Attachment A. TAFE Transition Plans Key points. Process

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1 Attachment A TAFE Transition Plans Key points Process TAFE Transition Plans were due on 7 September plans were received as well as a proposal from La Trobe University. All remaining plans had been received by 11 September A number of TAFE institutes have only provided detailed information for the 2013 year, and will provide more detailed information on 2014 and 2015 plans and forecasts by the end of September. The Plans have been reviewed and summarised by the TAFE Transition Taskforce. The Reform Panel will consider the plans at its meeting on Thursday 13 September. Where required, the Reform Panel will meet with the TAFE institutes during the week commencing 17 September to discuss the plans. A submission focusing on the 2013 aspects of the plans will be prepared for consideration by Cabinet on 8 October. This paper is presented in two parts (1) TAFE institute key points and (2) Key Issues, enabling comparison between TAFE institutes.

2 SWINBURNE UNIVERSITY Overall strategy is to establish Swinburne as Australia s leading university in science, technology and innovation through: o Refocusing the TAFE program portfolio and maximising efficiency through teaching benchmarks, increasing the level of online and workplace delivery, consolidation of courses to a single campus (eg trades at Croydon) and reducing corporate costs o Maximising pathway and progression opportunities for Swinburne students, including through growth in associate degrees o Strengthening partnerships with other VET providers throughout Australia and internationally to deliver Swinburne degrees offsite and provide pathways for their students into Swinburne o Aligning research to areas of teaching strength and industry priorities focusing on future manufacturing, sustainable futures, digital frontiers, personal and societal wellbeing and fundamental science that underpins technological developments central to advances in engineering, sustainability and health o Campus rationalisation - relocating the faculty of design from Prahran to Hawthorn and TAFE programs from Prahran to Swinburne s other campuses from 1 January 2014; and ceasing to offer TAFE and higher education courses at Lilydale from 1 July 2013 Collaboration o Swinburne have liaised with other TAFE s to transfer program delivery in some areas they are exiting for example, Kangan Institute and Chisholm TAFE in relation to automotive training and William Angliss in relation to hospitality. Course offerings withdrawal from automotive, building (painting and decorating), cookery, floristry, food processing (wine), government, hospitality, leisure, local government, massage, public safety, recreation and tourism. Where transfers to Kangan, Chisholm and William Angliss are not possible, teach out plans will be implemented. Swinburne will also reduce VET in Schools offerings. Fees rising by 22% to 26%. Increases will be implemented progressively over a 3 year period. Physical assets o Victorian government acquire the Lilydale site, assists the Shire of Yarra ranges to acquire the whole site or enable Swinburne to proceed to sale o Victorian government acquire Prahran site, apart from the part of the site on which the National Institute of Circus Arts will operate, or enable Swinburne to proceed to sale o Swinburne is seeking to reinvest proceeds of these sales into improved facilities at Hawthorn, Croydon and Wantirna Financial position Swinburne is projecting operating surpluses of $14.2 m in 2012, $16.3 m in 2013, $13.1 m in 2014 and $21.8 m in 2015 Supports sought from government:

3 o 30% increase in funding in each band of VETiS courses and increase in mandatory school contribution by 10% o $340,000 per year to continue Cert I in Work Education and Transition Education in Wantirna in 2014 o $180,000 per campus, per annum, to support CGEA and VCAL programs for disengaged youth o 20% increase on previous VTG rates and waiving of eligibility restrictions for sustainability courses o $1.4 million per in 2014 and flexibility of location of future delivery of theatre arts courses

4 VICTORIA UNIVERSITY Overall strategy o Improve student retention, progression and pathways through a new curriculum strategy and consolidation of delivery into 7 colleges o Rebalance VET and higher education courses (to 1:3 in favour of higher education), and expand fee for service delivery and on and offshore delivery (in Kuwait, India, the Philippines and Ahmadabad) to international students o Strengthen Trades training through Trades Academy and moving students into longer VCAL programs rather than short pre-apprenticeship courses o Build research capacity in areas of distinctive specialisation o Reduce corporate costs through shared services for administrative and student supports o Consolidate campuses Collaboration engagement with Kangan and MEGT on apprenticeship delivery. Offering guaranteed pathways to Kangan, Chisholm and Wodonga diploma students in Discussions also underway with NMIT, William Angliss and the Gordon. Working with learn local providers to transfer delivery of non-viable low AQF VET and further education certificates Courses discontinuation of events and tourism, boat-building, animal studies and veterinary nursing courses. Discontinuation all certificate I and II courses (except English, VETiS senior secondary and pre-apprenticeship courses) and advanced diploma courses. Reduction in sports and fitness, hospitality, business and financial services, with courses replaced with fee-for service or higher education options). Reduction of driver education programs. Closure of VU restaurant. Guaranteed pathways offered for remaining qualifications. Increased fees for VET in Schools programs and discontinuation of participation in Trade Training Centres in Werribee and Melton. Organisational restructure- 39% of VET business within integrated college structure; 33% through proposed Trades Academy and 27% through VU college (which provides LLN courses and learner support) Fees New fees from July 2013 with higher fees for diploma and above courses. Early results from June-July indicate a 6% drop in government funded commencements (impacts may be masked by higher enrolments in June) Staff 99 teaching staff redundancies and 15 non-staff redundancies. 49 of the teaching staff were made redundant by end June, with 50 teaching staff to be made redundant by the end of Physical infrastructure- Focus on fostering Footscray as a University Town, consolidating course delivery in the CBD at the Queen Street site, developing health delivery at St Albans, consolidating trades training in sunshine, developing a community-integrated learning model for peri-urban delivery (eg Sunbury, Melton).

