4 November , 2016

TAFE Crisis

By Pat Forward

Minister Simon Birmingham’s recent announcement that he will smash the “business model” of dodgy VET providers is hard to take seriously because his government’s track record on addressing the crisis in vocational education is so poor.

The language is tough – but it has no substance. There is a crisis in the vocational education sector, hardly a week passes without reports of for-profit private providers doing the wrong thing – rorting funding, ripping off students or targeting vulnerable members of our communities. Yet the crisis continues.

In recent times, successive reports have highlighted the negative consequences of market reform on the vocational education sector. The Final Report of the Review of the National Partnership Agreement on Skills Reform and the Redesigning VET FEE-HELP Discussion Paper are both scathing of the impact of VET FEE HELP on the vocational education system. The recently released Preliminary Findings Report of the Productivity Commissions Introducing Competition and Informed User Choice into Human Services: Identifying Sectors for Reform used the examples of reforms in the vocational education sector as an example of the “damaging effects” of governments introducing policy changes without adequate safeguards.

While the public debate focusses on blame for the mess that the sector is in, what underpins the confected outrage of political leaders is a steadfast refusal to admit that the bipartisan attempt to privatise TAFE in Australia has failed – even where government’s own inquiries have highlighted the failure of the reform process. It has resulted in billions of dollars wasted on courses which haven’t even been “delivered”, or the delivery of courses of such low quality, and usefulness that the reputation of the sector is in tatters.

By any measure, including the government’s own key performance criteria for the current National Agreement, privatisation of TAFE has failed.

If governments were serious about re-establishing trust in vocational education, and supporting this crucial education sector, they would restrict all government funding to TAFE institutions, and refuse to provide government funding to for-profit private providers, as the UK government has recently done.

The vocational education sector urgently needs its own independent review if it is to survive and overcome the current mess that it is in.

In the meantime, however, there are three things which really would destroy the “business models” of for-profit VET providers, and stop the rorting of the system:

  • Establishing a cost of delivery and regulating fees. No-one knows the cost of the multitude of VET courses which dodgy colleges can charge students thousands of dollars for – and for which there is no regulation of fees at all. In other words, state and federal governments are handing billions over to for-profit colleges, often in a faux “competition” for funding with TAFE colleges, having little or no idea how much the courses actually cost to deliver. This has been going on throughout VET FEE-HELP’s history and the government has refused to properly investigate the actual cost of delivery of a VET course, and to regulate fees in the sector.
  • Setting a minimum number of hours that providers have to deliver. There is no requirement for a minimum number of hours of training to be delivered, and until very recently, no requirement for any training whatsoever. As Phoenix head Ivan Brown famously said – it’s much cheaper to run a college when students don’t turn up! This has been going on throughout VET FEE-HELP’s history and the government has refused to mandate a minimum number of hours which providers must “deliver”.
  • Banning brokers. Large proportions of the government funding handed to private colleges are channelled into brokers, whose job it is to spot and sign up students. This is part of the so-called “business-model” that allows private colleges to prey on disadvantaged people, charging them in many cases twice as much as the rest of the community for courses, which are, in many cases, worthless. This has been going on throughout VET FEE HELP’s history and the government has refused to ban brokers.

Implementing these three things would smash the “business model” of shonky provider overnight. However there is no indication that the current government “review” will consider any of these common sense strategies.

If the best predictor of future behaviour is past behaviour, this next review will continue to concentrate on the blame game. Whose fault it is becomes less important as time marches on. A deep attachment to marketisation hobbles governments from making the necessary changes to the system. They will not mandate minimum hours, ban brokers or work to establish the cost of delivery and regulate fees precisely because these strategies would rapidly smash the business model of so many private providers.

Eighty-four per cent of VET FEE-HELP funds go to private for-profit providers. The bill for the scheme in 2015 was $3 billion – more than half what governments spend on recurrent VET funding, a third of which ($1.5 billion) also went to the private for-profit VET sector in 2014.

Vocational education really is big business.

And the reality is that there is no market in vocational education. There are expensive, and poorly regulated state administered schemes which incentivise entry into the sector of for-profit operators, many of which have sprung up overnight to make money out of successive governments’ ideological obsession with privatisation.

And then, on top of this, there is the scandal plagued VET FEE-HELP scheme.

The TAFE sector in Australia is being destroyed. Thousands of teachers have lost their jobs in the last five years. Thousands of young people are carrying debt – many unaware because they have nothing to show for it – no “training”, no education, no idea that the “free” course and laptop came with strings attached.

Campuses have closed across the country. Those who turn up to enrol are being turned away, or being charged, sometimes tens of thousands of dollars for courses which, only a few years ago, governments provided at modest cost through local TAFE colleges – because the value of these courses to individuals, industry and the community were certain.

Enrolments in vocational education are crashing – by 11% last year. TAFE share of government funding has fallen to 47%. And this does not count the funding going to the for-profit sector in the form of VET FEE HELP.

Not one cent of the government funding being churned into profits by the for-profit sector in VET is re-invested in education. No other sector of education allows for-profit providers access to government funding. As the TAFE sector languishes as the most poorly resourced education sector, its role in providing skilled people for industry, and well educated community members for society is unchallenged.

Despite the funding cuts, the campus closures, the loss of teachers and courses – TAFE has survived. TAFE to the general public is still the place you go for an apprenticeship; a second chance; a new beginning. While conservative governments accuse critics of the system of “talking down” TAFE; TAFE is still a respected part of communities across the country.

TAFE doesn’t have an image problem – it has a huge problem with its owners - governments - who steadfastly refuse to support it, and who turn their backs on the evidence of the failed privatisation experiment, and who, far from taking a stand against the “business models” of the for profit sector, continue to actively support billions of government dollars going to private for-profit providers.

If Minister Birmingham really wants to fix the crisis in vocational education, it is going to take much more than another “crackdown” from the Coalition. The AEU supports the call for an independent, Gonski-style review; and an outright ban on any government funding going to for-profit private providers. The conservative UK government has just done exactly this. In the meantime, three simple changes – establishing cost of delivery and regulating fees; setting minimum hours; and banning brokers would be a good first start.

Pat Forward is Federal TAFE Secretary and Deputy Federal Secretary of the Australian Education Union.