A view from the outside – sort of.

Now that, as many of you know, I am out of the day to day business of vocational education and in a more organisational learning and development (among other things) space, I have been looking at the VET sector through a somewhat newish lens, though a lens I have admittedly looked through before and I am troubled by what I see.  Someone asked my the other day what I thought the biggest issues facing the sector were.  I started to suggest that the kinds of things people have heard me talk about at length and then it struck me that I needed to push all of that thinking away and have a fresh look at the sector as someone sitting outside of it, or at least only on the very edge and so I did and I realised something.

No one outside of the sector actually cares about what is happening in the sector.  No one really cares about the problems with the TAE, whether ASQA is doing the right thing the right way, compliance issues, what the issues with amount of training are, no one actually cares.  They only care when they go to a provider, ask for what they want, and get told they can’t have it or they can’t have it in the manner in which they want it, and even then they don’t really care as they will either except it or simply go to another provider.  And I am not just talking about business’s here, I am talking about individuals as well, and that is a very very big problem for the sector.

Yes lots of people are involved in the sector, lots of people, millions in fact gain education, training and qualifications through the VET sector in this country, and even if we discount international students and training there are massive sums of money involved and VET is a critical part of our economy, not just in terms of that money, but in terms of the generation of skills and knowledge within this country, in terms of making us as a whole, smarter, better, more skilled, and more knowledgeable.   But again, very few people outside the sector actually care.

Now to be fair this is not an active dislike of the sector, the rampant hatred of all things VET that we saw in the thick of the VET fee Help debacle has dissipated, it is simply that VET  is not on the radar of most people as something which is important, that they need to understand, or that they need to care about.  It is at best a piece towards the back of the paper to which people either respond with ‘bloody dodgy private providers’ or ‘bloody TAFE.”  The sector has unfortunately become something that people only take an interest in, when they intersect with it and then their interest is purely, for the most part, about how they get what they want from the system and once they have it the sector floats away from their lives.

We even see this when if we listen to the way the which the sector is thought about by not only those outside of it but those inside of it as well.  Principles, guidance counselors, and parents who view the sector as somewhere for those kids who aren’t going to get into university to go.  Providers, consultants and all of the other ancillary business’s around the sector itself, who see the sector as a way to make money.  Bureaucrats,  unions, governments and those in positions of power who see the sector as a means to an end, stepping stones in a career, or organisations who see the industry as nothing more than a way to train their staff for as little actual cost as possible.   Please don’t get me wrong here I am not suggesting this is the way everyone thinks, but I can tell you it is far more prevalent than you might want to think.

So why is this the case, the answer is both simple and complex.  It is simple in that there is no single connected vision for vocational education in this country, there is clear no statement about the value of vocational education.  Governments talk about how important it is, but generally only to those from the sector, and in the background keep reducing in real terms the amount of funding the sector has. It is never the center piece of discussion, jammed in between K-12 and University and seen by many nothing more than a way to appear to reduce unemployment.

There is no single driving vision, that can be clearly articulated and disseminated, talked about, and used to educate the public on the enormous value that this sector brings to this country and that is real shame.

Anyway that’s just my opinion.  Hope all of you that went had a great #2017NVC and learnt something that you can take back and make the VET sector stronger.

Advertisements

Total VET students and courses 2016 – First look

Woohooo, it’s that time of the year again.  NCVER has just released the Total Vet students and courses Data for 2016.  Yes I know lot of you are now going ‘you’re weird’ and to be fair you are probably right, however, there is more often than not some lovely little gems of information tucked away in this report.  So lets have a look at what it says and see where that takes us.

First the highlights; 4279 providers delivered TVA training to about 4.2 million students in 2016, which represents an almost 5% rise in the number of enrolled students over the 2015 figures. There was also an around 1% rise in the overall participation rates in VET in the population aged 15-64, with  participation highest among 15 to 19 year olds at 46.2%.  This is on the back of an almost 3% decrease in the amount of commonwealth or state government funded training and while management and commerce remains the most popular field of education despite a 5.8% decline in program enrollments, the heath sector saw the largest one rise increasing by 30% in 2016.  The other interesting fact is that about 10% of all of the RTOs listed on Training.gov.au had no enrollment activity during 2016.

