Careers Australia in Voluntary Administration – Some comments

So just in case you haven’t heard the news today, Careers Australia was put into voluntary administration yesterday with PPB Advisory moving in as the administrators.  So as of yesterday there are 1000 staff who have been stood down and around 15,000 students who will have to organised into new courses through TDA who were Assurance Scheme for Careers.  I am going to be really blunt here.  I for one am not surprised that this has happened.  I said in a post earlier in the year when there was a range of closures of colleges which had grown large on a diet of VET Fee HELP, that as we approached the end of this financial year that we would see either the substantial contraction or closure of some of the big players.

Why has this happened?  The answer is actually very simple, as I talked about in the post mentioned above, heavy reliance on a single source of funding which can at any point be changed or removed is a recipe for disaster.  Careers Australia appear to have blamed the Federal Government and its policies around the sector, in particular the new VET student loans scheme and the governments decision not to allow Careers access to this scheme for their move into liquidation.

I have to say that I think if this is a true reflection of the rhetoric coming from Careers, then I think it is definitely stretching things a little.  Certainly it is the case that the cause of this collapse can probably be  linked to the decision by the government to change the way income contingent loans work and to deny Careers access to the new system.  However can we say that the Federal government is to blame, I think not.  In fact I actually struggling to find a scenario, except for the old, we are too big to fail, the government will have to bail us out mentality, that could have provided Careers and its management with the idea that they were ever going to be given full access to the new scheme.   I cannot see how someone within their management didn’t suggest that given the issues with the ACCC, a range of other issues, media coverage and general public sentiment, that there might be pretty good chance that the government, with its very strong position to clean up the sector, might, whether any of the issues raised about Careers were true or not, be reticent to give them access to the new scheme.  To be honest and to put in the word of Sir Humphrey Appleby, it would have been a brave and courageous decision by the minister and the department to allow them access to the scheme.

This should not be taken to suggest that I know anything about the inner workings of Careers or as to whether or not any of the allegations against them were true, or whether issues, if there were any, had not all been rectified.  It is just to say that simply from a point of view of being seen to be taking action and moving forward with the new scheme that, giving access to a provider which had been the subject of so much negative media scrutiny over the last 2 years would have undermined public perception of the scheme.  And the management of CA should have not only know that but have been prepared for it as well.  Even if they had been granted access to the new scheme this would have still seen their overall income drop by as much as two thirds, which would have had I suspect an equally devastating effect on them.  I am amazed that the management of CA appears not to have been working towards a solution or a way forward that didn’t include the VSL scheme, or maybe they did and we are seeing that in action now.  But again this is all simple speculation on my part and should not be taken to suggest anything about the mindset or plans and ideas of CA management.

It is yet another example of what happens when providers are far to heavily invested in one source of income, particularly where that source of funding is something that is controlled by the government.  Where your ability to be able to deliver the services you provide is entirely contingent on a single source of income and there are no plans or contingencies in place to react to changes in that income source there is always going to be a significant risk to continued financial sustainability.

I feel for the students and staff who have had their lives interrupted by this, however for a lot of us something like this happening has never been to far over the horizon.

Anyway that’s just my opinion.



VET provides great outcomes. It just has to be done right.

We have seen recently with reports from NCVER and Skilling Australia that Vocational Education in this country is not actually, as some would like everyone to believe, a poor cousin to a university degree.  In fact it turns out that in a range of areas Australians, may actually be better focusing on obtaining a vocational qualification than a 3-4 year university degree.  While this may come as a surprise to many people outside the sector, I would hazard a guess that most of us within the sector are certainly aware that often a VET qualification provides much better outcomes in terms of workforce participation than a university degree.

Take for example the community sector, while it is certain that there are employment opportunities for university graduates in the sector and that the sector is growing substantially and will continue to grow over the next few years at least, the vast majority of roles which exist and will be created over the next few years are roles where qualifications at a certificate III or IV level are far more appropriate than higher level and degree qualifications.  Why?  That is a really easy question to answer, level III and IV qualifications provide students with the hands on skills they need to have to be able take on the range of support roles, which make up the vast majority of roles available.  They provide potential employees with actual skills and knowledge which enables them to take on the day to day activities which are required in these roles.  As someone who has recruited large numbers of staff for these sorts of roles, someone with a Certificate III or IV, is in most cases a much better choice than someone with social welfare style of degree.  This is also not just something which is just part of the community sector, there are many sectors where this is the case.  Outside of this, many apprenticeships, provide higher levels of income at completion, than are available to recent university graduates.

A lot of the perception has to do with how the University sector has been promoted and funded over the last 20 years and the general lack of promotion and appropriate funding programs of the VET sector. It also starts at high school, where VET has often been considered to be the solution for those students whose grades were not good enough to gain them an entry into a university degree, rather than a viable alternative to university for a wide range of students.  This of course stems from a general lack of understanding of the sector both from people outside the sector and unfortunately in too many cases from people within the sector as well.  I have often spoken at length of the generally woeful job that is done of promotion of this sector as a viable alternative to university and given this, it is little wonder that the idea that a university degree produces a better outcome seems to be the predominate viewpoint.

