Refocusing VET in Victoria - Meeting with the Municipal Association VictoriaHon. Peter Hall, Minister for Higher Education and SkillsFriday 31 August 2012

The changes that bring us here today are about Government’s efforts to build a modern VET system that:

Provides for as many people as possible to develop skills that lead to jobs

Gives people confidence in the training system – so they know their qualification will lead to a better job or more certain future

Gives businesses confidence that they can access the skilled people they need

Government is able to monitor – to ensure good quality training Supports priority areas and allocates resources where they are most

needed Is easier to navigate and understand Is responsive to Victoria’s changing employment needs

To understand the changes we need some background

Prior to 2009: Government purchased a fixed number of training places from a group of approved providers – the great majority of training delivered by TAFEs.

From June 2009: Victoria commenced implementation of an uncapped, market driven VET system.

From January 2011: A fully demand driven system – underpinned by the Victorian Training Guarantee.

So what happened in response to these changes?

The number of training providers contracted to deliver government-subsidised training has risen from around 250 (in 2008) to over 600 (in 2011).

Training enrolments have increased by 44 per cent.

Investment in training has risen from around $800 million (circa 2008) to in excess of $1.3 billion in 2011/12.

The costs of the system far outstripped what was provided for in previous budgets, or the projected costs of the reforms

* Note: 2012-13 figures are estimates only. No definitive level of expenditure can be given due to the demand driven nature of the system.

Goverment subsidised training, Victoria

0

500

1000

1500

2008-09 2009-10 2010-11 2011-12 2012-13

$M

2012-13 BudgetActual spending

Original projections

• Pre skills-reform~ $800m a year

• Original provision 2011-12 ~ $900m

• Expected expenditure 2011-12 $1.3bn

• Future provision 2012-13+$1.2bn

This extra investment achieved a lot that was good

Opened opportunities for more people to gain qualifications – in both regional and metropolitan Victoria

Initiated more innovative and responsive practice from training providers to better meet the needs of industry

Provided incentives for people to keep learning and deepen their skills and qualifications

Gave many unqualified and disadvantaged Victorians the chance to gain their first qualifications

However, a number of challenges and opportunities were also identified…

So what were some of the challenges? What went wrong?

Too much training in some areas which contribute less to employment, productivity and skill acquisition

(for example a 1,955% increase in funding for fitness instructors; massive growth in some low level qualifications that did not lead to jobs) Opportunistic behaviour by some training providers Some concerns about quality – due to the way the system used to

operate The VET system became too difficult for people to understand,

navigate and work out if a course will lead to a good job

All of the above resulted in a system that delivered inadequate public value, and was financially unsustainable. Further reform was needed to create a modern VET system that builds skills that lead to better jobs…

So how are we building the modern VET system we need?

A more flexible and responsive system

• A new industry participation model

• More direct relationships between employers and training providers – less reliance on intermediaries

Higher expectations of training providers

• Stronger powers of inspection and enforcement for the VRQA

• Stronger entry standards for training providers wishing to deliver government subsidised training

• A new Market Monitoring Unit to monitor how the market is functioning including issues of quality, price and competitiveness

Real consumer choice and better information

• Roll out of a one-stop-shop training website for employers and students

• Trialling new quality metrics, including industry ratings and industry-moderated assessment

Continued and greater investment in skills that get people jobs

• All apprenticeship subsidies increased

• 21 per cent of courses (> 220 courses) have a higher subsidy than the previous small TAFE rate

• 150 courses largely unchanged, with subsidy rates within 5% of current levels

• Separate payments to TAFEs redirected into high value courses

• Removal of controls on fees – but continued support for low income students; unqualified young people; Indigenous Victorians – and fee free training for young people in State care/care leavers

Eligibility for the Victorian Training Guarantee:

Victorians aged under 20 can access training at any level, regardless of any qualifications already held.

Those aged 20 and over can gain access to training in any qualification higher than they already hold.

Access to Foundation level skills is unlimited to all Victorians, regardless of age or qualifications already held.

Access to training in an apprenticeship qualification is similarly unlimited, regardless of age or previous qualifications.

