Changes to VET policies don’t just effect students

This month we have seen two massive announcements that have the potential to wide ranging effects on the landscape of Vocation Education in this country.  Both of these announcements, one in the Victorian budget and the other in the federal oppositions budget reply, were about cordoning off large sums of funding for the VET sector and making it exclusively available to TAFE.  There have been a number of pieces already written about the effects of these policy positions in terms of student choice, the capability of the public provider to be able to deliver these programs and a range of other issues.  Today however I want to look at an issue which has received scant if any real discussion.

Education in this country is big business and employs a enormous amount of people to service the needs of students and industry.  Approximately 225000 people are employed in various roles in the Vocational Education and training industry in Australia. What is truly interesting about this number is that only about one third of this workforce is employed by the public providers.  The other 150000 or so people who make up the VET workforce work for providers other than TAFE.  It would be convenient, if as some commentators would like to have the public believe, if all of these other providers were large, faceless, profit driven corporations, however that is simply not the truth of the matter.  The vast majority of these providers are small to medium business, owned and run by people passionate about delivering high quality educational outcomes, who have invested their own livelihoods into these endeavours,  and who employ equally passionate, trainers, assessors, compliance, admin and other staff.    In addition to this non-public providers deliver around 60% of all VET programs nationally and about 90% of all international VET enrollments (which alone is currently around a $20 billion market for Australia).  It also needs to be remembered that currently across the board the vast majority of government funding for vocational education (in excess of 70%) already goes into TAFE nationally.

While I have always held that Australia needs to have an effective and efficient public VET provider, what are, by their own admission, agenda driven policy positions such as those take by the Victorian government and proposed by the federal opposition, have the potential to do large scale harm to the non-public VET sector and its substantial workforce.   If non-public provider numbers were to shrink by just 10% there is the possibility of an additional 15,000 people becoming unemployed.  Now that is a huge number and a huge knock on effect on our economy, simply because politicians are concerned about their scared cows.

Some people have suggested that any employment losses in the non-public sector would be evened out by employment gains in the public sector as TAFE would need to take on more staff to cope with more enrollments.  This is simply not the case.  We have already seen quite widespread rationalisation of TAFE administrative workforces, in an attempt to reduce duplication of roles and services and to direct more of the government spend to education programs rather than administration.  When we also the effectiveness of elearning in delivering high quality outcomes with much higher trainer/student ratios that face to face deliver, it becomes an even stronger proposition that very few of those people currently employed in the non-public sector would be able to migrate to employment in the public sector.  It is not however just simply a matter of employment either, there are large numbers of what could be called mom&pop providers, small and micro providers who work in niche markets, who have invested their personal holdings in their business and for whom these business’s are their sole sources of incomes.  The destruction of these providers would have far reaching effects economically and socially.

So when we think about the policy decisions that are being made about the VET sector in this country, let’s, occasionally at least, spare a thought for the 150000 committed and passionate people who work in this sector but don’t work for TAFE.

 

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Free Training and the Value of Education

As everyone is no doubt aware by now in their latest budget the Victoria Labor Government has decided to spend $172 Million primarily to make 30 priority courses and 18 pre-apprenticeship programs free, if and only if you do them at a TAFE.  I have elsewhere expressed my view on this particular policy decision and won’t expand on that here, however the fact that we are already see articles on how to take advantage of this new initiative are concerning enough .  What I do want to discuss is the concept of value in educational programs and how that intersects with ideas such as completion rates, student contributions, choice, quality and monopoly behaviours.

Let’s take a look for a moment at the world of MOOCs (Massive online open courses), free courses, which anyone, anywhere can enrol in.  The completion rate is between 5 and 15% depending on whether you count simply finishing or completing assessments and receiving a certificate.  That’s a rate that makes even the approximately 40% completion rate for apprenticeships, we have in this country look good. One of the reasons for this that we can refer to these courses as ‘easy in, easy out’ as my good friend Ryan Tracey suggested. There is not real cost, or condition on entry and enrollment, and no cost or consequence for exiting or no completion.  Now of course there have been a plethora of other arguments made for why this is the case and MOOCs may not be a perfect mirror for vocational education.

