Some VET Fact and Myths

Rod Camm wrote a really interesting piece for his ACPET National Monday Update this week, which really struck a chord with me, primarily because it is looking at the VET sector and trying to inject some facts into a discussion often held ransom to media outbursts and ideological positioning.  I thought therefore today I might look at the facts that Rod outlined and perhaps some others to see if we can’t get a little less biased view of our sector.

The first, and I think one of the most important facts pointed out, is that there is only about 2500 providers in the VET sector, actively delivering training, not the 4-5000 which is an often quoted number and the enrolments with these providers range from 1 student to over 100,000 students.  A lot has been made of high-flying corporate whiz kids, cashing in on the VET sector and making massive profits at the expense of everyone else The media, the various education unions and some politicians have had a field day promoting this view, often for their own ends.  The truth is however that private providers have average student enrolments of 819 with the median number being much lower at 204.  This is tiny in comparison to the 19,000 and 16,000 figures for TAFE.  The overwhelming majority of private providers are not huge corporate monsters, whose only goal is to make as much profit as they possible can; with just under 1000 private providers have less that 100 students, the vast majority are simply small providers, providing awesome outcomes to their students and the industries they serve.  I bet we will never see that little nugget from the news media or the deep left, who much prefer the sensationalism of corporate failures.  As I said in my piece early last year non-public providers are an incredibly diverse lot.

There is another myth that has been perpetrated upon this sector or more specifically upon the non-public side of the sector and that is that business and industry trusts and is more satisfied with the public provision of training than with the private sector.  You could wonder I  think, when you read the news media and the various commentaries and interviews around it as to why there was even a a need for a non-public VET sector given the love which is espoused for the public providers.  When we look at the data from NCVER however, we see a different picture; employers indicate 80.0% satisfaction with private providers, 83.6% with industry and professional associations and 66.1% with TAFE. 80% of employers are very satisfied with the training delivered by non-public providers.

Now please don’t think I am trying to badmouth or undermine TAFE here, I have always been, and will continue to be a strong supporter of a well-funded and healthy public provider system.  The public providers have a  tough job, constrained in ways the non-public side isn’t, funding, bureaucracy, student cohorts, and the needs and wants of governments, it is no wonder their satisfaction figures are lower. This doesn’t mean that they do not do as good a job as or produce outcomes equal to that of the non-public providers, it is just that when you are trying to keep so many, often competing stakeholders happy, you are never going to succeed in doing that.

On to some other stuff now, well some facts and figures, which Rod doesn’t mention, but which I think are worth commenting on, primarily costs, funding and VFH.  Now I have covered all of these points in other articles before, however I think that they are all worth mentioning again in this context.  The first is of course the issue of funding for TAFE, much has been made of the fact that TAFE needs to be better funded and interestingly in 2016 we saw a lot of people talking about the need for TAFE to receive at least 70% of the funding available for VET  This of course stopped quite quickly when it was pointed out that the public providers received around 80% of the public funding available in the sector already.  Now before you ask where this figure comes from, it comes from the actual budget papers of all of the state governments, who are the ones responsible for the funding of the TAFE sector.  The bigger question, which I asked last year and never got an answer for is where did that figure come from in the first place?

The other point is this idea that training delivered through a private providers is far more expensive that training delivered through the public provider, in one case it was claimed by The Greens, that private provision cost as much as 7 times the cost of public provision.  These claims are demonstrably incorrect as I explained in detail here.  These sorts of claims are based in general of really poor interpretation of information by people who have little or no knowledge of the sector itself.  They ignore facts such as, that under most of the entitlement funding models the subsidy if the same for all providers, so the amount of money being paid is the same no matter who delivers the training.  Even when we roll VET fee Help figures into the whole mixture of other funding and models that are out there, we see that at the very outside non-public provision across all courses at all levels the cost of delivery of a qualification through a non-public providers is about the same as it is through a public provider with both, when it all comes out in the wash costing around $45,000 per enrollment.  It is important to remember however that is figure is going to dropped substantially with the introduction of the VSL scheme in its entirety from June this year.  It will be interesting to see what happens to these figures and comparisons, when we get to look at them again at the end of the next financial year.