5 Seeking government support as follows: Approval to sell Sunbury site (subject to agreement between Hume City Council and VU on reinvestment in a new learning precinct) Financial contribution to VU s relocation of personal services from King Street (CBD) to Footscray and other capital priorities, equivalent to the proceeds from the sale of crown land at Newport Transfer the portion of Samson s Lane in the CBD that is owned by Government to VU at no cost in order to subsidise the Queen Street development Ensure that Grocon deliver 250 beds as student accommodation as a State planning priority and approve a 10 year land lease where this student accommodation could be constructed Financials updated 2012 budget forecast - $0.3m operating surplus ($15m deficit when capital grants and redundancy costs are included) forecast surplus of $3.3m, growing to $47m by 2016 (excluding asset sales, capital grants and costs of planned redundancies) VU is also seeking government support as follows: o endorsement of a new statute authorising the new college structure o dispose assets and retain proceeds of sale o exempt VU from wages policy o funding support for a feasibility study to support the development of a Trades Academy

6 BALLARAT UNIVERSITY Reduce number of schools from 7 to 4, establish an Industry Skills Centre and a College Menzies Affiliation extend Dual Sector Partnership with seven regional TAFEs from higher education to vocational training to enable demand for vocational training to be aggregated o Courses can be provided by any one of the participants in the affiliation o Seeking financial support of $3.5 million over three years from the Regional Partnerships Facilitation Fund to oversee establishment of entity Physical infrastructure: o Consolidate a range of Crown and University land titles and vest ownership with University o Construct an accommodation facility targeted at apprentices by retaining the proceeds from the sale of two sites in Ballarat and retaining $5 million awarded in 2011 to the University through the then Regional Growth Fund Accepted voluntary redundancies and commenced targeted staff redundancies numbers not specified

7 LA TROBE UNIVERSITY Significant challenges to the viability of the campuses at Albury-Wodonga, Shepparton and Mildura La Trobe s preferred model is a partnership with a consortium or merger of Sunraysia, GO TAFE and Wodonga, and La Trobe as the preferred (but not exclusive) higher education provider Government support required: o Significant direction and commitment from government o Continued availability on Commonwealth Supported Places model not viable otherwise o Significant transition costs to address staffing, organisational development, systems and infrastructure issues o $13.5 million over three years to develop integrated campus model in Mildura, Shepparton and Albury-Wodonga o New teaching and administration building at Mildura (subject of an Education Investment Fund bid) If La Trobe successful in implementing stronger partnerships with TAFE, concerns about medium term viability of Ballarat La Trobe willing to consider merger with Ballarat

8 RMIT State Government funding for VET activity projected to provide a minor 3.5% contribution to overall RMIT revenue in 2013 compared to a 6.4% forecast for 2012 => University has limited exposure to State Government funding for TAFE activity TAFE integrated into University and not separated as a stand-alone activity TAFE financials derived based on a number of assumptions Preliminary consolidated budget provided for 2013 will not be confirmed until budget process is complete in December. Consolidated budgets for , that were prepared in 2011, were provided Strategy: o Improving gross margins by a more informed selection of course type and markets growth in offshore and industry programs and rationalising low-margin State Government funded programs o Adopting a more progressive VET delivery model, including productivity improvements o Assessing scope for a different overhead structure for VET o Considering establishing a subsidiary RTO-based operating model Property backlog maintenance liability of $88 million for Minister allocated buildings o Approximately $5 million per annum required to maintain buildings to current standard and a further $4 million per annum required for operating support expenditure o Considering improving utilisation of RMIT-owned buildings and decommissioning Minister allocated buildings Provided a separate submission as to why RMIT should be exempt from Government wages policy

9 Regional TAFEs Northern Victoria BENDIGO Financials for 2014 and 2015 and further information on asset plan to be provided by 30 September Strategy to increase productivity (requires new EBA), reduce staff and corporate costs, and be a leader in English language literacy and numeracy skill development Collaborations o Leverage existing arrangements with La Trobe, Deakin and Ballarat, and develop new strategic relationships with other universities o Establish an independent, self-governing shared services provider for the regional TAFEs Removed non-performing courses Closed the Kyneton campus Will divest Castlemaine campus, lease space in Castlemaine and increase use of on-line delivery Balanced operational budget for 2013 but seeking support for: o Further analysis of delivery models o Echuca campus currently delivering 130,000 SCH. Breakeven is 270,000 SCH and expect to increase to 200,000 SCH over next couple of years o Extension of childcare centre to include a kindergarten o Feasibility study into the viability of the shared services model o Full feasibility review of the various city campuses and assets o SMS project ($310,000) o New cash receipting solution ($327,120) o Cash advances so that cashflow positive Staff reduced by 25, with 75 more by the end of 2012

