Queensland VET Investment Plan 2015-16

Well Minister Yvette D’Ath and the team at DET in Queensland have released the Queensland VET investment Plan for 2015-16 on Friday.  And I have to say that the Minister has delivered on everything that she promised.  This is particularly delightful given the recent debacle which occurred in South Australia

Firstly the current PQS RTOs have had their contracts renewed until 30 June 2016, which provides some, certainty and stability in the market place that had been missing over the last few months.

So what has the government and what does the plan look like.  As with previous years the majority of funding is in the form of demand driven arrangements, the key points are as follows;

  • a network of quality registered training organisations (RTOs) pre-approved by DET (pre-qualified suppliers) to deliver eligible training and assessment services.
  • choice for individuals and employers to select the qualification, and the pre-qualified supplier, that best meets their needs in terms of delivery strategy, value for money, and potential for securing employment
  • published subsidy levels for all subsidised qualifications or skill sets reflecting the level of government contribution toward the cost of training, influenced by priority and relative cost to deliver
  • co-contribution to the cost of training by individuals, employers and/or industry.

This demand driven funding is backed up by programs such as Skilling Queenslanders for work and direct allocations of funds to the public provider TAFE.  This is all very much in line with what the government and the Minister have been discussing over the last couple of months.

However talking about the model for delivery is very different from funding that model, so to coin a phrase, ‘Show me the money’ and to be completely fair the government has in my opinion stepped up.  There is a total increase in VET investment from $615-754 Million, with and extra $50 million going into the contestable demand driven Certificate III guarantee program.  With $20 Million extra to User Choice and $5 million more to both higher skills and public provider grants alongside the $60 million Skilling Queenslanders package, we are seeing a substantial and well-rounded program of investment from the QLD government, with importantly I think for everyone no surprises.

The only thing I would point to as a slight disappointment is the eligibility problem that I have spoken about before, but given the thrust of the program and the underlying principles are primarily about those who are unemployed or under employed, I can understand it and live with it.

So all in all congratulations against the Minister and the Department for a sensible, well funding, VET investment program.  Well Done.

 

 

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Education Brokers and the Facebook scenario

Firstly this is not an attack on the Educational Brokerages in Australia, it is more of an explanation and discussion on how the system works and why.

Everyone complains about Facebook, almost all of the time.  They complain about changes to the interface, the way it deals with what turns up in the news feed, how many ads they see, what the company does with all of the data it collects and who actually owns that data (I will give you a hint it’s not you).  The problem is that all of these complaints and issues grow from a mistaken belief about the place of Facebook users in the grand scheme of things.  As a lot of people often suggest if you want to find out why things are being done in the way they are being done, follow the money.  So if we follow the money in relation to Facebook, we quickly realise that Facebook users are not in any real sense of the word Facebook clients, they are in fact simple objects within a data set and consumers to be advertised to.  Facebook’s real clients and the people who they are really trying to keep happy are their advertisers who generate all of the income for the site and their shareholders.  Now while it is true that if you have happy consumers you are probably more likely to generate better income, when you have a billion users a lot of people have to not only complain, but stop using the system before the company would take notice.

So if we apply the same logic to the Educational Brokerage sector in Australia we can quickly see what is happening.  In fact all we have to do to find out who is important to these organisations is to ask a really simple question, which is of course, who pays them?  The answer, of course, is equally simple, they are paid by training providers to provide them with students.  So the income stream for brokers is tied completely to the continuing recruitment of students for their client RTOs.  If there client RTOs are unhappy or there are not enough students, or the costs are to high, or compliance issues start to impact and they leave the relationship, then the broker either has to find other clients or increase the number of students being recruited for the clients it still has to address the income shortfall.

Make no mistake however, as is the case with Facebook users, potential students are not the clients of brokers, they are simply the consumers of the service they provide.  They are in reality very little more than a product with a certain value attached to it, which is generated when they are ‘sold’ to a provider.  The value of a can of beans to Woolworths is that someone will pay money for it.  The value of a potential student to a Broker is that someone (a training provider) will pay money for them.  The more money a provider is willing to pay for a student the more value that student has to broker.

Now to be fair this should not be taken to suggest that potential cash value is the only driving motive for brokers nor it is to suggest that potential students don’t have a cash value for RTOs who don’t use brokerage services because they certainly do.  It simply suggests that as with Facebook the person who does not pay for the ‘service’ in this case the student is always going to be a secondary concern to the needs of the person who pays the bills, in this case the training provider.  When we add to this the concepts of the Brokers themselves being independent contractors, and or working either entirely or partially for commissions, we can easily identify the pain points within the system.