What of university education then, where it could be argued there is still a fairly easy in, easy out scenario, depending on the course of study chosen and bearing in mind that there may be some debt consequences.  Again however there is not cost on actual admission to a course, tick a box on your admissions form and the ‘cost’ of our degree disappears into the nether world of FEE-Help. Yes you have to pay it back at some point, probably, however for the vast majority of students their accumulated HELP debt doesn’t even enter their minds until the tax department goes, hello were going to be taking your income tax return to pay for your loan.  On average,  approximately 30% of students fail to complete their university studies within six years of enrollment.

If we also bring into the frame the VET FEE-Help saga where we saw in some cases completion rates as low as 2%, the only reason brokers and the like were able to sign up such massive numbers of people and generate such huge sums of money was because there was no barrier to entry and in particular no cost component.  I am aware that this is a simplification, however imagine how different the VFH landscape would have been if there was a mandatory $100 sign up fee, paid by the student prior to their enrollment.

Now before anyone says it, I know that there are a lot of people out there who could afford to pay $100 on the spot to access an enrollment, that’s the point.  It is not to suggest that there should not be equality of access to education, an even playing field so to speak, something which I have argued for and supported in various roles and across a wide range of forums.  It is simply to suggest if there was a gateway condition which needed to be fulfilled prior to entry into a program, then some of the things which occurred may not have.  Enough of that though.

Successive Queensland governments have held the position that in all but specifically funded programs designed to engage with people with various disadvantages (Skilling Queenslanders for example) that all providers must charge a student contribution fee on all state government-funded training, whether it is User choice, Certificate III guarantee or something else.  Providers can choose what the level of contribution can be and it ranges from $50 to $1000+ depending on the course, the provider and the level of funding provided, but they must in all cases charge a fee and there must be evidence that, that fee was paid prior to commencement of the course.  This of course doesn’t suggest there are not a range of programs and other initiatives which are designed to assist people who are unable to afford even a smaller contribution fee, there are, however in all cases what this does, by either the person having to contribute themselves or meet secondary criteria is provide even a small gauge that the person has some level of commitment to the course of study they wish to undertake.

The other issue which comes up here is that of choice.  Should not students be able to choose whom they wish to study, to choose the provider who best suits their needs in terms of curriculum, modes of learning, content, units offered and quality of teacher staff and outcomes.   Surely that is not a lot to ask.  I can almost guarantee that the standard mode of delivery of the courses offered for free, will be the bog standard one of semester based, face to face classes, mostly daytime classes.  Which is of course the model which best suits, teachers and administrators rather than students, particularly those who are trying to support themselves as well as study.  But most of all why should students be starved of choice and forced to undertake their studies with particular providers, who may or may not be able, or willing to customise the qualification to suit the needs of the student and whose learning outcomes may not be as good as offerings from other providers who are not similarly funded.

We can have equitable access, an even playing field for people wishing to undertake high priority, skills shortage programs, without resorting to massively devaluing the outcomes of students and the hard work of stakeholders in the sector, it just requires we actually build a systematic non-agenda driven approach to how we fund these training programs.

High Use Training Packages – Comments on the comparison data

As a lot of you are probably aware NCVER released some interesting data earlier this month on what they classify as High Use Training Packages, which allows for comparison of the data relating to these packages.  The data is quite interesting particularly when you start to look at it more closely, so today I thought I might look at some of the more interesting points in the data and offer some commentary on it all.

The first thing that jumps out of data is that Early Childhood and the TAE are very big business, with around 125,000 enrollments in Early childhood and 45,000 in the TAE.  To be fair a not insignificant number of the Child care enrollments are dual enrollments, with the student enrolled in both the Certificate III and the Diploma at the same time. Even with that though I think we can safely still suggest that Child care enrollments are nearly double the next nearest competitor which is the TAE.   I do have to admit that I was a little surprised by the sheer number of enrollments in the Certificate IV TAE at around 45,000 it sits right next to Certificate II in hospitality and Certificate I in construction, in terms of enrollments.  The question I want to ask here is if 45,000 people enrolled in the TAE, where are they?  Perhaps this will become clearer though as we move through the data.