So why bring all of this up and talk through it?  As Rod suggested it is important that we know the industry that we are working in.  It is important that we know not just how to do the jobs that we do but the facts and figures which underpin that.  Why? Because if we don’t then we might be tempted to believe some of the  ill-informed, ideology fueled nonsense that comes to us through and is promoted by the media and other sources.  Whether it is delivered by a TAFE, and industry association, a not for profit, an enterprise RTO or a private company, Vocational education is important to this countries future and decisions about it and how we can make it better need to be based on fact not opinion.

Anyway that’s just my opinion.

 

NDIS, workforce planning and VET

I have been thinking a lot recently about the roll out of the NDIS across Queensland and the rest of the country and I have been to a lot of forums and discussions about how the community sector is going to find, and more importantly train, the 19,000+ workers in Queensland alone which estimates are suggesting will be needed over the next 5 years to accommodate the new system.  Apart from the sheer numbers of people that will need to be found and trained to be able to work in the sector, there are what appears to be a range of other issues floating around in relation to this workforce.

One of the problems for the community services sector has been that progression and advancement in terms of job roles, is virtually non-existent.  We talk a lot about upskilling staff and giving the skills to move into management and supervisory positions but the real truth is that with the vast majority of roles being at that coal face, support work level the chances of advancement are for most people is quite small regardless of the levels of qualifications which are held by the person and I only see this as getting worse not better.  There has also been a lot of talk and discussion around the need to professionalise the sector and make sure that the training outcomes for participants at any level are of high quality so that there are skilled staff available to meet the increasing need for staff.  It is my opinion, which I have to say is contrary to the views which are being widely spoken about, that rather than seeing more professionalism and more opportunity for staff to change roles and advance we will actually less.  The main single reason for this is the way in which the NDIS system itself is structured.  We will in my opinion see more and more staff employed for single functions rather than as general support workers in a lot of cases.  We will see staff employed as cleaners for example, whose sole role will be to assist clients with their general domestic duties around the house.  We will see staff employed solely as drivers, personal care assistants, community access workers, and the like.  Whereas at least some if not all of these roles could have been undertaken by a single support worker in a lot of instances we will see these roles split out and made roles themselves.  We will see this because it makes economic and business sense, it will be easier, and more effective in terms of both man power and costs for both niche and large multi channel providers to have specialists in various areas rather than simply generalist support workers.  The problem with this of course is that it will further restrict movement of staff across job roles.

The next question which raises it head here then is what role VET should play in this, what qualifications should we be considering and how can we ensure quality of the provision of these services. As I have often said, I saw the massive proliferation of Diploma of Community services and Diploma of counselling courses delivered under the VET FEE Help system as for the most part significantly damaging to the sector.  It was damaging in a two main ways firstly a lot of the students who were undertaking these courses were obtaining, at least in my opinion quite low quality training which really did not prepare them for the realities of the sector.  Secondly, it was in my opinion the wrong qualification for most people who undertook it.  It was undertaken by a significant number of people who were sold on the idea that it would be a pathway into roles within the community sector and that is, in short, a lie.  Obtaining a role as a counselor with nothing more than a Diploma and very little actual experience is virtually impossible, as is obtaining a role as anything other than a support worker with a diploma of community services.  Getting a role as a support worker is probably actually easier with a certificate III or IV, because the units and the skills and knowledge taught are designed for that style of role, whereas those in the Diploma are generally not.  There is also the additional issue that in a significant number of cases employers pay higher rates of pay to people with a diploma rather than a certificate III which make people with diplomas even less attractive in the market place.  When we add to this the issue of funding, where the vast majority of entitlement style funding is aimed at the certificate III level as well, I think we will see significant issues in relation to how employers, providers and the governments will need to deal with the NDIS workforce.

