New analysis reveals major mismatch between federal VET student loan funding and skill priorities across states and territories

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1 EMBARGO - 11 April 216 New analysis reveals major mismatch between federal VET student loan funding and skill priorities across states and territories A TAFE Directors Australia (TDA)-commissioned analysis of official data reveals for profit private training colleges have gained a massive 75 share of the $3 billion Commonwealth VET FEE-HELP funding, highlighting a major mismatch with the state and territory priorities for funding vocational education training. The research was undertaken for TDA by the National Centre for Vocational Education Research (NCVER). TDA sought the NCVER analysis to assess courses, funding, educational outcomes, market share, completions and employment by provider type, and also to track the source of VET FEE-HELP loans. The report, Trends in public and private VET provision: participation, financing and outcomes accessed NCVER s own National VET Provider collection, supplemented by preliminary Total VET Activity (TVA) data for 214, and included, for the first time, an analysis of the Commonwealth s official VET FEE-HELP data. The performance of Australia s 57 TAFE Institutes emerges strongly, dominating all major state and territory VET-funded fields of education and trade apprenticeships. The Chief Executive of TDA, Martin Riordan said: This analysis clearly demonstrates that despite the extraordinary growth of private colleges, the TAFE sector is doing the heavy lifting in delivering high quality skills, qualifications and jobs. Even more encouraging, TAFE emerged as the dominant training provider, with superior completion and employment rates, even as private sector competition intensified, Mr Riordan said. While many TAFE leaders and teachers should be proud of their dominant position in delivering training in priority economic and skill shortage areas, the findings have disturbing consequences for federal tertiary education policy. While TAFE delivered 63 of enrolments across the majority of fields of education, Commonwealth allocation of student loans to TAFE fell to just 2 in 214, and the government s own emergency legislation to halt private college rorts has worsened this reduction in funding for TAFE students. Despite TAFE s solid performance under the National Partnership Agreement, Commonwealth VET FEE-HELP loans have overwhelmingly flowed to, and bankrolled the explosion in, private colleges. 1

2 This has clearly worked against state and territory vocational education spending priorities in major areas of training and skill shortages. This evidence may now better explain why we have seen a double-digit decline every year for four years in trade apprenticeships and traineeship, once a key strength for Australia and a feature of our small business history, Mr Riordan said. Key findings in the NCVER report include: TAFE remains the dominant provider of government-funded training, recording a 63 share of delivery across the majority of fields of education programs TAFE continues to be the main provider of programs in fields of education associated with traditional trade apprenticeships. TAFE has the majority share of program completions in government-funded training and the highest share in the top five training packages. TAFE has the majority share of most government-funded training activity in program enrolments, field of education enrolments, and reporting hours. Graduates from fee-for-service TAFE and other government providers have the highest employment rates in comparison with graduates from private providers and other providers. Of total VET FEE-HELP payments of just over $3 billion from the program s inception in 29 up until 214, almost 75 went to private providers and 25 to TAFE with the TAFE share dropping to just 2 in 214. The fields of education mainly delivered by TAFE and private colleges show wide differences, as private college course completions decreased, and employment prospects for students worsened. Mr Riordan said the analysis notes: Between 21 and 214 TAFE continued to be the dominant provider for government-funded enrolments for plumbing, and electrical apprentices, providing between 8 and 9 of market share respectively. It also says: The highest completions of nationally accredited course qualifications are those produced by TAFE, with the share produced by private RTOs being almost half that of TAFE. It should be obvious that Commonwealth management of the VET sector has been a most disappointing experiment, and that the capacity of TAFE to deliver high quality, job-ready skills needs to be fully restored. See the accompanying TDA fact sheet on the NCVER analysis & findings. See full report, Trends in public and private VET provision: participation, financing and outcomes. Media contact: Bob Bowden, or bbowden@bowmac.com.au 2

3 KEY ISSUES - SUMMARY Trends in public and private VET provision an NCVER analysis commissioned by TAFE Directors Australia This fact sheet provides key highlights from the recent NCVER report: Trends in public and private VET provision: participation, financing and outcomes commissioned by TAFE Directors Australia. It reports on training trends in the TAFE and non-tafe sectors from using data from the National VET Provider collection; supplemented by preliminary Total VET Activity (TVA) data for 214; noting this was a transitional year where some providers were exempted from reporting. TDA commissioned the NCVER research analysis on behalf of its 57 TAFE institutes, including its six dual sector universities with TAFE divisions, to assess TAFEs performance under the National Partnership Agreement (NPA). The NPA Agreement, which began 1 July 213, has required data disclosure by private colleges, as essential for receipt of public funding. This compliance on data had already applied to public provider (TAFEs), and other measures including market share by course delivery, completions, and employment outcome measures were also assessed. One of the central findings of the NCVER report is that despite the expansion of the private training market in recent years (driven by national competition policy), TAFE remains the dominant provider of government-funded training across the majority of programs associated with key priorities for state and territory governments. It is also important to note that TAFE continues to be the main provider of programs in fields of education associated with traditional trade apprenticeships. TAFE had the majority share of most government-funded training activity in program enrolments, field of education enrolments, and reporting hours between 21 and 214. It also had the major share of program completions. In the following sections we summarise the key findings from the main report. Enrolments TAFE had 7 of government-funded training enrolments for all certificate I, II and III qualifications in 21; by 214 this had dropped to 6, 6 and 5 respectively. 3

