Standing Committee on Employment, Education and Workplace Relations

Inquiry into the Role of Institutes of TAFE
Submissions

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Submission 49

National Centre for Vocational Education Research Ltd

A.C.N. 007 967 311

 

Submission to the House of Representatives Standing Committee on Employment, Education and Training on the Appropriate Roles of Institutes of Technical and Further Education

NCVER is pleased to to assist the Committee in its deliberations on the appropriate roles of Institutes of Technical and Further Education; and the extent to which those roles should overlap with universities. This submission provides background information for the Committee including information on recent trends in the demand for vocational education and the changes that are occurring in the provision of vocational education and training in Australia. The submission also discusses the differences between the vocational education and training sector and the higher education sector; relevant documentation on the capacity of the VET sector to meet the needs of its customers; and the need for all providers in the vocational education and training sector to simplify the existing system in order to customise the products and services of the sector .

1. Demand for vocational education and training

The VET sector delivers two-thirds of the highest post-school qualification gained by employed people in Australia. The sector is an important source of education and training for the nation as over 10 per cent of the population aged 15 to 64 years undertook a VET course during 1996, with participation rates in Victoria and the Northern Territory of over 12 per cent. (see table 1).

Almost a fifth (19 per cent) of the 15-24 year age group nationally undertook a VET course in 1996, with higher participation rates for males compared to females in all states.

Table 1: VET participation rates by sex and state, 15 to 64 year olds and 15 to 24 year olds

unadjusted data, 1996

15 - 64 year olds
	NSW	VIC	QLD	SA	WA	TAS	NT	ACT	AUST
Males	10.2	14.5	9.1	9.7	9.3	8.6	12.9	8.1	10.6
Females	10.7	10.6	7.5	9.6	8.3	6.7	11.7	7.3	9.6
All Persons	10.6	12.5	8.3	9.7	8.8	7.7	12.3	7.7	10.1

15 - 24 year olds
	NSW	VIC	QLD	SA	WA	TAS	NT	ACT	AUST
Males	21.3	22.7	19.3	20.3	17.2	18.0	21.6	16.5	20.7
Females	18.3	15.0	15.0	17.3	12.2	12.1	17.0	13.0	16.0
All Persons	20.1	18.9	17.2	17.8	15.7	15.2	19.4	14.8	18.5

Source: Derived using NCVER data and ABS Estimated resident population by Sex/Age, June 1996 (Cat. No. 3101.0)

The national collection of VET data is a source of information about VET courses conducted by providers that receive public funds. The collection only included TAFE and other government providers in 1994 but was expanded to include community-based providers in 1995. The collection in 1996 also includes Private Providers.

The provision of vocational education has grown in recent years. The number of clients undertaking vocational programs provided by TAFE and other government providers grew by over 5 per cent between 1994 and 1995 and by a further 2 per cent between 1995 and 1996. Annual hours provided by TAFE and other government providers grew by over 2 per cent per annum between 1994 and 1996.

Overall, the number of clients reported to be undertaking vocational courses grew by over 6 per cent between 1995 and 1996 while annual hours delivered rose around 5 per cent . A small part of the increase in client numbers from 1995 to 1996 is a result of the collection of data from private providers of publicly-funded programs.

Total demand for VET comprises students who applied for a placement and are attending a course, those who gained a placement but deferred and unmet demand (defined as whose who applied but were unable to gain a placement). Data on unmet demand for VET and higher education sectors is presented in table 2. The figures suggest that there is a greater unmet demand for VET than there is for higher education with 8.3 per cent of VET placement seekers being unable to gain a VET placement compared with 3.1 per cent of those seeking a higher education placement being unable to gain one.

