Private Equity, investment and consolidation in Vocational Education

A couple of days ago now the AFR posted an article about private equity and the Australian for profit education market, including Vocational education, in which they suggested ‘The Australian education sector is set to be the subject of a wave of consolidation led by private-equity looking to tap into its high-margins and predictable cashflow. Global strategic-advice company, EY-Parthenon, is gearing up to target the $25 billion for-profit education industry.’  The trouble is that I can’t help but think I have heard this all before.

During the middle and running through to the what was clearly inevitable end of now infamous VET Fee Help era, private equity firms, based on amazing high EBITDA margins, the lure of cashflow backed by government contracts, and an almost complete and utter misunderstanding of the VET industry in Australia, rush into the market and snatched up, partnered with or poured money into some of the biggest players in the educational market at the time all of which failed to produce the results which were way overhyped by ambitious CEOs, Managing Directors and founders looking to provide cashflow for expansion in a market which everyone, except it appears, the so call professional private equity gurus knew was a bubble soon to burst.

Now less than two years since the bubble well and truly started to burst and the demise of the vast majority of private equity backed providers, we see yet again a private equity strategy company selling the idea of investment in the Australian education business.  Admittedly EY-Parthenon and their Varun Jain and not limiting themselves to the VET market this time with their eyes on a more broad vista including early education, schools, VET and Universities. The problem for me is in statements such as such as the one where Mr Jain suggests that the fact that funding comes largely from the public sector, student fees and philanthropy is not something that he is concerned about, shows a think a deep misunderstanding of the volatility of the publicly post secondary education market in this country.  Post secondary education and particularly vocational education in this country has always been very much at the whim of the political winds and lean of whoever is currently in government.  I mean money always flows towards TAFE which of course could have more to do with gravity or perhaps more correctly inertia than anything else.  Then of course the spray which escapes from the main trickle is what is left for the non-public sector and exactly how much of a spray that is depends on some many thing that are out of the control of the operators of non-public RTOs.

So some of you are probably thinking now, why is he banging on about this.  It is simply because I am a little worried by this talking up of private equity again.  Not because I think that all education should be publicly delivered, the educational market should be as diverse as possible to allow for innovation and choice.  Nor do I care about private equity firms losing millions of dollars when the businesses they have invested in (without proper consideration most of the time in my opinion) fail.  Although I do care deeply about the effect that this has on both students and our sector workforce.  The concept of industry consolidation doesn’t present an issue for me either, as I do think the entire sector, public, private and not for profit, could do with a shake up and consolidation.

What worries me is that we have seen this before and we have seen the effects of it.  We have seen investors with little or no understanding of the education market in Australia and even less understanding of how to run an educational business, take substantial stakes in providers and because of their lack of knowledge and understanding drive their investment vehicles into practices and operations where their ability to deliver quality training and meet compliance needs are stretched to breaking point and beyond.  Roll ups, complex corporate structures, a focus on warm bodies rather than quality, all the things that force governments to enact changes to funding programs and harms the public’s view of the industry as a whole.

If you are a private equity firm (like EY-Parthenon ) please for a start do some real research, talk to people who are actually involved in the industry not just the usual crop of pundits, lobbyists, ex politicians looking a board seat and the like, because I can tell you that they knew like the rest of us about the issues around Vet Fee Help and market in general when the last crop of equity firms rushed in, they just didn’t bother to say anything.  Secondly if you are going to invest, again put people on your boards and in senior management roles who understand the market in this country and really understand the issues around training and assessment in our regulatory environment.  If you don’t then you are throwing good money after bad and damaging the industry in way you could not possibly understand.

 

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The problem of opinion and misinformation in VET

Australian VET is a regulated industry, in fact if you spend more than five minutes talking to almost anyone in the sector, you will understand just how abundant these regulations and other associated controls are.  Given that this is the case, and given that because this information is written into legislation, and other associated documents linked to and referenced in the legislation, I am sometimes dumbfounded how it is possible not to know the answer to a lot of the questions I hear being asked in the sector, and worse still giving an opinion, which is wrong, on something that is clearly articulated in black and white in the various documentation for the sector.

