it delivers like all providers of educational services a range of products designed to meet the needs of employers, students and the other stakeholders in the VET sector.  Now surely like any other provider, responsible management would suggest that income generated from the provision of these services (be that through government-funded programs or fee for service arrangements or whatever) should be sufficient to cover the costs associated with the delivery, management and administration of such training.  But I hear you cry TAFE as public provider has an important social role to play in the community.  Well that may be fair enough, it may have this social role and I will explore this a little later, however shouldn’t then at least the amount of income generated cover at least the actual costs associated with the delivery, management and administration of those programs themselves?  But we have seen as reported last month in The Age an upwards of $50 million loss by TAFE in Victoria, with Holmesglen losing over $13 million and Bendigo and GOTAFE losing $10 million a piece, with the rhetoric being that this is a result of funding cuts and the evils of the non-public sector causing enrolments to drop substantially.  But, and this is a big but for me, we also see Chisholm with an operating profit of $30 million and a regional TAFE, Wodonga, managing a $1.3 million surplus. So my question is then if both a large TAFE and a small TAFE in Victoria can manage to balance their books in these so-called tumultuous times, then what are the others doing that is leaving them so deeply in the red?  Is it just as simple as has been suggested in some circles that both Chisholm and Wodonga were simply better managed and better able to adapt and take advantage of the changes that took place in the system, and rather than complaining about the lack of funding, simply got on with the job, adapted and managed to produce a surplus?

But I am often told that things are not that simple, that it is not an even playing field and that TAFE performs social functions over and above those functions that it has as a public provider of educational services and this may well be true in some or all TAFEs.  What troubles me I guess is that it is not easy to see what government funding is being directed toward when it is being provided to a TAFE.  Is it going to support the social functions of TAFE, its infrastructure, support for the delivery of training or costs related to management and administration.  While I have very little problem with the concept of a TAFE being supported to deliver social outcomes over and above their role as a provider of educational services, supporting poor management practices and an inability to delivery training within the confines of the income produced by that training is a much harder pill for me to swallow.

I am also sometimes worried about the suggestion of the social equity and equality role that TAFE plays. It is something that we hear quite often, TAFE needs more support because it provides things to the community that other educations providers don’t.  It provides support for people with disabilities, learning issues and other disadvantages, equitable access to programs, community and social space, and a range of other things which fall under the umbrella of social good.  Now while it may be true that is some areas TAFE is the only avenue for the provision of these services and the only educational provider that services people with disability or disadvantage, this is simply not the case in general.  Many non-public providers work extensively with people with disability and disadvantage, and either through their own programs or in conjunction with other service providers seek to provide equitable access to programs.  There are also many community service providers who provide a range of services and spaces which do similar things to social activities of TAFE.  So to claim that these kinds of activities are things that are only provided by TAFE while it might be right in some cases cannot, I don’t think, be used as a blanket statement.

So I guess my point is a simple one and one that I have made before and that is, perhaps before we throw money at TAFE, TAFE needs to have a really strong look at what it does, what its core business is and how it delivers and manages that business and if we are going to throw a massive $320 million dollar lifeline to public providers we should know what it is that that $320 million is going to actually rescue or as I said we may well be sustaining the unsustainable.


Anyway that’s just my opinion.

ACPET – Funding for Members only.

Some of you may have seen the article in the Australian on Saturday where there has been a suggestion that only members of ACPET be allowed to access government funding.  Now while I am a supporter of ACPET I have to say I think this suggestion is dead wrong.  Firstly just because an organisation if not a member of ACPET does not make it unscrupulous, nor does despite an updated code of ethics and membership standard does membership mean an organisation is scrupulous or always behaving ethically or in the best interests of students.

There are significant reasons why a non-public training provider may not have chosen to be a member of ACPET.  These reasons for non-membership relate quite closely to the variety of kinds of non-public training providers which exist in this industry (So who are these private RTOs anyway).  Many not for profit and enterprise RTOs do not view themselves as being ‘private’ providers, and are in most cases certainly not ‘for profit’ style providers and given the membership landscape and language of ACPET, at least a proportion of these providers feel uncomfortable joining a membership organisation that does not seem espouse their position in terms of in particular the money side of the business. I expressed such feelings at the recent QLD State Forum where I expressed disappointment that there wasn’t much representation from providers that weren’t ‘for profit’.

Now don’t get me wrong, I am not in any way opposed to for profit providers, despite claims to the contrary learning is a business and non-public providers are a vital part of it, but back to the matter at hand.

To attempt to tie funding to a membership organisation that is not representative of all non-public providers is deeply anti – competitive and would restrict the access of a range of high quality providers.

The added suggestion that student contribution fee levels be set, is also wrongheaded. As I have said in other places as a community services organisation we strive to make our courses as accessible as possible and stipulating a minimum contribution fee eve if such a fee was say $500 would disadvantage a significant number of our clients.

Add to this the fact that this would simply add another level beurocracy and regulation to an already heavily regulated system and the entire suggest seems difficult to support.

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