Table 2: Unmet demand for each of VET and higher education: of those who applied for a placement in 1996, percentages attending, gaining, and not gaining a placement by age, Australia, May 1996

		VET*
	Attending %	Gained placement but deferred	Unable to gain placement	Total
15-19	81.6	9.2	9.2	100.0
20-24	81.7	12.7	5.5	100.0
25-64	73.2	17.7	9.2	100.0
All persons	76.8	14.9	8.3	`100.0
		Higher Education
	Attending %	Gained placement but deferred	Unable to gain placement	Total
15-19	91.6	6.1	2.3	100.0
20-24	94.9	3.0	2.1	100.0
25-64	86.1	9.7	4.3	100.0
All persons	90.1	6.8	3.1	100.0

*VET includes TAFE, business colleges, industry skills centres and other educational institutions

Source: ABS unpublished data and ABS Transition from Education to Work, cat. No. 6227.0

1.2. VET client profile

The client base of VET is underpinned by changes in labour force participation, retraining of the existing workforce in line with changing skill requirements of industry and demographic influences. Since 1990 the proportion of 15-19 year olds in the VET client base has declined from 30 per cent of all clients enrolled in vocational courses, to about 22 per cent in 1995, with a further decline to around 20 per cent of clients in 1996. Over the period 1990 to 1996, participation rates in vocational education for 15-19 year olds have remained largely unchanged at around 20 per cent.

The VET client profile by sex and age for 1995 and 1996 is presented in tables 3 and 4 respectively. Of clients who specified their gender, females comprised over half of enrolments in vocational programs.

Table 3: Client sex profile
	Vocational Programs
Sex	%1995*	%1996*
Males	49.6	48.8
Females	50.4	51.2
Total clients	454272	487062

*Percentages are based on clients who specified their gender

Source: Australian Vocational Education and Training, Statistics 1996: an overview, NCVER

The predominant age cohorts undertaking VET courses are the 15-19 year, 30-39 year, and the 20-24 year age cohorts (table 4) . This age profile indicates that VET provides for the training needs of a range of client groups including:

• school leavers and people entering the workforce for the first time;
• retraining needs of the existing workforce;
• upgrading of entry qualifications because of the gap in qualifications between new entrants to the workforce and qualifications held by older participants in the workforce; and
• upgrading the skills of people re-entering the workforce after a period away from work.

1.3. Demographic influences

Over the last decade demographic factors have impacted on both the vocational education and training sector and the higher education sector . There was almost a ten percent decline in the number of 15-19 year olds in the Australian population between 1990 and 1995 (followed by a one percent rise in the age cohort between 1995 and 1996).

Table 4: Client age profile

	Vocational Programs
Age	%1995*	%1996*
14 years and under	0.5	0.3
15-19 years	22.4	21.4
20-24 years	20.3	18.9
25-29 years	12.4	12.7
30-39 years	22.1	22.5
40-49 years	14.2	15.3
50-59 years	5.6	6.4
60-64 years	1.1	1.2
65 years or over	1.2	1.3
Total clients	454272	487062

*Percentages are based on clients for whom their age was known

Source: Australian Vocational Education and Training, Statistics 1996: an overview, NCVER

The decline in the population in these younger age groups has had serious ramifications for the higher education sector in terms of declining student numbers and associated government funding. In part, the move by universities to diversify and 'drift downwards' by introducing associate degrees is a direct response to the funding imperative brought about by the decline in the 15-19 year old population.

Because the demand for places in both the vocational education and training sector and the higher education sector are affected by changes in the national demographic profile it is useful to consider forecasts of population growth by age cohort to assess likely future demand for the sectors. Forecasts of population by age, shown in table 5, have been estimated using the Demographic Module of Econtech's Murphy Model 2 Economic Model. The model uses assumptions for age-specific fertility and mortality, and inter-state migration to project the population by sex, age and state of residence. The forecasts indicate that the number of people in the 15-19 year and 25-29 year age cohorts will increase annually over the forecast period to 2003-04. The number of 20-24 year olds will decline annually into the next decade, while the number of 30-39 year olds will remain substantially unchanged.

