Jurisdictional approaches to student training entitlements: commonalities and differences

The past two decades have seen some evolution towards a more nationally consistent vocational education and training (VET) system. One of the challenges is to find the right balance between national consistency and appropriate flexibility, to accommodate the regional and local industry requirements and learner preferences that best serve the needs of states and territories. This report maps the implementation by jurisdictions of the most recent training market reforms, agreed to in the 2012—16 National Partnership Agreement on Skills Reform — a student training entitlement. The authors also undertake an analysis of the commonalities and differences in each jurisdiction’s approach. This report will be useful as a composite description and the analysis valuable to the review of the student training entitlement and other aspects of the 2012—16 National Partnership Agreement on Skills Reform, planned for 2015—16.

Key messages

• A set of clearly articulated principles on training entitlements would be useful in any future national partnership agreement. These principles would need to embrace the dynamic of consistency and flexibility that exists across the national training system.
• National coherence should be enhanced wherever possible, in particular by better alignment across all jurisdictions, of student eligibility criteria and the logic underpinning the allocation of subsidies. This is necessary to avoid unreasonable differential treatment of students across Australia.
  • A national public-value framework with indicative performance measures and risk management approaches would help to guide an improved design of the publicly funded training market.
• Information and transparency are crucial underpinnings of a demand-driven system.
  • Governments need sound regional and national labour market analyses to inform funding decisions.
  • To make an informed choice, students and others paying for training must be able to compare training options. More needs to be done to help them to understand their entitlements, know how to judge quality and have a good idea of the outcomes they can expect from their training.
• Flexibility in the public funding of training and in policy implementation by Australian states and territories should focus on ensuring that the right mix and quality of skills are produced to meet industry needs, nationally, regionally and locally, as well as to assist graduates to obtain jobs and/or move to further learning.
• The priorities of public subsidies offered via ‘entitlements’ are likely to be further refined in light of the improved availability of VET information from initiatives like ‘total VET activity’ (for more information see <http://www.ncver.edu.au/totalvetactivity.html>).

Readers may be interested in two related publications: The development of Australia’s national training system: a dynamic tension between consistency and flexibility and Student entitlement models in Australia's national training system: expert views. These are available from the NCVER Portal, along with a research summary: Balancing consistency and flexibility in student training entitlements: research overview.

Dr Craig Fowler
Managing Director, NCVER

This report maps the approaches taken by the Australian states and territories to the implementation of a student training entitlement within the national training system as at 30 March 2015. The entitlement was agreed to in the National Partnership Agreement on Skills Reform (NPASR) of 2012—16. The initiative aims to create a more accessible and equitable training system by ensuring that all working-age Australians have access to a government-subsided training place up to their first certificate III level qualification, as a minimum, as well as their choice of training provider. It is the most recent reform within the training market element of the national training system.

The evolution of the national training system since the 1990s has involved the development of three strategic elements: national frameworks for vocational education and training (VET) products; national standards for providers; and the development of a national training market. All three elements have had to find the right balance between consistency in key aspects, nationally, and flexibility to ensure responsiveness to the different local conditions and circumstances around the country. This project establishes the commonalities and differences between the jurisdictions’ approaches to training entitlements as the basis for considering whether the right balance has been achieved between consistency and flexibility in this reform.

Method

Information was gathered from publicly available sources on each jurisdiction’s approach to the student training entitlement as at 30 March 2015 and arranged by the categories in which flexibilities are allowed under the National Partnership Agreement on Skills Reform:

• eligibility for the entitlement
• the level of entitlement available
• the courses (qualifications) the entitlement applies to
• processes for setting subsidies, fees and prices and maintaining budget control
• the providers delivering the entitlement
• the way by which access to high-quality information on the training entitlement is provided to clients.

Student training entitlement profiles were then verified with each jurisdiction to ensure that there was clarity in our understanding and assessment of their approach, noting that information from public sources is not always easy to obtain or confirm. Following the endorsement by the jurisdictions, analyses of the commonalities and differences in each of the jurisdictional approaches were conducted.

