The Vocational Education and Training (VET) sector needs a vital overhaul if it is to survive a deregulated, competitive environment, a major education conference has heard.

And rogue operators need to be weeded out to ensure funding is spent efficiently.

Professor Peter Noonan

Speaking at last month’s EduTech conference in Brisbane, Professor Peter Noonan, of Victoria University, said VET was suffering from an increasing deterioration.

“Public investment is sliding and publicly funded enrolments are sliding,” Prof. Noonan said.

He said there was a need for new national VET partnerships.

“We need to look at the length of training and put more focus on assessment of outcomes and less on regulation and compliance,” Prof. Noonan said

“We need to refresh policy and funding for VET in a properly designed system,” he said.

“We need a dynamic, open, flexible and client driven system – but without allowing predatory operators to pillage the system,” he said referring to the spate of private training operators who have rorted the system.

Prof. Noonan said the public funding base of VET was being eroded and how funding was delivered was a key factor in the success of vocational training.

“If managers are always looking at the risks to funding, when will they have the time to innovate?”

Wendy Perry, Managing Director of Workforce Blueprint, told the conference a major threat to the VET sector was the rise of non-accredited training.

She said that, also, the VET sector was confused about its purpose and that it was important to balance employer and industry demands with individual aspirations.

“It makes me angry when I see $111 million spent on 117 (course) completions. It’s disgusting,” she said.

Ms Perry said Australia’s VET system was among the top three in the world and it needed to embrace 21^st Century skills and entrepreneurship.

“We need to be looking at these things as well as new discovery technology,” she told the conference.

The federal government has said it is willing to consider a wide-scale audit of training providers to weed out rorting of the $1.6 billion VET FEE-HELP loans scheme.

Massive pricing discrepancies between fee-for-service and VET FEE-HELP courses being offered by a number of registered training organisations (RTOs) have emerged in recent months, with taxpayers forking out up to 400 per cent premiums to line the pockets of training companies with government loans, many of which will never be repaid.

The deregulation of the VET FEE-HELP scheme has led to a massive increase in for-profit, private education providers and an industry-wide decline in quality.

According to the Commonwealth Education Department, just over a quarter of students who enrolled in VET FEE-HELP courses in 2011 finished within three years. Completion rates for online diplomas were extremely low, with just seven per cent of students completing their course.

The government bill for VET FEE-HELP loans blew out by $315 million in 2014 to $1.615 billion, representing 189,000 students at 254 training providers.

Modelling by the Grattan Institute estimates 40 per cent of those loans will never be repaid as those students’ income will never rise above the repayment threshold of $53,000, meaning taxpayers will wear that cost.

According to a University of Sydney study, some of Australia’s largest RTOs are raking in profit margins of more than 50 per cent from these loans.

Laurie Nowell
AMES Australia Senior Journalist