10 GOTAFE Will continue as an individual entity with partnerships with five universities (La Trobe, Ballarat, Deakin, Charles Sturt and Melbourne) and co-operative arrangements with other TAFEs and RTOs Does not support: o Menzies affiliation at odds with demand driven entrepreneurial approach central to GOTAFE s business model; practical issues given vocational nature of delivery, and with achieving required training quality and industry engagement o La Trobe co-operation model financially unattractive, would restrict student pathways and carries risk of being seen to support withdrawal of La Trobe from the region o Mergers with other TAFEs amalgamating a range of diverse organisational cultures would be challenging, resulting in stifling of TAFE led entrepreneurism and rendering the organization unproductive during a time of uncertainty and significant change Will further develop its capacity over the next three to five years in Children s Services, Aged Care & Nursing; Agriculture and Dairy; Traditional Trades; Lower Hume corridor; and Disadvantaged learners each student has an individual career development and learning plan Will strategically grow business via statewide and interstate VET opportunities: National Centre for Dairy Education Australia; National Centre for Equine Education; and Food Processing Targeting Asian and Pacific countries including China, Singapore, Indonesia and India Will lobby government to change policy to allow it to seek registration as a Group Training Organisation Operational surpluses in each year but seeking support for: o A transitional dollar amount (unspecified) over the next two or three years o Supplementary funding to assist with transition of TAFEs being responsible for corporate support systems, such as the roll out of the Student Management System o A range of new facilities in Shepparton, Wangaratta and Lower Hume Reduced numbers of full time and contract staff by 30 over last 6 months. Further reductions through normal attrition or redundancies as required

11 SUNRAYSIA Reducing expenditure by $3 million, increasing student tuition fees, focusing delivery profile on higher funded courses, particularly growth in trades, and refining and expanding modes of delivery Plan to increase tertiary participation by creating a Sunraysia Tertiary Education Precinct (STEP) o Facilitate closer collaboration with university partners primarily Ballarat and La Trobe and enhance relationships with private training providers and the schools sector o Could provide support functions to other providers such as campus management would consider outsourcing support functions through shared services or other arrangements to reduce costs o Shortlisted for a $38 million EIF bid announcement expected September o Seeking $5.5 million committed in budget, even if EIF bid unsuccessful, to begin development of STEP as a staged process Propose to take over the Two Rivers School at the Mildura campus to create a specialist indigenous training centre Collaboration o Priority is to strengthen relationship with Ballarat open to considering different operational models o Should not jeopardise relationship with La Trobe unless full merger proposed, as delivery offerings of La Trobe and Ballarat quite different o Not timely to consider program delivery on behalf of La Trobe concerns regarding financial viability and community backlash o Pathways also with Deakin, Charles Sturt, Flinders (Renmark campus), William Angliss and Box Hill 26 positions made redundant in May teaching and 13 non-teaching; expect further reductions through natural attrition rather than further redundancies Projecting a modest funded surplus but seeking funding of $837,208 for SMS project and $327,120 for cash receipting module

12 WODONGA Major new three year Government contract, moving into more specialist areas, decreasing delivery in lower funded or non-core areas, renewed focus to maximise asset utilisation, and decrease overheads Reviewed all courses, relevant costs and associated pricing tuition fees will increase by 80% in 2013 Further reduction of 30 FTEs in 2013 Collaboration either La Trobe or Menzies affiliation. Seeking clarification on preferred direction. Should that not be forthcoming, will enter into detailed discussions to determine which option to pursue o Menzies affiliation assumes La Trobe University and Wodonga TAFE campuses reinvented as a single Menzies University campus Detailed review of possible asset rationalisation with addition of DECA yet to commence Projecting $612k funded deficit in 2013 and surpluses in 2014 and 2015 Seeking government support for: o Menzies option - $250k in 2013 to explore option, $3 million in 2014 to integrate systems and pilot model, $5 million to further develop Menzies on La Trobe campus o Transition funding $725k for SMS $200k for administration centralisation project $250k for records management $168k for Vic Track $300k for TELCs $3 million for DECA (requires replacement investment of around $1,445k)

