Standing Committee on Employment, Education and Workplace Relations

Inquiry into the Role of Institutes of TAFE
Submissions

This document has been scanned from the original printed submission. It may contain some errors

Submission 94

CHAMBER OF COMMERCE AND INDUSTRY
Western Australia

A submission to the House Of Representatives Standing Committee On Employment, Education And Training on:

• the appropriate roles of institutes of technical and further education; and
• the extent to which those roles should overlap with universities

JANUARY 1998

Introduction

The Chamber of Commerce and Industry of Western Australia (CCI) is the peak employer body in Australia's largest state. CCI draws its membership from every sector of industry and represents the interests of small, medium and large businesses. CCI has worked closely with Government to ensure that the needs of business are taken into account in the development of policies and has contributed significantly to reforms within the education and training system.

There is general support from CO's membership for the education and training reforms agreed through the ANTA/MINCO process by the Commonwealth and State/Territory governments during the past 18 months. An industry led outcome is critical to the successful implementation of these reforms. CCI has emphasised at all levels of Government the need for policies to focus on industry needs. Employers play an important role in setting training direction, establishing links with education and training institutions, providing training for employees, and most importantly, providing employment opportunities for the graduates of education and training programs.

The pressure to increase the range and diversity of training and skills acquisition programs is enormous. This pressure mainly stems from technological and structural changes, industry competition and workplace change. A well developed vocational education and training system is crucial to the broader micro-economic reform agenda. This pressure has influenced (and will continue to influence) the way in which education and training services are delivered.

The implementation of the agreed reforms in the vocational education and training sector will assist in the expansion of employment opportunities for all Australians and particularly for young people. In addition to the positive effect on industry productivity, the reforms promote well defined pathways from school to employment. Positioning of technical and further education (TAFE) institutions in the light of the vocational education and training reforms is an important issue which needs to be addressed as a matter of some priority.

Background

The reforms to vocational education and training will ensure the development of an open, competitive national training market. The reforms will place competitive pressures on training providers to deliver quality training, particularly structured training for apprenticeships and traineeships. Measures such as user choice, national industry and enterprise competency standards and customisation of training to suit enterprise needs will produce a responsive and flexible training system.

TAFE colleges and institutes were established to provide courses which articulate readily within the workplace and deliver the skills required by industry. The traditional trade areas and fee-for-service training provided by TAFE has in the main focused on industry needs with regard to course content (although choice and flexibility has been restricted).

But there has been a tendency for elements of TAFE to enter the credential race to get full articulation with universities or to maximise credit transfer often overlooking industry needs and the requirement for real vocational outcomes.

TAFE colleges and institutes have often found it difficult to respond quickly and flexibly to training demands. They have operated on a supply driven system where the needs of the system have been considered more important than the needs of the system's clients. Although changes have started to occur there is still a tendency for many full-time, institutional based courses to provide alternative university entrance rather than focus on the needs of industry.

The utilisation of capital assets in the TAFE system has been affected by the move to more flexible training options which cannot always be accommodated within existing facilities. The need for training diversity associated with enterprise specific skills needs has added to this problem.

Public funding for the TAFE system has been tightened. Institutes and colleges have become more reliant on other funding sources such as fee-for-service activities and tendered programs in order to remain viable. Significant variations have emerged in delivery costs for comparable training, within the TAFE system and this has added to the pressures on the system and the confusion amongst employers about the direction of vocational training.

The Roles of TAFE and Universities

The relationship between TAFE and universities may be described currently by one of the following models:

• operating as separate institutions providing programs exclusively at the TAFE or university level
• operating as separate institutions with clear articulation arrangements in place to allow free movement between programs in each sector
• operating under an alliance arrangement where parts of a TAFE program are offered in a university and/or parts of a university program are offered in a TAFE institute or college
• operating as multi-sector institutions such as Royal Melbourne Institute of Technology, Swinburne Institute of Technology and Northern Territory University, where the single institution offers university and TAFE programs

It is likely the Committee will be presented with arguments from TAFE for a continuation of either of the first three models. The supporting arguments will be that TAFE offers industry a focused, demand driven approach which will be compromised by a move to the fourth model - the multi-sector institution. The counter argument, likely to be presented by the existing multi-sector institutions and other universities that would like to move towards a multi-sector model, will be that there is a convergence of programs driven by industry needs for higher skilled workers that makes the dichotomy between TAFE and university redundant.

CCI does not favour any one of the four models over another. There are probably issues related to competition and monopolies that are raised by the establishment of multi-sector institutions that would concern CCI. However, these same issues have arisen in the TAFE system with a move to large regionally focused institutes. The introduction of a user choice approach and the next further step of introducing student vouchers will provide the necessary competition regardless of the model.

There are perceptions in industry that an increased role for universities in TAFE activities will result in a reduced influence for employers to negotiate program content, sequence and timing of training, assessment arrangements etc. The establishment of user choice arrangements in the vocational education and training sector has finally established industry's rightful place in the development and delivery of training to its employees. The involvement of universities in vocational training should not jeopardise this hardfought for industry influence.

In considering the ongoing role of TAFE and the degree of overlap between TAFE and universities, CCI advocates principles which:

• change the emphasis of the training market from a supply driven system, based on the needs of the training provider, to a system based on demand that is specifically aligned to employer and student needs-,
• encourage competition which will result in a more efficient and cost effective process while increasing employer and student options irrespective of the location of enterprises;
• diversify the supply of training and education and ensure all appointments of practitioners are merit based;
• increase the participation of employers in the training market by ensuring public funds are linked to employer needs and to provider of choice;
• integrate education and training programs with nationally recognised outcomes and standards;
• focus on training delivery models which are flexible and user friendly; and
• promote training initiatives which are enterprise focused and devoid of extensive bureaucracy.

