Private training providers in Australia: Their characteristics and training activities

This study examines the nature of the training activity of private registered training organisations (RTOs) offered to Australian students in 2003, based on data from a national sample of 330 private RTOs from a population of around 3000. The study also provides estimates of the overall contribution by the private sector to the vocational education and training (VET) effort in Australia for that year.

• Private RTOs are a very diverse group, covering adult/community providers, enterprise-based providers, industry organisations, commercial training organisations and other private providers.

• Private RTOs offer a wide range of accredited and non-accredited VET courses across the full range of the Australian Qualifications Framework. Most deliver in only one state/territory. As well as their course offerings, many private RTOs also provide a wide range of student services. Training is largely delivered face to face.

• The majority of private RTOs are small in terms of numbers of staff they employ, with over three-quarters of the sample employing 20 or fewer staff.

• Sixty-three per cent of the surveyed private RTOs received some government funding.

• Private RTOs make a substantial contribution to the overall VET effort in Australia. Noting a number of caveats regarding the population register and response error, it is estimated that private RTOs in 2003 had 2.2 million students (a standard error of around 10%). This includes one organisation with 290 000 (part-time) students, reflecting large-scale provision of short courses. This compares with the 1.7 million students in the public sector in 2003.

• It should also be noted that:
  • around 170 000 of these students are covered in the provider collection maintained by the National Centre for Vocational Education Research (NCVER) because they are publicly funded
    
  • around 25% of the private RTO students studied unaccredited courses.

• Comparisons of the magnitude of training activity with the public VET sector are problematic because there are no estimates available of the training hours associated with each student in private RTOs.

• No accurate estimate of overall VET effort will be possible without a collection built on common statistical standards.

The implementation of key policy initiatives in the 1990s such as the National Training Framework and national competition policy provided the impetus for the emergence of a training market for vocational education and training (VET) in Australia. Subsequent years have seen a significant rise in the number of private training providers operating in Australia.

The study was specifically designed to gather data on private training providers and the nature of the training they offered in order to understand more clearly their overall contribution to the provision of VET in Australia. For the purposes of this study, private providers were defined as those registered to provide nationally accredited VET and who were listed on the National Training Information Service database in the following categories:

• adult/community providers (includes adult education centres, adult migrant education providers, community access centres and community education providers)

• enterprise-based organisations (training centres within enterprises whose prime business focus is an industry other than education and training)

• industry organisations (includes industry associations, professional associations and group training companies)

• commercial training organisations (providers supplying fee-for-service programs to the general public)

• others (includes agricultural colleges, government providers, licensing authorities, local government, other government providers)

Telephone interviews were held with 330 private providers (response rate of 35.5%) to elicit information on their training activity for the calendar year 2003. The response rate was low, partly because many of the providers listed on the National Training Information Service were unable to be contacted or were out of survey scope. In addition, a relatively large number refused to participate in the survey. For these reasons, and because some provider types are over- or under-represented in the sample, caution needs to be exercised in extrapolating the findings from this sample to all private training providers.

The overall profile of private providers delivering nationally accredited training programs to Australian students in 2003 is very diverse, with significant variations in terms of the types of students they attract, the nature of the courses they offer, the funding sources that support this activity and the factors shaping their businesses.

The organisations

Twenty-six per cent of the surveyed private providers classified themselves as adult/community providers, 13% as enterprise-based organisations, 19% as industry organisations, 39% as commercial training organisations and 3% as some other provider type.

Australian student enrolments

The majority of enrolments in private providers were part-time rather than full-time students. Around one-third of the surveyed providers reported that they had enrolments of 50 or fewer students, while approximately one-half had fewer than 100 students. Most students were enrolled in nationally accredited training programs. Around 25% of students were studying in unaccredited courses.

Funding sources for Australian student enrolments

Just over one-quarter of the surveyed registered training organisations reported that they funded their nationally accredited training activities for Australian students from government sources only. Fewer than four in ten organisations (37%) received no government funding for these activities. Twenty-four per cent of registered training organisations (RTOs) were fully self-funded, with a further 20% being funded from a combination of income from students and government sources. Those receiving government funding only for their nationally accredited programs tended to be adult/community providers (42%), while those with self-funded students only, or with a mix of government and self-funding, were more likely to be commercial training organisations (41% and 33%, respectively) and adult/community providers (31% and 30%).

