Report admits quality will suffer in training expansion

Sue Simpson
Research Officer

The government openly acknowledges that private providers will be training a greater proportion of students at TAFE’s expense with a report by the NSW Auditor-General stating that under Smart and Skilled “the extension of contestable training” is being funded out of “existing TAFE budgets”.

With no increase in government funding, the government wants to have 16,000 more people completing a post-school qualification each year for the next five years — a 14 per cent increase in student numbers. The NSW State Plan has an even higher longer-term target of increasing “the proportion of working aged people with post-school qualifications at Certificate III and above by 50 per cent by 2020”.

The government’s highest priority for the changes is “no extra cost”. The NSW Auditor-General’s Report to Parliament into Vocational Education and Training Reform released in late January, states the “no extra cost” to government requirement makes it harder to provide “quality VET” and increased access to VET, particularly for “non-disadvantaged groups”.

Before the state election, politicians should come clean on their long-term plans for TAFE.

The Auditor-General recommends that by July this year (after the state election), the DEC “identifies the actions it will take to capture efficiencies and build a sustainable VET system capable of supporting the NSW goal of a more highly-skilled population”.

The Auditor-General points out that NSW investment in VET has been historically low. Over the past 10 years, this state government’s training expenditure has not increased. Only Queensland has a worse spending record on publicly-funded VET. VET students are simply paying more as government funding fails to keep pace with increased enrolments.

Across Australia, government spending on school and university students has increased while government expenditure on VET students has fallen by a quarter.

Federation’s position is that TAFE teachers are also paying for the reforms through the “efficiencies” generated by job losses, casualisation and wage limits.

The NSW Government’s second priority is for TAFE to be “viable”. This requires TAFE to be “more responsive, flexible and autonomous”. The Auditor-General comments that last year in Victoria “five of the 17 TAFE Institutes were at high risk of being financially unsustainable in the short-term and eight were at medium risk” because they “were slow to adapt”. Their funding had simply been cut.

The next government in NSW will decide how much TAFE direct funding will be contestable and reallocated to access by private providers.

The continuation of direct non-contestable government funding for “pre-vocational training, skill sets and full qualifications above Certificate III, school based training, school-equivalent education and specific training programs to respond to community emergencies and industry restructuring” is up for review in 2016.

Also for review is the deregulation of fees whereby private providers could charge up to 50 per cent less than the fee maximum. This will be considered when the DEC “has established effective systems to monitor Registered Training Organisation (RTO) performance”.

The Auditor-General wants to avoid private providers making higher profits out of their lower costs. This will, however, continue to make it harder for TAFE to maintain a well-paid, highly trained workforce.

Lack of trust inhibits sharing

The Auditor-General’s Report embraces more rather than less competition. In the words of the report: “Contestability is intended to harness the profit motive to produce innovation, improved service delivery, efficiency and public benefit.”

While the Auditor-General understands “the Department’s cautious approach” in slowly reallocating discrete TAFE funding to the market, this approach “is not optimal. Contestability research shows that you need the threat of new entrants to drive the benefits of competition”.

Before taking up his position in NSW the Auditor-General, Grant Hehir, was Secretary of the Victorian Department of Treasury and Finance that oversaw the introduction of a totally deregulated VET training market.

Discussion of education is largely missing in the report. The report does note that the DEC has found that “in highly competitive training sectors”; there can be “a lack of trust between RTOs and a reluctance to share assessment resources”.

Collegiality and sharing of good educational practice improves educational performance.

While supporting greater deregulation, the Report acknowledges the limitations of the national regulator, the Australian Skills Quality Authority (ASQA) which “has only 204 staff, including five investigators, to monitor the compliance of around 5000 RTOs with national standards.

“Four out of the five RTOs reviewed by ASQA in 2013-14 had misleading marketing, offered courses with unrealistically short duration or did not comply with standards around student assessment.”

The report states that the Victorian Government had withdrawn $45 million in payments to private providers over substandard training and “actively case-managing 20 RTOs to address inappropriate behaviours”. A particular problem was the sub-contracting of training to third parties. This is allowed in NSW “subject to approval”.

More government investment in TAFE is justified. Without that investment TAFE, as we expect it, will be a memory.