vocational training in victoria: reform & performance
TRANSCRIPT
Vocational Training in Victoria: Reform & Performance
We need higher level skills to arrest Victoria’s declining productivity…
2001 to 2005: Victoria’s multifactor productivity growth rate was half the national average 2006 to 2010: Victoria’s growth rate declined at five times the average annual rate of NSW
Only half of working age Victorians have the core literacy and numeracy skills they need for work at a time of increasing structural change in our economy...
We need to increase workforce participation to mitigate the costs of an ageing population and key workforce shortages (e.g. community services)…
But 625,000 low skilled Victorians are in low skilled work or disengaged from work…
A higher skilled workforce will be critical to securing Victoria’s future competitiveness
Victoria’s VT system has been on a reform trajectory from a centrally planned model to a demand-driven model
early 1990sProfile funding
mid 1990s - 2000sPurchaser provider
2008 - 2012Student entitlement
2012 -Refocusing VET
Goal: FundingTAFE
Goal: Drive efficiency
Goal: Meet student demand
Goal: Modern system based on choice and competition
Flexible fees
Subsidy reflects supply-demand and public value
Uncapped places
Student entitlement and choice of provider
Fully contestable market
Profile of activity funded
TAFE attracts students
TAFE budget funded through contract
No market
Fees regulated/capped
Subsidy based on historical cost
Planned course provision with capped places
Government purchased places, mostly with TAFE
Portion of funding contestable
Fees regulated/capped
Subsidy based on course cost
Uncapped places
Student entitlement and choice of provider
Open contestable market
Regulated fees
Problems with centrally-planned models:
• Inefficient system with misaligned activity, both unmet demand and churn
• Objectives not being met
The introduction of the Victorian Training Guarantee in 2009 placed purchasing power in the hands of students
Victorian Training Guarantee:
• Victorians aged under 20 can access training at any level, regardless of prior qualifications
• Victorians aged 20 or over can access training in qualifications higher than those they already hold
• Access to apprenticeship qualifications is unlimited to Victorians, regardless of age or prior qualifications
The role of industry and employers in the training system has evolved, from passively lobbying government for places to actively engaging with individuals and providers
Students access places on a first-come
first-served basis
Training Providers offer fixed number of
subsidised places
Governmentallocates fixed
number of training places in specific
courses
Industry & Employers
lobby for training places to meet skills
needs
Training providers Compete to attract students &
employers
StudentsPersonal
entitlement to subsidised training at provider of
choice
Government
Funds
Facil
itates
Regulates
Old model: Passive industry New model: Active industry
Industry & Employers
Influence student choice and provider offerings
Recent growth in national context…
ACT NSW NT Qld SA Tas Vic WA-10%
0%
10%
20%
30%
40%
50%
60%
70%
28%24%
9% 10%
61%
-3%
61%
17%
% change in number of students in AQF courses of study 2008 to 2012(NCVER prelim June 2013)
‘Refocusing Vocational Training’ builds on the gains of the demand-driven system, while improving core elements of market design
Supply-driven system
Unbalanced public investment
• TAFE transition• ACFE 10 year strategy
• Subsidies targeted towards real job pathways• Deregulation of fees• Concessions and loadings for effective participation
Government policy constraining market-driven industry
restructuring
• Better commissioning • Improved monitoring of provider and market performance
Gaps in quality assurance & market oversight
• Redesign of industry engagement• Improved information to the market
Entitlement• Victorian Training Guarantee retained
Diversity of providers• Funding directed to providers who meet quality requirements and
attract students