So what do all of these highlights mean, before we dig a little bit deeper into the data.  I have to say that realistically it seems to paint a fairly good picture for the VET sector in Australia.  We are seeing solid levels of participation across the Australian population and far more importantly I think we are seeing almost 50% of the 15 to 19 age group involved in some kind of VET activity in 2016.  The decline in funded programs is however a concern, and a concern that must be addressed by both state and federal governments.  For too long now the VET sector has been under funded with the amount of public money coming into the sector reducing in real terms and falling further and further behind K-12 and university funding.

So what other pieces of information can we glean from the report.  Well Queensland had the highest overall number of providers at 1270, with VIC close behind with 1100 and NSW third with just over 1000 providers.  As you would expect the three eastern states dwarf the other states, with each of them having more providers than all of the other states combined.  This trend is also echoed in the total student numbers a well.  NSW leading here with 1.1 million students with both VIC and QLD coming in not far behind, each with over 900,000 students.  When we look at the student numbers a couple of really interesting points pop out.  Firstly female students increased by 10.5% to 2.0 million, with the proportion of female students increasing from 44.1% to 46.5%.  In addition indigenous students increased by 20.1%, accounting for 4.0% of the total estimated VET student population and students with a disability increased by 1.8% or 4.3% of total estimated students.  All other things being equal, this has to be a great result for the sector, with those populations which have traditionally struggled comparatively in terms of workforce participation and education, becoming more engage with vocational education.

When we consider the data around program enrollments, that is what people studied and how, we see a trend or a movement which I think is going to continue into the future.  Across the board in 2016, compared with 2015 national training package program enrollments decreased by 4.1%, while skill sets increased by 111.6%.  This is something that a significant number of commentators including myself have been suggesting, has been occurring and will to continue to occur over time.  I would suggest that in our fast changing workplaces, both workers and employers are looking build and improve specific skills to meet market demands quickly and effectively, thus preferring skill sets and single unit training over full qualifications.

The largest percentage of enrollments was, as we would expect at the Certificate III level with 26% of all enrollments, with diploma level and certificate II qualifications coming in next, both with in excess of 16% of enrollments.  These are the core business areas for the VET sector so the fact that they account for in excess of 60% of enrollments is no surprise.  We saw the health sector record the largest growth of all fields of education increasing by 30.3%, however troublingly we saw by contrast, Natural and physical sciences experienced the largest decline in program enrollments, decreasing by 15.0%.  While our ageing population and the ever growing need for health and allied health professional is clearly driving the growth in that sector, I suspect that a severe misalignment between the training packages and the needs of the science sectors may be the underlying reason behind the decrease in enrollments there.

So that’s it for a first look, I think there are real positives that the VET sector can take from the data in this report, but there are also some things to consider quite seriously, such as the continued decrease in funding and the lack of student enrolling in science related courses.  It will be interesting to see if anything else pops up out of the data as it it looked at more closely and read in conjunction with other data.

Anyway, that’s just my opinion.

 

Apprenticeships – Time for a Change

This has been something which has been on my mind for a few months now and I have had a number of conversations with people inside and outside the Apprenticeship system or more precisely the apprenticeship management system.  The main arm of the management of apprenticeships and traineeships at the moment is the Australian Apprenticeship Support network or the ASSNs which is an evolution of the previous systems that were in place to help everyone involved, employer, student, provider and the government to get the best outcomes out of the system.  Before I go on, it is important to note that I am not talking about apprenticeships and traineeships themselves or how they are structured, delivered or anything like that. What I want to talk about today is the future of the ASSN and whether or not it is a model which is viable to take us forward into the 2020’s or if it really is something which has had its day. This should also not be taken as an attack on the organisations which form the ASSN or the work that they do.  It is certain that they, for the most part do a fantastic job.  The issue is whether or not the approximately $190 million which the government providers these organisations to provide this service is the simplest, most effective and most efficient method and whether not there may be better ways of delivering this service.

Why I say this is because in this digital world, it seems a little difficult for me to understand the need to have people driving around, talking to employers and providers, recruiting, mentoring and all of the other things they seem to do, when the underlying process should be very simple.  Now there has been a move to streamline the system with the AASN now utilising a lot of electronic forms and data, rather than the clearly time consuming and costly paper system which used to exist and this in itself points to the crux of the idea and the problem.

