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.

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.

 

ASQA: A divided and broken system of regulation

Back on the 20th of September I posted a piece entitled ‘One set of rules for all providers?‘, suggesting that far from it being the case, as ASQA so vehemently pronounces, that there is one set of rules for every provider regardless of there size, or whether they are publicly or privately owned, the State owned providers are treated far more leniently than any private provider and given access to modes of rectification which are simply not available to non-public entities.   So now six weeks or so later and after the lapse of the month deadline TAFESA was supposedly given by ASQA to rectify the debacle that was, and probably still is their training and assessment practices what has happened?

NOTHING!

Why has nothing happened you may well ask, and that really is the burning question here.  But first let me remind everyone that the last sanction listed on the ASQA decisions database against a TAFE was back in 2012.  So why time and time again do we see public providers, TAFEs, being caught out breaching the RTO standards, having poor, or in some cases it appears non-existent assessment practices and never do we see any of these breeches met with any sanctions.  We see this because despite what ASQA might claim and want us to believe, the regulatory system for the VET sector in this country is broken and divided and certainly not one system for all.  In fact I am amazed that ASQA representatives can claim that all providers are treated the same with a straight face, when there is overwhelming evidence that this is not the case.  The issues with TAFE SA alone are enough to show this.  If the level of non-compliance that has allegedly been found there was found at a non-public provider, they would have been deregistered by now. Will that happen to TAFE SA?  Not a chance, they will apologize, say that have changed their systems and processes and will do better, and at worse they might stop delivering some of the programs for a few months, but then it will be straight back to business as if nothing has happened.

How then have we got to a system that is so broken and so badly weighted against non-public providers.  To be fair at least some of it is our own fault.  As a sector we saw the issues of VET Fee Help and the actions of the Careers, ACNs and Pheonixs and we (or at the very least those bodies who were supposed to be acting on our behalf) didn’t speak up or take action against them.  This of course played into the hands of the media and those like the AEU and others whose agenda is to end non-public delivery of VET, by giving them ammunition to smear the entire sector.  So bad were the excesses of the few that Ministers had little choice but to react with a big stick, if for no other reason than to save their own political skins.  If we then add to this the fact that TAFEs are state owned entities, which the state utilises not simply as educational facilities but as weapons of policy enactment across a range of areas, and in  addition so heavily heavily unionised, that whenever something happens which the unions don’t like, the social media storm which erupts is of category five proportions.  It is no wonder the system is broken. Any minister or even the regulator itself that ever suggested closing or curtailing the activities of a TAFE due to non-compliance, would be met with such a media storm, both through traditional and social channels, that it is unlikely they would emerge with their skins, let alone their careers, still intact.  So as a result of this we now have a system of regulation which is deeply skewed in favour of the public provider and which actively over regulates and over sanctions private providers while all the while claiming this is not the case.  ASQA has become a political weapon rather than a fair and equitable regulator.

So what is the answer?  It is simply that peak bodies like ACPET need to step up and call out this atrocious and unfair treatment and the inequity which exists, because this is supposed to be a level playing field and ASQA is supposed to treat all providers the same.  In fact everyone needs to step up, everyone needs to voice our opinions and call out these issues.  We need to embarrass and force the regulator to do its job properly and the government to let it.  Lone voices in the wilderness are not enough here.  If as non-public providers you want to actually see some change to this, if you actually want to be treated fairly, you, yes you, need to step up and you need to force those bodies that are supposed to represent you to step up as well.  Create a storm on social media, don’t let the news stories die, be loud.  Why do you think so many people believe the rhetoric from the AEU, it’s not because they are right it is just because they are loud.  And if you don’t step up then this situation will continue because no one else is going to do anything about it.

Anyway that’s just my opinion.

A war on TAFE? Some VET facts and myths.

Recently again, my news feeds, social media and other outlets have been jammed with the AEU, Greens and Labor people talking about the war on TAFE and that non-public providers are causing the death of TAFEs in Australia.  To be fair I understand what is going on here;

  1. A not insubstantial number of AEU members in various states are TAFE workers.  In fact the overwhelming majority of AEU members from the VET sector come from TAFE.  It therefore makes sense that the AEU vigorously pushes the TAFE bandwagon.  Less TAFE staff means (probably) less AEU members, making them a less relevant voice in the VET sector.
  2. The Greens with their deep ideological commitments to public provision of a wide range of things including education and a VET policy that says no funding should go to non-public providers at all, coupled with a solid understanding of their voting base, means that there is a war on TAFE, resonates with their political agenda and makes them more palatable to their voters.
  3. Labour.  Well with deep connections to the Union movement, a lean towards the left, and again a good understanding of their ‘true believers’ talking up the death of TAFE makes sense.  It also helps that they can use it to kick the government as well.

The fact that these are the main groups behind the various save our TAFEs movements makes it pretty clear that a lot of the rhetoric around this and a lot of the negative press leveled at the non-public side of VET is, well, driven by political and ideological agendas.

Now two things before I go on.  Firstly let me make it abundantly clear that the position taken by the government and its advisory groups are, just as much as with the groups above, driven by ideological and political agendas.  Secondly, as I have said so many times before, we need to have a strong efficient and effective public VET education system in this country, losing it would be a loss for Australia.  However, we also need a vibrant and well supported non-public system as well.