Table 5: Forecast annual per cent increase in the Australian population , by age

	1995-96 to 1996-97 % increase	1996-97 to 1997-98 % increase	1997-98 to 1998-99 % increase	1998-99 to 1999-2000 % increase	1999-2000 to 2000-01 % increase	2000-01 to 2001-02 % increase	1995-96 to 2002-03 % increase	1995-96 to 2003-04 % increase
14 years	1.9	0.0	0.9	-0.3	-0.8	0.7	0.8	2.0
15-19 years	1.0	1.2	1.0	1.2	0.4	0.3	0.1	0.3
20-24 years	-2.5	-1.9	-1.5	-1.0	0.3	0.7	1.1	1.0
25-29 years	3.2	1.8	0.6	-0.6	-2.4	-2.7	-2.0	-1.4
30-39 years	0.4	0.2	0.3	0.3	0.6	0.8	0.4	0.2
40-49 years	1.0	1.2	1.2	1.6	1.6	1.5	1.3	1.2
50-59 years	5.3	4.7	4.2	3.9	3.8	3.2	3.2	2.4
60-64 years	2.1	2.9	3.2	3.0	3.3	3.0	2.4	4.1
65 years or over	1.7	1.5	1.5	1.4	1.7	1.7	1.8	1.9

Source: Derived by NCVER using Demographic Forecasting Option in Econtech's Murphy Model 2 (MM2) Economic Model

2. Supply of vocational education and training

Details on the provision of vocational education over the period 1994 to 1996 are presented in table 6. Vocational education and training is provided by public TAFE institutions, by community-based providers, by enterprises, and increasingly by secondary schools.

Table 6: Provision of Vocational Education, 1994 - 1996

			Clients		Annual Hours
		1994	1995	1996	1994	1995		1996
TAFE and Other Government Providers
Vocational Programs		1043058	1098866	1117640	256100405	261886933		268491449
Program Type Unknown		73	0	0	5053	0		0
Adult and Community Education Providers
Vocational Programs		88451	173882	207102	5061813	8734298		9982660
Private Providers
Vocational Programs		N/A	N/A	29837	N/A	N/A		6574280
Total Training Activity
Vocational Programs		1131509	1272748	1354579	261162218	270621231		285048389
Program Type Unknown		73	0	0	5053	0		0

Source: Selected Vocational Education and Training Statistics, 1995; Australian Vocational Education and Training Statistics in detail 1996, NCVER

2.1 Changes to provision within the VET sector

In recent years the dominant focus of the VET sector has been on increasing the competitiveness of the training market by expanding the number and range of training providers. There has been a fundamental shift from a vocational education and training system almost exclusively focused on TAFE institutes to a more broadly conceived VET system comprising private providers in addition to TAFE institutes, with enterprises and community based providers also providing training.

Further changes to the vocational education sector in the pipeline include the opening up of the market to private providers through the User Choice policy, national recognition of the skills and qualifications of all new apprentices and trainees and the New Apprentices Scheme that aims to expand the numbers of commencing apprenticeships and traineeships (to 220,000) and the range of industries available to apprentices. Industries such as technology and communications, tourism and hospitality will be targeted in addition to the traditional trades such as manufacturing, engineering and construction.

User Choice to be introduced in the new year will allow 'the client' (defined as the employer and the employee) to negotiate with individual registered providers, both private and public, about the off-the-job component of new apprenticeships. User choice operates in a national training market not limited by State and Territory boundaries.

3. Interface between the education sectors

The interface between universities and the vocational education and training sector and between secondary schools and the vocational education and training sector accounts for only a relatively small share of each sector's activities. The overlap in activities can be conceptualised in terms of the Venn diagram shown in Figure 1. Each sector in the main has its own separate identity with the focus of VET being vocational training linking with industry needs. The overlap between the sectors occurs only at the margin.