What does this mean for VET providers.  One of the significant shifts I think, will again be the rise of skill sets around certain job roles within the sector.  If you require staff to undertake cleaning or driving roles, an employer will be better served by employing people with appropriate skills and qualifications in that particular area and then providing them with skill sets to meet sector needs.  There will I think also be a market for somewhat niche certificate III qualifications where electives and imported units are utilised to formulate qualifications for very specific job roles. Someone whose primary role was going to be transportation could have a fairly standard certificate III in individual support but the inclusion of something like TLIC3011 – Transport passengers with disabilities (a standard elective) transforms it into a quite specialised qualification.  This is not only of use to employers seeking to train new staff for specific job roles, but may also make a graduate of a certificate III program more employable as they have a specific skill which may be in demand.

One thing I know for certain, the workforce requirements of the NDIS, and the reaction of various governments to this requirement is going to have a massive effect on the way in which community sector qualifications are delivered, funded and utilised.

Anyway that’s just my opinioni.

Does Public VET mean Quality VET?

Before I start I need to make something clear, I think that a well supported public VET provider is, for the most part, a vital part of the VET landscape in this country.  There is work and projects which are done by the public provider which are either not done by non-public providers or only done by a small number of non-public providers, usually from the not for profit sector.  This piece should also not be taken to be criticism or bagging of the public provider sector, but rather a look at what seems to be a view being pushed by a range of particularly media commentators that the Public provision of VET through TAFE automatically means quality.

Firstly then a couple of facts.  The vast majority of private, again I prefer the term non-public providers, deliver high quality outcomes for their students and employers.  We can see this from NCVER data, and a range of reports from the various state and federal governments.  We can also see this from the small number of non-public providers who have closed or been closed as a result of the fall out from the VET FEE Help issues.  As I have always maintained there were about ten or so providers who were not playing the game as it should have been played so to speak.  10 out of around 4000 or about 0.25% of all providers.  Enough defending the value of non-public providers however’ what is a far more interesting phenomenon I think is the calls from various commentators, that governments should be cordoning off more funding for public providers, because, and this seems to be a common theme, public providers provider quality training.

It is important to note here that I do believe that for the most part public providers (TAFE) do provide quality training outcomes to their students and employers, however as with non-public providers I simply do not think that we can automatically assume that public means quality in all cases and in all courses.  We certainly cannot assume that public means better than non-public in all cases and in all courses.  There are numerous examples across widely varying industries of non-public providers delivering training of at least the same, if not better quality than that which is delivered by TAFE.  Just as there are examples in the opposite direction as well.  TAFE does some things very well. Non-public providers do somethings very well, and across the board there are things are probably not done as well as they could be.

Of course the point of this view is to push the agenda that because TAFE equals  quality that TAFE should get the lions share of government funding.  The interesting thing is that it already does.  The vast majority of government funding and training monies go directly to TAFE, in fact in most states the split between public and non-public when it comes to funding is about 80/20.  So somewhere in the vicinity of 20-25% of government funding goes to non-public providers, while 75-80% goes to TAFE.

So if TAFE already gets the vast majority of government funds allocated to training already,  and if across the board it really doesn’t seem to matter where a person goes to get your training done, as they are probably going to get a quality experience, which meets their needs and provides them with the outcome that they desire regardless of the choice them make, where, oh where is this view coming from.  Part of it is certainly ideological and interestingly I have no real problem with groups, particularly political parties, taking their ideological stances, I just want them to be honest about it.  I don’t care whether you are a politician, part of the education unions, an academic or a researcher, or anyone else for that matter, if you are making a stance on ideological grounds then at least be willing to tell us that.

What this sector needs going forward is not infighting between the various parties, interest groups, providers, media and others, who are whether consciously or not, promoting a particular ideology or agenda.  We need facts and informed discussions.  We need everyone to sit down, put their baggage, their ideologies, to one side, and listen to what other people are saying.  Listen, then openly talk and enter into meaningful discussions about what is best for this sector and the vital part that it plays in the future of this country.

Advancing Skills for the Future – QLD’s Draft VET strategy

As some of you may be aware the Queensland state government recently released their consultation draft of their strategy for VET entitled Advancing Skills for the Future, so I thought that I might have a bit of a look at what it says and the effect this might have on VET in Queensland.  I will however caveat all this by saying that as we are due for an election in Queensland in the next 12 months, the strategy whether it is good or bad, may never move forward, but hey that is the nature of the sector we work in.