Now I am the first to admit two things, one, there is a lot of documentation to look through (the Standards, Data Definitions, funding agreements, AQF, to just name a couple) and second, I am the kind of person who loves, reading and assimilating information and data.  That being said however, how is it possible for someone to be in a position of relative power, (CEO, Consultant, Compliance Manager, whatever) and not have read and more importantly understood at least the very basic documents which regulate the sector, and given the amount of misinformation, and glaringly wrong opinions which are offered by people who should really no better, it can only be assumed that they either haven’t read or haven’t understood the documents, or have simply shifted all of the responsibility for knowing what the right answer is to someone else.  Now to some extend I don’t, by necessity, mind if people, say a CEO of an RTO doesn’t have all the answers and relies on his compliance person to understand everything and to get it right, however if this is you, then don’t give an answer when someone asks a question.  If you don’t know the answer, all you are going to do is muddy the water and make it more difficult for the person asking the question to get the right answer, which then probably need.

What is far more concerning to me is when people, who are supposed to be senior leaders in the sector or who are consultants who work with large numbers of providers, voice opinions which are clearly incorrect on subjects where your opinion doesn’t matter because the answer or the definition is written clearly into some form of regulatory document.  Not only does this provide whoever is asking the question, or who they are working with, with the wrong answer, which could have catastrophic consequences for that person or organisation, but if they say it enough and it gains momentum and gets passed around enough, this clearly wrong piece of misinformation, becomes gospel.

One of these, as an example, came up a number of years ago, at an ASQA briefing and was categorically answered, but the myth, wrong, opinion, or misinformation still exists today and is still quoted by people.  At this briefing a gentleman stood up during the time allocated for questions and asked, why it was the case that highly experience industry people had to hold all of the units of competency that they were teaching.  He said that it was making it difficult for him to find trainers because a lot of people in his industry didn’t have the newest UOC’s and therefore couldn’t teach and assess those units.  The person from ASQA (who is a person who is highly regarded, highly skilled and help draft the standards) looked dumbfounded for a moment and then replied that the standards didn’t say that and asking him where he had learned this from.  This of course bought a hue and cry from the audience many of whom insisted that that was exactly what the standards said.  The ASQA representative carefully explained that all the standards said was that trainers had to have, small c vocational competencies.  They didn’t have to hold the exact unit they just had to be able to prove that they were competent in the skill that they were teaching if and when they were audited.  Another round of discontent emerged with a lot of people say that TAFE had always required them to RPL the most recent units at the very least.  Again, the ASQA person reiterated that while that may be the practice of TAFE, that was simply a management decision, was not required by the standards and should not actually be considered to be best practice. Now not only was this information shared at the briefing, it was also shared through FAQ’s on the ASQA website and through recordings of the briefing.  Yet, much to my disbelief, I heard this very question being asked in another forum late last year, a a great many of the people who answered spouted the very same information which has been debunked numerous times since that first briefing.

The real problem is that this is only one example of this kind of opinion masquerading as fact which is doing a substantial amount of damage to the sector.  It is no wonder that RTO’s are failing audit if they are relying on opinions from so called experts rather than actually going and reading the cold hard, black and white information contained in the various acts and other documents.  The vast majority of the questions I see posed on online forums, at conferences and in general discussion, aren’t the subject of opinion, and do in fact have definitive answers if you can just be bothered to go and read the documents that govern what we do.

So how about before we ask or answer a question, we all go and read, not just The Standards, but all of the ancillary documentation associated with the sector, or if you don’t have the time or the inclination to do that, (I personally think our sector would be better off if more people did though) just google the question, ignore the opinion and go to the actual source documents.  We all talk about wanting the VET sector to be more professional, and I have to say, actually reading and understand the legislation etc which underpins might be a good start.

One set of rules for all Providers?

Right, first off the bat, this is probably going to get a little ranty, so if you don’t feel like listening to me have a rant, albeit a rant with some facts to back it up, you might want to stop reading now.

Secondly, I am a supporter of TAFE.  I think as with non-public providers, public provider (TAFE) for the most part do a fantastic job and are a vital part of the fabric of VET in this country.

As I said in a post more about 18 months ago the VET system in this country is supposed to be regulated against one set of standards, which apply to all providers whether they are public, private, not for profit, community education or whatever.  If you deliver vocational in this country you are supposed to meet the standards and if you don’t there are supposed to be penalties for such non-compliance.  Clearly this is the biggest pile of horse s**t that has ever been perpetrated on this sector.