It seems to me that we may have an over complicated system providing a solution to a problem which is quite straightforward.  There are in essence only three parties which are involved in the apprentice or traineeship, that is the student, the employer and the provider (RTO).  Surely in this age of digital disruption some sort of self service model for employers, where they simply registered to become a employer for an apprentice or trainee and picked the RTO they wanted to use from a drop down box of government contracted providers, with a portal for students to then apply for the available roles is something which is not beyond the realm of imagining let alone creating.  There seems to be little or no reason why contracts and agreements, payments etc could not be handled through the same system.  All that would then be required would be a group of people to ensure, that the various requirements of the whole process were being met and that it was producing the outcomes which were required.

Now I understand that I may have grossly oversimplified the entire apprenticeship process, however that was to some extent my purpose here.  Why would I do that?  To point out that I think the days of the AASN are numbered.  I think that within the next 2-5 years we will see a significant shift in the way in which these services are delivered to stakeholders on behalf of the government. We will see more self service style options and more centralised management of the the system, why?  Because it is cheaper and has the potential to be more efficient.

If I was an AASN organisation I would be thinking about where my next income stream was coming from.

Anyway that’s just my opinion.

VSL – The first six months, well sort of.

As many of you are aware the report on the first 6 months of the Vet Student Loans (VSL) Scheme, which replaced VFH at the beginning of the year has been released.  Now while it is not too long (a mere 31 pages, plus a spreadsheet of data), it does make for some interesting reading.  It is important to note that this report is on the six month transition period between VFH and VSL and some of the data is for providers, who while part of the transitional program did not have their approval to deliver VSL courses renewed under the full scheme.  There were 167 under the provisional arrangements but only approximately 125 have continued into the full scheme.  The other significant thing to remember about some of the details in this report is that there are caps of 5,10 or $15,000 associated with the vast majority of courses listed, with Aviation courses having a much higher cap than others.

Through transition there were 167 providers, 35 were TAFEs and other public institutions and 132 were private providers, and interestingly of that 167 only 138 enrolled students who accessed VSL funding.  A total of 24,492 students had VSL approved for a total of $78,131,044.  This represents an average across all enrolments of just over $3000 per student.  One might say on these figures alone, if this program has achieved nothing else it looks as if it has achieved the government’s goal of reducing the student debt.  It seems clear that the days of unbridled greed both in terms of enrolments and the fees being charged are well and truly over.

What is a little bit more interesting is that public providers seem to be the clear winner in the VSL funding stakes, with TAFE QLD pulling in the most funding at a shade over $13 million, and TAFE NSW coming in second with only about $8 million.  In fact all but one of the top ten spots in the VSL league ladder are held by TAFEs or public institutions with BasAir aviation college in tenth place. The truly interesting thing for me in all of this is the change in the league tables for most popular courses, with the perennial winner, the diploma of business dropping back to sixth, and the fourth placed, under VSL, Diploma of Leadership and management sliding way down the pack to a dismal twenty-first.  The upward mover is screen and media now coming in at fourth having previously been pretty much unranked, with Nursing and Community services still holding onto their VSL popularity.  What does this mean, well, what it could mean is that without the unfettered fees of VFH, slinging brokers (which you can’t really use now anyway) in excess of $5,000 to grab students off the street so you could enroll them in an $18,000 Diploma of leadership and management is no longer a sustainable business model, and perhaps when these students aren’t being pressured into signing up over the phone, at their front door or as they exit centrelink it turns out that most people don’t actually want to do the course and perhaps only did it so they could get that Ipad that was on offer.  Oh sorry I must have slipped my cynical hat on there for a moment without noticing.

If I am being really honest this report doesn’t actually tell us very much at except that VSL has done what it had been expected to do which is to curb the out of control spending which had occurred under VFH, and reign in some of the abhorrent business practices which had grown up around the program as well.  It is far to early to tell whether the design is right, I get the feeling it is at a high level but needs some adjusting where the rubber hits the road, and whether new issues will pop up as the program marches forward.  Is it perfect, no.  Is it better than the utter disaster we had previously, at least in my opinion yes.

Anyway that’s just my opinion.

NCVER’s Government funded Student data; What does it tell us?