Firstly there is the obligatory simple statistics in the introduction, 1430 providers (both public and private), $810 million and change in funding spread across 600 or so PQS providers, again both public and non-public) and in addition 14,000 government-funded students in 2015-16 over 2014-15.  Make no mistakes VET is big business and touches the lives of a massive number of Queenslanders every year, with more than 270,000 funded students alone in 2015-16.  These types of high level statistics tell us very little about how the sector is operating or which bits might need to change.

Next we come to the now absolutely obligatory statement about the future of work, STEM and advanced technology and automation in the workforce.  This is the world we live in now and let’s be honest any government or organisation that isn’t embracing this view of the world right now is going to be left behind.  We then have a piece about how the whole VET system works and who is responsible for what and then some more statistics about how well the Queensland VET sector is doing.  So far all pretty standard stuff and what you would expect.

Now however we get to the meat of the strategy with the governments vision for VET: In a changing world, all Queenslanders are able to access – at any stage in their lifetime and career – high
quality training that improves their life prospects and supports industry development and economic growth. There are also three key areas that the government see as being crucial to their ability to deliver this vision, which are;

  1. Industry and innovation
  2. A quality system, and
  3. Access and participation

The rest of the paper then looks at what the government intends to do in relation to these areas and what goals it wants to achieve.

Industry and innovation

Job Queensland get a fairly big mention here, particularly in relation to its administration of specialist funding and what seems to be its key role of listening to what is it that industry wants particularly in regional and remote areas.  There is a recognition here that the fastest growing job market over the next few years will be health and social assistance with a projected rise in numbers of employees of around 11% or one in five of every new job created.   While this recognition of the fact the sector will grow over the next few years my only concern is that I have seen so many numbers released around how many new employees will be needed by so many different agencies and departments that have to think that perhaps someone has it wrong, but then again it is probably far better to prepare for a high need in term of new employees and over compensate than it is to come up short.  There is also an additional commitment to STEM and related activities which is again something which should be expected.

 

A quality system

I have often suggested the Queensland has had its finger on the pulse and has better managed its state based funding arranges that a lot of the other states and it seems that this tighter control over who can deliver funded training in Queensland and the management of risks around it will continue, with the tightening of entry criteria and reporting and renewal of contracts based on the quality of the providers and their outcomes.  In addition and this is something that I really do welcome, is a commitment to providing better information to the public about both the sector and the variety of choices which exist for students who wish to engage with it.  That this includes a commitment to improve how VET in schools works and the advice given to young people at school and school leavers, an area which has been sadly lacking over the past few years.

 

Access and participation

In what is by far the largest section of the paper the government goes on to talk about how it intends to achieve its goal of All Queenslander’s having access to skilling pathways
that enhance employability and social wellbeing.  After a discussion of what is currently happening in Queensland, which for the most part, at least in my opinion, is working well the paper goes on to discuss the future direction.  We will be seeing more Skilling Queenslander’s for work which given it has been the flagship employability program of Labor in Queensland for a number of years now should not be surprising to anyone and neither should the goals of better engaging with vulnerable youth, particularly those who have already intersected with the justice system.

There is also, again not unsurprisingly, a commitment to TAFE.  A commitment to ensure that grants allow TAFE to have up to date resources and training facilities and to properly provide the services which they are supposed to deliver.  There is also a commitment to look at the TAFE Queensland Act 2013 to ‘ ensure it enables the public provider to fulfill its role in meeting government priorities and providing commercial and non-commercial services in a competitive environment.’

Overall I have to say that when I finished reading this paper, I was, well a little blase about the whole thing.  Yes it contains a lot a high level goals as one would expect in a strategic document, but very little in the way of meat.  There in of course lies the rub.  It is difficult to know, guess at or comment on a lot of the commitments in this paper simply because we don’t actually know what they mean or more importantly what the government means by them.  What does the statements about the TAFE QLD act or looking at the appropriateness of grants to TAFE mean?  What does a high quality provider look like under PQS?  How does the government see it providing for the training of 20-50,000 new health and community services workers over the next 5 years?  These are all questions for which no answers are given and while we may be able to hazard a guess of the broad direction some of these commitments might take, given the platform and proclivities of the current government, we certainly cannot read anything certain from this document.

