A few dodgy private training colleges shouldn’t taint the rest

A few anecdotes about dodgy Vocational Education and Training (VET) providers doesn’t mean that the whole system is broken. The World Bank Photo Collection, CC BY-SA

Stories in the media about the cowboy enrolment and training practices of some private Vocational Education and Training (VET) providers have spurred calls for further reform to existing VET funding arrangements.

The anecdotal evidence is pretty damning. But it’s rarely a good idea to make policy on the basis of anecdotal evidence alone. There are good reasons to believe that the overall effect of allowing private providers to compete for publicly funded VET students has been more positive.

We’ve been here before. Before July 2009, the Victorian government had a VET system where it decided how many places, on what courses, and what providers (mostly TAFEs) would be publicly funded. Let’s call it VET Mark I.

It then moved to a system of uncapped student entitlements where students essentially received a taxpayer-funded voucher to put towards the cost of enrolling in any course of their choice with any provider, including private providers (VET Mark II).

At first, the mood seemed positive. But media reports of enrolment blowouts in lifestyle courses like personal training, and anecdotes of cowboy enrolment practices among some private providers, rapidly turned perceptions of these reforms negative.

In 2012, within three years of the original reforms, the (new) state government backtracked, moving to the system we have now in Victoria (and across most of Australia). Funding still follows the student, but governments have clawed back influence on student course choice by offering more generous subsidies for some courses over others (VET Mark III).

VET Mark III may well be better than VET Mark II in ensuring that students learn the skills the economy needs. But without credible evidence from proper independent evaluation, we’ll never know.

What we do know from just such an evaluation of the move from VET Mark I to VET Mark II is that, on average, when students are offered free choice among courses and providers, whether private or public, they tend to choose wisely.

The 2009 move from VET Mark I to VET Mark II in Victoria increased both the proportion of enrolments in courses in skill-shortage areas and the proportion of enrolments linked to higher-wage occupations.

The same evaluation also shows that qualification completion rates improved in Victoria as a result of increasing student choice and allowing private providers to contest the VET market.

This not only reflects the fact that completion rates tend to be higher for students enrolled with private providers, but also that completion rates increased for students enrolled with TAFEs. Increasing competition for students between VET providers can ensure quality in the system, because all providers have to up their game.

Message to policy makers: don’t panic

Policymakers concerned about cowboy practices among some private providers should take measures to stamp out such practices. Measures announced today by Assistant Training Minister Simon Birmingham are a step in the right direction.

However, when considering more fundamental reforms that may follow-on from the current Senate inquiry, the government needs to stay focused on the overall picture and not throw the baby out with the bathwater.

The best evidence we have so far suggests that VET outcomes have improved as a result of reforms increasing student choice and allowing private providers to contest the market.

We also need to improve the information available to potential VET students, providers, governments and researchers. Competition is more likely to have positive impacts where high-quality information (including provider/course-specific information and subsequent student outcomes in the workforce) is freely available to all.

Policy decisions are more likely to be sensible where they are informed by credible and timely evidence based on independent analyses, rather than made on the hoof in response to anecdotes about shocking, but perhaps atypical, provider behaviour.

Most importantly we need better information on course quality. There’s no one perfect measure here, so we should be looking at corroborating evidence across a range of measures.

Currently, the data collection required for an evidence base in VET is lacking. But it could be done and it needn’t be expensive. Until we take this step we risk making policy, if not quite in the dark, then at best in the half-light.