For the last few years we have seen the media, the unions, governments and regulators attack, on what at some points seemed to be a daily basis, non-public RTOs.  Now to be fair some of this was legitimate, but it is also fair to say that there was a hell of a lot of massaging the truth, to sell more papers, push a particular agenda or to grab the best sound bite.  The reputation of the sector and in particular the non-public part of the sector was basically covered in petrol, lit on fire, and burnt to a crisp, while at the same time the AEU and others held TAFE up to be a shining paragon of how Vocational education should be delivered.  The regulator (ASQA) took those RTOs who had done the wrong to task, deregistering some, applying sanctions and constraints, taking others to court and generally pursuing breeches vigorously.  The same can clearly not be said for how TAFE in general is regulated and treated.  Let’s just for a minute look at some of the ‘issues’ there have been with TAFE over the last couple of years and particularly very recently.

Kangan – Unsecured student records in an abandoned building

TAFESA – Aircraft maintenance certificates ‘not worth paper they are printed on’ 

TASTAFE – Jobs for the boys, or in the case girls

Kangan (again) and South West TAFE – rorting funding around engineering training and assessment

GOTAFE – What appears to be enrollment fraud

So let’s exclude the TASTAFE jobs for the girls scandal for the time being and just look at the other examples.  Any single one of these would have resulted in serious regulatory action if not deregistration of any non-public provider who had been found doing these things.  In fact the most recent with GOTAFE was exactly what a relatively large non-public provider was in fact deregistered for last year.   What then has happened to the TAFEs involved, well GOTAFE appear to have been reprimanded by the Department and TAFEA are embarrassed.

REALLY!

Where are the sanctions, were is the action from the regulator, where is the constant media attention day after day, where are the politicians jumping up and down.  I notice the Greens who were so quick to condemn the actions of private providers have been, well, silent and invisible about these issues.  And the AEU, the AEUs response to the most recent GOTAFE scandal was basically, its not the TAFEs fault they were forced to do it because the government didn’t give them enough money.   Again, you have got to be kidding me.  When a non-public provider did the same thing the AEU wanted them hung drawn and quartered but now that it is a TAFE its not their fault. Hypocrites.  

And where might one ask is ASQA, the national regulator, who is the regulator of note of all of the providers mentioned.  Nowhere to be seen.  I don’t think ASQA has made any single comment on any of these issues, not a single one, yet again had this been done by a non-public provider they would have been making statements about how they were cleaning up rouge providers, applying sanctions and deregistering providers.

Why nothing from ASQA you may ask?  That’s easy these TAFEs are state owned entities, who are clearly being protected by their respective state governments as the government knows that forcing a TAFE to close because it was well, rubbish, and deserved to be deregistered would have such a detrimental backlash on their electoral chances in the next election that not a single one has the backbone to actually let these activities by properly investigated and regulated.

So while non-public providers are still being sanctioned and have penalties imposed for their assessment practices not being perfect, or their compliance paperwork not spot on, these TAFEs are off doing whatever the hell they want with what only can be described as impunity.

The idea that there is one set of rules that apply to all of the providers of vocation education in this country is a steaming pile of garbage, and perhaps all of those people who have banged on for months and even years about the evil horrors of non-public providers, should perhaps, just once, look in their own back yard, take responsibility, and get their act together before they some vitriolically attack the non-public sector.  But we all know that is not going to happen.

Oh and on top of all of this Victorian TAFE teachers through the AEU Victoria have taken their bat and ball and gone home because it is outrageous to expect them to teach for about half of the time they are at work.

Anyway that’s just my opinion.

 

Higher level teaching degrees and VET

So as many of you are aware there has been some new research which has come out about degree qualifications and teaching in VET.  Now it is important to note that I have not at this point had an opportunity to look over the entire study and the conclusions that it draws, however given the information which is available there are at least some questions I think are worth airing.

Firstly however a comment, I always find it interesting when academics suggest that VET needs better teaching qualifications when most academics don’t have any formal teach qualifications at all, they are simply experts (they have a PhD or similar) in their field. So I always tend to think that if University ‘teachers’ are considered to be capable because they have experience in their field, why is their this suggestion that it should be different in VET. Some if not most of the VET people who get the best outcomes for their student are those with the deepest industry experience and currency.  So with that little comment out of the way.