So as a high level strategy document, it does its job, however there are still a significant number of questions that need answering about how this strategy is going to be achieved.

Anyway that’s just my opinion.

 

 

Rebuilding VET

So  a number of people over the past few weeks have asked me about my opinions about how we can rebuild and revitalise VET in Australia.  While I have in the past spoken about what I thought might be specific changes to particular parts of the system, I have to at least some extent shied away from proclaiming my view for a future of VET.  One of the reasons for this is that, to me, a lot of what happens in this sector, a lot of what the sector does and the vast majority of the outcomes which are produced are excellent.  I am not sure that the sector needs a reimagining or wholesale reenginerring of how it operates.

If you listen to the left you will hear the constant chant of TAFE TAFE TAFE, get rid of private providers and the system will be right.  If you listen to the right, it is all about market forces, competitiveness, and the free market and here of course is the rub, they are both right and they are both wrong.  The answer lies somewhere in between.

We need a strong public provider and a strong network of private providers to make the system work effectively, more importantly though we need both groups to be treated the same and regulated the same, and not just in name only, in actual practice.

We need to recognise that trainers and assessors in this industry need to have three skill sets.  They need to have a deep understanding and relevant, up to date knowledge of their industry; they need vocational currency.  They need to have and understanding of the VET sector; how assessment processes work and what it means for someone to be competent, and they need to be good at presenting the material they are covering in an engaging and meaningful way, so that students actually learn what they need to.

We need the owners and senior managers of of all providers, be they public or private to really actually put students and their outcomes first.  Yes sustainability is vitally important, but we are in the business of education, so the actual education should be our focus, not how much money we can make, or whether or not we have the best office or the best view, or what awards we get.  The outcomes for students should be at the heart of what we do and if it isn’t we should probably get out and find another sector.

We need the regulator to actually regulate.  More than that however, we need to regulator to act fairly, consistently and in timely manner.  It is essential that providers regardless of whether they are public or private, new entrants or longtime RTOs, catering to 100 students of 10,000 students that they will be treated and assessed fairly and consistently and that breeches dealt with appropriately.

We need to government to invest in the VET system and to invest in it properly.  There is a need for sensible long term commitments to funding plans, be they direct entitlement style funding, organisational funding or contingent loan facilities.  The commitment however has to be long term and it has to address the skills and knowledge needs of this country moving forward.

Sounds really simple doesn’t it.

 

What is the purpose of a VET qualification?

Over the last few weeks, the concept of mission statements for, and the purpose of, Vocational Education (VET) has been rolling around in my head, so this week I thought I might throw an idea or two about the purpose of VET in particular out to the world and see what happens.  Firstly then here is what I think is a relatively simple statement about what VET is designed to do;

Vocational Education and Training (VET) is designed to deliver workplace specific skills and knowledge, across a wide range of careers and industries which prepare participants for work, advancement or further study.

but let’s just leave that there sitting in your brains while I go on a little bit of wander through some of my thoughts on this idea of purpose in VET.

The first question which comes into my mind when I think about any kind of education, but particularly education over and above compulsory, Primary and Secondary education is why? Why would someone make the decision that they wished to undertake some program of study in some chosen field?  While we talk about lifelong learning, and learning for the sake of enjoyment and personal interest and I am sure that for a significant number of people the continuing learning process is something which motivates them and to at least some extent underpins some of their decisions in relation to learning, I don’t think it is for most people the central thing which drives them to undertake formal courses, particularly formal courses in the VET sector.

Most people, according to the NCVER just over 80%, undertake VET for employment related reasons.  This would seem to suggest that for the most part people who undertake a VET course are looking to convert the outcomes of that course (skills and a certificate) into either employment or advancement in their role or field.  This idea of converting a VET qualification into employment is an important one because I think it is one that in general all stakeholders can agree upon in terms of a purpose.