Figure 1: Interaction between sectors

[Not reproduced]

Course enrolments in VET grew by almost 17 per cent between 1994 and 1995, and by a further 10 per cent between 1995 and 1996. This growth in the VET sector has not, however, occurred at the top end of the qualifications range ¾ the Associate and Advanced Diploma (introduced in 1995) ¾ that overlap with qualifications offered by the university sector. In 1994, Associate Diploma courses accounted for 13 per cent of all vocational course enrolments in the VET sector. The proportion of Associate and Advanced Diploma enrolments had reduced to 11 per cent by 1995, and to only 8 per cent of all vocational course enrolments by 1996. Diploma courses, which also have overlap with the university sector, have increased from less than one per cent of all vocational course enrolments in 1994, to 1.5 per cent in 1995 and to 4.5 per cent of vocational course enrolments in 1996.

3.1 VET in schools

The move by secondary schools to embrace VET courses has been propelled in the most part by the substantial funding made available recently by government. Because the initiatives have not been in operation for long only a limited amount of the research and evaluation work needed to assess the success or failure of the schemes is underway. In making its recommendations, the Committee will need to be mindful of these initiatives and note that, to date, their outcomes have not been evaluated.

3.2 VET and Universities

3.2.1 Overlap in 'middle level' courses

The overlap at the margin between the Institutes of TAFE and the Universities has largely arisen because of the demise of the Colleges of Advanced Education (CAEs). The CAEs were created to be equal but different to the universities. The original intention was for them to offer 'middle level' courses around the diploma and associate diploma level but, as we now know, there was a strong push by the CAEs into degree and higher degree courses and eventually competition with universities.

The demise of the CAEs, mainly through amalgamations with universities has some bearing on the current Inquiry as both TAFE institutes and Universities have moved to fill the 'middle level' position originally intended for the CAEs. There is, for instance, evidence on the one hand of an upward academic drift in TAFE institutes and on the other hand a downward drift in universities with their moves towards two year associate degrees. Tensions have developed between the institutes of TAFE and the universities in delivering middle level courses largely because of the autonomy enjoyed by universities ¾ particularly their powers to self-credit. The move by universities to introduce a two-year associate degree is regarded by the institutes of TAFE as unfair competition because the word 'degree' is seen by the institutes as giving universities a market edge.

While, it is understandable that there will be some overlap at the margin between the TAFE institutes and the universities in their offering of intermediate level courses it is important that the lessons learnt from the demise of the CAEs are not forgotten. It will be important for the Inquiry to decide whether this sort of competition will have any benefits for the consumers of vocational education and training.

Furthermore, the sort of repositioning involved in these upward and downward 'drifts' has the potential to neglect the needs of an important segment on the VET community ¾ those involved in apprenticeship and post-apprenticeship training, particularly in the traditional trade areas.

Another issue involved in the overlap between TAFE and the universities for 'middle level' courses is the cost difference involved for students in undertaking similar courses in the VET sector rather than the university sector. For many students, other things being equal, the option to pay HECS at a later date will be the preferred option to an upfront fee required to undertake a VET course. This cost impasse between the sectors means that TAFE institutes and universities are not competing on a level playing field.

In addition, TAFE institutes and universities are not competing on equal terms because of the different operational structures operating in the two sectors. All public universities in Australia are established as corporate entities under their own Acts of Parliament with powers to manage their own affairs. TAFE institutes, in contrast, have their fees set by government at a level which usually bears no direct relationship to cost and are not free to manage their own affairs and to compete in their own interest.

3.2.2 Complementarity between VET and universities

The main aim of the VET sector is to provide ongoing lifelong learning which includes the role of providing university graduates with vocational training and workplace skills . In recent years there has been substantial growth in the movement of students from the higher education to the VET sector (currently twice the rate of VET students moving to higher education)

There are examples where the VET sector and higher education sector co-operate through feeder programs from VET to higher education and through multi-sector campuses. In some regional areas degree students undertake part of their course at the regional TAFE institute thereby delaying the need for students to move away from the region and utilising capital and teaching resources more efficiently.

