NCVER VET provider market structures – Dam what a boring title

First off NCVER could you come up with some sexier titles for your work please.  I mean VET provider market structures: history, growth and change is a very interesting read but the title doesn’t excite me to even open it, which is of course a shame given the volumes of interesting things contained inside it.

Enough of that though.  A little over a 18 month ago I wrote a  piece entitled “Who are these private RTOs anyway?” and the response to it enormous, in fact it became one of my most popular posts of 2015.  It simply sought to provide some perspective on the breadth of providers within the VET sector in this country and how it seemed a little unfair to simply lump all providers together into one basket, particularly when the vast majority of providers are small to medium size businesses and not nation spanning conglomerates.  Now NCVER has released a report on providers within the VET market and what these providers look like, and well isn’t it an interesting read.

Now I did have the pleasure of seeing some of this data earlier in the year during a presentation around it by NCVER, but I wanted to wait until the full paper was released before I made any commentary about the results.  So now it is all out and available lets have a look at what it says.

The first thing that is really striking in the research is that the VET provider market place has been fairly stable in terms of the number of providers over the last 15 years. While there was, as to be expected, back in around 1998 (when we first got our RTO status) an enormous amount of applications, much higher than at any point since, since that point applications and overall numbers have remained relatively constant.  What can we take from this?  I think we can pretty safely say that the number of providers we currently have in the market is probably the number of providers that the market can support.  While providers may come and go for various reasons having such a constant number over such a long period of time seems to suggest that the overall number of providers is appropriate.  What makes this really interesting is that over the 15 years the data covers there has been a myriad of changes to policy, funding arrangements, training packages, and well pretty much everything to do with the sector, however the number of providers within the sector has not changed substantially.  Providers have obviously come and gone and new providers have replaced old, but the overall number has really not altered at all.

A lot of the other information that is interesting is the research which pertains to the breadth and diversity of providers within the market place.  Firstly it needs to be said that this research makes no claims nor does it seek to make any about the levels of quality or outcomes across the various provider types, it simply looks at the number of providers and the students they service.

The really interesting thing for me was to see that around 2000 providers or 40% had less than 100 students and some had far far fewer students than this number, and on the flip side 50% of all students were enrolled with the largest 100 providers.  What we see from this is something that I have been suggesting for some time now, while there are a small number of very large providers, with large numbers of students (and can we please stop using the terms TOP which suggest they are the best and use the term LARGEST), that is not the norm, in fact about 50% of all students don’t do their study with a large institution be it public or private, they in fact choose one of the multitude of small to medium sized providers who operate in the market.  In fact when we look more closely at the data we find that 30 providers account for more than 1 million students (about 25% of the total number), however the next million students (25%) are services by more than double that number (70 providers).  The other 50% of students is looked after by around 4500 providers all of whom have less than 6000 students and in fact 4000 providers have less than 1000 students.

So what does all of this tell us.  Well while the research data released by NCVER doesn’t make any claims about what the data might be saying, I am going to.  To me what the data is telling us is that around half of all of the students involved in Vocational Education and Training are choosing to undertake their training with small to medium providers, most of whom are not public providers (TAFE) and the interesting question which comes out of that should be why.  In a lot of cases small to medium providers tend to play in niche markets or are strongly connected to organisations either as enterprise RTOs or in some other way, or have only a small number of qualifications on scope which represents the skill sets of the people involved in the business.  They also in a lot of cases provide a very different learner experience,  more personalised or tailored to the particular needs of the student and tend to provide a variety of ways in which students can study and interact with them outside of standardised classroom or online learning environments.  As with most parts of the Australian economy small to medium enterprises seem to be the foundation of the VET sector and the place that significant number of Australians want to get their education.

I think that when we look at the overall data in this report it becomes clear that those pundits who have suggested that there needs to be a rationalisation of the VET provider market place are simply wrong, well at least in my opinion.  The number of providers that we currently have seems, as I have said previously, to be the number of providers that the market wants and the diversity within those providers seems appropriate as well.  It is to me at least a recognition that not everyone learns in the same way or in the same environment or at the same pace and a lot of students realise that and look for providers that allow them  to engage in study in way they want to and in the programs that they want to enroll in.

Anyway that’s just my opinion.

About pauldrasmussen
Paul Rasmussen is one of Australia’s most widely read Vocational Education and Training Commentators. He provides deep, unbiased analysis and insights not only on topical issues, but also on the underlying structure and policy which supports the industry. His writing and analysis has been praised for its uncompromising and thought provoking style and its ability to focus on the issues of real importance to the sector. He has advised various government departments and ministers, training providers, public and private organisations, not for profits and small to medium enterprises on the VET sector and the issues and opportunities facing it. He is one of Australia’s most awarded learning professionals and a regular speaker at a range of conventions and forums. His extensive experience in vocational education, and learning and development coupled with formal qualifications in philosophy, ethics, business and education management allow Paul to provide a unique view of the road ahead and how to navigate it.

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