So for those of you who aren’t aware, NCVER released its government funded student data for 2016 recently and I think it has some interesting findings contained in it.  Firstly though what is the overall picture which the data presents us with. The big thing which should jump out of this data for anyone looking at this data is that 7.8% of the Australian population aged 15 to 64 years participated in the government-funded VET system in Australia in 2016.  That is about 1.3 million students, a 3.3% increase from the previous year.  This shows the enormous part that funded training plays in the VET landscape in Australia and the importance that it plays in allowing  people to undertake post secondary education.  Without this funding a significant amount of that 7.8% of the population would not have otherwise been able to access the training they needed to improve their workforce participation options.

Interestingly while there was an increase in students there was also a decrease in subject enrollments, primarily due to the fact that there was a significant (nearly 300%) increase in the number of people undertaking funded skill sets as opposed to full qualifications.  This points out a growing industry trend and one which must be acknowledge and properly dealt with by all of the various funding bodies involved in the sector, that of increasing demand for focused skill sets to meet the needs of an industry or a particular employer.  This is a trend which is on the rise rapidly not just in VET but across organisational learning and development and post secondary education in general.  Organisations and students are looking for short, focused courses containing a small number of units to fill skills and knowledge shortfalls and to be more competitive in rapidly changing markets.

Interestingly 52.2% of funded students, were enrolled in their study at TAFE or other government providers, with only 40.8% enrolled at what would generally be defined as private providers.  The balance of enrollments were through community education and other providers.  This represents an increase for TAFE in terms of students of 14.8%, with both private and community providers both dipping by around 7+%.  I find this interesting (and yes I know these are last years numbers and things can change) because there has been significant media coverage of the downturn in student numbers enrolled in TAFE’s.  What this seems to suggest, at least to me, is that if TAFE is clearly improving its position in the funded training market, then it must be losing substantially in the more competitive fee for service markets, including income contingent loans which as we all know are not Funded Training.  To be fair, the non-TAFE sector has for a long time (even before VFH) traditionally done better in the fee for service space for various reasons.  I will be interesting to see what the total VET activity data says this year, when we can get a picture of all enrollments to compare against the funded enrollment data.

Every demographic with the exclusion of 15-19 year old’s increased in terms of student numbers as did Females, indigenous people and people with disabilities, which is win as often these groups are the ones most in need of financial assistance in terms of their ability to undertake training.  The community services training package was the largest contributor to student numbers at 18.5%, which given the numbers of staff which will be needed in this sector in the coming years is probably a good thing.  The most popular fields of education though were engineering and education however information technology and natural and physical sciences had very significant drop offs at 14.6% and 16.4% respectively.

Overall the real impact of this report is that it shows that enormous value that funded training contributes to this country.

Anyway that’s just my opinion.

P.S.  As some of you know I will be moving on from my current role at the end of this week, to take on a more traditional, less VET centric organisation Learning and development role.  I will be still quite strongly connected to the sector, just in a different way than I currently am.  It is also probably the case that (and I can’t promise this) that I will take a break from posting for a couple of weeks as I get up and running in the new role.

 

Paul

Competing Agendas and the VET sector

One of the significant problems for the VET sector is that there seems to be conflicting agendas or at the very least differing agendas which create tension within the system, between a range of its stakeholders.  If we consider the major stakeholder groups within the sector and what it is they want from the sector we should be able to see where these various tensions lay.

I would argue that the following four groups encompass the major stakeholder groups within the VET sector within Australia.

  1. Students
  2. Employers and Industry
  3. Government (State and Federal)
  4. Education providers (Public and Non-public)

Now simply by glancing at this list it may be possible to glean particular areas where tensions might arise between the needs, wants and agendas of these various groups.  Let’s have a look the various groups then in detail and see what their agendas for being involved in the VET sector might be.

Students, it might be suggested have the simplest of  agendas in relation to the sector, however as we have already touched on this may not be as clear as we first thought or how we have conceptualised the student agenda in relation to VET may simply not be correct.  It is my contention that the primary reason, the main agenda which students have, for accessing VET is to obtain a qualification.  This is of course where the first tension begins to rise.  Students want a qualification, because they can convert that qualification into workforce participation of some kind.  However, it is important to note here that if the purpose of significant numbers of students accessing the system is to gain a qualification, this in and of itself says nothing about their motivation towards learning or becoming competent.  It seems anecdotally at least that one of the primary concerns of a significant number of students accessing the system, particularly at higher levels and where they have at least some work experience in their field is ‘How long will it take me to finish this qualification?’

