Lack of clarity around TAFE NSW’s primary purpose says Auditor

The NSW Auditor has found TAFE’s commercial purpose has “conflicted with legislated social objectives” of ensuring access by the state’s disadvantaged communities and groups. This is one of the main conclusions of a report by the NSW Audit Office into the “One TAFE” modernisation program.

The Report also notes that the TAFE Act “defines the purpose of TAFE NSW is to provide technical and further education services that meets the needs of the workforce and industry as well as ensuring access by disadvantaged communities and groups. TAFE NSW receives funding for community service obligations to cover support services for disadvantaged students.” 

CCA’s CEO, Dr Don Perlgut, comments:

“One of the best and most efficient means for TAFE NSW to achieve its social purpose is to work collaboratively with NSW not-for-profit adult and community education (ACE) providers, which last year reached more than 100,000 of the state’s vulnerable and disadvantaged vocational education and training (VET) students. This collaboration could include sharing facilities – TAFE campuses contain many tens if not hundreds of vacant classrooms and specialised facilities like commercial kitchens. Developing educational pathways would give students a clear progression from lower-level VET qualifications delivered by ACE providers to higher level qualifications run by TAFE – skills upgrading that is essential as the state emerges from the COVID recession. Sadly, neither of these two obvious initiatives are taking place,” said Dr Perlgut.

“The report was released by the Audit Office on Friday 17 December, and highlighted in a news article by Anna Patty in The Sydney Morning Herald on 28 December. The release of a report just prior to Christmas is sometimes an attempt to deflect attention from its contents,” said Dr Perlgut. 

Extracts from the Report (download PDF)


“The One TAFE NSW modernisation program was an ambitious plan to deliver on the NSW Government’s vision for TAFE NSW, while achieving ongoing savings. Several factors contributed to TAFE NSW not effectively managing the program to deliver on planned timeframes and objectives. These factors include unclear expectations of the primary role of TAFE NSW, unrealistic timeframes, undertaking a large number of complex projects concurrently, governance arrangements that were not fit-for-purpose and poor-quality data.”

Key findings:

  1. Governance arrangements to deliver on the modernisation program were not fit-for-purpose: “The role of the TAFE Commission Board was ambiguous. The Act provides for an advisory board with strictly advisory functions. But in 2016 the TAFE Commission Board was directed to act as a governing board."
  2. Commercial objectives of the program conflicted with legislated social objectives: Clearer direction around how TAFE NSW should balance the social objectives in the Act with the commercial objectives of the modernisation program would have helped TAFE NSW to set up appropriate governance arrangements to deliver the reform agenda. In addition, there was limited reporting on spending and performance of non-commercial activities. TAFE NSW regularly reported on the estimated costs of support services for disadvantaged students. However, this is not reported publicly and it does not keep track of the costs of delivering uneconomic courses or in uneconomic locations. There is no regular reporting on the outcomes achieved by these activities.
  3. Complex program within compressed timeframes increased implementation risks: “The One TAFE NSW reform was a complex program that involved merging ten TAFE institutes into one registered training organisation, moving towards corporatisation, establishing new enterprise-wide business systems, standardising courses, creating a single digital service, restructuring the back office and expanding in overseas markets. All this was expected to be completed within three years while delivering ongoing savings and maintaining service delivery.”
  1. Planning for successful delivery of the modernisation program was not effective: “The modernisation program also did not sufficiently consider whether TAFE NSW had the necessary capacity and capability to undertake many large-scale programs concurrently.”
  1. There is a lack of clarity around TAFE NSW's primary purpose: “The NSW Government expects TAFE NSW to operate on a more commercial basis while at the same time continuing to deliver on a broad range of social commitments. However, commercial and social objectives conflict with each other at times. In attempting to achieve its social commitments as a public provider of Vocational Education and Training, TAFE NSW is sometimes required to act in ways that detract from its commercial objectives. For example, the Act requires TAFE NSW to provide certain disadvantaged groups, such as people in rural areas, with access to technical and further education services. A commercial provider may find the number of learners in these areas too small to justify its presence in the region…. That said, there was no clear guidance on how to balance or prioritise these competing objectives. Without clarity as to the primary purpose of TAFE NSW, it is difficult to put in place the appropriate accountability and control arrangements to support TAFE NSW achieve its objectives.”
  1. Not all activities and projects undertaken for non-commercial purposes were funded from community service obligations: “TAFE NSW receives separate funding to support students facing disadvantage through Community Services Obligations. But this funding does not cover the costs of other non-commercial activities undertaken for social purposes, such as delivering uneconomic courses or in uneconomic locations. For example, the Connected Learning Centre business case was approved on the basis of delivering social objectives rather than a purely financial basis. Without clarity about activities undertaken for non-commercial purposes, it is difficult to know if enough funding has been set aside to cover the costs of these activities. This increases the risk that courses delivered under commercial terms are priced higher to offset the costs of services provided to pursue social objectives. Higher priced courses can hinder TAFE NSW's ability to operate successfully in a contestable market.”

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