Let us then jump away from the rhetoric and agendas and just look at some facts however, and then perhaps we can make some considered conclusions about some of the recent rhetoric.  Now bear in mind these facts have come from data publicly released by NCVER.

Myth Number One: Private RTOs have grown out of control.

Fact Number One:  A small number of private providers (and some TAFEs) substantially increased their enrolments mostly on the back of the flawed VET fee help scheme.  However 47% of all non-public VET providers have less than 1,000 Students.

Myth Number Two: TAFE provides a far better quality of training than non-public providers.

Fact Number Two:  If we look at the Employers’ use and views of the VET system 2017 report from NCVER we can see that Employers report a 91.5% satisfaction with private providers against 85.6% with TAFE as well as an 82.9% satisfaction rate for the delivery to apprentices and trainees as opposed to 81.8% for TAFE.

Myth Number Three: Private providers cherry pick students and courses and leave TAFE to do the heavy lifting with remote, disadvantaged, disabled and indigenous students.

Fact Number Three:  Private providers actually deliver to 50% of all indigenous students, 43% of all students with a disability, 54% of the most disadvantaged students, and more than half of all remote and very remote students.

Myth Number Four: TAFE does the vast majority of the training of trainees and apprentices.

Fact Number Four: Non-public providers delivered 45% of apprentice and trainee enrollments.

So I am just going to leave those here for you to think about for a little while and remember the old saying ‘Never let the facts get in the way of a good story.”

Have a great weekend everyone.

Things which might actually save TAFE

As I am sure you are all aware there have been conferences, talks by leading academics, pieces in the various papers and policy positions bandied about recently, all with the theme of how to save TAFE or that TAFE is at the tipping point of losing relevance and going the way of the dodo so to speak.  I am also sure that you are aware that the solutions posited by most of these pieces have in essence been, give all the money to TAFE.  Give TAFE between 70 & 100% of all the funding provided for the sector, the figure changes depending on who you listen to, provide it with rescue packages and invest heavily in it and everything will be ok, because it is the public provider and therefore always the better choice than non-public providers.  Of course it is difficult to see how the rhetoric could be different to this given the agendas and political leanings of the some of the groups involved, notably the AEU and The Greens.

What I find interesting about all of this rhetoric about ‘saving TAFE’ is that the vast majority of people in the non-public part of the VET sector fully support having a strong, vibrant, effective and efficient public VET system, operating together with strong, reputable non-public provision of VET through for profit, not for profit, enterprise and community providers.  However the position from the ‘save TAFE’ groups seem to be non-public is bad and should be shut out of everything and TAFE is always better.  I just find the difference in viewpoint to be really interesting.

If we take what seems to be a more reasonable position and one which has for many years had, for the most part, a level of bipartisan support, the idea that we need both public and non-public provision of vocational education in this country, then what might be some things which could actually improve things at TAFE.

All TAFE teachers get 4 weeks leave and the whole contact and non-contact hours rubbish is scrapped.  

There was hue and cry from the AEU Victorian branch recently when the Victorian government suggest that TAFE teachers should spend 900 rather than 700 hours teaching, about half of time they are paid to be there.  One of the reasons TAFE is seen as inefficient and costly is around the costs of it teaching and delivery of its teaching services.  For example, virtually no one else in the country gets approximately 10 weeks leave a year.  Why is this a problem, a colleague recently waited nearly 10 weeks for TAFE (not a QLD TAFE) to get back to him with a date for one (that’s right one) day of training for his staff.  The issue, there were only a limited number of people who could teach the class and they were having difficulty fitting a day into their schedule.

Remove TAFEs ‘social responsibilities’ and let others for example community and not for profit providers do it instead.

A lot is made of the additional ‘social responsibilities’ which have been put upon TAFE by governments.  Why not simply divest TAFE of these responsibilities and find providers in the NGO sector who can do it, leaving TAFE to do what should be its reason for existence TEACHING and EDUCATION.

Remove as much of the duplication of services and administration as possible.

This one is just a no brainer for me, and I know that several states are doing just this now, TAFE QLD for example.  The costs created by duplication of services and administration is in some cases very much like an episode of ‘Yes Minister”

Review and overhaul the management structures.

Again, what seems to be a no brainer, make TAFE as lean and flat in terms of its management structures as it can be, much like a lot of the high quality private providers.

Make TAFE actually accountable for the quality of their training and assessment activities in the same way non-public providers are, and make management responsible and subject to penalties if things go wrong.

Currently no one seems to take responsibility when something goes wrong with a TAFE (look at the recent example of TAFESA) and certainly no one is ever held responsible, accountable or suffers any penalty for things that happen under their watch.

So there we go, there are a couple of ideas for making TAFE great again, without simply just throwing money at it and hoping something works.  If any of you have any other ideas I would love to hear them as well.

Now I know that some of you are going to come back at me and say that this will cost jobs, and this will strip staff of their hard-won entitlements, but lets back the truck up a bit, you may not be able to have your cake and eat it.  Maybe, just maybe if you actually want to save TAFE there might be a cost in that, which people are going to have to accept.  You know like a 20% rise in teaching hours or less management and admin staff, but hey you wanted to save TAFE remember.

Anyway that’s just what I think.

Have a great weekend.

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