For employers and industry the idea of being able to convert a person to a worker or a more highly skilled worker through a qualification is central to why employers would utilise the VET system. Employers need workers with the right skills and qualifications to undertake the roles they have within their organisations.  From a Government perspective, if we focus on workforce participation, converting people into workers through a qualification reduces unemployment numbers, (even when they are undertaking training) and creates a pool of skilled workers for employers and industry to call upon when needed.  For providers having a good qualification to employment conversion rate helps to make the business more profitable and sustainable through growth in their reputation as a quality provider.

So it seems to me that this idea of conversion, converting a qualification into employment or advancement is an important one across the board and one which we could perhaps use to underpin our various models and thinking.  If the central goal of the delivery of a VET qualification is employment or increased chances of employment and advancement, this creates an environment where the outcomes for the student are central and quite clear.  This should then provide us with a critical lens through which to assess compliance and quality in terms of providers, connection with industry, funding levels and appropriate courses and range of other parts of the puzzle.  It also would provide students with a lens through which to evaluate both the courses they are interested in undertaking and the providers through which they wish to undertake them.

 

Anyway that’s just what I think.

Voluntary Administration, closures and VSL – A New Year in VET

As many of you may be aware a number of RTOs have over the last few weeks have shut their doors either voluntarily or not so voluntarily.  A significant proportion of these providers were ones which had large exposures to the VET fee Help market and have been financially impacted quite severely by the move to the new VET student loans scheme.  Have we seen the last of these closures?  I certainly don’t think we have. Over the rest of this financial year we will see the closure or downsizing of a significant number of VFH providers who, for what ever reason have been unable to adapt to the new market place.

Why is this happening?  There are a number of quite obvious reasons why this is occurring, although it is important to note that I have know direct knowledge of the the reasons behind any or all of the recent spate of closures.  The first reason I would point to however,  is a simple one, either the provider has not been granted access to the new VSL system for whatever reason, or the courses which they relied on have been removed from the list.  In both these cases the revenue which was being generated through VFH will have effectively stopped.  Take for example a provider with $11 million turnover, $10 million of which came from VFH.  Not being given access to VSL or having their courses removed from the list effectively reduces them to a $1 million turnover business and destroys the cash flow created through the VFH system.  Finding a way to plug this revenue hole will be almost impossible given the changes under VSL, because even if the provider were to be granted VSL access in the next round or commence delivery of courses which are now on the approved list there are other issues which I will outline below.

The second reason why a number of VFH providers are struggling is the loan cap.  As we know the government has capped loan amounts depending on the course you are undertaking, at $5,000, $10,000 and $15,000.  Let’s take our $11 million provider again.  Say they were delivering the Diploma of Leadership and Management under VFH for $15,000 and this accounted for all of their $10 million VFH income (I know this is unlikely but it is just an example).  The price of the the Diploma is now capped by the government at $5000, so even if the provider is granted early access to VSL and can still generate the same number of enrollments, without the use of third party brokers (which now can’t be used under the legislation) their income from ‘Loans’ under VSL will be at most 1/3 of what it was under VFH, reducing their income to $3 million making it exceedingly difficult to continue operating the same manner they had been.  The other thing to consider here is that even if the provider can generate the same number of enrollments, payments under VSL are now made on a completion rather than commencement basis.  This means that providers now have to have enough additional cash flow generated from other sources to sustain delivery and assessment to these students for perhaps as long as six months before they complete and payments flow through.  Even if therefore a provider was granted access to VSL and could generate the same level of enrollments, they will not, in most circumstances be able to maintain their cash flow at the same level which will of course mean they will either need to severely downsize or close.

The changes from VFH to VSL give us substantial evidence as to why providers should ensure that their revenue streams are as diversified as possible if they want to be able to sustain changes in government policy, funding and the market in general.  Heavy reliance on one source of funding, as myself and others have said for a long time now, is a recipe for disaster.  So will we see more of these closures?  I certainly expect that we will, in particular I think we will as the end of this financial approaches and the legacy arrangements around VFH (and the payments associated with those arrangements) cease and revenue streams become tighter.  I suspect that June/July will be the prime time this year for the closure of a number of RTOs

Anyway that’s just my opinion.

Happy New Year.

 

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