Next steps in VET reform for Victoria – spin squeezing

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Spinning girlThe next steps in in vocational training reform, relating specifically to the state’s 14 TAFE institutes and four dual-sector universities have been announced.  19 recommendations were outlined in TAFE Reform Panel’s final report: A Strong and Sustainable Victorian TAFE sector.

Grappling with changes in the economy and identifying the demand for skills into the future, workforce capability needs and learner’s expectations have major implications for Victorian TAFE Institute’s and Registered Training Organisations.

6 areas of action by government to enable and support the TAFE institutes to transform their businesses and assure the efficient and effective operation of  the vocational training market, are outlined in the panel’s report including:

1. Sustainable solutions for rural and regional Victoria

2. Greater commercial and operating autonomy and removal of legacy constraints

3. Clearer accountabilities and fit-for-purpose governance, monitoring and reporting

4. Transitional financial support

5. Facilitating student pathways and outcomes

6. Monitoring the market and addressing market failures

Recommendations from the panel provides advice to government on monitoring the market, integrating regional Institutes, capability development, commercial objectives, benchmarking, asset management, financial viability, innovation, student pathways, identifying community service obligations, and workforce development strategies.

Next Steps for Refocusing Vocational Training in Victoria

The Victorian Government responded to these recommendations in Next Steps for Refocusing Vocational Training in Victoria – Supporting a Modern Workforce.

The Hon Peter Hall MLC Minister for Higher Education and Skills writes in the forward of this document,

We know that the TAFE sector plays a critical role in community and regional development across Victoria. We will support our regional and rural TAFE institutes to:

  • sustain a strong local presence in regional communities, by providing a clear expectation and financial support for planning towards financial sustainability
  • roll out a pilot for technology enabled learning centres in Gippsland, so that students in different areas can be taught simultaneously
  • encourage and support stronger relationships with schools and universities to improve progression into further learning and enable life-long learning.

To place all of our TAFE institutes on a stronger competitive basis with the private sector, TAFE institutes need to become more autonomous. To facilitate this we will:

  • increase the commercial focus and operating autonomy of our TAFE institutes, balanced with accountability and transitional support
  • remove constraints on productivity by freeing TAFE institutes to negotiate enterprise bargaining agreements, streamlining reporting and enabling them to better use assets
  • implement legislative changes, which support commercially-oriented and skills-based boards.

 The Government fully supports 12 of these recommendations, supports six in principle, and does not support the recommendation to integrate the governance and management structures of regional TAFE institutes.

The objectives for vocational training and Government involvement include:

  • Efficient and responsive provision of vocational training
  • Fair access to vocational training opportunities
  • Ensure public value is derived from vocational training (NB. the use of ‘private beneficairies’, students and businesses is interesting)
  • Ensure quality training is delivered

whilst the VET market has grown significantly and the split between TAFE and private providers is more balanced the report states,

“…the growth in the vocational training market has not been as effective as it could have been due to an absence of
appropriate market management tools.”

The VET market in Victoria is experiencing spin squeezing (making some providers dizzy!) with the demand for more complex, higher level skills and demographic changes impacting on workforce participation.

System design weaknesses identified following the implementation of the VTG including:

  • Weak price signals
  • Limited and poor quality information
  • Gaps in Quality Assurance Framework
  • Inconsistent competitive environment
  • Limited market oversight capacity

Seven Criteria 

“A more modern vocational training system is now required.”  Just what does this look like?  Well the report identifies, “Seven criteria have informed the design of a better vocational training market”:

  • Competitive market structure
  • Flexible prices
  • Quality products
  • Informed decisions
  • Industry relevance
  • Efficient investment
  • Access to opportunity

 “Refocusing Vocational Training in Victoria is a package of changes to prices, information and quality, supported by a new market oversight function through the establishment of a market monitoring unit that collectively address the criteria for a strong vocational training market.”

Table 4 in the report outlines how Refocusing Vocational Training reforms respond to identified design weaknesses and satisfy the criteria for a strong market and in summary this includes:

  • Subsidies and loadings
  • Specific programs – The fund will support industry endorsed proposals for initiatives that address training market issues and barriers, and support eligibility exemptions for retrenched workers.
  • Income contingent loans
  • Uncapped fees
  • Transparency and disclosure – Employers have the ability to rate the performance of training providers in a particular study area against selected criteria by using the industry rating tool.
  • Industry engagement
  • Contract standards for Registered Training Organisations – Standards address capabilities and performance measures that are not effectively captured within existing regulatory requirements.
  • Industry Validated Assessment
  • Market monitoring – The quality of VET outputs will be monitored while mechanisms exist for quality failures to be addressed.

Opportunities and Challenges

What are the opportunities and challenges for Victorian TAFE Network and private Registered Training Organisations?

  • Time-limited and contestable structural adjustment funding will be provided to TAFE institutes of $200 million ($100 million for infrastructure  over the next four years to support innovation, collaboration, structural reform and business transformation to ensure their ongoing financial sustainability.  NB. It doesn’t seem like a large amount when divided over 4 years and 14 Institutes.
  • TAFE Institute’s will be have greater flexibility in negotiating enterprise bargaining agreements, and the ability to register as group training organisations.
  • TAFE institutes will stand independently in the market place, operate in a commercially sound way and be accountable to the Government as public sector enterprises.
  • The Victorian Government will seek to work with other jurisdictions to develop a performance framework for providers at the national level with agreement on clear and valid quality metrics that can be objectively measured and tracked by regulators and funders.
  • Government is developing a Learn Local strategy which will set out these objectives for the Learn Local sector in more detail, and outline how Government and the ACFE Board will work with stakeholders to achieve the desired outcomes.
  • Government has established a Market Monitoring Unit (MMU) in DEECD that will lead the task of monitoring and reviewing market settings.

Appendix 1 Victorian Government response to the TAFE Reform Panel’s recommendations is a useful summary of what to expect next.

Spotting

For all players in Victoria it’s going to be important to manage the ‘squeeze and spin’.  ‘Spotting’ , like dancers do, enables the execution of flawless spins and turns, without losing focus or sacrificing the outcome of a strong vocational training market.  TAFE Institutes and all training providers will need to fix their gaze on a single location, control their balance and create an innovative strategic plan to counter dizziness.  Like this Spinning Girl Illusion, make sure you can move either way to adapt to changes in the market and policy, and know which way you are spinning at all times.

Written by Wendy Perry, Managing Director, Wendy Perry and Associates Pty Ltd, March 2013.

 

 

 

 

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