Is someone working on commission going to recommend a Cert III or IV course to a student which might generate $600 worth of income or is there the temptation to recommend the diploma level course which will generate $3,000, particularly when the RTOs (who remember are the ones paying the bills) might make $15,000 from the Diploma course as opposed to $3,000 for the Certificate IV.  Again it is important to note that I am not saying that this is the driving force behind all of these operations, but when we start looking at the money we can see why people might prefer to recommend a Diploma over a Certificate IV or even utilising VET-FEE HELP over accessing direct government funding.  As someone from a brokerage said to me a while ago, ‘our business is recruiting diploma students, it is up to the individual to decide if it is the right option’.  Now while this is true, I would suggest it is also true that even for people who are deeply involved in the VET sector funding arrangements can be complicated to say the least, and for a potential student having a ‘personal learning consultant’ recommend undertaking a Dual Diploma of counselling and community services, which they don’t have to pay anything for up front, becomes an easy thing to agree to because well it sounds good and seems much easier than trying to figure out the morass of funding available.

So here is a question for everyone to ponder.  What would the role of the broker be if the person who was paying them was the student, if their income was generated by creating the right result for a potential student rather than being driven by the training provider?

Sustaining the unsustainable Part 2 – What the hell is happening in South Australia

So as most of you are aware a little while ago I posted about the Victorian Governments $320 million TAFE rescue package and asked why they were going down this path, how it could be justified and what was it that they were actually supporting with this ‘rescue package’.  Now yet again we see a similar, thought to be fair not exactly the same, thing occur in South Australia.  We are seeing the government not only cut subsidies to more than 200 vocational training courses, but handing 90% of the available funded places, some 46,000 out of 51,000 to TAFESA.  It is a decision which seems to have come with very little warning or consultation and has been roundly criticised by employers, business groups and the training sector.  It appears to neither take into account the capacity of TAFESA to deliver these programs nor the vast amount of training, particularly in the trades sector that in SA is done by high quality non-public providers such as PEER VEET.  It also seems to ignore the hidden ramifications like students having to travel over 300km to undertake training at a TAFESA campus, rather than with a high quality local provider or the job loses that this will cause in the non-public training market, primarily in the small and medium provider end of the market.  It situation is so dire that the Federal assistance minister for education and training, who is responsible for vocational education is consider investigating whether the SA government has breached their agreement in terms skills training.

So why would the South Australian government go down this path which has everyone, except for perhaps for TAFE, although if I was involved in the management of a TAFE in SA at the moment I would be really worried about our capacity to actually deliver the outcomes that the government wants, shaking their heads.  It can’t be because they want to save money because a subsidised place at TAFESA costs about 2.5 times more than the same place at a non-public provider.

It seems that the real reason may have far more to do with South Australia trying to balance its overall budget and to find some ways of utilising the white elephant of Tonsely campus or their $38 million mining, engineering and transport  hub, set up to service an industry (mining) which is rapidly contracting and not taking on trainees.  It is an awesome idea to allow unlimited numbers of people to be trained in trades for which there is little or no demand at the moment, while limiting training in disability support (one of the biggest growth areas in the country) to 200 places.

This decision is at its heart one based on political ideology and protectionism, at the cost of student and employer choices and outcomes.  It is a truly backwards thinking decision which is even more disturbing than the Victorian rescue package and even less based in any kind of rational thought processes.

Anyway that’s just my opinion.

Sustaining the unsustainable? – A rescue package for Victorian TAFE

So as many of you are aware the Victorian government has handed down its 2015-16 budget and there is a lot being said about skills and training, but also a lot not being said.  Matthew Dale has written a good article on what is not being said, particularly with respect to non-public RTOs here.  I however want to take a different tack from Matthew and focus on one particular part of the budget, namely a TAFE rescue fund worth $320 million.  Now before I go on, and these days I feel like I have to say this all of the time simply because there are so many voices out there who seem to want to jump on anyone who dares to suggest that TAFE needs to change the way it thinks and delivers its services, I am a supporter of publicly funded and supported education, and a robust public sector provider seems to be play a part in the delivery of equitable high quality outcomes which meet the needs of various stakeholders.  It is also the case that the provision of these equitable high quality outcomes can also be achieved through non-public sector means.  We need to have both sides of the equation right and we need to make sure we are maximising the benefits that can be delivered by both public and non-public providers.  That being said however I worry, particularly in the Victorian case, that what we are doing is at least in some cases supporting the unsustainable, encouraging bad management (both fiscal and human resource), and not getting the best possible returns on our investments, be those returns social or financial.

