Early impacts on course choice and completion of moving to student demand driven VET in Victoria

Description and objectives of the research

Australia faces a number of skill related challenges, namely skills shortages, sluggish productivity growth and low rates of labour market participation combined with an aging workforce. As outlined in Australian Government policy documents (Skilling Australia for the Future and the National Agreement for Skills and Workforce Development) a key initiative to address these challenges is reforming the vocational and education and training (VET) sector to make it more responsive to changing skill demands. The National Agreement for Skills and Workforce Development also contains ambitious targets for increasing VET completion rates.

Victoria has led the way with reforms aimed at moving to a student demand-driven model for VET. Prior to July 2009, public funding for VET was allocated directly to VET providers on a block grant basis, in part based on historical enrolments and skills forecasts. In practice this meant a cap on the overall number of publicly funded places, with a report published by the Victorian Government (2008) claiming that “approximately 27,000 students missed out on a TAFE place across Australia last year”. There may also have been course ‘mismatch’ in terms of the types of publicly funded courses available and the types of courses students wanted to enrol for. Between July 2009 and January 2011 Victoria has (incrementally) moved to a new model where funding follows the student, with no overall cap, and where providers must compete to attract students and therefore funding. Similar reforms are planned for South Australia (2012) and given the overall direction of policy in this area we can expect other states to follow in subsequent years.

Early indications are that the number of VET enrolments and the number of VET providers have both increased in Victoria and that course choice patterns have changed following the reforms (Skills Victoria, 2010). We don’t know, however, whether these patterns have continued into 2011. Neither do we know whether course choices have changed in such a way as to better fit the needs of employers. Third, we don’t know whether VET outcomes, e.g. in terms of completion rates, have improved following the reforms. These are critical in terms of assessing the success or otherwise of the reforms in meeting Australia’s skills requirements.

This project will estimate the impact of these reforms on VET course choices and course completion rates for those aged under 20 years in Victoria, all of whom are now covered by the Victorian Training Guarantee that provides an entitlement to a government subsidised training place for a VET course of their choosing. Such early estimates can provide important information for policy makers, VET providers and employers both in Victoria (e.g. to provide evidence to support fine tuning of the implementation of the reforms) and across Australia (e.g. to provide evidence to support the design of reforms for other states).

Contact: the Melbourne Institute contact for this project is Dr Duncan McVicar.

Progress

This project commenced in April 2012 with a final report to be submitted to the Department of Education, Employment and Workplace Relations in January 2013..