Delivery patterns

Three-quarters of the surveyed private RTOs delivered training in one state/territory only. Adult/ community providers were more likely to be delivering in one state/territory, while one-quarter of industry organisations and enterprise-based organisations were delivering training in three or more states/territories.

The most common fields of education in which training was delivered were management and commerce (33%); health (19%); food and hospitality (18%); education (16%); and information technology (12%). Delivery across fields of education was generally spread across all provider types, with the significant exceptions being information technology (highest for adult/community providers); mixed-field education (almost exclusively offered by adult/community providers); and engineering and related technologies (largely confined to enterprise-based organisations).

Private RTOs offered a wide range of qualifications from certificate I through to diploma and higher-level qualifications. In 2003, most students completing qualifications were awarded a certificate III, followed by certificate II and certificate IV.

Private RTOs predominantly used face-to-face delivery methods in their own organisations for both training and assessment. There were some significant differences between provider types, with commercial training organisations less likely to offer face-to-face training in their own organisations; enterprise-based and industry organisations were more likely to offer on-the-job training; and industry organisations and commercial training organisations more likely to offer face-to-face training in facilities located in industry or other companies.

Staffing

In 2003, the private RTOs sampled employed about 12 800 full-time staff, 2900 part-time staff and 5200 casual staff. Sixty per cent employed between one and five full-time staff only, while another 13% employed between six and ten full-time staff. The predominant picture is of very small organisations, in terms of full-time staff, with 84% having ten or fewer full-time staff. The most common groupings of staff were full-time and part-time staff (28%) or a combination of full-time, part-time and casual staff (23%). Industry organisations and enterprise-based organisations exhibited a very strong preference for employing full-time staff. By contrast, adult/community providers tended to employ casual staff more than full- or part-time staff.

Services provided by organisations

The surveyed RTOs reported offering a diverse range of services to their students. Fifty-one per cent of the organisations offered career counselling/placement; 45% computer facilities; and 41% personal counselling. This was followed by 36% academic counselling; 34% access to study space; 31% study assistance; 30% library facilities; and 24% assistance on fees concerns. The distinctive exception was adult/community providers who made available significantly higher proportions of a range of services to their students-particularly computing facilities, academic counselling, study spaces, library facilities and fee assistance.

Inhibitors and promoters of growth for organisations

In general, organisations were neutral about growth factors for their organisations. Such policy initiatives as the requirements of training packages, of New Apprenticeships and the Australian Quality Training Framework were seen as promoters of growth, although not strongly. Lack of recognition by overseas countries of Australian pre-university qualifications and competition from online trainers providers were noted as weak inhibitors of growth. The key inhibitors of growth were reported to be competition from technical and further education (TAFE) institutes and the absence of fee assistance loans for private students (such as the Higher Education Contribution Scheme that exists for university students).

The sample responses were weighted to obtain estimates of the total number of students. These estimates need to be treated with caution because of the low response rate (around one in three) and problems with the population framework (the National Training Information Service had inaccurate contact and scope data). Putting these reservations to one side, it is estimated that private RTOs account for around 470 000 full-time students (standard error of 19%) and 1.7 million part-time students (standard error of 11%).

These numbers exceed the student numbers of the public VET sector (1.7 million students in 2003), but it should not be concluded that the private sector is larger than the public VET sector. Indeed, a number of points need to be kept in mind when making comparisons between the public and private sectors:

• There is crossover between the sectors, with around 170 000 private RTO students captured within the public VET sector because the students are publicly funded.

• The sample includes one organisation with 290 000 (part-time) students, all of whom were presumably enrolled in short courses.

• A direct comparison of training activity is not possible because the survey did not collect training hours, just student numbers, for private providers.

• It is estimated that around 25% of the students at private RTOs were undertaking unaccredited training.