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by Peter Henneken AM BBus BA FIPAA FAICD Research Associate, TJRyan Foundation.
How relevant is the ‘entitlement model’
In 2010 the Victorian government started injecting $400M into Vocational Education and Training and offered all eligible Victorian an entitlement to a VET program. The offer was uncapped and and, of course, enrolments exploded, especially in a whole range of cheap courses, heavily promoted and mostly in areas of low demand. The ‘entitlement model’ is included as reforms and actions to be carried out in the National Partnership Agreement on Skills Reform of 2012:
improving training accessibility, affordability and depth of skills, including through the introduction of a national training entitlement and increased availability of income contingent loans.
Queensland has focused its entitlement on Level 3 certificates:
The Certificate 3 Guarantee will give Queenslanders access to a government subsidised training place, up to and including their first certificate III qualification in priority areas. Year 12 graduates will be able to enrol in fee-free priority training courses.
As can be seen there needs to be a fine balance between demand, the subsidy level and the total budget available. I have mentioned earlier the implications of higher course prices that may result. Alternative models of allocating places to students will also need a process of rationing, which may be inherently more unfair than an entitlement model.
Over the last decade and a half, VET funding on a national basis has declined per hour of contact. Over the same period Commonwealth and State VET recurrent funding on a per capita equivalent basis has fallen behind government primary school, secondary school and higher education.
The initiative of the current Commonwealth Government to fund degree and sub-degree programs in approved VET providers will allow some redirection of VET budget to Cert I to IV programs. Without commenting on their fairness, so will the extension of HECs type loans to degree and subdegree programs in VET. This does not solve the problem of ability to pay fees, at least in Queensland for Cert I to IV programs.
Mitchell highlights five reasons that the entitlement model doesn’t fit well with the VET sector:
1. The sector has spent the last 20 years saying it is industry led, not driven by the individual;
2. It assumes that students are informed consumers and able to make sound decisions. (Willox reinforces this point: ‘Basically people are burning their entitlement to training for a course that doesn’t give them a career path, and doesn’t give that person proper purpose or direction.’67);
3. It assumes that all training providers can be trusted to provide clear information about their services, i.e. the product is true to how it is described to prospective students;
4. It assumes that some students and rogue providers will not collude to pervert quality requirements. The construction white card is provided as an example, and
5. It doesn’t fit well with VET because the (Victorian) policy makers keep changing the rules. The complaint highlights the complex rules, categories of eligibility and different fee structures.
Conclusions about the entitlement model:
1. A number of the criticisms of the entitlement system are essentially criticisms of other aspects of the current VET policy settings. These include the issues around quality including consumer protection and the use of market mechanisms to purchase training. These issues have been covered in other parts of this paper and are not central to an entitlement model;
2. Information for prospective students does have to be improved;
3. There needs to be a better process to encourage providers to select students who are most likely to benefit from the course. Completion rates and placement into employment need to be KPI’s for providers and linked to funding. This would encourage better selection and career advice processes. This is of course a restriction on an entitlement and would need to be designed as part of the system guidelines. I mentioned earlier the merits of programs such as ‘Skilling Solutions Queensland’.
4. The issue of whether the system is industry led or individual led, particularly where the education and training is not part of an employment relationship has also been dealt with elsewhere in this paper. As argued earlier, more broadly-based programs will better serve learners and industry in the longer term;
5. Having said all that an entitlement system properly designed is a way of providing equitable access, to programs not part of an employment arrangement or programs that do not have a specific target. This point is subject to the impact on student fees that have resulted, and particularly the resultant effect on disadvantaged students;
6. As restrained budgets will make it difficult to provide substantially increased funds to VET, there is an urgent need for effective and fair loan arrangements, for Cert I to IV learners:
7. It may still be useful to have the option of caps for expensive programs where few people are employed and for the latest ‘fashionable’ programs.