13 Regional TAFEs south west Victoria THE GORDON Seeking to expand into growing and other key markets such as Wyndham, building on existing interstate delivery, working collaboratively with Deakin University to penetrate specific international delivery across China, India, Indonesia and Malaysia, and cost savings/productivity improvements Strategic course review identified 43 courses at risk course closures will not be finalised until after community consultation during October Collaborations: o Deakin strong, long standing relationship for pathways; also exploring range of shared services and service delivery models o South West preliminary strategic discussion on partnership opportunities; Action Plan to be agreed by March redundancies to date (16 packages offered in June 2012, 14 packages offered in August 2012) further redundancies once course offerings finalised Forecasting funded surplus 1 of $9.1 million in 2013 with contracting delivery and $200k without contracting delivery, excluding $4.7 million of redundancy costs. Seeking government support over for: o Retaining proceeds from the sale of property ($1 million) o Not repaying $1.4 million cash advance received in 2011 o Paying peppercorn rent over 5 years for an existing VU facility at Wyndham o A proactive approach to retraining and up skilling workers before they are retrenched ($3 million from government though the Geelong Innovation and Investment Fund (GIIF), $600k from The Gordon) o Investing in a Youth Hub to engage young people in programs, including continuation of VETiS, by providing a range of services including counselling, careers advice and study support ($2.69 million from GIIF, $470k from The Gordon) o Establish a Community Partnership Program to support people from low SES areas ($2.56 million from GIIF, $590k from The Gordon) o Establish a program in Colac Otway through sole tenancy of the new Trade Training Centre in Colac ($1.49 million from government, $458k from The Gordon) o Deliver disability services ($1.2 million from government) o SMS project ($598,288) o New cash receipting solution ($327,120) o Transition to the new structure ($1.9 million) o Maintenance program ($2 million from government, $1 million from the Gordon) o Removal of requirement to invest working capital funds with the Treasury Corporation Victoria If business cases not supported, will need to reconsider organizational structure and workforce composition 1 Before interest, depreciation and capital grants

14 SOUTH WEST Targeted focus on more profitable courses 32 courses not offered in second semester 2012, planned phasing of price increases, will progress development of a world-class Centre for Trade Training Excellence in Warrnambool (subject to EIF bid), develop a Hamilton Education Hub and develop a centre of excellence for rural, agriculture, racing, equine, dairy and horticulture education at Glenormiston Reduction in costs reduction in staff, productivity improvements, cost savings across non-salary items, adjustments to campuses (relocation of Art Department and library in Warrnambool) o Reduction in staff - 36 (28 EFT) to date through redundancies, natural attrition and expiry of contract, 22 vacancies (15 EFT) not filled. Expect a further 15.5 EFT reduction in 2013 through natural attrition and redundancies, if necessary Collaborations: o Existing relationships with Deakin University, Charles Sturt University, and William Angliss o Exploring new partnerships, particularly with The Gordon Action Plan to be agreed by March 2013 Funded operating deficit of $1.7 million in 2013 and $982k in 2014, reaching a small surplus in Dependent on government support: o $2.063 million to fund transitional costs, with $575k paid immediately, $738k by 31 October 2012 and $750k by 1 January 2013 o Advanced payments of $1.801 million in 2014 and $690k in 2015 Additional support required: o Consent to forecast and operate with an operating deficit o Retention of the proceeds from the sale of property to be invested into a Hamilton Educational Hub at the underutilised RMIT site o Development of a South West Tertiary Education Council Sale of buildings in Glenormiston to fund capital works (equine fencing and horticulture hothouses) and sale of building in Warrnambool to partly fund relocation of Art Department and library

15 REGIONAL TAFES - GIPPSLAND GIPPSTAFE Overall strategy: Stabilising financial position in 2013 through reducing course delivery, revising prices, lowering corporate administration costs and increasing asset utilisation Building the business by expanding fee for service revenue and international programs to reduce reliance on State Government funding Expanding markets and maintaining access for Gippsland learners through the use of technology and partnerships with other VET and higher education providers and pursuing merger opportunities Collaboration and structural reforms The Board is interesting pursuing an amalgamation with Chisholm and Advance TAFE by the end of In the alternative, they see value in a more formalised alliance with Monash Churchill. In order to expand pathways and tertiary offerings GippsTAFE is also pursuing collaborations with the University of Ballarat, Community College Gippsland, Apprenticeship Group Australia and Curtin University (in Malaysia). Staffing changes GippsTAFE plans to reduce its current workforce by 100 staff. 35 positions have been made redundant already, while further rounds of redundancies are planned for August/September, and October/November, with a final round in February Industrial relations GippsTAFE s plan does not address the renegotiation of a workplace agreement for its teachers. Courses GippsTAFE intends to expand its apprenticeship market and its offerings in health and community services. The institute has indicated that it will not offer a range of certificate and diploma courses in music, business administration, community pharmacy and retail, screen and media, visual arts, events, interior design, allied health, salon management, beauty therapy, tourism, hospitality, management and sport and recreation next year. This will lead to some reduction in offerings to VETiS students. Other courses under review include Diplomas of nursing, disability and community services (alcohol, other drugs and mental health).

16 Fees No detail on fee arrangements for 2013 but notes all prices have been reviewed and adjusted. Physical infrastructure Asset utilisation will be increased through hiring, rental and leasing of its infrastructure (particularly in Traralgon, Warragul and Chadstone). Leases on facilities in Warragul have been terminated as of December Morwell, Leongatha and Yallourn Campuses will be under-utilised. The institute recommends disposal of the Yallourn site and reinvestment of those funds into upgrading the Morwell site. Financials GippsTAFE is aiming to break even financially in 2012 and Without government loan outlined below they will not maintain liquidity ratios in the first semester of 2013, but expect to stabilise their cash position by the end of the financial year. Government support GippsTAFE is seeking financial support to investigate the feasibility of structural changes GippsTAFE have previously written to HESG seeking support (in the form of a loan) for outlays towards pilot works for SMS, to complete the building footprint for Chadstone Campus and to effect transitional redundancies The institute is also seeking assistance towards meet the ongoing licencing and implementation costs of a new student management system (estimated to cost $144,000 per annum) and around $327,000 for a new cash receipting product.

17 ADVANCE Will be finalising Transition Plan by the end of September Overall strategy Will leverage extensive experience of successfully managing small, aggregated cohorts of learners across significant distances using blended learning methodologies, specialist video conferencing infrastructure and learner-centred management to expand revenue base by developing and distributing flexible learning options across state and ultimately nationally. Aggressively build commercial revenue in areas of strength aeroskills, agribusiness, commercial fishing, community services, maritime transport, natural resource management, and racing. Increasing fees, reducing costs merging 9 teaching teams into 5 Collaboration and structural reforms Every Victorian TAFE will be a potential purchaser or partner in Advance s flexible delivery offering. Will increase regional VET and HE options through existing and additional partnerships Ballarat, Deakin, Monash and GippsTAFE. Menzies Affiliation will provide another platform for joining with other regional TAFEs to grow delivery of specialist areas into regional areas. Pursuing new HE partnerships by aligning two of niche areas with nationally respected research groups and investigating opportunities with Open Universities Australia, Charles Sturt University or University of New England. Works closely in partnership with 21 secondary colleges. Investigating private providers using campus infrastructure to deliver courses which they are no longer able to offer, in particular visual arts and careers advisory services. Staffing changes Have made 32 staff redundant or have not renewed contracts; a further 14 staff to be made redundant before the end of (It later states that 32 teachers (13.5 EFT), 15 support staff (13.9 EFT) and 10 learner support staff (7.6 EFT) to be reduced). Plan to increase casualised teaching workforce Industrial relations

18 Seeking an additional 100 hours of teaching productivity across 20% of teaching staff under current EBA. Courses Teaching out and discontinuing 34 courses from July 2012, including courses in Visual Arts. Fees Increasing student tuition fees by 80% on average and assuming a 15% reduction in student demand as a result. Physical infrastructure Consolidate campus infrastructure to three main sites Bairnsdale, Lakes Entrance and new Port of Sale campus (subject to EIF bid). Closing eight outreach centres across Eastern Victorian region in 2012 and a significant part of the Forestec campus in 2013 will seek to lease out portions of the main building. Financials Deficit of $3.3 million in 2013, $1.8 million in 2014 and $0.7 million in Surplus in Government support Transition funding of $4.6 million in 2013 and $1.7 million in 2014 required to: Ensure stable cashflow Professionally manage the change management project ($420k in 2013) Continue two critical industry courses that are no longer viable maritime coxswains, and forestry courses ($198k) Support for continuation of disability support across region ($286k in 2013) Return of concession rate gap Continuation of elearning grant ($396k) Mothballing parts of Forestec in 2013 ($791k) Support for SMS project ($439k) Gearing up systems to better cater for interstate delivery ($20k). (It later refers to $5.6 million in support - $4.6 million in cash and forgiveness of current debt to HESG of $1 million)

19 Peri-urban CHISHOLM The Chisholm plan sets out strategies and financial forecasts for the period The plan has been endorsed by the Chisholm Board. Overall strategy: Organisational redesign to reduce salary costs and lower corporate administration costs Building distinctive pathways in partnership with schools, ACE providers and universities to attract and retain students and encourage their progression at Chisholm Redesigning educational products, business models and better use of technology to maintain delivery at non-profitable campuses (Mornington Peninsula, Bass Coast and Cranbourne). Expanding offshore delivery in China, Vietnam, Africa, Cambodia and Indonesia An asset strategy that invests in campuses, technology and systems that improves utilisation of facilities and cost-effectiveness of Chisholm s operations Collaboration and structural reforms Chisholm has offered to lead a feasibility study on a merger between Chisholm, Advance TAFE and GippsTAFE. Chisholm is committed to continuing to auspice VET in Schools with 87 schools. Chisholm has negotiated partnership agreements with Deakin and Latrobe to provide franchised and joint delivery of degree programs at Chisholm campuses in Dandenong and Frankston; and with Monash and Swinburne to provide guaranteed entry for students who complete Chisholm diplomas Staffing changes Reduction of 251 full time equivalents, of which 179 relate to planned redundancies during 2012 and The balance relates to decreased casual/agency staff and redundancies taken in early Industrial relations Chisholm will seek to achieve greater alignment of teaching conditions with the Educational Services (post-secondary) Modern Award, with an intent to remove the nexus between teaching and non-teaching duties.

20 Courses Overall Chisholm is forecasting a reduction of 610,000 student contact hours and 1,500 students in 2013, compared to 2012, then anticipates 5% yearly growth from The institute is forecasting growth in 2013 in community services, health, the construction trades and telecommunications and is planning reductions in sub-sectors of general manufacturing, business services, culture, recreation and retail sectors. Fees Chisholm has not finalised course fees for 2013, but are budgeting to raise total tuition fee by 70%. Physical infrastructure Chisholm is not considering the disposal or sale of any land or buildings. Asset priorities include: Meeting commitments for a Berwick Trade Careers Centre to provide VCAL and pre-apprenticeship programs Purchasing a 5 story building in Dandenong, which would utilised by Chisholm and its university partners (estimate $9.0m for purchase + $4.5m for refurbishment) Frankston redevelopment (following masterplanning funded by government this year) including refurbishing an existing building to provide a Tertiary Centre which would be utilised by Chisholm and its university partners (estimated cost $5.6 m) Converting Dandenong campus library into a more contemporary student learning hub (with greater IT capacity) and student service centre Maintenance: Maintenance backlog of $5.6million with an additional $3.67 m of structural maintenance not currently being addressed and $1.19 spent annually on responsive maintenance. Financials Chisholm is forecasting an operating deficit of $2.5million in 2013 (representing a $6.3 million decline on 2012 forecast result), with a return to operating surpluses of $2.8 million and $4.4 million respectively in 2014 and Government support Chisholm is seeking government funding of $10.7 million in 2013 to enable Chisholm to meet commitments for the Berwick Grade Careers Centre and deliver on its transition plan. Chisholm proposes that this funding request is sourced through:

21 Being authorised to retain approximately $7.4 million in overpayment for pre VTG students; and $3.3 million of new funding Chisholm is also seeking clarification on the IR framework, a governance framework customised to providers delivering a spectrum of vocational and higher education courses, policies on non-tuition fees and the respective roles and responsibilities of institute Boards and government in relation to asset maintenance and replacement. In particular Chisholm is seeking greater Board autonomy in relation to raising capital and asset management.

22 Metropolitan TAFEs WILLIAM ANGLISS INSTITUTE (WAI) Overall strategy: Reducing corporate administration overheads, including through staff restructuring, centralising procurement and better business systems and internal reporting Growing market share in food, tourism and hospitality, including through better pathways between school, VET and higher education and expanding delivery in regional Victoria Growing international operations in China, Singapore, Timor Leste and the Middle East Collaboration WAI has entered into a partnership agreement with South West Institute of TAFE to develop qualifications, flexible delivery models and articulated pathways to create training opportunities for regional students in food tourism and hospitality related courses. Staffing changes WAI plans to make teaching and administrative positions redundant in the last quarter of 2012 (having reduced by 44.5 EFT in 2011). Industrial relations WAI is seeking to negotiate an enterprise agreement that delivers flexibility and productivity efficiencies comparable to those of the modern award used by private RTO s, as a first step towards ultimately negotiating a single WAI Institute Enterprise Agreement (for teaching and PACCT staff). Courses WAI s specialist youth and community programs (covering VCAL, VETiS and disengaged youth programs such as HEAT, STREAT and Charcoal Lane) will not continue without additional support. Fees

23 WAI s plan indicates that fees have been raised and notes that all on-campus courses will carry a general service fee loading at a rate of $.30 per enrolled hour. While more detail on fees is not included, the plan notes that prospective students at WAI s recent open day were generally positive about prices for Financials WAI forecasts an operating deficit of $2.12 million in 2013, noting that they have also modelled higher than anticipated reductions in training revenues, with the worst case scenario presented resulting in an operating deficit of $4.36 million in Total costs of transition are estimated at $1.64 million. Government support WAI is seeking government financial support for: Workforce change management, including retraining staff and redesign of systems, processes, policy and workflows but excluding redundancy costs ($315,000) disengaged youth programs and support for learners with a disability seed funding for a specialist regional outreach program to provide specialist programs to regional Victoria and develop (currently being scoped, with more detail to be provided over September and October) a Higher Education Regional Partnerships Program, as a collaboration between WAI, South West Institute and SuniTAFE ($203,000) the development of an English Language Centre to integrate English language training with vocational programs (business case by mid June 2013) remodelling part of their campus to establish a Provedore and refurbish the institute s student services facility ($3 million) work to develop a modern enterprise agreement, in partnership with the VTA ($280,000) financial support beyond implementation of the student management system WAI is also seeking State government policy support to apply for recognition as a University of Specialisation operating under more autonomous model of governance (under a University Act).

24 HOLMESGLEN The plan has been considered but not explicitly endorsed by the Holmesglen Board. Overall strategy: Reducing costs through reduction of courses and staff, reduction of cleaning, maintenance and other services, business system upgrades and improved internal reporting and containing capital outlays through no major capital programs over Strengthening student attraction, experience, satisfaction and revenues through strengthening customer engagement and sales strategies, developing internship and student exchange programs and raising fees. Growing the business domestically and internationally, including through a public-private partnership with a private health provider and identifying other business partnerships, acquisitions and joint ventures. Positioning Holmesglen as a distinctive education provider through co-location of an interstate university at Holmesglen, developing new training products, pursuing a new type of tertiary provider status and continuing to advocate for access to commonwealth supported places for higher education delivery Increasing legal and management autonomy to facilitate entrepreneurial activities Collaboration and structural reforms Holmesglen is interested in acquiring Swinburne University s Prahran campus. The Holmesglen plan foreshadows further work by the Board on potential acquisitions, sale and lease back of facilities and privatisation/sale of non-core profitable business units. Beyond potential acquisitions, Holmesglen s focus on collaboration is predominantly with interstate and international institutions. The focus of these partnerships is on increasing Holmesglen s pathways from higher level VET qualifications to higher education. Internationally the institute is pursuing partnerships with local VET providers and private industry in Brunei, Mongolia and Timor. Staffing changes 65 EFT teaching positions will be made redundant in EFT redundancies were actioned in June and the remaining teaching redundancies will occur before the end of In addition the institutes estimates a reduction in 25 contract and sessional teaching staff and a further 24 administrative and support staff in 2012.

