House of Representatives Committees

Standing Committee on Employment, Education and Workplace Relations

Inquiry into the Role of Institutes of TAFE
Submissions

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Submission 52

Monash University

 

Inquiry into the role of TAFEs

Submission to the House of Representatives Standing Committee on Employment, Education and Training

 

Prepared by the

Monash University-ACER Centre for the Economics of Education and Training 

October 1997

 

Background

1. To assist its Inquiry into the Role of TAFEs, the House of Representatives Standing Committee on Employment, Education and Training has called for submissions on:

2. In May 1997, the Victorian Minister of Tertiary Education and Training, the Hon. Phil Honeywood, initiated a Review of the Provision of Technical and Further Education (TAFE) in the Melbourne Metropolitan Area. The Review is intended to build upon recent policy and structural reforms with the aim of ensuring that the Victorian TAFE network is capable of delivering high quality vocational education and training (VET) in an efficient and effective manner well into the twenty-first century.

3.The terms of reference for the Victorian Review are:

4. As part of the process, the Ministerial Review Committee identified the need to examine research literature on institutional amalgamations, both in Australia and overseas, to ensure that it is informed about recent relevant experience.

5. Towards this end, the Ministerial Review-Committee commissioned the Monash University-ACER Centre for the Economics of Education and Training (CEET) to prepare a review and annotated bibliography of Australian and international research literature relating to institutional amalgamations in the post-secondary education and training sector during the past ten years. As requested in the project brief, the principal focus of the report is on literature dealing with:

 

Purpose

 6. The purpose of this submission is to bring some of the key findings of this research to the attention of the House of Representatives Standing Committee on Employment, Education and Training in its Inquiry into the Role of TAFEs.

 

Issues

Several issues arising from this research are noteworthy as follows.

 

Differences between TAFEs and universities

Several important differences exist between TAFEs and universities as follows: 

All of these factors have a significant impact on the nature, processes and costs of educational provision in TAFEs as compared with universities.

 

Economies of scale

7. The most recent Australian research on amalgamations in higher education suggests that most scale economies are realised in universities with 11,500 EFTSU (Heaton and Throsby 1997). Such cost savings appear to be due to scale effects rather than to changes in the scope of institutional activities (eg. Lloyd et al. 1993). Heaton and Throsby (1997) also find evidence of diseconomies of scale in large institutions (ie. more than 11,500 EFTSU).

 

Economies of scope

8. Research findings on economies of scope in higher education are contradictory. Most research suggests that large institutions can experience scale-related diseconomies when their educational profile is too broad whereas small institutions can overcome scale-related diseconomies through specialisation. Colleges of Advanced Education (CAEs) which merged with technical institutions in the 1980s experienced greater cost savings than others, due primarily to program diversification and resource flexibility (Abbott 1996).

 

Vocational education and training

9. Although research on scale economies in vocational education and training is limited, it suggests that

 

Organisational flexibility and responsiveness

10. Some of the literature suggests that a fewer number of large multi-purpose educational institutions offers the potential for greater organisational adaptability through qualitative flexibility. However, there is some emerging evidence to suggest that a larger number of smaller, specialised institutions may be provide greater numerical flexibility and responsiveness to industry and community needs in a market-oriented environment.

 

International developments

11. Large-scale processes of organisational restructuring through amalgamation are occurring in the post-secondary vocational education sectors in Finland and the Netherlands. In both cases, these processes have aimed to consolidate institutions of higher vocational education into a system of post-secondary education and training operating parallel to, and in competition with, university systems. According to the OECD, the maintenance of separate university and non-university systems appears to have been adopted as a means to enhance flexibility, diversity and responsiveness to changing industry and community needs.

12. Neither the Dutch nor Finnish experiments have involved mergers between vocational education institutes and universities, although both have attempted to raise the status of higher vocational qualifications to degree level. And both have attempted to create multi-disciplinary institutes of higher vocational education capable of providing a broad array of occupationally-relevant programs, in addition to applied research and development activities for third parties.

 

Conclusion

13. Available research on amalgamations between universities and institutes of technical education and training is somewhat inconclusive. Proposals to alter the relationship between TAFEs and universities via institutional mergers require careful consideration of a range of issues including: economies of scale and scope; the relative merits of separation versus integration with respect to vocational and academic education at a tertiary level; and issues concerning organisational flexibility and responsiveness in a market-oriented environment.

14 The Victorian Ministerial Review Committee has kindly agreed to allow Monash University to append the relevant review of research to this submission to the Inquiry into the Role of TAFEs by the House of Representatives Standing Committee on - Employment, Education and Training (see Attachment).

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