Skills for All – capping and subsidy reductions

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A letter today from Raymond Garrand, Chief Executive of the Department of Further Education, Employment, Science and Technology outlined the outcomes from the consultation on changes to the Skills for All Funded List.

There were 55 courses that were considered to be capped or changed in some way in terms of funding and in summary 20 courses will incur a subsidy reduction (of 30% or 50%) and 13 courses will be capped (dropped from the list) with no new enrolments from 4.4.13.  This is a sensible approach and a considered measure as local training providers could have been facing major business sustainability problems if all 55 were capped or had the subsidies reduced.

Image by Somerset College via Flickr
Image by Somerset College via Flickr

Another change is that funding of Recognition of Prior Learning (RPL) for Certificate I and II qualifications will be removed.

It seems contributing to the decision to drop qualifications from the list is that the VET fee for service market needs to be restated and that there has been a significant transfer from fee for service into Skills for All funded places.  I would say that the South Australian VET fee for service market was effectively ‘killed’ within the first 6 months of Skills for All.

Release 5.0 of the Funded Training List outlines those qualifications that will be a capped (13), have a subsidy reduction by 50% (14) and by 30% (7) mostly in business, hospitality and retail.  There will be no changes to 17 courses.

When Skills for All was introduced some providers effectively got a ‘pay rise’ especially in the lower level qualifications whereas the higher level qualifications were generally under resourced.

Reviewing the Consultation Outcomes Report I think further work is needed to identify and understand workforce skills demand and reflect in the Skills for All Funded List and program more broadly.  In a recent blog post I asked the question as to whether or not the proposed changes to Skills for All were based upon demand?  The use of information on job openings is so limiting in relation to thinking, policy design and practice – it should be considered as a contributing form of evidence for demand identification supported by demand forecasts and skills profiles for future workforce requirements.  Underpinning the idea of job opening is an out of date view that 1 job = 1 qualification and that is just not the case in reality, that is 1 job = multiple qualifications and skills from different Training Packages and at different Australian Qualification Framework levels.

With recent experience working in Maldives and Bhutan where they are building national workforce plans I’m convinced that South Australia needs a State Workforce Plan that is connected to industry and regional workforce plans.

It’s pleasing to note that “DFEEST will be actively consulting with industry and training market…to improve the information available about the demand driven system, the competitive market and improve the tools it uses to consult.”   For example the consultation survey was long, not well designed and provided a very limited way that people could participate in the consultation process.

We invite DFEEST to work with our enterprise, industry and training provider clients to gain insights into true workforce skills demand.

So what are the implications from this update to the Skills for All Funded list?

  • over the next month providers will be focussed on conversion i.e. learners who may have enquired in the past now being converted into enrolments before the cut-off date with an increase in marketing to assist
  • RPL practice may suffer as for lower level qualifications it’s not funded – this would be very disappointing to see as RPL should be offered to everyone – I’d prefer to see an opt out of model rather than opt in to on the proviso that RPL is at the right skill level for the individual (not necessarily funded via Skills for All though)
  • providers will need to rethink their costing and pricing quickly, adjust sales and business plans, course information, financial systems, marketing, websites and manage potential fallout and questions on why the change from their clients
  • the market will become more competitive and I dont think there will be such a wide range of pricing i.e.  from $0-4000 for a qualification with the Skills for All subsidy applied
  • for disadvantaged groups the impact of these changes will need to be watched closely as it could cut some people out of the system entirely
  • quality indicator data will be important to review to understand how the public sees Skills for All and these changes

My prediction is that new enrolment trends from April to the end of the financial year will slow dramatically especially as the local economy tightens even further – the contrast with enrolment and conversion data for the first 9 months of implementation and the next 3 will be very interesting to see.  I’m not confident that the fee for service market will recover quickly under these circumstances either.

I think we’ll see providers considering diversification and/or niching as a way of differentiating themselves from other providers of the same qualification.  Skills for All clients will become more savvy, shopping around for providers that are cost effective, offer delivery and assessment methodologies that suit them that they have been referred with a good reputation – this will be top of mind.

I’d like to see further take up of Skills in the Workplace underpinned by Training Need Analysis and the Workforce Development Program as our goal at Workforce BluePrint is: All enterprises, major projects, industries, regions and countries have a workforce plan.

I look forward to hearing the new Minister, Hon Grace Portolesi MP, views on skills and workforce development – this is not the end of changes to Skills for All, and providers need to undertake scenario planning to get control over their business plus state and national elections will potentially have an impact on budget allocation and policy directions – an interesting time indeed!

Written by Wendy Perry, Head Workforce Planner, Workforce BluePrint and VET Specialist and Managing Director of WPAA, 28 February 2013.


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