There is a side issue which goes along with this as well, which is that these workforce outcomes are of course contingent on the fact that VET providers are actually ensuring that the students who come out of there courses are competent and have been properly trained and assessed.  It is also important that students are enrolled in courses which are going to deliver workforce outcomes for them rather than those where the outcomes are far more tenuous.  Again if we look at the community sector we see significant numbers of students who were enrolled in Diploma’s of community services and counselling on the back of government funding models who are struggling to find employment because they would have been better off and had better workforce participation options available had they undertaken a certificate III or IV program.

To keep VET providing significant outcomes to students and other stakeholder we need to ensure that we are vigilant about not only competence, but the appropriateness of qualifications for the outcomes that the student and employers want.

Budget, Budget, Budget

So unless you have been asleep, under a rock or like a lot of people plainly disinterested, the Turnbull Government handed down its latest budget on Tuesday night and if you want to pour through all of the documents associated with it they can be located here.  What I am primarily interested in looking however is the new ‘National Partnership agreement’ (NPA) namely the skilling Australians fund which will allocate funding to the states for vocational training, providing they ‘deliver on commitments to train more apprentices.

First things first.  Finally having a commitment (4 years) from the Federal government around the issue of the expiring NPA is a good and positive thing.  There were many at all levels in the sector who were worried deeply about what was going to occur when the old agreement expired and no provision was in place to bolster state financial commitments to the sector, there would have been large scale holes in the VET budgets of all of the states, making it an exceeding difficult time for both providers and potential students.

The devil as they say is in the detail and as yet, as we expect there is not a lot of that floating around.  I have to admit though that when I look at the budget speech itself, the portfolio statements from the department, and the media releases from Simon Birmingham and Karen Andrews and see the continuing usage of the word apprenticeship and less occasionally the term  traineeship, I worry slightly.  Don’t get me wrong here I think apprenticeships and traineeships are important and a vital part of the sector and that something needed to be done about the declining numbers I am worried slightly about how this language will cash out, primarily because in a range of market segments apprenticeships and traineeships are not the predominant model in terms of the delivery of qualifications to students.  I am also the first to admit, that this may simply be a language thing and that, the terms are in reality simply shorthand for VET funding models in general.  It could also mean that the feds will essentially foot the bill for user choice style training and that the states will be responsible for everything else, or it could mean the government is attempting to push the sector and industry towards these delivery models over other models. It is this last option which really concerns me particularly within the sector in which I primarily work, community services.  It is for the most part impossible to get a job in this sector in client facing roles without at the very least a certificate III, and given that there is a high level of casualisation and issues around staff retention both at organisational and industry levels, most organisations are reticent to look at traineeship models for either new or existing workers.  Significant numbers of employers simply make having the appropriate qualification a mandatory component of employment.  This means that for people wanting to enter the sector they either have to pay for it themselves or access funding under some form of entitlement model.  If this language spells a move away from entitlement models of funding then this would be a bad thing the community services sector particularly from a workforce capability standpoint particularly given the high numbers of staff that will be needed in the sector over the next few years.

Improving apprenticeship and traineeship levels is certainly important, however it can’t be done at the expense of other forms of funding which may have high levels of usage in certain market segments.  So I guess we will have to wait to see what comes out of all of this in the wash.

Anyway thats just my opinion

Costs, Benefits and the value of a VET qualification

What is the value of a VET qualification?  I have recently found myself rolling this question around in my head quite a lot in an attempt to come up with some way of looking at qualifications within the sector to determine whether, particularly for individuals, they are worth undertaking.  What I mean by this is simply if I spend $5000 on  a course of study am I likely to as a result of that qualification get a return on my investment of at least equal to or hopefully more than the amount I spent.  Given that most people undertaking VET courses do so to improve their workforce position (about 80% of all students according to NCVER figures) what we are in reality saying here is if I spend $5000 and I going to get that back in the form of wages or earnings as a direct result of having that qualification.

Now I know that it is the case that not everyone does a course of study in order to directly influence the amount of money they are paid for their labor or services and that people undertake courses for a variety of reasons, I guess I am simply trying to see whether their might be a way of evaluating the ‘value’ of a course in such a way as to be able to give us meaningful information about the likelihood of the course having an impact on a students employment or workforce opportunities.

Here is an example of what I am talking about, which course offers better value to a student

Course A:  Course cost $15,000.  Average wage of person with Qualification $100,000.  Percentage of graduates who gain employment within 12 months 10%, or

Course B:   Course cost $5,000.  Average wage of person with qualification $50,000.  Percentage of graduates who gain employment within 12 months 80%.

Given these two options, which one would you choose.  If we don’t consider anything else apart from the information provided, which course offers the better outcome and more importantly can we even actually make such a determination.

Is it the case that even though it seems that most students undertaking courses are doing so for improved workforce outcomes, that the actual value of the qualification itself is not derived from actual improvements in workforce outcomes, but is in fact determined by other more intangible factors.

So I have a question for all of you out there and it is just this – What is the value of VET qualification and can we encapsulate that value in monetary terms?

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