4. Issues arising from shifts in the provision of vocational education

4.1 Simplification of the qualifications system

The core products of the vocational education training sector are the qualifications attained by students successfully completing courses and the skills and competencies gained by the individuals that can be used by business to improve their productivity and contribute to Australia's overall economic competitiveness. One of the main reasons that people undertake education and obtain a qualification is to signal their abilities to potential employers. Therefore it is fundamental to the efficient working of the training market that both students and employers can interpret the qualifications and competencies attained through the vocational education and training sector and the higher education sector.

There is some evidence to suggest that VET customers are confused by the plethora of qualifications and classifications currently delivered by the VET system. The National Employer Satisfaction Survey (AGB McNair, 1996) concluded that 78 per cent of employers stated that VET qualifications do not really tell you what job skills a person has acquired. Taylor (1996) in his Review of the Australian National Training Agreement also noted that industry was critical of the complexity of the VET system and confused over the differences between programs and funding.

While the adoption of the Australian Qualifications Framework (AQF) in 1995 provided a consistent framework for the articulation of the different VET products, it does not provide an adequate basis to market those products to VET customers. Improvements in product definition and quality awareness amongst the consumers of vocational education are still necessary in order to improve the transparency of the system. The AQF qualifications that were adopted in 1995 are shown in table 7.

Table 7 Australian Qualification Framework (AQF) Qualifications:

Established in 1995

Schools sector	VET sector	Higher education sector
		Doctoral degree
		Masters degree
		Graduate Diploma
		Graduate Certificate
		Bachelor Degree
	Advanced Diploma	Advanced Diploma
	Diploma	Diploma
	Certificate IV
	Certificate III
Senior Secondary	Certificate II
Certificate of Education	Certificate I

Source: Australian Qualifications Framework Advisory Board (1996)

A first step towards improving the transparency of the system would be to reduce the number of levels in the AQF as the differences between the qualification levels are not at all clear ¾ in particular between Certificates I to IV. Moves by the university sector to introduce yet another level in the form of an Associate Degree to 'compete' with the Advanced Diploma level qualification would hinder rather than help the move towards improving the efficiency of the vocational education training market.

There is a clear need to improve the articulation between the VET sector and universities which involves improving the mechanisms for recognition of VET studies towards higher education qualifications. Full recognition and two years credit is given to associate degrees awarded by community colleges by some four-year institutions in the United States.

5 Inherent differences between institutes of technical and further education and universities

The fundamental difference between the TAFE institutes and the universities is the strong link between the TAFE institutes and the workplace. A large proportion of VET students are mature age and are already in work ¾ their motivation in undertaking courses is to upgrade their skills. Another set of VET students are apprentices or trainees, directly linked to the workplace through a contract-of-training.

Research recently undertaken by NCVER on VET in Victoria provides information on other characteristics of VET that distinguish it from other learning mediums. The project involved interviews with representatives from urban and non-urban Victoria, from a range of public and private providers, enterprises within industry, policy makers, unions and employer and industry groups. The research identified the key characteristics of VET, that distinguish it from other education mediums, to be:

• VET is competency-based, customer-focused, practical and applied.
• VET is flexible in terms of delivery mode, content and structure. A VET course could be structured as a combination of correspondence programs with on-campus short intensive sessions. Courses can be structured in off-peak work periods to meet the needs of industry and at short notice. Some TAFE institutes operate 51 weeks a year and for 7 days a week. VET providers will go to the client rather than requiring the client to go to them. VET has a developed system of entry and exit points for students with an emphasis on completion of modules rather than completion of an entire course. There is no evidence that the higher education sector provides the flexibility of TAFE.
• VET is applied and practical with VET providers targeting program packages at the specific needs of the client. A university is constrained from being flexible by existing higher education faculty profiles which are inherently curriculum outcome driven.
• VET is capable of reacting to local needs and operating an 'open-door policy' so that the needs of small as well as large companies can be met.
• VET is competitive. The principles of User Choice where public funds are allocated to the chosen provider (public or private) of the trainer or employer mean that TAFE institutes must be able to compete across state borders and within states between providers.
• VET is less institutionalised and bureaucratic than other parts of the education system so that the needs of customers across the range of service provision can be met, including the method of course delivery, course content and course structure.