Commonalities

As at the end of March 2015, all jurisdictions:

• meet the minimum requirement of the student training entitlement agreement within the 2012—16 National Partnership Agreement on Skills Reform. In addition, they all have extended the entitlement beyond the minimum requirement, as the agreement encourages, but not in the same way
• have entitlement models that involve more contestability among providers, although the extent of the contestability is very different across the jurisdictions
• determine which providers may deliver their entitlement training through some form of quality assurance. All jurisdictions have entry-to-market or contractual arrangements that ask for at least some additional evidence than the ‘minimum’ on particular criteria in the national Standards for Registered Training Organisations (RTOs) 2015 to demonstrate quality performance (except the Northern Territory, which uses the 2015 standards as is)
• decide the distribution of public funds for entitlements across industries and occupational levels through the application of a public-value principle
• have expanded the public information available on entitlement eligibility, the courses included in the entitlements and their fees and subsidies. However, students still need more information to make good training choices. Students should be able to compare providers (by performance and cost) and courses (by outcomes). Such information has only become available recently on the enhanced nationally focused, My Skills website.

Differences

• Training entitlements differ across Australia as a result of all jurisdictions having gone beyond the minimum requirement regarding eligibility.
• Courses eligible for an entitlement differ because the focus is on the skills needs of the economies within jurisdictional boundaries.
• Course subsidy levels, student fees and the measures used to stay within budget constraints also differ. The Northern Territory fully subsidises entitlement courses, except for non-tuition or discretionary fees, which are low, and providers may charge the student. New South Wales fixes or fully regulates subsidies, fees and, therefore, prices. The other six jurisdictions have deregulated student fees to varying extents, such that providers receive variable prices. In four of the six, only non-tuition or discretionary fees are deregulated, whereas all aspects of fees are deregulated in Victoria and the Australian Capital Territory.
• Budget control generally is achieved through caps on entitlement places, with Victoria also using more dynamic subsidy amendments as a rationing device.
• With regard to aspects of quality, the finer details of the requirements of the various jurisdictions regarding entry to the entitlement market are crucial, as well as the contractual and performance requirements imposed on registered training organisations approved to operate within that market.
• All jurisdictions are supporting public provider/TAFE (technical and further education) viability in the more competitive training market, but are doing so in different ways.

Which differences matter

There are access and equity implications in state and territory differences in eligibility, the extent of the entitlement and the available courses. These differences lead to differential treatment of students across Australia.

The jurisdictions’ ability to determine which courses are included in their entitlement schemes runs the risk of perpetuating shortages in the skills required in the national economy and which are not apparent at the state or territory level.

The rates of entitlement course subsidy and fees are different across Australia. This too has access and equity implications. Of concern is that subsidy levels can affect the providers’ ability to deliver high-quality student educational experiences. Training quality maintenance and improvement is paramount.

Strong oversight of the credentials and performance of the registered training organisations delivering entitlements is essential. Some jurisdictions have tightened provider entry and performance requirements. The jurisdictions are well positioned to inform ‘fit for purpose’ improvements to national standards for VET providers and training products.

The standards for training products and providers should be continuously improved so that contractual requirements for evidence about quality are uniform. Experience so far with implementing entitlement models bears this out.

The jurisdictions still need to better understand the costs, constraints and obligations of the public provider and incorporate these appropriately in the design of contestable yet equitable funding models.

Transparency of VET information to prospective students has not been sufficiently achieved; nor is there national agreement on what students need to know to make informed training choices.

Conclusion

What was agreed in the 2012 National Partnership Agreement on Skills Reform was a consistent minimum or threshold level of entitlement. All jurisdictions have achieved this, and more. They have used the flexibility built into the agreement — but not in the same way. This is in keeping with how other elements of the national training system have evolved. There has been a tendency towards innovation in implementation at the jurisdictional level, followed by adaptation and adoption of successful practices nationally. Some innovations, such as in the types of evidence that demonstrate provider performance, could inform improvements to national standards for providers.

At this stage of the evolution of the student training entitlement a set of guiding principles would be useful in any future national partnership agreement. The aim of such principles would be to support greater cohesion and to enhance public understanding of, and participation in, the initiative. These principles would need to embrace the dynamic of consistency and flexibility that exists across the national training system.

National coherence should be enhanced wherever possible; for example, by better alignment of student eligibility, information and transparency, along with strategies for labour market analyses to inform to prioritising of funded courses. A national public-value framework with indicative performance measures and risk management approaches would help to guide the design of the publicly funded training market.

Flexibility in the public funding of training should focus on ensuring that the right mix and quality of skills are produced to meet industry needs nationally, as well as regionally and locally, to assist graduates to obtain jobs and/or move to further learning.