Differentiated subsidies • Lower subsidies for higher quals that deliver greater private
returns, but income –contingent loans so no upfront-fees
Fundamentals retained
Gaps addressed
Enrolments patterns to Q1 2013 Patterns of Delivery to Q1 2013
Apprenticeship and Traineeship trends to Q1 2013
Training activity to Q1 2013
9% 8%
45% 47%
46% 45%
Q1 2012 Q1 2013
TAFE
PRIV
ACE
Activity is moving towards courses of higher public value and labour market need
Direct Consultation
Skills Portfolio Skills Portfolio Skills Portfolio
Wendy Timms John Spasevski Lee-Anne Fisher
Building & Construction Agriculture, Forestry, Fishing Food & Beverage Wood, Pulp, PaperHospital, Medical, Health CareResidential Care & Social ServicesICT, Financial ServiceFurniture, Admin & supportEducation
Machinery, Equipment, Transport, Manufacturing, AutoRoad &Rail TransportWater, Air & other TransportWarehousing, Logistics & Storage ServicesAccommodation & Food Services, Personal ServicesRetail & Wholesale Trade
Metals & Metal productsPetroleum, Coal, Chemical, Polymer & Rubber productsNon metallic & Mineral ProductsElectricity, Gas, Water & Water Services, Mining, Professional & Scientific ServicesTLFC, Property Services, Printing
The Minister for Higher Education and Skills
talking directly to industry and employers
DEECD Market Facilitation and
Information
Industry Skills Consultative
Committee meets3-4 times a year
Monthly Industry Forums hosted by
the MinisterSeven to date
Industry Associations
EmployersHESG Regional Facilitation Managers
The objectives of vocational training
• delivers a productive and highly skilled workforce• enables all working age Australians to develop
the skills and qualifications needed to participate effectively in the labour market
• contributes to Australia’s economic future• supports increased rates of workforce
participation
National Agreement for Skills and Workforce Development
In shortage and specialised occupations
33%
40%
Q1 2012 Q1 2013
Specialised or In Shortage enrolments as share of all industry -specific enrolments
Enrolments in Victoria’s largest employing industries
Health Care and Social Assistance
Retail Trade
Manufacturing
Construction
Professional, Scientific and Technical Services
12%
11%
11%
9%
8%
19%
9%
10%
13%
3%
Employment and Enrolments2012 (% total)
Enrolments Employment
Source: Monash CoPS
• 54% enrolments in Victoria’s five largest employing industries (51% employment)
• Enrolment shares exceed employment shares in health and construction - areas of relatively high shortages
• Gap in Professional Services largely reflects the need for degrees or above
Health care and social assistance
Enrolments patterns to Q1 2013 Enrolments by Provider Type, Q1 2013
Enrolments in specialised & in-shortage related courses to Q1 2013 Top 5 Qualifications in Q1 2013
Top 5 Qualifications Q1 2013Certificate III in Children's Services 8,576Diploma of Children's Services (Early childhood education and care) 5,894Diploma of Nursing (Enrolled-division 2 Nursing) 4,865
Certificate III in Aged Care 4,486
Certificate IV in Disability 2,273
Construction
Enrolments patterns to Q1 2013 Enrolments by Provider Type, Q1 2013
Enrolments in specialised & in-shortage related courses to Q1 2013 Top 5 Qualifications in Q1 2013
Top 5 Qualifications Q1 2013Certificate III in Electrotechnology Electrician 4,902
Certificate III in Carpentry 4,097
Certificate III in Plumbing 3,565Certificate III in Civil Construction Plant Operations 1,793Certificate IV in Building and Construction (Building) 1,470
Manufacturing
Enrolments patterns to Q1 2013 Enrolments by Provider Type, Q1 2013
Enrolments in specialised & in-shortage related courses to Q1 2013 Top 5 Qualifications in Q1 2013
Top 5 Qualifications Q1 2013Certificate III in Process Manufacturing 3,502
Certificate IV in Competitive Manufacturing 3,079
Certificate III in Engineering - Fabrication Trade 1,543
Certificate III in Competitive Manufacturing 1,478
Certificate III in Food Processing 933
Victorian Training Market Quarterly Report Q1 2013
available at:
www.education.vic.gov.au/training/providers/market/Pages/reports.aspx