My first worry here is study size and knowing who it was that the survey was sent to.  570 and 360 respondents out of a supposedly 80,000 strong workforce seems a little low to me to be jumping to conclusions from.  I mean that is after all less than 1% of the total workforce.  My other initial concern is who it was sent to.  I don’t think I ever remember seeing anything about this survey anywhere or anyone at all mentioning that it was underway.  I could be wrong or my memory could be going, but if anyone out there got an invitation to respond to the survey let me know I would be really interested.  I am interested because, often these studies do not cover what could be called a definitive cross-section of the industry.  I am reminded of some research done around supporting students with disabilities which was presented a NCVER No Frills a number of years back, where it turned out that the researcher had only spoken to TAFE providers about how they dealt with disabled student and when asked why she had not contacted any non-public providers her utterly ill-informed answer was ‘private providers don’t deal with students with disabilities so there was no point in asking them’.  Now I am not saying something like that has occurred in this survey, but it would be really interesting to see if all of the parts of the sector had been able to give input and if it had covered all of the states.

Now I come to the real question I have about this paper, what is the evidence for a statement like  “Whether it was in VET pedagogy or something else, a degree or above really made a difference to things like a teacher’s professionalism, their contribution to the organisation and a deep understanding of the necessity of audit procedures.”  Is it just anecdotal or is there something more substantive.  Is it based on the response from teachers themselves saying they thought it made a difference or is there some other more shall we say robust data, or even feedback from their managers and employers about how their professionalism or contribution increased as a result of undertaking a higher degree.  I mean the cynic in me always says, if I had paid a significant sum of money for a degree and someone asked me if it was worthwhile, people are mostly going to say yes, even if it wasn’t just to appear to not appear to have made an error in judgement.

All that aside however, it is important to note that I am not against people in VET getting higher level degrees, nor am I against the concept of these degrees. I do however think that any change in policy to suggest that higher level qualifications become the standard or the entry point should be resisted wholeheartedly.  What VET needs is people who are highly experienced and appropriately qualified in their fields, who are passionate about passing that knowledge on to students and consistently ensure that they are current and well versed in industry practice.  Then we need to provide them with appropriate training qualifications to be able to effectively pass that information on and to assess the competence of students effectively.  That is what this sector needs not more people with degrees, who haven’t actually been in the industry for years because they have been to busy getting their degree.

Here’s an idea, before any more academics tell the VET sector what is good for it and that having university teaching degrees will raise the standard of teaching, how about we change university policy and force all academics who are teaching at university to have higher level teaching degrees and lets see how well that goes down.  I still remember that idiot academic last year complaining that he wasn’t being allowed to teach in the VET sector because he didn’t have a certificate IV TAE, even though he had a PhD in his field.  Just because you have  PhD in something doesn’t mean you can actually teach what you know to anyone.

Anyway that’s just my opinion.

The report on unduly short course duration and what it means

Unless you have been hiding under a rock recently you will have heard, I am sure, about the ASQA report into Unduly short duration courses.  This 171 page behemoth of a report looks into and makes recommendations regarding, what has been viewed by a lot of people as a significant issue with the deliver of VET qualifications, courses of study with very short actual duration’s.   Now I am not going to dig through the entire report, if you want to know what got us to this point and the general research and thinking behind the recommendations feel free to dive into it and have fun. Today I am just going to look at the recommendations made towards the end of the report, what I think of them and what effect they might have on the sector.

So the three recommendations that come out of the report are;

1. Strengthening the Standards for RTOs by defining the term ‘amount of training’ to include the supervised learning and assessment activities required for both training packages and VET
   accredited courses.
2. Ensuring effective regulation of training by enabling Industry Reference Committees (IRCs) to respond to identified risk by including appropriate training delivery requirements, including the amount of training, and
3. Enhancing transparency by requiring public disclosure of the amount of training in product disclosure statements, presented in a consistent way to enable comparisons across courses.

