In late August I attended the conference of the Australian Council for Private Education and Training (ACPET), the national peak body that represents the private for-profit vocational education and training (VET) registered training organisations (RTOs). Some 390 attendees travelled to cool Hobart, although I appeared to be the only person from the community education sector, along with a couple of not-for-profit organisation representatives. It was, thus, a strong representation from the private training sector, with a sprinkling of government policy makers and businesses that service the VET sectors.
Two major themes emerged. The first is the growing importance of international education, underscored by a report in this morning’s Sydney Morning Herald that international education now represents $7 billion/year to the economy of New South Wales. International education has “surged ahead of tourism to become NSW's highest service export industry by nearly $2 billion, and the number of overseas students at the state's universities has grown by more than 30,000 over two years”, according to the NSW Department of Industry.
From the community education perspective, however, the second emerging theme was far more significant: an at times anguished discussion about the bad public relations that private for-profit RTOs are receiving, with the collapse of certain RTOs and the abominable state of VET FEE-HELP abuses.
The pattern for this discussion was set at the opening keynote address by Senator the Hon Simon Birmingham, the Minister for Education and Training. His speech has been widely reported and is worthwhile reading his exact words.
Minister Birmingham noted that, of “the around 220 VET FEE-HELP providers that have chosen ACPET for their tuition insurance, 19 are currently subject to VET FEE-HELP audits for compliance or payment concerns.” My observation is that percentage – 8.6% – is a pretty high number, making it hard to argue that it is only a select few for-profit providers that are ripping off the system.
On this theme, the comments by three other speakers are worth noting:
Professor Peter Noonan (who spoke to the CCA Victorian CEOs some months ago) talked bluntly about the challenges of the for-profit VET sector and made two points that are worth remembering (not been noted in the media):
1. He compared the numerous for-profit VET sector consumer abuses to the situation of greyhound racing in NSW (for those outside of NSW who have not been following it, the NSW Government is in the process of eliminating the industry in that state). He made the point that three years ago nobody would have predicted that the NSW Government would move to ban greyhound racing, but yet it is. The Government did so after numerous warnings that went unheeded. His point was clear: the for-profit VET sector needs to pay attention and clean up its own act.
2. He specifically pointed to the recent “Sainsbury Report” on VET in the United Kingdom, that Gavin Moodie has highlighted, and made the point that although he (Noonan) was not certain which direction this recommendation would go in the UK, providers in Australia needed to be aware of it. That report (recommendation 33, page 68) notes that:
"Given what appears to be the highly unusual nature of this (funding to the private sector) arrangement compared to other countries and the high costs associated with offering world-class technical education, we see a strong case for public funding for education and training to be restricted to institutions where surpluses are reinvested into the country’s education infrastructure."
This is not just about VET FEE-HELP but government funding generally, and the increasingly widespread perception that a great deal of government funding to private for-profit providers is not providing value or quality. You can also read Noonan’s recent article in “The Conversation” here.
Denise Boyd, Director of Policy & Campaigns, Consumer Action Law Centre gave a hard-hitting address on consumer concerns in the for-profit VET sector. She concluded that the sector needed to create a VET Industry Ombudsman, and reflected similar concerns as Noonan: If the industry does not clean itself up, the Commonwealth Government will come in and do it, and when the Government does that, there are likely to be a number of unintended consequences (the last phrase is mine, not hers). You can read submissions from the Consumer Action Law Centre that detail their approach to the private for-profit VET sector here.
Jonathan Chew from the Nous Group (which has completed a number of significant projects for NSW Department of Industry) gave a more measured presentation, but made similar points, including:
- There is evidence that VET has achieved two things: a shift towards private RTOs and an increase in participation.
- We have achieved an increase in contestability, but not the benefits of contestability? There is more choice, but there was already a great deal of choice to begin with.
- The biggest disappointment has been the absence of substantial innovation, which is hard to measure. There has been a rush to online delivery in VET FEE-HELP.
- There needs to be a shift from the focus on contestability to an emphasis on system reform.
I conclude that there is now a powerful emerging public consensus: the “market contestability” of Australian VET has contributed to a flawed system that needs a number of fixes. For one, Australia needs to look to the Sainsbury Report (pp. 67-68), which went on to state:
"Ideally, all publicly-subsidised technical education – notably college-based courses and the off- the-job component of apprenticeships – should be delivered under not-for-profit arrangements. This means delivery in a dedicated not-for-profit educational institution, such as a college or university, in a bespoke training centre established by an employer to train its own employees (or those in its supply chain companies), or in a private or third sector training provider where any surplus is reinvested rather than taken as profit."