TAFE is primarily a provider of educational services, it delivers like all providers of educational services a range of products designed to meet the needs of employers, students and the other stakeholders in the VET sector.  Now surely like any other provider, responsible management would suggest that income generated from the provision of these services (be that through government-funded programs or fee for service arrangements or whatever) should be sufficient to cover the costs associated with the delivery, management and administration of such training.  But I hear you cry TAFE as public provider has an important social role to play in the community.  Well that may be fair enough, it may have this social role and I will explore this a little later, however shouldn’t then at least the amount of income generated cover at least the actual costs associated with the delivery, management and administration of those programs themselves?  But we have seen as reported last month in The Age an upwards of $50 million loss by TAFE in Victoria, with Holmesglen losing over $13 million and Bendigo and GOTAFE losing $10 million a piece, with the rhetoric being that this is a result of funding cuts and the evils of the non-public sector causing enrolments to drop substantially.  But, and this is a big but for me, we also see Chisholm with an operating profit of $30 million and a regional TAFE, Wodonga, managing a $1.3 million surplus. So my question is then if both a large TAFE and a small TAFE in Victoria can manage to balance their books in these so-called tumultuous times, then what are the others doing that is leaving them so deeply in the red?  Is it just as simple as has been suggested in some circles that both Chisholm and Wodonga were simply better managed and better able to adapt and take advantage of the changes that took place in the system, and rather than complaining about the lack of funding, simply got on with the job, adapted and managed to produce a surplus?

But I am often told that things are not that simple, that it is not an even playing field and that TAFE performs social functions over and above those functions that it has as a public provider of educational services and this may well be true in some or all TAFEs.  What troubles me I guess is that it is not easy to see what government funding is being directed toward when it is being provided to a TAFE.  Is it going to support the social functions of TAFE, its infrastructure, support for the delivery of training or costs related to management and administration.  While I have very little problem with the concept of a TAFE being supported to deliver social outcomes over and above their role as a provider of educational services, supporting poor management practices and an inability to delivery training within the confines of the income produced by that training is a much harder pill for me to swallow.

I am also sometimes worried about the suggestion of the social equity and equality role that TAFE plays. It is something that we hear quite often, TAFE needs more support because it provides things to the community that other educations providers don’t.  It provides support for people with disabilities, learning issues and other disadvantages, equitable access to programs, community and social space, and a range of other things which fall under the umbrella of social good.  Now while it may be true that is some areas TAFE is the only avenue for the provision of these services and the only educational provider that services people with disability or disadvantage, this is simply not the case in general.  Many non-public providers work extensively with people with disability and disadvantage, and either through their own programs or in conjunction with other service providers seek to provide equitable access to programs.  There are also many community service providers who provide a range of services and spaces which do similar things to social activities of TAFE.  So to claim that these kinds of activities are things that are only provided by TAFE while it might be right in some cases cannot, I don’t think, be used as a blanket statement.

So I guess my point is a simple one and one that I have made before and that is, perhaps before we throw money at TAFE, TAFE needs to have a really strong look at what it does, what its core business is and how it delivers and manages that business and if we are going to throw a massive $320 million dollar lifeline to public providers we should know what it is that that $320 million is going to actually rescue or as I said we may well be sustaining the unsustainable.

 

Anyway that’s just my opinion.

ACPET – Funding for Members only.

Some of you may have seen the article in the Australian on Saturday where there has been a suggestion that only members of ACPET be allowed to access government funding.  Now while I am a supporter of ACPET I have to say I think this suggestion is dead wrong.  Firstly just because an organisation if not a member of ACPET does not make it unscrupulous, nor does despite an updated code of ethics and membership standard does membership mean an organisation is scrupulous or always behaving ethically or in the best interests of students.

There are significant reasons why a non-public training provider may not have chosen to be a member of ACPET.  These reasons for non-membership relate quite closely to the variety of kinds of non-public training providers which exist in this industry (So who are these private RTOs anyway).  Many not for profit and enterprise RTOs do not view themselves as being ‘private’ providers, and are in most cases certainly not ‘for profit’ style providers and given the membership landscape and language of ACPET, at least a proportion of these providers feel uncomfortable joining a membership organisation that does not seem espouse their position in terms of in particular the money side of the business. I expressed such feelings at the recent QLD State Forum where I expressed disappointment that there wasn’t much representation from providers that weren’t ‘for profit’.