Of these three, it seems at least to me that it is the last one which is the least contentious, that is requiring public disclosure of course duration.  Of course for it to be able to be effective recommendation one does really need to be sorted out first.  If there is no consistent definition of what constitutes  amount of training, and no consistent way of presenting this information, then three is really pointless.  let’s however put that to one side and I will come back to it later when I talk about the first recommendation.  I see no real issue with providers being required to publicly disclose the duration of their courses, both in a product disclosure statement and on MYSKILLS, and that the PDS be provided to every student.  One of the advantages here is that having this information publicly available is that not only does it provide the consumer with additional information which can be used to realistically compare programs, but also it provides the regulator with a metric which can be audited and the provider held to account were they don’t meet their own durations.

Let’s take a step back now though and look at recommendation one.  If recommendation three is fairly uncontentious then one and two are pretty polar opposites. There have long been arguments about what constitutes the amount of training, with a range of divergent opinions such as nominal hours meaning essentially face to face delivery hours to what constitutes supervised and unsupervised learning and to try and get a definition out of anyone about how long a course should actually be and to have some consistency around the answer if you do get it is almost impossible.

So let’s have a look at what the report says in recommendation one about what should or should not constitute ‘amount of training’ It is proposed that amount of training could include:

• supervised or guided learning, such as:
  • tuition and other trainer-directed workshops or activities
  • structured self-paced study
  • structured work placement
  • projects and prescribed set tasks
• Assessment activities.

It would not include unsupervised learning, such as:

• private study or preparation, including prescribed reading, or
• self-initiated learning or research.

Here is the thing, when I look at what is being recommended it seems pretty reasonable, or at worst it seems to cover all of the things I would want a definition like this to cover and excludes the things it probably should.   Anything that is instructor led is included which, well, should be an obvious inclusion, structured self-paced covers elearning, distance and those other forms of non instructed led delivery, this is certainly in my opinion another obvious one, but one which has been challenged (wrongly I would suggest) by some.  Structured work placement and a catch all for projects and other set tasks rounds out the list and a pretty fair list at that.  With a definition out of the way we can now move onto the Recommendation Two, the one that has been worrying people the most.

It is recommendation two where the rubber meets the road so to speak with the report suggesting that where the IRCs feel that there might be an unacceptable risk—including a risk to the learner, the workplace, the community or the environment—or where there are already systemic issues with the quality of training that the IRCs recommend a strategy to effectively mitigate the risk which may include:

• specifying mandatory training delivery or assessment requirements (including the amount of
  training where this is warranted), and/or
• providing enhanced guidance to RTOs through the inclusion of recommended training delivery or
  assessment requirements, including the amount of training.

We have already seen a movement towards this in a number of training packages, with mandatory work placement hours and specific assessment criteria (Student must have provided information to at least 3 clients) forming part of the newest iteration of the CHC package for high number of units and qualifications.  These kinds of criteria and placement hours have long been part of other packages and were sorely need in the CHC package and are probably something with most of the training packages should, if they already don’t include.  What the report doesn’t say is that mandatory ‘amount of training’ should be included in all packages and qualifications.  It does suggest that in;

• aged and community care
• early childhood education and care
• security operations
• equine programs
• construction safety induction (‘White Card’), and
• training and education,

that consideration be given, due to the fact that considerable risks have already been noted in these areas, to including a mandatory ‘amount of training’ for new learners as a matter of priority. Given the quality of some of the training which has been delivered in these areas I can’t say that I am adverse to this idea, importantly I am not adverse to this idea for new learners.  For people with experience in the sector undertaking training, placing the same mandatory ‘amount of training’  is unwarranted and would create undue difficulties for experienced people needing to obtain qualifications.  That being said, having a mandatory ‘amount of training’ for new learners would provide a guide or a benchmark from which training provided to more experienced learners could be judged.

While I understand that part of the argument against minimum durations is the how long does it take a person to be competent argument, to which the answer is of course well as long as it takes, which could of course vary widely between learners.  I might be a much faster learner than others and get competence in  half or a third of the time the average person takes, but also it may be the case that I may be slower and may take twice as long as average.  This doesn’t I think negate the fact that for new learners, we can probably come up with a fairly reasonable minimum mandatory ‘amount of training’ in those areas where this kind of intervention is required.

