Description
This report explains the planning processes and financial arrangements underpinning the vocational education and training (VET) sector. It looks at the structural capacity of the sector to respond rapidly and efficiently to a dynamic labour market and changes in pattern of skill demand. The report finds that the complexities of the labour market and the multiple demands on the VET system mean that the planning processes used by state and territory authorities are relatively different, dynamic and, in some instances, quite complex.Summary
About the research
The Australian vocational education and training (VET) sector is a complex and multi-faceted entity which receives direction and funding from both the Australian Government and the state and territory governments, as well as being influenced by local social and economic imperatives and the historical structure and role of the sector.
This report examines the system’s capacity to adapt to the current and anticipated demand for skills in the workforce, while taking account of the multiple demands imposed by government-determined priorities. Its focus was on the planning processes for publicly funded training.
Key messages
- The planning and funding arrangements for VET in Australia are relatively tight, with limited capacity for market responsiveness. Considerable resources are directed towards these processes, but planners have not paid enough attention to how public funding can stimulate fee-for-service demand and, to a lesser extent, industry and individual investment in training.
- The economic boom has reduced demand for formal VET. In some areas, technical and further education (TAFE) institutes have found it difficult to fill their funded places. The system needs to find ways to strengthen the individual demand for training.
- At the same time, TAFE institutes retain a role in providing tertiary education pathways for school leavers. TAFE institutes are the major provider of second-chance education and also have a growing percentage of teenage students. This poses new challenges for TAFE institutes.
- For the system to introduce greater flexibility, there needs to more interactive and responsive planning which allows for the flow of information from local markets to influence national thinking. This suggests that data collection must have more than a compliance focus.
- Cooperation between providers, public and private, and other agencies can increase local capacity for planning.
- Funding mechanisms should go beyond allocating student contact hours to financing contestable programs and programs delivered by private registered training organisations.
This report is one part of a program of work conducted by the National Institute of Labour Studies, Flinders University, and the Centre for Post-compulsory Education and Lifelong Learning, University of Melbourne. A well-skilled future by Sue Richardson and Richard Teese provides a synthesis of that work. Another suite of NCVER-commissioned work examined the role of VET in regional partnerships. This work is summarised in Regional partnerships: At a glance by Tabatha Griffin and Penelope Curtin (NCVER 2007).
Tom Karmel
Managing Director, NCVER
.
Executive summary
This report is a component of the research program entitled A well-skilled future: Tailoring VET to the emerging labour market, in which the evolving labour market and changing work organisation and management are examined in the context of the vocational education and training (VET) sector. The research has been undertaken by researchers from the National Institute of Labour Studies, Flinders University, and the Centre for Post-compulsory Education and Lifelong Learning, University of Melbourne.
The research attempted to examine the processes used across the national VET system for managing the relationship between the supply of and demand for training. In particular it looked at the capacity for the supply of training to adapt to the current and anticipated demand for skills in the Australian workforce. These processes can broadly be divided as market and planning-based mechanisms. To a considerable extent, the market-based mechanisms are outside the formal infrastructure for VET and are not subject to major interventions. Therefore, this study has concentrated mostly upon the formal planning processes for VET, located predominantly at the state and territory level.
Formal processes
The allocation of public VET funding is based upon two sets of processes. At the national level it is governed by the principles and protocols of the National Training Framework, and the associated negotiations between the Australian Government and state and territory governments. These negotiations are influenced by the federal and state and territory priorities for skills development, which in turn have been informed by research, consultation and economic and social policies. At the state and territory level the allocation of funds is framed within agreements with the Australian Government and is made up of:
- funding for training that is purchased from the public training providers (technical and further education [TAFE]) and other registered training providers
- funding for apprenticeships and traineeships via employers through the ‘User Choice’ 1 allocations and mechanisms
- funding for programs that are contestable 2 for public and private registered training organisations.