4 Shares of Certificate I program enrolments in governmentfunded VET by provider type, Shares of Certificate II program enrolments in governmentfunded VET by provider type, Shares of Certificate III program enrolments in government-funded VET by provider, Source: National VET Provider Collection 214 TAFE continues to be the main provider of certificate IV and diploma and higher level qualifications, even though its share has decreased across the period. For example, TAFE had just over 8 of certificate IV, and diploma and higher qualification enrolments in government-funded training in 21; by 214 it still had the dominant share of both qualifications, at 57 and 73 respectively. Shares of certificate IV program enrolments in government-funded VET by provider type, Shares of Diploma and higher program enrolments in government-funded VET by provider type, Source: National VET Provider Collection 214 The Total VET Activity data for 214 indicates that private RTOs have increased their share of certificate III enrolments, certificate IV enrolments, and had slightly higher diploma and above enrolments than TAFE. Private RTOs have just over 5 of market share of Certificate IV qualifications. The share for TAFE stands at just over 35 while that for other RTOs and providers is almost 15. 4

5 Program enrolments TVA program enrolments by qualification level and provider type, 214 6, 5, 4, 3, 2, 1, Diploma or higher Certificate IV Certificate III Certificate II Certificate I Non AQF qualification Source: National VET Provider Collection and National VET in Schools Collection, 214 The top five Training Packages under Total VET activity 214 were those that are included in the suite of packages in: Business Services, Construction, Plumbing Services and Integrated Framework, followed by Health, Financial Services and Property Services. TVA program enrolments by training package and provider type, 214 SIF - Funeral Services (includes WFS) UEP - Electricity Supply Industry - Generation Sector (includes UTP) AUM - Automotive Industry Manufacturing PMB - Plastics, Rubber and Cablemaking AVI - Aviation (includes TDA) CSC - Correctional Services PMA - Chemical, Hydrocarbons and Oil Refining MSL - Laboratory Operations (includes PML) PUA - Public Safety (Confidential) MTM - Australian Meat Industry CUF - Screen and Media ACM - Animal Care and Management (includes RUV) CUV - Arts and CUlture AUR - Automotive Industry Retail, Service and Repair CPP - Property Services (includes PRD, PRM PRS) FNS - Financial Services (includes FNA, FNB) HLT - Health CPC - Construction, Plumbing & Services Integrated Framework BSB - Business Services (includes BSA) 1, 2, 3, 4, 5, Source: National VET Provider Collection and National VET in Schools Collection, 214 5

6 The TVA 214 data also indicates that Training Package qualifications account for the highest numbers of enrolments for all providers. TAFE has the highest number of enrolments for locally accredited skill sets and locally accredited qualifications. Private RTOs have the highest number of nationally accredited skill sets. TVA program enrolments by type of accreditation, 214 Higher level qualifications National accredited skill sets Locally accredited skill sets Locally accredited qualifications National accredited qualifications Training package qualifications Source: National 2, 4, 6, 8, 1,, 1,2, 1,4, VET Provider Collection and National VET in Schools Collection, 214 Other Private RTO TAFE 6

7 Enrolments for selected trades and non-trades Between 21 and 214 TAFE continued to be the dominant provider for government-funded enrolments for plumbing, and electrical apprentices, providing between 8 and 9 of market share respectively. Other RTOs and providers, including enterprises, are gradually moving into the market for apprentices in these fields. Program enrolments for plumbers (ANZSCO 334) for different provider types, Program enrolments for electricians (ANZSCO 341) in governmentfunded VET by provider types, Source: National VET Provider Collection 214 TAFE dominance as provider of choice is diluted for trainee enrolments in government-funded training for carers of the aged and disabled. In 21 TAFE represented 6 of activity; by 214 it accounted for around 4 of activity, thereby losing its dominance to private RTOs. Program enrolments in government-funded VET by accreditation type for carers of the aged and disabled (ANZSCO 4231) by provider types, Source: National VET Provider Collection 214 7