These principles apply to all post-compulsory education and training and do not rely on the adoption of a particular structural arrangement for TAFE and/or university programs.

Although the Committee is required to consider the appropriate roles of institutes of technical and further education, it should not be overlooked that an increasing amount of public-funded vocational training is delivered by non-TAFE providers.

The competitive tendering of vocational training and the implementation of user choice will have an increasing impact on the role of TAFE institutes and colleges. Many employers will choose non-TAFE providers for apprenticeship and traineeship training.

The competitive forces which TAFE has finally been required to face must become a fixed element in the vocational training environment.

User Choice

CCI supports the full introduction of user choice. User choice in vocational education and training will encourage partnerships between industry and training providers. These partnerships will ensure effective local relationships between TAFE institutes and colleges and industry at the enterprise level.

The New Apprenticeship system will enable employers and trainees to choose a training provider and negotiate the means by which the training will be delivered. CCI supports the expansion of user choice to include all full-time vocational courses. Individuals should be able to select a registered training provider from the public or private training sector and expect the public funds allocated for the training to flow to the selected provider. The next step in the evolution of user choice is the acceptance that a student voucher system or training credit arrangement will increase competition and bring further efficiencies to the TAFE sector. A student voucher system will ensure that training needs are properly addressed by registered training providers who understand that poor performance will result in a move by students to better performing TAFE colleges, institutes or private training providers.

CCI acknowledges the progress made by State and Territory Training Authorities in agreeing on the framework for the introduction of user choice. However, CCI believes far more work is required to ensure the TAFE system becomes fully responsive to the needs of industry and individual students. CCI will maintain an interest in the implementation of user choice particularly in:

• the operation of user choice in regional areas
• the operation of user choice across state/territory boundaries and the progress towards national training market
• access to publicly funded training infrastructure (third party access)
• registration of providers, tendering processes, quality assurance and audit arrangements.

During 1997 a detailed study was undertaken by ANTA of ten selected user choice pilot projects. The results of the study and the outcomes from these projects have provided a positive picture of the benefits of user choice. Employers, community groups and individuals involved in the pilot projects are strongly committed to the user choice concept. The pilot projects also indicate that user choice has the potential to improve access and equity by encouraging greater responsiveness by training providers to the needs of disadvantaged groups.

The majority of the pilot projects were delivered by TAFE institutes and colleges and have shown how the TAFE system can respond to local level needs in a flexible way when required to.

Third Party Access

The increase in the competitiveness of the training market will pressure providers to deliver affordable and quality training. CCI supports measures which enable training providers other than TAFE to have access to publicly funded vocational training infrastructure (facilities and equipment).

Access by third parties to TAFE facilities is already being granted on commercial terms in some cases, but currently there is no general right of access. Some State Training Authorities have established a policy on third party access but a consistent approach is required which ensures industry can access the best available trainers and training equipment facilities. Third party access is appropriate where:

• access enables the training needs of employers to be better satisfied;
• duplication of existing infrastructure in uneconomical;
• denial of access would unduly restrict entry to the training market, limiting contestability and competition; and
• fair and reasonable terms are established relating to price, terms of access and related matters.

Third party access increases utilisation of facilities and maximises the return on the public funded capital investment. A market based approach to access requires the separation of the role of managing the public infrastructure from the training and service delivery role. This separation would benefit the TAFE system because the asset managers will need to maximise the rate of return on the assets and not simply manage, in a bureaucratic sense, a depreciating asset.

The market based approach to third party access also:

• places emphasis on public providers to operate as business units-
• is consistent with user choice principles;
• maximises the return on public infrastructure; and
• reduces the potential of the public provider to forego some revenue in order to maintain market advantage.

Third party access will benefit public and private providers wanting to deliver services within and across regions and will enhance the national training market concept.

Positioning TAFE's

The move to open up the training market has ensured the placement of training delivery as a commercial activity. Like private training providers, TAFE institutes and colleges must focus on the development of a business culture and conduct their activities within competitive neutrality principles. TAFE institutes and colleges must optimise funding and operate as 'business units' with much more autonomy and control over their activities. Institutes and colleges should be able to rationalise and modernise facilities to meet training demands. A separation between the management of training facilities and the purchasing of training will give institutes and colleges far greater control over local decision-making. TAFE institutes and colleges can respond to industry needs when given the autonomy to operate in a flexible way. Partnerships and alliances with industry at the local level will produce efficiencies in operation which will benefit both TAFE and its clients. The ability of institutes and colleges to respond to local needs will depend on how much central control is exerted by the State and Territory Training Authorities.

Summary

CCI supports the following initiatives:

• a demand driven training system focusing on full implementation of user choice;
• full and open competition within the training sector encompassing competitive neutrality principles;
• introduction of a simple and flexible student voucher system for vocational education and training;
• establishing TAFE institutes and colleges as flexible and responsive 'business units' operating within the vocational and education training market-,
• third party access to TAFE infrastructure and facilities based on a market approach;
• nationally consistent articulation outcomes which maximise pathways between the TAFE and the University sectors; and
• partnership arrangements between Universities and TAFE Institutes which maximise
• public funds and focus on student outcomes.

Back to top