Skills for Prosperity and the 2011 Federal Budget

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On the 3rd May 2011, Skills Australia launched their most significant paper to date on workforce development titled Skills for Prosperity A roadmap for Vocational Education and Training.

This paper puts forward 9 themes for the evolution of the VET sector as I have summarised below plus I’ve added in some comments (my opinion in italics):

  1. Putting learners and enterprises at the forefront of service – whilst a focus on clients isn’t new, what is different here is that the individual would hold the funding entitlement and a 100% subsidy would apply for qualifications up to Certificate III including all foundation skills courses.  As the qualification level increases the subsidy would reduce and become a co-funding arrangement with the individual.
  2. Enabling skills use and productivity in enterprises – with the introduction of an Enterprise Skills Investment Fund (managed by Skills Australia) where funding from Productivity Places Program, Critical Skills Investment Fund, Workplace English Language and Literacy, Workforce Innovation Program, Apprenticeship incentives and possibly Enterprise Connect to be tipped in to this 1 fund and enterprises will make a scaled contribution for workforce development.  The role of (redesigned) Australian Apprenticeship Centres is suggested as a single point for enterprise-linked program [what are the implications for capability and capacity, would contracts need to be readvertised or will existing services morph into workforce development advisors?]
  3. Supporting communities – better targeted and coordinated effort – joint program planning with Vocational Education and Training, employment service and community providers and a much higher profile for Regional Development Australia in regional workforce development – RDA should be in your partnership map!
  4. Aspiring to excellence – resourcing the new national VET regulator (ASQA); reform of the AQTF to mandate independent validation of an annual sample of students assessments; reduction in the number of VET practitioners working under supervision (nil under supervision by 2013); high-quality deliver of the Training and Education Training Package including a demonstrated track record, evidence of expertise, professional development of staff, external validation by an expert panel, TAE trainers/assessors holding high level quals, supervised training sessions and independent assessments for those undertaking the qualification ; a national VET workforce development strategy ($40 million over 6 years); and introduction of nationally agreed criteria (over and above the AQTF it seems – interested to know what they will be!) for RTO’s to be eligible as providers of publicly funded entitlement places.
  5. Delivering outcomes and understanding the sector’s contribution – outcomes based funding to improve the completion of qualifications (but underlying this is the assumption that clients of the VET system want whole qualifications and I wonder how RTOs will be able to manage cash flow?); incentives for RTOs  for completion of qualifications (Quality Skills Incentive) above Certificate III by low SES and disadvantaged students; AQTF indicators on learner engagement, employer satisfaction and competency completion (already in place) and full course completions (new) plus a heap more info (see Section 6, recommendation 16 in the full paper); publication on the My Skills website of RTOs assessment validation results; and new indicators for industry, education and community partnerships .
  6. Providing agile and adaptive products and services – optimising the use of digital media, ICT and the national broadband network; a national bank of foundation skills units and qualifications managed by Innovation & Business Skills Australia; and publicly funding skill sets (finally!!!  but this shouldn’t be in the format of a ‘mini qualification’ rather skill sets based upon enterprise, licencing and job role needs)
  7. Ensuring better pathways across education sectors – specialist degrees with a vocational focus; income-contingent loans for those undertaking Certificate IV+ courses; a national review of VET in schools (well overdue and I’d like to see VET in school provide a taster across a range of options rather than completely locking into 1 position).
  8. Securing prosperity through sustained and balanced investment – additional $310 million per annum accumulating, from $8,286 million in 2008 and rising to an estimated $12,000 million in 2020; co-contribution financing framework to share the costs of training with government; performance incentives for disadvantaged students ; changes to indexation mechanisms to better reflect real costs (sounds like they could use the VET Business Analysis tool we developed to cover all the inputs and outputs and the return).
  9. Creating a simpler system – working out Commonwealth, state and territory responsibilities; streamlining the apprenticeship/traineeship system; consistent nominal hours required for qualifications (for me nominal hours flies in the face of competency based training and whilst I understand the desire for national consistency I don’t see how hours will do it – we should be able to come up with a more sophisticated way of paying for training [workforce development] aside from nominal hours).

I’d suggest that providers and agencies ramp up their relationships with each other to get ready for further reform – this includes Vocational Education and Training with Employment Service (Job Services Australia and Disability Employment Service) with Adult and Community Education (ACE) and community service providers with Australian Apprenticeship Centres – and all with Regional Development Australia, Industry Skill Councils, industry and professional associations – all taking a proactive approach to educating their clients about the opportunities.