If we slice the data in other ways we also find other interesting snippets.  On average across all qualifications and packages females account for about 44% of participants, yet when we look at Aged Care, individual support, Nursing and Child care we see that the participation figure for women jumps to more than 80%, with 94% of all childcare enrollments being female.  At the other end of the scale in carpentry, building and construction and electrotechnology we see the situation reversed with less that 5% of enrollments in those qualifications being female.  Certificate II in kitchen operations and hospitality were the two most popular courses for participants who were still at school, while construction and plant operations were the most popular with indigenous students.

If we look at labour force status there are some statistics which are really obvious, such as the fact that in electrotechnology and carpentry less that 5% of students were not currently employed, which given that these are the two qualifications with  the highest % of students undertaking the qualification through an apprenticeship is hardly surprising.  Labour force status also answers the question about the 45,000 TAE enrollments. 89% of these enrollments were from people who were already employed.  Interestingly 82% of all enrollments in Certificate II in kitchen operations were for people who were not currently employed.

Now while there are some really interesting pieces of data through out the rest of the report, I want to jump over now to the outcomes measures, because this will provide us with an interesting story particularly when we combine it with some of the other data we have seen.  It seems that while a high proportion of those students who undertake kitchen operations qualification ar eno employed when they commence, quite a low percentage of these students namely only 31% actually gained employment after completing the qualification, which is way bellow the national average across all qualifications of 47%.  This figure is terrifying because 74% of the people who undertook this qualification did so for employment related reasons, that is they wanted to get a job.  It seems therefore that if you are unemployed, a certificate II in kitchen operations may not be the best option if gaining employment is what you want to achieve. It also makes me wonder who are the people who are giving these students advice, because it would seem to be very poor quality advice to give someone looking for work that they should enroll in a kitchen operations qualification. This becomes worse when you realise that 60% of students enrolled in this qualification were students who were still at school, in fact it was far and away the most popular choice of enrollment for school students with almost 20,000 enrollments.  But wait there is more, 89% of these enrollments were government funded positions.

WHAT AN ABSOLUTE WASTE OF MONEY!

So schools are delivering a government funded qualification to their students, who just as an aside they are supposed to be preparing for entering the workforce, when it is glaringly clear that the qualification they are delivering is a worthless piece of paper to the vast majority of students undertaking it and does nothing to assist the potential workforce participation outcomes of the students.  To be fair though the school only get $2240 per student (QLD) for the delivery of the qualification, which means that we only spent about $30 million on an utterly worthless qualification.  And people wonder why I think VET in Schools is a travesty.

Enough of that though.  If people who are unemployed do want to undertake a course that will more than likely get them a job, then it is unsurprisingly clear the direction they should be heading in.  Carpentry, Electrotechnology, TAE, Aged Care and Individual support qualifications, followed by Nursing, Childcare and Cookery saw 60+% of students who weren’t employed before training employed after completing their courses.  Makes you think that perhaps we might be better serving our school students by enrolling them in CHC qualifications.

So there a few of the highlights from the data, however there is a lot more in this data set than meet the eye at first glance, particularly when you look at it in terms a range of other workforce data which hopefully I will have the opportunity to talk to you about over the next few weeks.

Let’s talk about the system before we talk about funding.

There has been a number of articles and papers popping up recently which have discussed the need to reform post secondary training and education funding in Australia.  Now while certainly I would agree that this is an issue which we need to look at, and one which requires careful consideration, I can’t help but wonder if it isn’t a little bit of the tail wagging the dog.  Bear with me while I explain.

There is always a lot of discussion about how VET in this country is funded, who should get what, should it be more competitive or less, what should be funded, the list is endless and so is the opinion and verbosity about it.  Firstly don’t get me wrong, I think that discussions around how we fund post secondary education and in particular VET in this country are vital to our ability to be able to deliver high quality educational outcomes and ensure equality of access to education in this country.  However all of this talk of funding obfuscates the real problem that underlies the entire sector and that is the question of what is the purpose of the sector and what we need to do to ensure that we have a system that best addresses that purpose.  I would hazard to guess that if we took the approach of making sure the system and purpose of the sector were aligned that we would need to spend much less time thinking about the who, what, and how of funding as hopefully the answer to these questions would be apparent as a result of how the system worked.