Now don’t get me wrong, I am not in any way opposed to for profit providers, despite claims to the contrary learning is a business and non-public providers are a vital part of it, but back to the matter at hand.

To attempt to tie funding to a membership organisation that is not representative of all non-public providers is deeply anti – competitive and would restrict the access of a range of high quality providers.

The added suggestion that student contribution fee levels be set, is also wrongheaded. As I have said in other places as a community services organisation we strive to make our courses as accessible as possible and stipulating a minimum contribution fee eve if such a fee was say $500 would disadvantage a significant number of our clients.

Add to this the fact that this would simply add another level beurocracy and regulation to an already heavily regulated system and the entire suggest seems difficult to support.

Funding, Funding, Funding – Providing real sustainable Vocational Outcomes

I was talking with a group of industry friends last week, some TAFE, some non-public and some non VET people thrown into the mix and as it often does the issues of funding, market contestability and VET-FEE HELP came up.  After we had finished a quite lengthy discussion (to be fair we did get derailed on VFH for a while) I got to thinking that it might be time to revisit the issue of funding.  One of the things that really bought this to the front of my mind, was when on of the people who were not directly involved in VET, ask ‘How the hell do you guys keep track of all of the different funding and what about to who and how to access it.  I tried to look for something the other day and it gave me a headache after about 5 minutes.’  The problem is that they are right, between AAC funding for apprentices and trainees, direct grants to organisations, JSA funding, direct funding to providers, VFH (which I know technically speaking is not funding but a loan), and whatever else is out there, it is a nightmare and if it is a nightmare for those of us in the sector and for industry types who have some understanding of the system, how much more difficult is it for the average person in the street, particularly the average person in the street who is heading to Centrelink to start looking for work and is approached by an Educational Consultant on the foot path on the way in, providing all sorts of promises.

IS IT ANY WONDER WE ARE SEEING PEOPLE BEING FUNNELLED INTO INAPPROPRIATE VET-FEE HELP COURSES AND HUGE DEBT!

 

Now I have spoken at length, both here and in other places,  about things like the effects of contestable funding on Public providers, focussing funding efforts on real vocational outcomes and how government funding effects training delivery, however as a sector we really do need to get this whole, who and what is funded and by whom piece sorted, sooner, rather than later. The problem though, and I think this is a problem more so for the VET sector than other educational sectors, there are often a range of other factors involved that are not as present in other areas.  Training is often linked to workforce participation, eligibility to benefits, employer benefits and incentives, it is often used as an instrument to manipulate certain workforces, industries and groups in line with policy, strategy and perceived needs.  It is also often used within organisations to reward staff, to establish talent pools and meet compliance needs.  So rarely is training solely done for the educational benefit of the individual doing the training, there is always other forces at work, usually managed through funding initiatives (except perhaps and in the case of FFS and even then there is still an effect).  Then on top of this there is the argument around public and non-public providers which I am not going to get into here.

Now before I go any further I should put a couple of things out there.  Firstly I believe in equality of opportunity when it comes to education, If you are capable of doing a PhD you should be able to do it, if you are capable of doing a Certificate II you should be able to do that as well.  Secondly there is no such thing as free education, just because the student doesn’t pay directly doesn’t mean it is free, someone, somewhere has to pay for it eventually and thirdly there are always going to be those people who are going to require additional assistance in order for us to provide equality of opportunity.

So what should funding look like;

It should be as simply as possible, if it is not easy to understand, then read the big letters above, because we will continue to see these thing happen if people don’t know what is available and how to access it.

It should provide students (and organisations) with the opportunity to choose where and with whom they are trained.  Students (and organisations) should be able to decide (within reasonable parameters) how they want to study and what works best for them.

It should provide the best possible return on investment in terms of vocational outcomes, after all why are we subsidising vocational education if it is not providing a vocational outcome.

It should for the most part be about education outcomes for participants, not a new Mercedes for TAFE directors or multi million dollar profits for non-public providers.  Funded training should be focussed on providing what the participant requires for a real vocational outcome.

It should allow us to be able to meet the needs (as much as actually possible) of our various industries (including trades and small  business) for skilled competent workers.

And it shouldn’t give you a headache to try to figure out whether someone is eligible.

Anyway that’s just my opinion

 

 

Paul can be contacted at either

Rasmussen Learning Consultants  or

Spectrum Training

 

 

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