Why is this the case? Why are students or potential students concerned with how long it will take them to undertake the program and obtain their certificate?  The answer is simple and it is that they intend either immediately or at some time in the near future convert their qualification into improved workforce outcomes for themselves.

Some people may be cynical of this line of thought and suggest that surely students want to learn, to be engaged in the learning process and to gain the skills and knowledge they need to improve their workforce outcomes.  I am not suggesting that this is not the case, I am simply suggesting that students want to achieve this in as short a time as possible and as we shall see it is this motivation or agenda which creates tension, particularly with the agenda of the government and to a lesser extent, employers, industry and providers.

Employers and industry might be expected to have somewhat similar motivations in relation to students particularly in relation to the time taken to achieve a qualification.  There is a very real tension which exists between, business and training, which I have discussed in a various articles, where the drive from business is for the delivery of training to be conducted in as short a time frame as possible in order to ensure minimal disruption to day to day business requirements. It is the case however that there is for employers, businesses and industry and inherent tension in this position as employers in a range of circumstances need to ensure that their employees not only have the appropriate qualifications, but also have the skills and knowledge which should underlie that qualification and failure to do so may in some circumstances have catastrophic repercussions for the business in question.  It is of interest to note that this internal tension not only exists between business and VET but also between business and general learning and development programs.  The issue is more apparent in relation to VET however as the training and assessment requirements for a qualification are in general more rigorous than those required for general learning and development programs.

Again when we look at the agenda of the government in relation to VET it may be easy to assume that from their perspective their primary agenda is workforce participation, however as with other groups we need to be careful and think about the situation further.  It is both unfortunate and true that most elected officials in charge of the VET sector have very little knowledge of how the sector works, its outcomes and the motivations of other players in the sector.  This could be said of a wide variety of ministerial portfolios though.  More so than any other sector of the educational landscape VET is seen solution to a range of differing problems.  Primarily most governments tend to see VET as a solution to, or at the very least a significant force in relation to, the problem of unemployment, however not necessarily in the way in which most people might expect.  While it is certainly the case that providing unemployed people with training in particular vocational areas, should have the effect of making them more likely to be able to participate in the workforce.  There is of course an additional advantage to having unemployed in training and that is that given the way in which statistics can be calculated it can be said that those who are undertaking study are not unemployed, therefore reducing the number of people who appear to be unemployed.

So while it may be important to a government to want people to undertake training to improve their skills and knowledge for better workforce participation, or to provide better quality of services, increase innovation and improve the general education base of the nation, it seems that it may also be true, particularly at certain times, that it may also be advantageous to governments to simply have significant numbers of people involved in education programs, particularly where those people would otherwise be listed as simply unemployed.

It is also important to remember that wrapped around this agenda and any other agenda the government may have about vocational training and education is the fact the, at least in Australia, governments both state and federal are substantial financial contributors, either directly or indirectly to the costs associated with students obtaining vocational qualifications.

Various levels of government provide direct and indirect financial support to students, employers and industry, and public providers (TAFE), through a variety of channels and programs, however as myself and others have discussed at length, this creates an additional agenda for governments around value for money and return on investment.  This is simply because there are not inexhaustible public funds available to be funnelled towards vocational education.  It is this environment in particular where there is a mixture of public and private sources of financial inputs into the system, a limited resource environment, and a desire to create best possible returns on those investments, which reinforces the education as a business mindset, which is to my mind, and I have discussed this elsewhere, the mindset that should be adopted by all providers within the sector.

The other factor which arises in relation to the government financial commitments to the sector, relate directly to the impacts of policy settings and decisions on the overall health of the sector, and the perceived impact this has on both the sector and those in government.  One of the shining examples of this was the issues surrounding the VET FEE-Help program.  VFH was an in income contingent loan scheme, similar to the system used to fund students participation in the Higher education sector  The policy and contractual settings for which created a situation which had a devastating effect on the sector as a whole, on the perception of governments ability to manage the sector and on students ability to be able to convert their qualifications into usable workforce participation outcomes.  This statement should however not be taken to suggest that the entry of unscrupulous providers into the system for the sole purpose of utilising the VFH system to amass profit was not the actual cause of the issues.  It is simply to suggest that a funding system, the settings of which allow such behaviour to occur in the first place, show the deleterious effect to government decisions and policies can have upon the overall system.