25 Industrial relations Holmesglen considers that there is scope for efficiencies in salary levels of teaching staff, but indicates they will not participate in any processes within the sector or with industrial parties until there is clarity on application of wages policy and streamlining of any requisite government approval processes. Courses Holmesglen plans to cease offering some certificate courses in business and business administration, advertising, engineering and multimedia. They also intend to cease VCE delivery and diploma delivery in legal practice, advertising, interactive digital media, professional writing and ceramics. Courses such as business and finance, hospitality and sport and recreation will be delivered with higher tuition fees, but if demand is insufficient will be ceased. Ongoing viability of certificates in work and transition education for students with learning difficulties, language and literacy programs, general education programs such as VCAL and a range of apprenticeships and pre-apprenticeships will be assessed in Fees Holmesglen is planning a 102 per cent increase in tuition fees in Financials Holmesglen is forecasting an operating surplus of $951,934 in 2013 and funded surplus for both 2014 and Total restructure costs are estimated at $6.5 million. Government support Holmesglen is seeking clarification (and extension) of commercial powers for TAFE institutes including the ability to enter into commercial joint-ventures, greater freedom in investments, the ability to raise private capital and acquire private providers and any restrictions on non-tuition fees. Holmesglen is preparing advice on its preferred governance model, premised on buying out the state government s ownership of the institution and full legal and management autonomy.

26 KANGAN INSTITUTE NB: It is not clear whether the plan has been endorsed by the Kangan Board. Overall strategy: Application of lean principles to reduce corporate overheads Application of lean principles to teaching and learning to deliver quality and productivity improvements, while ceasing non-profitable courses Strengthened customer segmentation and customise products and services, supported by targeted marketing, to improve student attraction, retention, completions and satisfaction Strengthening productive collaborations and partnerships with other providers and with industry to extend delivery in areas of strength Building commercial business, in particular through VETASSESS (which undertakes assessments including migration skills assessments) and eworks (which provides an e-learning platform for public and private training organisations) Collaboration Other VET providers: Kangan have commenced discussions with Swinburne University of Technology to support the transition of their automotive students to Kangan s Automotive Centre of Excellence Kangan has also held preliminary discussions with dual sector and standalone TAFE institutes to explore partnership opportunities to leverage Kangan s strengths in automotive, fashion and textiles, aviation engineering, health and corrections education. Preliminary discussions have occurred with VU with regard to apprenticeship delivery in the north and west of Melbourne. Staffing changes positions will be made redundant across teaching and support areas. The first phase of the re-profiling project occurred between June and July, with reductions in teaching positions in course areas discontinued mid-year ongoing and 3.6 fixed term teaching positions ceased. Phase 2 is occurring over August-September involving a reduction of 21.1 ongoing and 5.1 fixed term support service staff. Phase 3 will occur over Oct-Nov based on 2013 course profile. Industrial relations Kangan intends to negotiate within the terms and conditions of the Modern Award as a first step towards ultimately negotiating a single Kangan Institute Enterprise Agreement (embracing both teaching and PACCT staff). Kangan is seeking clarification of the applicability of public sector wages policy, and in particular, a commitment to timely approval processes through government.

27 Courses Courses to be delivered in 2013 will be confirmed in November Kangan is seeking to grow its apprenticeship enrolments, enrolments and retention rates for year olds and RPL delivery. Physical infrastructure Kangan is seeking to invest $10 million from the sale of its Moreland Campus (currently in the process of being sold) in its Health Education project. Financials Kangan is seeking to maintain an average 6.5 per cent net operating surplus each year for Government support Policy changes: The Kangan plan recommends an independent review of the funding and oversight framework for vocational training in Victoria and HESG s management of government expenditure an exemption for Kangan Indigenous learners from the limit of 2 enrolments (plus foundation courses) per year reinstatement of differential student contact hour funding rates to meet the costs of maintenance and depreciation reinstatement of full-service provider funding to provide transitional support The Kangan plan also foreshadows a submission from Hume City Council and Kangan Institute, supported by local industry, to seek higher subsidies for a range of entry level qualifications. Funding support is also sought for: Rental subsidies to continue housing Kangan s aircraft at Melbourne airport to support aviation engineering training An increase in the funding base for eworks (state-wide e-learning centre of excellence) Expanding the institute s automotive industry specialism model support services for learners with a disability Capital funding for the Institute s health education project ($45 million)

28 Kangan notes that its preferred governance option is to retain its current status as a statutory corporation, with changes made to its constitution to enable smaller membership and greater autonomy. With respect to the state-subsidised student management system, Kangan notes that Kangan s participation in the project is currently under review, with the Kangan Board aiming to make a decision in September.