6. The views of the clients of vocational education

The results of the 1995 Employer Satisfaction Survey of VET undertaken by AGB McNair provides information on how employers view the VET sector. Because only half the employers had experienced recent contact with TAFE, only 56 per cent of surveyed employers agreed that VET skills were appropriate to their needs, with about a quarter of employers responding that VET was not meeting their needs. Key results of the survey were:

• Over three-quarters of employers responded that the skills acquired through VET were meeting their current needs with only 12 per cent dissatisfied;
• two-thirds of employers were satisfied that that the VET training system is providing skills relevant to their future needs, with less than 20 per cent being dissatisfied;
• nearly three-quarters of employers indicated that training resulted in productivity gains for their enterprises, and a similar proportion were satisfied with the accessibility of training;
• less than a quarter of employers were dissatisfied with the amount of on-the-job training in courses or with the flexibility of course content.

These findings have been replicated in other studies of employers who use VET such as the Allen Consulting Group (1994) study of competitive skills for Australian enterprises.

On the down side, fewer than half of employers surveyed in the AGB McNair survey were satisfied with the flexibility of timetables and session times; only 40 per cent felt their needs were sufficiently taken into account when designing training and most employers thought more could be done to meet the training needs of small business. With the introduction of User Choice in the new year and the increase in competitiveness that has occurred across the sector since 1995 it is likely that the problems perceived by employers with VET during 1995 will have been overcome. Certainly the higher education sector is inherently less likely to be able to respond to the needs of employers identified in the survey than the VET sector (for the reasons discussed in section 5). The results of the 1997 survey of employer satisfaction with VET performance will be available later this year.

The other clients of the VET system are the individuals who undertake courses in VET. The survey of 1994 TAFE graduates throughout Australia undertaken by the ABS during 1995 found that over 80 per cent of graduates reported that they had achieved the main reason for doing their course. Over 80 per cent of graduates cited employment related reasons, such as to start a business or get a job, to get a promotion or a better job or to get new skills for their job, as the main reason for undertaking the TAFE course. Some 13 per cent cited interest or personal development and 6 per cent cited going onto other courses of study as the main reasons for VET participation. Some 73 per cent of graduates employed felt their course was highly relevant / relevant to their job, indicating a reasonably high level of satisfaction with VET products.

7. Conclusions

In conclusion, the main points that have been addressed in this submission are as follows:

• In its deliberations, the Committee should note that the changes that have taken place in the provision of VET through the opening up of the VET system to private providers and the introduction of VET into schools have been the subject of only limited research and evaluation to this point in time.
• The overlap in the activities of the VET sector and the higher education sector has come about largely as a result of the demise of the Colleges of Advanced Education, with both sectors moving upwards and downwards, respectively, to fill the vacated middle level.
• TAFE institutes and universities are not 'competing' on a level playing field for the middle level courses ¾ universities have an advantage over TAFE institutes both in terms of the perceived cost (and the timing of the cost) of courses to students as well as at an operational level as universities have been corporatised and are autonomous. TAFE colleges, by contrast, are not autonomous and cannot compete in their own interests.
• While there are some overlapping activities between the VET sector and the universities at the margin, there is a clear case for keeping TAFE and universities separate. A main role of the VET sector is in providing lifelong learning. The VET sector is focused on meeting the customers' needs and in developing skills required in the workplace. In so doing, VET provides shorter more specialised courses than are delivered through the higher education sector. In the main, TAFE customers are satisfied with the courses being delivered by TAFE.
• VET customers find the system of AQF qualifications complex and difficult to understand. There is a need to reduce the levels of the AQF, particularly between Certificate Levels 1-4. The mooted introduction of associate degrees by the universities overlapping with TAFE diplomas would only add to the existing confusion.
• There is a case for improved articulation upwards between TAFE and universities with reciprocal cross-sectoral credit transfer and recognition.

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