All of this also sits atop specific agendas in relation to vocational education, which form part of the various party platforms.  At the far left of the spectrum we have the greens with an ideological position that non-public providers should receive no funding at all and that the government should support TAFE (public providers) to the exclusion of any other providers who might wish to be part of the system.  One the right, the Liberal party has an ideological position which favours competition in the market place, a more open view of access to funding, and a position which looks at the public providers, at least to some extent, as simply another provider within the system.  Somewhere in the middle we have most Labor, which while tending to fall more towards the public provider position held by the far left, sees a not insignificant place for private providers within the overall system.

When we then add the agenda perspective of VET providers (RTOs) both public and private we can start to see why we need to develop a way of thinking about the system which is able to address these tensions.  What then is the motivation of RTOs?  I think that this is both an interesting and troubling question for a lot of people and the initial off the cuff responses of a significant number of people will at least to some extent depend on their view of education, its status as a public good, where they sit upon the political spectrum.  It is not uncommon to hear criticism of private, though I prefer the term non-public providers, as being less concerned with educational outcomes and more concerned with profitability.  It is also not uncommon to hear criticism of TAFE (public providers) as being more concerned with administration, staff entitlements and titles, and maintaining the status quo, over education outcomes.  Both views are wrong and are based on long term misunderstandings in relation to the vocational education market and the goals and agendas of its various stakeholders.

It is very easy to make generalisations about the various types of providers in the sector, however it is important to realise that for the most part these generalisations are simply incorrect.  It seems that for the vast majority of providers both public and non -public that the motivation behind them is to produce quality student outcomes.  There is an issue with this motivation; while it would be wonderful it all students could always be provided with all the support they required to be able to undertake their chosen program of study and have the best materials, teaching, and administrative experiences, this cannot always be the case.  All of that costs money and someone, somewhere, sometime has to pay for it all and realistically payment can only come from one of three places, employers and industry, government or the students themselves.

The hard truth of vocational education, and in fact of any facet of formalised education, is that it is a business.  Whether you are a non-public, for profit provider, or a public TAFE, there is no difference.  There is not an inexhaustible amount of money, nor will students, employers or government simply pay any price for training and qualifications.  All providers need at the very least to be self-sustaining in terms of their income and revenue regardless where that revenue comes from and more and more we are seeing pressure on all providers to do more for students for less. This is particularly evident in terms of direct, entitlement style funding from government, where the expectations on providers are being raised while the amount of funding is decreasing or remaining the same.

So while the motivation of providers may well be to deliver high quality student outcomes, and I have no doubt that for the vast majority of providers this is the case, there are very simple economic factors which place pressure on the delivery of these services.  It is not economically viable for any provider, public or private to run a program at any level for only a handful of students.  TAFEs are often criticised for cancelling programs due to lack of number, however the very fact they have to cancel programs shows that there is fundamental economic factors at work and is a perfectly acceptable reaction to these factors.  If the cost of the delivery of a course is $20,000 and there are only three students enrolled for which the total income that the provider will receive is $9,000 then clearly the additional $11,000 must come from somewhere.  Either the government, an employer, or the student themselves must pay more for the course or revenues generated from other parts of the business will need to be redirected to subsidise the course in question.  Now some may feel that utilising revenue generated from other courses or activities to subsidise courses which have low student numbers is an acceptable use of those monies, particularly if it does not affect the overall financial viability of the provider, however supporting programs in one area with funds from other areas is fraught with issues and can create extreme difficulties where the initially more financially viable course becomes less viable.  The other significant issue which exists for those who would  suggest that subsidy from revenue of otherwise non-viable programs is appropriate, is an argument around fairness and equity both for students and in the market in general.

As we can see there are a significant number of tensions which exist in the VET sector both internally to the various stakeholder groups as well as between them.  There are a range of motivations and agendas attached to the various stakeholder within the sector, which unfortunately do not always sit comfortably with each other and as a result this increases the complexity of the industry, the development of sound policies and the development of ethical and sustainable business models  which can in fact cope with and respond to these various agendas.

 

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.

 

%d bloggers like this: