print this pageVET experiments will come at a cost
TAFE's share of Certificate 3 Guarantee funding in the 2013-14 financial year was $63 million. That sounds like a lot of money, but according to the Minister for Education Training and Employment's response to a question on notice at the recent Estimates hearings, it was just 49.6 per cent of the total pot.
The most chilling aspect is that private providers received the remaining 50.4 per cent ($64 million actual expenditure) for delivering only 19 qualifications in the FY13/14 funding period. Only 19 qualifications were open to private providers under the first iteration of the Certificate 3 funding model, and for most of that year it was only 12; the remaining qualifications where phased in later in the year.
The current financial year sees 105 Certificate 3 and a medley of other lower qualifications up for grabs by all pre-qualified providers, as Queensland goes fully competitive. Some of these pre-qualified RTOs are interstate companies or interstate TAFE colleges. This foreshadows the marginalisation of TAFE as a provider in Queensland, in spite of the best efforts of those employed in TAFE Queensland, and threatens TAFE as the benchmark for quality provision.
The impact on quality of the marketisation of training through the introduction of private for-profit providers has been the subject of much debate over the past decade and a half. Some argue for the increased flexibility and innovation that marketisation seems to drive. Others argue that with the profit motive as the key driver, educational quality suffers. What hasn’t been examined to date is the economic impact of marketisation and competition policies.
In his recent article “Contracting out publicly funded vocational education: A transaction cost critique”, published in The Economic and Labour Relations Review, Phillip Toner of the University of Sydney draws together evidence of the effects of 15 years of contracting out training provision by government and runs it through the filter of “transaction cost economics” to see if the result is worth the price paid.
Toner points out that the move to competition is based on the 60-year-old ideas of Milton Friedman, who championed the separation of the government roles of provider and purchaser of educational services. Friedman’s argument was that private providers would increase pedagogical innovation, decrease costs and be more proactive in meeting the needs of employers and students.
However, the evidence points to different conclusions. While the market does throw up increased flexibility and innovation, it is often at the expense of adequate delivery and rigorous assessment practices. This is exacerbated by the unwitting collaboration of students and private providers to get the qualifications issued for the least cost and in the shortest time possible. Providers maximise profit at the expense of contact with students and through ensuring that failure is not an option. Students don’t complain about poor quality provision as long as they get the piece of paper quickly and cheaply.
The one provider that has no incentive to cheat the system and cut corners is TAFE. In his conclusion, Toner says: “Funding needs to be re-balanced to the public VET provider to assign the task of delivering this critical service to the organisation which has within it the least incentive and opportunity to diminish quality.”
Toner makes it clear in his analysis that he is not against markets as a mechanism for the distribution of government services, but he identifies that leaving it to the unfettered market constitutes a risk of poor provision and assessment of vocational skills that is a cost for the community and economy that is too high to pay.
Queensland is about to discover the true price of conducting broad scale social and economic experiments based on decades-old philosophical ideas that fly in the face of critical evidence.
David Terauds
TAFE Organiser
Queensland Teachers' Journal, Vol 119 No 6, 22 August 2014, p19
