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Issue #1741      July 27, 2016

VET privatisation failures

VET (vocational, education and training) researcher and analyst Dr John Mitchell shows how a new government-commissioned report lays bare the failures of privatisation.

The policy failings of Australia’s privatisation of vocational education have been revealed in a new report, whose findings have been sadly overlooked by media and policy makers.

The Review of the National Partnership Agreement on Skills Reform, prepared for the Commonwealth Government by ACIL Allen, was completed on December 21, 2015 but not released publicly until April 1 this year.

My experience in working for governments tells me that the delay is due to the awkward findings of the report (heavily massaged as they are) and its alarming admissions of failure of the key aims of VET privatisation.

As background, in 2012 the Commonwealth, states and territories committed to a National Partnership Agreement on skills reform. The agreement set out the goals and structures of intergovernmental VET funding and reform for 2012–13 to 2016–17. This report is the mid-term review of the agreement, which all governments involved agreed to.

The agreement has the objective of achieving a “VET system that delivers a productive and highly skilled workforce which contributes to Australia’s economic future, and to enable all working age Australians to develop the skills and qualifications needed to participate effectively in the labour market.”

It says it will do this by delivering four key outcomes.

  • More accessible training for working age Australians and, in particular, a more equitable system that provides greater opportunities for participation in education and training.
  • A more transparent VET sector, which enables better understanding of the activity occurring in each jurisdiction.
  • A higher quality VET sector, which delivers learning experiences and qualifications that are relevant to individuals, employers and industry.
  • A more efficient VET sector, which is responsive to the needs of students, employers and industry.

What did ACIL Allen’s review uncover about each of the four desired outcomes?

In large part, the objectives were not achieved, and in many cases we have gone backwards, although the report’s authors tried hard to remain optimistic about some new trends and fragments of success.

Reduced accessibility

Regarding the desired achievement of a more accessible and equitable training system, for instance, it states that there is “moderately strong evidence” to conclude that “the outcomes of accessibility and choice have increased since the baseline years of 2008 - 2009”. However, in recent years, “growth in a number of relevant indicators has been negative, including in the total number of courses available”.

In an extraordinary response to this negative finding, the authors expressed the hope that the scandalous VET FEE-HELP program and the contentious “entitlement” models that became election-deciding issues in Victoria and Queensland in 2014 – 15 will somehow improve access and choice.

This hope deftly avoids much mention of the public outrage around the VET FEE-HELP program, the amount of funding given to providers such as the now collapsed Vocation Ltd, and the bi-partisan political admission that VET FEE-HELP needs reform. This is wishful thinking at its worst.

The report did acknowledge some “unintended consequences” of VET FEE-HELP, including that students will opt for a course covered by this loan scheme even when the course is at a level unsuitable for them.

Poor transparency

Regarding the second desired outcome of a more transparent sector, stakeholders consulted as part of the review “provided mixed views”.

The report noted that jurisdictions have made investments in both improving the understanding of how consumers access and use information to inform decisions leading to a VET enrolment, and in providing relevant and current information in a user-centric way.

On the other hand, “this has not led to the desired improvements in consumer awareness, mainly because there continues to be generally inadequate information on important aspects such as training prices, quality, and entitlement limitations”.

Students are still making decisions on courses without having enough information to weigh up the quality of the course, their employment prospects, and the debt burden they are putting on themselves.

Lower quality

Regarding the third desired outcome of higher quality, the authors noted we have seen “an overall decline in both student and employer satisfaction with training.”

Searching for an explanation for the failure to achieve a higher quality sector, the report suggested that “these quality issues may be in part due to the pace and scale at which the National Partnership reforms were implemented”.

This part of the report reads as if no one is to blame; no one can take responsibility; the drop in quality just happened because the policymakers tried so very hard to introduce reform on many fronts!

“In a relatively short period, the NP (National Partnership) sought to introduce significant concurrent changes in a large number of areas, including a significant increase in the number of publicly subsidised private RTOs, an overall increase in the volume of enrolments, and the continuing expansion of income contingent loans in the VET sector.”

The truth is that these policies were set up and implemented by human beings, not machines, around the concept of a student entitlement model and a competitive market.

Those policymakers hadn’t thought through the possible negative consequences and, in the face of mounting critiques by academics, industry leaders and journalists, actually intensified pursuit of their “market” ideology, regardless of the damage to students’ hopes, lives and careers.

Inefficiency and unresponsiveness

The report’s authors explained that the fourth desired outcome, a more efficient and responsive sector, relates mostly to the public provider, TAFE, becoming more commercially organised and focused.

The authors cheerfully found that, “in relation to the treatment of public providers, there is clear evidence of a wide variety of steps being taken across jurisdictions to improve the ability of public providers to operate effectively in an environment of greater competition – including changes and investments in systems, organisational structures, governance, legislation, funding, and branding”.

This awkwardly-worded finding does not fit with the views of electors in Victoria in November 2014 and Queensland in February 2015, who responded positively to Labor’s election-winning theme that Coalition governments had been intent on destroying TAFE and the ALP in both states was intent on rescuing it.

TAFE was an issue in both elections. Voters were clear: they did not like the ways governments were trying to “improve the ability” of TAFE systems to be more competitive, they preferred investment to make sure their local TAFEs could continue to operate. Stripping TAFE so that it could compete on price with providers such as Vocation Ltd does not add value to Australia.

I have learnt to spot pieces of work where a consultant’s findings are not good for the government client, but the consultant skilfully delivers the bad news without making the reader feel too distressed.

This type of report writing is an advanced skill and ACIL Allen is to be congratulated for politely identifying fundamental failings by governments in pursuit of the high-flown objectives in the NP.

But we need our politicians to act on the reality of this report, not the language, and force a fundamental rethink about the VET sector.

No more game-playing.

Australian Education Union

Next article – Call for Black Lung Royal Commission

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