The planning processes are influenced by research and reconnaissance on skills needs and supply, which range from national estimates of ‘Skills in Demand’ compiled by the Department of Education, Employment and Workplace Relations, to the information gathered by local training organisations through their industry and community interactions. All state and territory training authorities maintain and, in most cases, continue to adjust planning processes for the purchase and delivery of VET. Apart from negotiations with the Australian Government, these processes typically include:
- the use of broad employment and industry data supplied by the Commonwealth, and in most cases the use of projections and modelling, including the Monash model
- statewide research into regional skill needs and VET demand, which in some cases includes separate data-gathering exercises, and the use of regional or area studies and industry studies
- formal and informal input from industry and the use of industry (training) advisory bodies in some systems
- research and planning undertaken by large training providers, which in most cases are TAFE institutes/colleges
- the input of state and territory economic and social policies and priorities, including industry and regionally specific initiatives
- the use of contestable funds to allow some degree of market influence.
Full-fee VET programs delivered by public and private training organisations are generally not influenced by these processes. VET in Schools and school-based apprenticeship programs, which continue to grow in levels of participation, are influenced by VET planning and skills priorities processes in some systems, and not in others.
These formal processes are dominated by the allocations to and negotiations with the TAFE sector, which accounts for over 85% of public training funds. In most cases TAFE institutes/colleges retain a relatively local clientele. The degree of autonomy of the institutes/ colleges and their market orientation varies across the country. However, they continue to play a significant social role for different social groups, as second-chance education, and more recently as a provider for school-age students.
Complexity and flexibility
The planning processes are required to deal with a complex and dynamic labour market and patterns of skills demand. Occupational skills markets range from the highly localised, especially in rural areas, to the use of the international labour market in some of the major mining and development markets. They also vary across occupations and across regions, especially in the context of the boom in mining and related industries. This is reflected in the patterns of school leaver entry into VET programs, including apprenticeships.
As a consequence of the complexities of the labour market and the multiple demands upon the VET system, the planning processes used by state and territory training authorities are relatively different, dynamic and in some cases quite complex.
Implications for VET
Public investment in VET is premised upon the limited capacity of the market to generate sufficient levels and appropriate forms of training to supply the skills that are needed by industry and the community. The planning processes are premised upon the objectives of achieving the most efficient and effective allocations of public funds and of maximising the overall levels of skills formation. In this context some of the implications for future VET planning include the following:
- The dominance of the TAFE sector in the delivery of formal and publicly funded VET risks a type of path dependency, with strong pressure upon the planning processes to maintain existing agreements for the large TAFE providers who can lack flexibility in their delivery profiles.
- With the exception of major industry and infrastructure developments, it remains difficult for skill and industry-specific publicly funded training to be delivered to enterprises or communities at relatively short notice. Flexibility remains a major issue.
- There is a common problem of data quality and consistency. This is especially the case at regional levels where the relationship between the demand for and supply of skills can be volatile.
- The current economic boom has reduced the demand for formal VET. In some areas of the country, some TAFE institutes have found it difficult to fill all of their funded places. This limits the reliance upon individual demand for VET, and requires ways of strengthening this demand.
- The TAFE sector retains a role in providing tertiary education pathways for schools leavers, is the major provider of second-chance education, and has a growing percentage of teenage students. The planning processes need to reconcile mostly localised social demands with regional and wider skills demands.
1 ‘User choice’ is a national policy designed to give employers a choice of registered training organisation in the delivery of off-the-job training for their apprentices and trainees.
2 Contestable funds are those allocations of training funds that are not directed towards a single registered training organisation and can be contested by a range of providers, usually through tendering processes.
Download
Related items
These two-page research overviews summarise the 13 reports which make up the research project, 'A we… Show more
The aim of this research was to identify approaches used by a select number of overseas countries-th… Show more
This report is the final report - the synthesis report - from the research program, A well-skilled f… Show more
This report examines the nature and effectiveness of 'inclusiveness' strategies implemented by TAFE… Show more
The aim of the research was to identify whether, and how, the demand for the types of skills provide… Show more
The vocational education and training (VET) sector seeks to teach courses that will meet the future… Show more
The ageing of the Australian population has become an issue of national concern. How ageing impacts… Show more
People's life pathways are no longer as predictable as they were in the second half of the 20th cent… Show more
This report is part of a suite of research projects entitled 'A well-skilled future: Tailoring VET t… Show more
Employment options have altered dramatically over the past 15 years, with full-time and permanent em… Show more
This report examines Australian studies of work organisation and how the workplace is changing in re… Show more
The participation of Australians in vocational education and training (VET) varies a great deal in t… Show more
This report examines participation in vocational education and training (VET) across different regio… Show more