29 NORTHERN METROPOLITAN INSTITUTE OF TAFE (NMIT) Overall strategy: Reduce corporate overheads by streamlining administrative activity, enhancing business system functionality and improving asset utilisation. Strengthen teaching and learning capability and maintain effective student support services to maximise student attraction, retention, completion and satisfaction Grow enrolments and scale in programs that are dropped by other TAFEs and private providers, where it is economic to do so Maintain and grow offshore VET delivery in China and expand delivery of VET into other Asian markets such as South Korea, Malaysia, Vietnam and Indonesia. Seek State government support to become a Polytechnic University, either alone or as a wholly owned subsidiary of Latrobe University (see below) Collaboration NMIT has initiated discussions to merge with La Trobe University. Under the proposed model, NMIT would be run as an independent corporate entity controlled by La Trobe. NMIT would have its own board and would hold its own assets (similar to a Qantas/Jet star model). NMIT would change its corporate structure to become a Company Limited by Guarantee, with La Trobe holding a constitutional majority of votes. NMIT would be able to apply the University brand as a subsidiary of La Trobe and would be able to access La Trobe s commonwealth supported places to deliver higher education programs. Substantial further work will be required to understand the benefits and drawbacks of this model, including governance, oversight and State balance sheet implications. Staffing changes NMIT will reduce staff by up to 25 FTE at December 2013 and plan for future staff reductions of up to 75 FTE in Industrial relations NMIT will seek to negotiate teaching hours closer to the modern award, which provides for a teaching load of up to 1,165 hours (compared with hours under the current MBA). Courses NMIT is aiming grow delivery in five areas of speciality: creative arts, environment and primary industries, trades, business and community services and education pathways.

30 Fees NMIT will increase fees by a median of 50% and pursue additional revenue gains through a combination of expanded delivery and future fee increases. Physical infrastructure NMIT plans to retain all of its existing campuses, with the partial exception of Ararat. NMIT has preliminary plans to sale Jessie Street site in Preston and part of the Ararat site, with a view to reinvesting the proceeds of sale in ICT systems and building upgrades. The Board will revisit the asset plan in March 2013 NMIT has had preliminary discussions with private developers to create a student accommodation facility at the Preston campus. NMIT has also initiated a project to introduce car parking charges for staff and students across all campuses for implementation in 2013, as a means of off-setting expenditure for building maintenance. Financials NMIT expects to return to surplus on recurrent activity by 2015, having run a significant deficit in 2013 of -$8.9 million and break even in These projections are based on government support in Transition costs are estimated at $4.6 million. Government support NMIT is seeking financial support of $6 million each from the State and Federal Governments to support their progression as a Polytechnic University, investments in teaching and learning development, ICT projects and re-branding as a Polytechnic University.

31 BOX HILL Transition Plan submitted for but dependent on Board considerations and market conditions Strategy to maximise benefits of CAE partnership and reduce costs maintenance of assets will be reduced to a minimum, cross subsidisation of front line services supporting youth at risk and other innovative projects will cease, considering further outsourced provision of services, no major new institute funded investment in property, plant and equipment beyond 2013, productivity improvements Seeking to establish as a Polytechnic Tertiary Education institution, with access to CSPs and funding to support mandatory quality reporting requirements and participation in the Higher Education Participation and Partnership program Collaborations o Formal relationships with four universities Monash, Deakin, La Trobe and ACU. Proposing that redeveloped Whitehorse campus will have separate floors for university partners as part of a tertiary education precinct o Has partnerships with over 100 secondary schools Staged approach to price increases. In 2013, average price rise of 100%, ranging from zero to 593% 88 courses to be cut with a further 50 at risk (not specified) 2013 course offerings to be finalised during October Job losses in 2013 in excess of 100 EFTs (in excess of 200 staff positions) Planning for a balanced budget in 2013, returning to a surplus in 2015 Seeking government support for funding: o Transition costs of $8.3 million with $4.6 million in 2013 to cover redundancies, initiatives focussing on youth transitions, and greater investment in innovation o SMS project ($3.5 million over 5 years) - have withdrawn from project pending funding o Retention of 2011 advance funding o Feasibility studies and business cases for acquiring Box Hill Bowling Club and Wards site o Maintain VET in Schools program levels o Resources to support CAE continuing to play key role in the ACFE sector o Asset renewal and replacement redevelopment of Whitehorse campus, Stage 2 of Integrated Technology Hub ($26 million), refurbishment of 21 Degraves St ($4 million), purchase of Skilled Engineering building, development of new master plan, plant and equipment associated with Integrated Technology Hub ($4 million) o Asset maintenance ($14 million over 3 years) o Depreciation ($7.5 million per annum) o Funding for CAE committed as part of merger continuation of ACFE support funding for 2012 and 2013, holding CAE SCH funding to pre October 2011 non-metro TAFE rates, additional full service provider funding of $1 million per annum, extend ACFE support funding of $2.6 million for 3 years to 2016 o Ensure program closures as a consequence of Swinburne s closure of Lilydale campus efficiently transferred to Box Hill, including a feasibility study and business case on the viability of maintaining Lilydale campus for Box Hill Seeking policy changes: