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Concern for VET recurrent funding Speakers at an education conference in Melbourne last month expressed concern about the outlook for the recurrent funding of Australia’s VET sector. In a presentation to the Centre for the Economics of Education and Training (CEET) annual national conference Peter Noonan an Associate of CEET and Gerald Burke, a former director, provided an update to a 2005 CEET paper on VET funding that had noted a relative decline in recurrent VET funding compared to schools and higher education. According to Noonan and Burke the relative decline appears to be a continuing one. The speakers cautioned that analysis of funding involves complex and different sets of data, which makes it difficult to make comparisons across the sectors. Data in the Annual National Report on the VET system last year showed that public funding per hour of publicly provided training had fallen 8.5 per cent in real terms in the years 2003 to 2007. Estimates based on NCVER data showed that between 2004 and 2008 the VET sector has experienced a three per cent rise in real income from the Commonwealth but a two per cent drop in income received from states. The Commonwealth’s contribution to VET has continued to rise under the Rudd government especially through the Productivity Places Program, through the very large infrastructure funding associated with the economic stimulus, and improvements to student assistance affecting all sectors. However it is difficult to see that the decline in recurrent funding per hour of training in VET is to be stemmed. Efficiencies can be made in the delivery of training but there is a danger that the quality of staff and delivery will be affected by a continuing decline in real funding per student. On the other hand, the higher education sector is about to enter a period of increased funding and growth through demand-driven funding arrangements, extra finance for low SES students, performance related funding, and better indexation. The higher education sector has been operating at lower real funding per student than in the 1990s and the new developments are not likely to restore the earlier levels but it is a much stronger outlook than for the VET sector. Current Commonwealth/State agreements around VET expenditure do not require specific financial commitments from the states in exchange for additional Commonwealth funding and with most states facing considerable financial constraints due to the economic downturn, they are unlikely to increase funding to the VET sector. Noonan told conference delegates that he anticipates a difficult outlook for TAFE recurrent funding due to the current fiscal situation of most states, except in Victoria which has announced increases in VET funding under its Skills Reforms. There has been considerable growth in private revenue to the TAFE sector but it is much smaller than that attracted by higher education institutions. Burke and Noonan indicated that differences in funding arrangements have several implications for the broader tertiary sector including student choice of institutions, particularly if upfront TAFE fees increase. It is also likely that major differences will emerge between the states. The funding arrangements could prove relatively advantageous to institutions able to offer both higher education and VET courses. The expanded funds for higher education money are with minor exceptions available to public providers and not to private providers which now include several TAFE institutes. “This is an anomaly to be explored; that some institutions are able to play in both markets –higher education and VET – while others can only play in one,” Burke said. Ongoing developments in the broader tertiary sector will be the subject of further CEET research during 2010. CEET is a joint venture of Monash University (Faculty of Education and Faculty of Business and Economics) and the Australian Council for Educational Research (ACER). CEET is a research centre that focuses on the role of education and training in economic and social change. The thirteenth annual CEET National Conference took place at Ascot House, Ascot Vale, Melbourne on 30 October attended by more than 50 delegates. Presentations from the conference are available from http://www.education.monash.edu.au/centres/ceet/publications/conferencepapers/2009.html This article was first published in Campus Review « Back to eNews
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Speakers at an education conference in Melbourne last month expressed concern about the outlook for the recurrent funding of Australia’s VET sector.

In a presentation to the Centre for the Economics of Education and Training (CEET) annual national conference Peter Noonan an Associate of CEET and Gerald Burke, a former director, provided an update to a 2005 CEET paper on VET funding that had noted a relative decline in recurrent VET funding compared to schools and higher education.

According to Noonan and Burke the relative decline appears to be a continuing one.

The speakers cautioned that analysis of funding involves complex and different sets of data, which makes it difficult to make comparisons across the sectors.

Data in the Annual National Report on the VET system last year showed that public funding per hour of publicly provided training had fallen 8.5 per cent in real terms in the years 2003 to 2007.

Estimates based on NCVER data showed that between 2004 and 2008 the VET sector has experienced a three per cent rise in real income from the Commonwealth but a two per cent drop in income received from states.

The Commonwealth’s contribution to VET has continued to rise under the Rudd government especially through the Productivity Places Program, through the very large infrastructure funding associated with the economic stimulus, and improvements to student assistance affecting all sectors.

However it is difficult to see that the decline in recurrent funding per hour of training in VET is to be stemmed. Efficiencies can be made in the delivery of training but there is a danger that the quality of staff and delivery will be affected by a continuing decline in real funding per student.

On the other hand, the higher education sector is about to enter a period of increased funding and growth through demand-driven funding arrangements, extra finance for low SES students, performance related funding, and better indexation.

The higher education sector has been operating at lower real funding per student than in the 1990s and the new developments are not likely to restore the earlier levels but it is a much stronger outlook than for the VET sector.

Current Commonwealth/State agreements around VET expenditure do not require specific financial commitments from the states in exchange for additional Commonwealth funding and with most states facing considerable financial constraints due to the economic downturn, they are unlikely to increase funding to the VET sector.

Noonan told conference delegates that he anticipates a difficult outlook for TAFE recurrent funding due to the current fiscal situation of most states, except in Victoria which has announced increases in VET funding under its Skills Reforms.

There has been considerable growth in private revenue to the TAFE sector but it is much smaller than that attracted by higher education institutions.

Burke and Noonan indicated that differences in funding arrangements have several implications for the broader tertiary sector including student choice of institutions, particularly if upfront TAFE fees increase. It is also likely that major differences will emerge between the states.

The funding arrangements could prove relatively advantageous to institutions able to offer both higher education and VET courses. The expanded funds for higher education money are with minor exceptions available to public providers and not to private providers which now include several TAFE institutes.

“This is an anomaly to be explored; that some institutions are able to play in both markets –higher education and VET – while others can only play in one,” Burke said.

Ongoing developments in the broader tertiary sector will be the subject of further CEET research during 2010.

CEET is a joint venture of Monash University (Faculty of Education and Faculty of Business and Economics) and the Australian Council for Educational Research (ACER). CEET is a research centre that focuses on the role of education and training in economic and social change.

The thirteenth annual CEET National Conference took place at Ascot House, Ascot Vale, Melbourne on 30 October attended by more than 50 delegates. Presentations from the conference are available from http://www.education.monash.edu.au/centres/ceet/publications/conferencepapers/2009.html

This article was first published in Campus Review

Concern for VET recurrent funding