Concessions and loadings for priority groups remain

Who qualifies for a concession? All Health Care Card holders, or their dependents

A range of loadings exist: Regional loading – a 5% loading for any training

undertaken in a regional location Indigenous loading – a 50% loading applies to all

Indigenous students Youth loading – a 30% loading for any 15-19 year old

student from a low SES background who does not have a senior secondary certificate

Examples of subsidy changes

Course Old rate - Small TAFE

Old rate - Large TAFE

Old rate – Non TAFE

New Rate New rate + regional loading (5%)

New rate + youth multiplier (1.3)

Cert IV Agriculture 10.39 10.10 9.24 10.00 10.50 13.00

Cert IV in Children's Services (Outside school hours care)

6.93 6.74 6.16 8.00 8.40 10.40

Cert IV in Aged Care 9.53 9.26 8.47 10.00 10.50 13.00

Cert III in Hospitality 7.79 7.58 6.93 1.50 1.58 1.95

Cert III in Hospitality (Commercial Cookery)

10.39 10.10 9.24 11.50 12.08 14.95

An example of how concessions work – Certificate III in ABC

Non-concession student: Government subsidy: $1.50 per s.c.h Student fee: $4.50 per s.c.h Qualification requires 200 s.c.h Government pays 200x$1.50: $300 Student pays 200x$4.50:

$900 Training provider receives

$1200

Concession student: Government subsidy: $1.50 per s.c.h Student fee: $0.90 per s.c.h (20% of non-

concession student fee) Government pays: subsidy, 200x$1.50= $300

plus concession reimbursement $432 (60% foregone revenue)

$732 Student pays 200x$0.90:

$180 Training provider receives $912

“A strong public training provider network will continue to be a vital feature of this system. Our TAFEs and dual-sector universities are highly valued by Victorian learners and businesses. They will continue to play a critical role in delivering training that meets the needs of their communities.

In particular, government will continue to support the TAFEs to:• lead the development of high-quality and innovative curriculum, teaching practices and

assessment, including for learners with complex learning needs• build on their strengths in exporting education services interstate and overseas• foster participation in higher level qualifications and in higher education through clear pathways,

strong partnerships with universities and other higher education providers and through higher education delivery within the TAFE

• be efficient and able to effectively compete in a demand-driven, contestable training system, including by applying technology to improve access to and the efficiency of education and training delivery.”

Source: Refocusing Vocational Training in Victoria (released in 2012-13 Budget)

TAFEs remain a vital part of the system - the removal of central planning and government constraints means they can become more innovative and flexible in order to better meet the needs of industry

The TAFE Transition process

The TAFE transition process is overseen by an independent four-member body, the TAFE Reform Panel, which is chaired by Mr Ken Latta.

TAFE institutes are developing Business Transition Plans which the TAFE Reform Panel will assess and use to inform the development of a Roadmap for the sector.

The TAFE Reform Panel is supported by a TAFE Transition Taskforce which is facilitating regular discussions with TAFE institutes on their plans, and holding monthly meetings with TAFE CEOs.

All Councils have been invited by the Panel to provide submissions on key issues.

Assessment and feedback on Business

Transition Plans by TAFE Reform Panel

Aug Sep Oct Nov 2013Dec

Roadmap (early 2013)

Document to communicate changes in sector to stakeholders

Implementation of changes

through 2013

Jul

Business Transition Plans (due Sep 7)

Plans developed by TAFE institutes setting out how they will respond to changes over

next three years

What else is happening to strengthen our training market?

Continued roll out of the $20 million Regional Partnerships Facilitation Fund – a second round of grants to be announced later this year

Skilling the Valley – working with local councils, industry and others to meet the skill needs of the Latrobe Valley

Establishing seven Technology Enabled Learning Centres across Gippsland – bringing study opportunities to local areas

Reviewing the role and structure of Learn Local (ACE) provision – as part of better meeting the needs of disadvantaged and hard to reach learners

Good News Stories

Advance TAFE OneHarvest partnership– 800 employees

Wodonga TAFE Australian Defence Force (ADF) - $10m contract

The Gordon NBN - $1m contact Chisholm Institute ADF School of Catering – 10 year

anniversary partnership GippsTAFE Waratah

Restaurant and Leongatha campus Technology Enabled Learning Centres Up to 22 locations across Gippsland Teaching Partnerships GOTAFE DECA William Angliss Institute ‘Reach Out’ teaching Bowens Hardware Simonds House of Learning –

800 employees VTA Mint Group

Questions?