For quite a long time I have held the position that when we look at the VET sector, its purpose is fairly clear and that is that the purpose of Vocational education and training is to designed to deliver workplace-specific skills and knowledge to assist participants to improve their workforce participation options.  Now over the years people have suggested that this concept is to narrow and that the purpose is to increase the overall levels of education with in the country, so that we have in general a smarter better educated populous, because education and learning are ends in themselves and not simply means.  While I have some sympathy with the position and generally that education and learning are important in and of themselves, this is not and should not be the central purpose of vocational education in this country.  It is certainly not the purpose for which the vast majority of students use it for.

it is clear from years worth of data collected by NCVER and other places that more than 80% of all participants in VET are seeking to convert their participation in the sector and subsequent qualifications to improve their workforce participation levels, either through getting a job or by improving or changing the job role that they currently have.  If the vast majority of participants in the sector are seeking workforce participation improvements and the sector is, pretty much by the definition of the words themselves (Vocational, Education, Training), about delivering workplace skills, then it seems clear, at least to me, that the main purpose of the sector should be what I outlined above ‘to deliver workplace-specific skills and knowledge to assist participants to improve their workforce participation.’

Given the purpose which I have put forward this gives us a fairly solid foundation from which to commence building a system to deliver on that purpose.  I don’t propose to do all of that here and now, but I will point out a few things which instantly seem to pop out.  The first is that there must be a connection between the knowledge and skills being learnt by the participant and the role they want to utilise them in.  No point in teaching someone underwater macrame if they want to an airline pilot or teaching a prospective printer how to work a Gutenberg Press. This means that there must be an intimate connection between industry, content, delivery and assessment.  It also needs that the system needs to be agile enough to cope with rapid changes in the skills and knowledge base of particular industries.

It also means that the system must ensure the validity, particularly in terms of competency, of any qualification issued.  Participants must be able to convert their qualifications into workforce outcomes and the only way that can effectively happen is if there is robust confidence in the competency outcomes of the qualification.  If as an employer I cannot guarantee that a person a particular qualification or  a qualification from a particular provider, then I am less likely to allow the conversion of that qualification into a workforce outcome, which in turn undermines the entire system.  In fact if workforce outcomes are the primary purpose of a VET system then the ability to convert qualifications into those outcomes is the lynch pin.

As i said I am not going to try and develop and entire basis for a system here, but as i said earlier, while discussions about funding are vital, we need to ensure that we have a system that supports the purpose of what the sector is trying to do first.

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.

 

Who is in charge of VET in Australia?

My good friend Marc from the famous MRWED made a comedic comment on one of my posts recently, which when I starting to think about it drove something home to me.  His little joke got me to thinking about a very serious question, ‘Who is in charge of VET in Australia?’

I challenge you all right now to answer that question.  It should be easy shouldn’t it, shouldn’t we as professionals within the sector be able to say who is in charge, who is the person that speaks for the sector, who makes sure it actually works?

How many of you said either Minister Birmingham, or Assistant Minister Andrews, the COAG industry and Skills council perhaps, the Australian industry and skills committee maybe.  Is it Michele Bruniges or Subho Banerjee (They are the secretary and deputy secretary of the Federal Department of Education if you weren’t aware) or perhaps the various State based ministers or departments?

Ah, stuff it, I give up.  It is just too difficult!

Seriously though, just thinking about this hurts my head and clearly between all of the Ministers and committees, and departments, there is no one single person who is actually responsible for the oversight of the VET system in this country.  In addition there is no one person whose role it is to promote and advocate the sectors interests, not the interests of TAFE (TDA and AEU) or of private providers (ACPET), or enterprise providers (ERTOA), but the interests of the sector and if the person is supposed to be doing this advocating and promoting is some one from the federal department they are doing a particularly shoddy job of it.  The various ministers and political spokespeople for all of various parties often talk a big game, but also all to often their rhetoric is tinged by political ideology and agendas rather than by what is good for the sector.

