An overview

Establishing competition among training providers

Australia has adopted a policy of increasing competition among training providers. Increasing amounts of funding, that was once exclusively allocated to TAFE institutes and other public training providers, have been made available for competitive tendering. By 1997, nearly 17% of vocational education and training clients were enrolled with non-TAFE providers, although 95% of the total training hours were still delivered by TAFE.

This policy has certain advantages as it has provided:

• a greater choice of training provider for industry and individual clients
• the development of specialist private training providers in new areas that were previously under-serviced
  
• more efficient training delivery which has led to lower unit costs in some cases
  
• the development of a competitive environment with a much greater focus on meeting customer needs.

However, some people find this policy controversial, arguing that competition has lead to a reduction in quality because of its focus on cost of delivery, and dissipation of funds that were once directed to the enhancement of the public TAFE system.

The impact of development of a training market in Australia is documented in detail in the book The market for vocational education and training, (Robinson and Kenyon 1998).

The key issue is that such policies have produced more focus on students, which is essential. The Australian experience also indicates that considerable reform can be achieved by providing relatively small amounts of funding through a competitive process. It is also important to maintain a high quality public training system.

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