The other argument raised is that employers are ones who are pushing for quicker and quicker delivery times, they want new staff to be trained as quickly as possible. But here’s the thing, employers can’t have it both ways, they can’t have staff trained as quickly as possible and then complain about the quality in the next breath.  I have had this argument so many times with managers over the years in a variety of roles both in and out of RTOs, you can either have it fast, cheap or good, pick two because you can’t have all three and anyone who tells you you can is either lying or trying to sell you something.  Having  mandatory minimum ‘amount of training’ however cuts the legs of this argument straight away, the answer to the can we have that quicker question is simply no and we have official documentation to back it up.

All in all I can’t say that I have any real problems with the recommendations, yes, having a minimum mandatory ‘amount of training’ worries some people, however I would suggest that for a lot of the high quality providers in the market, they would be meeting or exceeding any minimum requirements that were ever made mandatory.

Anyway that 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.

A Federal system for Vocational Education?

I for one have been for a long time now a proponent of the Federal government being in charge of Vocation Education in Australia, so as you might expect I have reacted quite well to the news recently that there seems to be once again support for this notion both Federally and by the States.  As I said I have for a long time thought that a set up where the federal government is in charge of the regulation and funding of a national system of vocational education makes sense.  It should make it easier to navigate the morass of funding that currently exists and changes whenever you attempt to work across state boarders whether from an RTO perspective or from an organisational perspective.  Having a single set of rules and criteria would certainly make a difference.

One of the significant things I think having a Federal system would do is to change the States from being on both the provider and funder sides of the equation.  Currently all of the states fund VET in their state, however they also provide vocational education through their network of TAFE institutes.  Moving all of the funding for the delivery of training to the Federal government would have the effect of TAFE becoming another provider in the market, simply a provider which is owned by the State government and the state government could then determine from its overall budget what amounts it wanted to allocate to the resourcing and infrastructure of their TAFEs.  It would see a transparency around what money being given to TAFE from the State government was actually being used for.  Now that is not to suggest that a federal system might not earmark a certain amount of money for delivery by public providers, but what it would do is clear up the sometimes muddy waters around what is support for delivery and what is support for infrastructure.

The other significant thing it would or should do is as I said at the start even out the currently differences in what is funded and to what level.  As I said a couple of weeks ago I was amazed when I found out that in Victoria every AQF qualification is funded, the amount of money simply varies, which is unlike Queensland and other states where funding is allocated to what is seen to be the needs of that State in terms of skilled workers now and into the future.  Having one set of funding rules across the country would work for everyone, it would make it easier for organisations (particularly those who work across the entire country or a number of states) to access funding for their staff training, which is as anyone who has ever worked in a L&D role in such an organisation will tell you is currently a brain melting nightmare.  It would work well for providers both niche and large.  For example we are one a small number of providers who deliver a particular qualification, currently someone from Queensland can obtain the qualification for around $100 (it is funded in QLD), where as someone from NSW (where it is not funded) would have to pay $3,500 for the same qualification.   The management of funding contracts at a provider level would also be much easier, no longer perhaps having to produce multiple reports for different states with different rules and requirements.  A federal system should have the effect of smoothing out a range of the issues which currently make funded programs across states difficult to manage for everyone.

So what are the downfalls, well there could be some issues where their might be a mismatch between the needs at a national level in terms of skills and the needs at a state level.  On a nation level there could be a shortage of appropriately qualified aged care workers say but WA might have a massive over-supply.  Conversely there could be no national shortage of plumbers but serious shortages in QLD.  Not that these kinds of issues could not be relatively easily addressed, it is just that given that we are such a large country it may be the case that such differences arise.  Although on a side note seeing these differences at a national level rather than at a state level might encourage the federal government to provide incentives for say aged care workers in WA to move to other states or plumbers to move to QLD.

I also don’t think a federal system would affect programs like for example Skilling Queenslanders for work, where the additional money in the program is not going to providers but to community organisations to support the learning activities of their cohorts.  There kinds of programs could still be funded on a state by state basis dependent on need, the funding source for the provider would simply change for the state to the federal government.

It would or should remove this ridiculous situation we currently have where while most of the providers in the country are regulated by ASQA, two states still regulate a portion of RTOs in their state.  All providers both public and non-public would be just that providers for a national system, providers with one set of regulations and one set of rules around funding.  I for one really hope it gets legs and gets over the line.

 

Anyway thats just my opinion.