8 Reporting hours TAFE also had the majority share of most government-funded training activity in program reporting hours between 21 and 214. This share has gradually declined. TAFE s dominance in government-funded training is not apparent in subject-only enrolment reporting hours. Between 21 and 214 these were led by other RTOs and providers. Reporting hours for subject enrolments in government-funded VET by qualification level and provider type, providers Source: National VET Provider Collection 214 Data from the 214 TVA Collection indicates that private providers had 44 of market share of reporting hours for program enrolments in certificate III qualifications, substantially more than TAFE with just over 35, and more than double that of other RTOs and providers. 8

9 Enrolments in Fields of Education In 21 the greatest proportion of total FOE enrolments were for mixed field programs delivered by TAFE, closely followed by FOEs in engineering and related technologies and management and commerce also delivered by TAFE. In 214 the top proportion was for engineering and related technologies followed equally by management and commerce and mixed field programs all delivered by TAFE. Table 1 Shares of total FOE program enrolments in government-funded VET by provider type and FOE, 21, 214 () TAFE Private RTOs Other Total TAFE Private RTOs Other Total 1 - Natural and physical sciences 2 - Information technology Engineering and related technologies Architecture and building Agriculture, environmental and related studies Health 7 - Education 8 - Management and commerce 9 - Society and culture 1 - Creative arts Food, hospitality and personal services Mixed field programs Other Total Source: National VET Provider Collection 214 9

10 Data from the Total VET Activity collection for 214 indicates that in comparison with private RTOs and other RTOs, TAFE has majority market share of mixed field programs; agriculture, environmental and related studies; and natural and physical sciences. Market share is higher for non-tafe sectors in the other areas. Shares of enrolments by FOE and by provider type, TVA 214 () Source: National VET Provider Collection and National VET in Schools Collection, 214. Completions Between 21 and 213 TAFE produced the majority share of completions in government-funded training. For example, when the numbers of completions for training package qualifications, national accredited qualifications and higher-level qualifications are aggregated we find that just over half of the share are training package completions produced by TAFE, under a third are those produced by private RTOs, and the remainder produced by other RTOs and providers. The highest completions of nationally accredited course qualifications are those produced by TAFE, with the share produced by private RTOs being almost half that of TAFE. TAFE also produced the majority share of completions when each of the accreditation types are looked at individually. For example, where TAFE produced just under half (48.5) of the total share of training package qualification completions, private RTOs produced almost a third and other RTOs and providers around 7. This pattern was repeated for all types of qualification completions. TAFE produced twothirds of the completions in national accredited qualifications, and almost 9 of all higher-level qualification completions. TAFE also has the highest share of government-funded training completions in the top five training packages. For example, in 213 it accounted for 76 of completions in Construction, Plumbing Services and Integrated Framework, 68 for Training and Education, and 55 for Community Services. Its share of completions (although still in the majority) was lower for Business Services (53), and Tourism and Hospitality and Events (52). Private RTOs have 4 of the share of government-funded Training Package 1

11 completions for Tourism, Hospitality and Events, 38 for Business Services, and 32 for Community Services. Other RTOs had very small proportions of government-funded completions across these Training Packages with the lowest proportion for Construction, Plumbing and Integrated Framework (5), Tourism and Hospitality and Events (8), Business services (9), Training and Education (12) and Community Services (13). 11

12 Employment outcomes 85 of graduates from fee-for-service TAFE and other government (domestic) providers were employed six months after training; they had the highest employment rate in comparison with graduates from private providers (8) and those from non-fee-for-service TAFE and other government providers (around 75), and community education providers (around 75). Employment rates for subject completers across the different providers are also 75 mark. Between 4 and 5 of graduates not employed before training from non-fee-for-service TAFE and other government providers, fee-for-service TAFE and other government providers and private providers were employed six months after training had ended (table 11). Funding and financing In 214, total operating revenues and expenditures (including those for Commonwealth and state and Territory governments) stood at $ million, expenditures at $ million (figure 93). Figure 93: Total operating expenditures and revenues $ m Total Expenditure Total revenue Source: National Finance Collection, 214 Since its inception, VET FEE-HELP has provided just over $3billion to students eligible for these loans between 29 and 214. Almost 75 of the total loan amount for the five year period went to eligible students training with private providers compared with 25 going to eligible students training with public providers. 1 8 share of VET FEE-HELP loans to students in public and private providers () Loans for students at private VET providers Loans for students at public VET providers Source: VET-FEE-HELP data provided by the Australian Department of Education and Training : VET FEE-HELP statistics. 12