Why can’t we have a Chief Vocational Education and Training Officer, someone whose job it is, is to look after the sector, make sure it works, manage all of the conflicting parts and promote and advocate for and on behalf of the sector, even if all they did was promote and advocate for the sector that would nearly be enough.  Because the longer the sector is managed by committees, faceless bureaucrats (with no background in the sector) and an endless array of ministers who usually change at least every 3 years, until it stops being a political football, used by some to pursue their own ideological viewpoints we will continue to see it flop from one disaster to another and for someone who is passionate about the value of the VET sector I find that a really shame.

Queensland VETiS and the New ATAR, a disaster waiting to happen?

So as some of you may know, I have over the years been quite critical of a range of things which occur in the VET in Schools (VETiS) space, not only in Queensland, but in most other states as well.  Things such as the the clear lack of adherence by school based RTOs to the Standards, the qualifications and depth of industry experience of trainers and assessors (particularly those who are teachers) and the types and levels of qualifications which are being delivered.

So let me be clear right from the outset where my opinion lies, anything higher than a certificate III (and if I am being completely honest even Cert III level often worries me) should not be being delivered within a schooling setting.   The concept of the delivery of Certificate IV, Diplomas and even advanced diplomas to students who have not finished their secondary education is in my opinion ridiculous and fraught with dangers.  In addition while I have nothing but the utmost respect for Teachers, just because you are a teacher does not mean that you know a dam thing about vocational education or the needs of industry in terms of training deliver and assessment, and sorry, but if you are a PE teacher who has been RPLed through a Certificate IV in Training and Assessment and  Certificate IV in Fitness so that you can deliver Certificate III qualifications to your students, unless you have a whole pile of industry experience (and I don’t mean teaching experience I mean actual experience working the industry you are training in), you ARE NOT qualified to train and assess your students and you are not complying with the Standards.

Now that I have been really clear about where I stand on this it will probably come as no surprise that I consider the Queensland curriculum and assessment authority’s (QCAA) stance on VET and the new ATAR system being introduced, as potentially incredibly damaging to the quality of training and assessment being provided to our school students, shortsighted and showing a complete lack of understanding of the VET system in this country, will have a devastating effect on the workforce participation potential and ability to undertake further training of a significant number of students, and is well frankly idiotic.

What you may well ask is happening to elicit this vitriolic response? It is actually quite simple, and revolves around the calculation of ATAR rank, and while on the surface it seems not to problematic, there is a mindset underlying it which has the potential to be incredibly damaging.  When calculating the new ATARs QTAC will calculate ATARs based on either:

  • a student’s best five General (currently Authority) subject results, as is currently the case for the OP system, or
  • a student’s best results in a combination of four General subject results, plus an applied learning subject result.

Now on the surface that seems reasonable, however as is often the case with these things the devil is in the detail and when you look further into what an applied learning subject result might be you find this;

The best result in a:

  • QCAA Applied (currently Authority-registered subject or Subject Area Syllabus subject) or
  • Certificate III or
  • Certificate IV or
  • Diploma or
  • Advanced diploma,

Did the person who came up with this concept, have even the slightest notion of what is, or should i say should be, involved in completing a Diploma of Advanced Diploma.  The QCCA is actively encouraging the delivery of programs of study which almost by definition will be rubbish, because there is simply no way in which (at least in most cases) the assessment requirements for studies at the level that they are talking about can be met within a school setting, and to think that this is possible shows an utter and shameful lack of understanding of VET and the AQF.  Further more they are encouraging the delivery of programs to students, which will make them ineligible for the vast majority of the post secondary VET funding options which are available for when they realise that their Diploma in Business is utterly worthless and will not help them to get a job. Why?  Because for the vast majority of actual funding programs, if you hold anything higher than a Certificate IV in anything you are automatically excluded. 

VETiS in Queensland is already a disaster and this will simply devalue further the qualifications which are being delivered through it more and deeply harm the outlook for students who have been sold the lie that the piece of paper they get from their school saying they are competent at a Diploma level (or really any level at the moment) will get them a job.

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