Transcript Hugh Guthrie (pptx, 188kb)

The effects of the
funding cuts in
Victoria on training
for the Service Skills
industries
Hugh Guthrie
OctoberVET, Ballarat
October 17 2014
vu.edu.au
CRICOS Provider No:
00124K
This presentation
In this presentation I will cover:
• Service Skills: its coverage and offerings
• The aims of the research
• Funding approaches in Victoria and how they have changed
between 2008 and the present
• Some issues with contestable markets and entitlement funding
• How the research was conducted
• What the research found
And finally
• What conclusions we have drawn
Service skills coverage and
offerings
• Wholesale, Retail and Personal Services. This sector includes
retail and wholesale, hairdressing, beauty, floristry, community
pharmacy and funeral services
• Tourism, Travel and Hospitality, including travel, tours, meetings
and events, accommodation, restaurants and catering, holiday parks
and resorts, and
• Sport, Fitness and Recreation, including sport, fitness, community
recreation and outdoor recreation.
The research questions
1. What are the changes in provider and enrolment numbers in the
industry sectors and related qualifications covered by Service Skill’s
Training Packages over the time course 2009 to 2013?
2. What have been the effects of the changes on employers and
employees?
3. What have been the effects of the changes on training
providers, and consequential effects on students and
communities?
Some issues with contestable
markets and entitlement funding
• The difficulty of establishing objective measures of inputs, outputs
and quality to advise contracting processes by Government
• That the principal client in the purchasing decision is clear
• That students will be rational consumers and use their entitlement
wisely
• There are particular market conditions that may create perverse
incentives for students and employers not to demand quality training
and for providers to supply to a low-quality market
• Low barriers to market entry for some courses
• Ownership and incentives, “skin in the game” and a commitment to
their students and employers rather than being focused and strongly
incentivized by personal and organisational returns
Funding approaches in Victoria
• Stable from 2008 to mid-2012
• Changes to subsidy rates foreshadowed in May 2012
• First changes in subsidy rates introduced for new enrolments from
1 July 2012
• New subsidy rates apply for all enrolments from 1 January 2013
• Continual adjustment since with little notification. There have also
been changes to eligibility criteria for entitlements
The research process
• We ran three forums, involving (respectively) industry and both public
and private providers. This involved 10 organisations and 12
respondents
• We interviewed 35 individuals from 27 organisations, covering
community providers, public, private and enterprise RTOs, an
employer and industry associations
• We called for submissions and received 7, most of which were from
providers
• We monitored the press, and drew upon submissions to the Senate
and HoR enquiries into TAFE and the literature
What the research found for Service
Skills qualifications
• Effects on funding bands
• Effects on enrolment numbers
• Effects on provider numbers
In summary, the public providers have lost market share to private
providers
Funding level band against number (Percentage) of Service Skills
qualifications subsidised in both 2013 and 2014
Band and
rate/Year
A
B
C
D
E
Total
>$10
$7.50 - 10
$5 - 7
$2 – 4.50
<$2
2013
7 (9.7%)
13 (18.1%)
18 (25%)
15 (20.8%)
19 (26.4%)
72
2014
6 (8.3%)
5 (7.0%)
10 (13.9%) 27 (37.5%)
24 (33.3%)
72
Enrolments in Victorian Government subsidised vocational
training overall and for Service Skills qualifications 2008–2013
Enrolments
Total enrolments,
Victoria
Service Skills
enrolments,
Victoria
2008
2009
2010
2011
2012
2013
381,300 376,800 426,900 548,700 670,400 645,000
100%
99%
112%
144%
176%
169%
79,385
100%
85,669
108%
94,091 121,443 132,288
119%
153%
167%
89,879
113%
Number of providers overall by provider type, and for Service Skills
qualifications, 2008-2013, Victoria
Provider type and numbers
2008
2009
2010
2011
2012
2013
Learn Local (community providers)
342
320
316
309
298
282
Private RTO
201
246
344
422
445
428
18
18
18
18
18
18
561
100%
584
104%
678
121%
749
134%
761
136%
728
130%
Service Skills Learn Local
(community providers)
64
70
58
57
56
47
Service Skills Private RTO
105
110
169
208
210
194
18
18
18
18
18
18
187
100%
198
106%
245
131%
283
151%
284
152%
259
139%
Public RTO or university dual
sector
Total
Service Skills public RTO or
university dual sector
Total
Load in Service Skills qualifications, by provider type, 20082013, Victoria
120
100
80
Other registered providers
60
Community education providers
TAFE and other government providers
40
20
0
2008
2009
2010
2011
2012
2013
What effects the research found for
Service Skills qualifications and
providers
• Effects on qualification and provider viability
• The rapid changes in subsidy rates have led to adjustment to
operation and teaching and learning practices, profile, levels of fees
and staffing levels
• Planning and budgeting has become very difficult
• There appear to have been significant regional effects
And finally:
• While the level of training in Service Skills in 2013 remained well
above the level in 2008 (around one third higher) the level of funding
in 2013 for Service Skills qualifications was around 70% of the
funding in 2008. This raises the issue of whether or not Service Skills
occupations are receiving their fair share of subsidised funding.
FYTEs for selected Skills Councils, 2008-2013, Victoria
70000
60000
50000
Service skills
Agri-Food
Auto Skills Australia
40000
Community Services and Health
Construction and Property Services
E-Oz Energy
30000
Innovation and Business
Manufacturing
SkillsDMC
20000
Transport and Logistics
10000
0
2007
2008
2009
2010
2011
2012
2013
2014
FYTEs by Service Skills area, 2008-2013, Victoria
25000
20000
15000
2008
10000
2009
2010
5000
2011
2012
0
2013
FYTEs by Service Skills area, 2008-2013, Australia, all
jurisdictions excluding Victoria
25000
20000
2008
15000
2009
2010
2011
10000
2012
2013
5000
0
Beauty
Community
pharmacy
Floristry
Funeral
Services
Hairdressing Hospitality
Retail
Sport and Tourism and Wholesale
recreation
travel
What we have concluded based on
the research
• Initially greeted favourably, but problems soon began to emerge
• Corrective action has involved the use of subsidy level as a ‘blunt
instrument’ of market control
• Constant tinkering is having an adverse effect on providers, students
and employer stakeholders
• The approach treats the ‘training market’ as uniform across Victoria.
It is not
• Quality is suffering; planning and budgeting for providers is difficult if
not impossible
• An urgent rethink of the Victorian funding model is needed if the
system is not to collapse, and confidence in service skills
qualifications is to be restored.
CONTACT DETAILS
The report can be accessed at http://behc.com.au/REPORT.pdf
My contact details are:
Hugh Guthrie
Principal Research Fellow
Work-based Education Research Centre
300 Queens St, Melbourne
PHONE +61 3 99198529
EMAIL [email protected]
http://www.vu.edu.au/contact-us/hugh-berkeley-guthrie