The 2011 Federal budget, released 1 week after the Skills Australia paper, leaves little evidence that they aren’t the most important agency in workforce development [now becoming synonymous with the term VET but covers a heap more than training and assessment] and demonstrates that our political leaders are listening to what Skills Australia has recommended.  Parts of the budget papers and facts sheets are reflections of whole components of the Skills Australia paper with small tweaks or slight word and title changes.  For example (extract from A new partnership with industry):

The Building Australia’s Future Workforce package provides a $3.02 billion investment over six years for a new approach to deliver the skilled workers the economy needs and ensure more Australians have the opportunity to share in the nation’s prosperity. This is on top of new funding of more than $2 billion over the next four years for Australia’s university sector.

The package has four components:

  • Putting industry at the heart of the training system      
  • Skills to support increased participation
  • Modernising apprenticeships                                           
  • Reforming the national training system

A National Workforce and Productivity Agency will be established from 1 July 2012 to administer a new industry driven National Workforce Development Fund. The independent Agency will be an expansion of the role and functions of Skills Australia, through high level industry and union leadership and collaboration. It will be recognised as an authority on workforce development policy and advice and will direct skills funding to industry needs.

The Agency will engage directly with industry on workforce development issues and address sectoral and regional industry needs as well as

  • administer the new National Workforce Development Fund
  • conduct skills and workforce research, including into the quality of jobs and future working life in Australia
  • drive engagement between industry, training providers and government on workforce development, apprenticeships and VET reform
  • develop and monitor sectoral skills and workforce development plans in conjunction with Industry Skills Councils and industry
  • provide independent advice on sectoral and regional skills needs to support workforce planning and productivity, including in small business
  • promote workforce productivity by leading initiatives for the improvement of productivity, management innovation and skills utilisation within Australian workplaces

Skills Australia will be transitioned into the new Agency through 2011-12, with the Agency beginning operation from 1 July 2012.

Through the National Workforce Development Fund (the Fund) the Government will provide $558 million over four years to support training and workforce development in areas of current and future skills need. Government funding will be supplemented by a co-contribution from industry with government contributing at higher levels for small businesses.

Under the Fund, enterprises will identify their current and future business and workforce development needs. The enterprise would then apply for funding to support the training of existing workers and new workers in the area of need. Both the Government and the employer will provide funding to support this training. Large enterprises will contribute 66 per cent of the cost of training, medium enterprises 50 per cent and small enterprises 33 per cent.

Industry Skills Councils will play a key role in assisting enterprises to identify their training needs, facilitate the selection of a training provider to meet these needs and in monitoring the implementation of successful proposals.

Under the Fund businesses, national professional associations and industry bodies will be eligible to apply for funding. This will ensure that training is driven by the workforce development and business needs of enterprises. Employers will be able to purchase the training they need in the format that suits their business to deliver valuable qualifications to their employees.

Enterprises will be eligible to apply for funding if they operate in a high priority sector or if the occupations in which they are seeking to train their workforce are in local or national demand.  The priority sectors to be targeted in 2011-12 will be construction and aged care in addition to the sectors currently targeted under the CSIF.

The Fund will incorporate funding from the Critical Skills Investment Fund (CSIF).

Employers and workers will also benefit from a new partnership with peak employer and union organisations through the Productivity Education and Training Fund. These key bodies will be supported to ensure that the productivity benefits that can be achieved through the Fair Work framework are well understood. The Fund will support union enterprise representatives and employers to use the enterprise bargaining process to introduce productivity improvements in the workplace.

A series of fact sheets covers:

  • A new partnership with industry
  • Apprenticeship reform
  • Better futures for jobless families
  • Future arrangements for DES purchasing
  • Future arrangements for Job Service Australia
  • Greater participation in Higher Education
  • Helping indigenous Australians
  • Investing in our young people
  • Investing in regional productivity and participation
  • Opportunities for people with disability
  • Place-based initiatives
  • Reform of the National Training System
  • Skills to promote increased participation
  • Strengthening job seeker compliance
  • Support small business to drive economic growth
  • Very long term unemployed people

We’ve already seen the new tender for Local Employment Coordinators [and Jobs Expos]

A total of $45.2 million will be allocated to the extension of this measure. This will include access to a flexible funding pool of $20 million over two years. The measure will take effect from 1 July 2011 and run until 30 June 2013.

My advice, get your organisation and your own workforce ready now, review your strategic directions, consider how the changes will impact on you, develop or update your workforce plan and I have 3 final words to say to you [Kimmy – Kath n Kim reference – sorry] – “communication, partnerships and relationships”!

For upcoming national tenders keep an eye on www.tenders.gov.au, for further reform DEEWR website and Skills Australia website, and let me know if you are planning on attending the Putting skills at the heart of the economy conference in July 2011 in Melbourne.

Wendy Perry, Head Workforce Planner, Workforce BluePrint and Managing Director, Wendy Perry and Associates Pty Ltd

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