LINDA SIMON. A crisis approach to reform in the VET sector

Aug 3, 2017

Many of us who write about vocational education and training (VET) are asked not to use the word ‘crisis’ as it undermines confidence in the system.  Unfortunately it will take a lot more than a change of language to restore consumer confidence, as private training providers continue their financial collapse and students are left stranded.

 In May this year, training company Careers Australia went into voluntary administration six weeks after being stripped of federal funding due to ‘dismal completion rates and aggressive recruitment practices’.  15,000 students were left stranded and 1000 staff unemployed.

Loss of federal funding has impacted on a number of private providers, with the government’s new VET Student Loans scheme halving the number of training organisations eligible for loans, as well as capping the loans.  The changes to the Student Loans scheme were brought in at the start of 2017, when the government closed down the previous VET FEE-HELP scheme, which saw costs blow out from $325 million in 2012 to $2.9 billion in 2015.

One may think at this stage that this is how a market should operate, that the quality providers will survive and those not delivering the products required or paid for by the government, will collapse.  However, there are a number of issues that make this a very problematic, one could even say critical, approach in the VET sector.

One is that the products we are referring to here are students’ lives – the young people of Australia.  Surely such a precarious market-based approach should not be applied in this case. The product they are buying and the federal government is funding, is a quality education and qualification that will lead to a job and ultimately a career.  This should not be left to the vagaries of a market.

If Careers Australia was the only training company to collapse, the case could still be made for a competitive training market, but the crisis is much larger than that.  Evocca College, like Careers Australia, also lost its accreditation under the new VET Student Loans scheme.  Evocca and Careers Australia were two of the largest private colleges taking in more than $440 million of government funds in just three years.  VET FEE-HELP data for 2015 revealed that only 1600 of Evocca’s 13,000 students completed their courses between 2013 and 2015, despite the company being paid $110,000 per graduate.  In other words, the private company was able to access significant amounts of taxpayer funds without delivering the product, ie. students completing with quality qualifications.  Evocca has also sacked hundreds of staff and closed campuses.

Non-completions is not the only issue facing some private training providers.  Sunshine Coast-based SmartCity Vocational College was deregistered by the VET regulator ASQA this year, due to it not having enough appropriately qualified trainers and assessors, and insufficient facilities.  In this case, as with others, not only did hundreds of staff lose their jobs but they also were left with unpaid annual leave and other entitlements.  When this has occurred in other industries, such as manufacturing, the government has been quick to act to attempt to protect the workers.  Why has this not happened in the VET sector?  One of the reasons is that the private VET sector is largely made up of casual and contract employees, many of whom do not have the protection of a union willing to fight for their rights.

As well as staff, hundreds of students have been stranded mid-way through courses and some with considerable debts.  Whilst many will be found places with alternative training providers and are protected under tuition assurance schemes, not all will be able to complete courses, due to the particular nature of their courses or their own requirements.  The market will have failed them and those who have been interviewed by the media have expressed their concerns that this could happen in Australia’s VET system, and their anger that they often did not know what was happening until they were informed (often by a notice on the door) that their training provider was no longer delivering education.

Despite calls from a range of organisations, including the TAFE Community Alliance, the government has failed to undertake a proper investigation or review of all the factors that have led to this crisis.  What we do know is that many of these private training companies are relatively new, being established either as a result of the availability of ‘easy-money’ through the VET FEE-HELP scheme or when the competitive training market came into being a few years previously.  We also know that this crisis is not the responsibility of one government but the responsibility of both major parties.  Often such companies have been established or supported by well-known personnel, including former Hawke government education Minister John Dawkins, who was involved in the failed Vocation company, and Scott Flavell, the former director-general of the Queensland Department of Employment and Training who helped set up Careers Australia.

The other part of this crisis is the effect of this market approach and grab for funding on the public VET provider, TAFE.  It has been caught up in trying to continue to ensure its place in the training market, and to compete with private providers on their terms.  Not only has TAFE funding been cut, but it has also had to suffer the loss of confidence in the VET sector.

As in any crisis it easy to look back and see the signposts, but one has to question all governments that failed to take notice of the number of new training organisations being established and the enormous growth in student numbers that occurred with the opening up of VET FEE-HELP.  Given this continuing crisis and the enormous loss of government revenue, one would hope that the Federal Government would want to make sure they had it right this time, and not just continue to reform and rework when another crisis point is reached.

Linda Simon has been a teacher in schools, TAFE and now at university. She currently teaches subjects relating to adult education at Charles Sturt University. She was Secretary of the TAFE Teachers Association for over fifteen years, and Federal TAFE President of the Australian Education Union for six years. Currently she is National Convenor for Women in Adult and Vocational Education (WAVE), an Executive member of AVETRA, and an organiser of the TAFE Community Alliance. She has served on the Boards of NCVER and BVET in NSW, and is an educationalist and researcher committed to equity and public education.

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