1 Next Steps for Refocusing Vocational Training in Victoria – Supporting a Modern Workforce Presentation to VISTA Association of VET Professionals, 9 April 2013 Kym Peake, Deputy Secretary, Higher Education & Skills Group

2 Victoria’s VET system has been on a reform trajectory, to overcome the limitations of a centrally planned provision model

3 Over the past 12 months we have been implementing system-wide reforms to improve the design and operation of Victoria’s training market TAFE transition Subsidies targeted towards real job pathways Deregulation of fees Concessions and loadings for effective participation Strengthened contractual requirements for RTOs Improved monitoring of provider and market performance Redesign of industry engagement Improved information to the market Victorian Training Guarantee retained Funding directed to providers who meet quality requirements and attract students Lower subsidies for higher qualifications that deliver greater private returns, but income-contingent loans so no upfront-fees Fundamentals retained Entitlement Diversity of Providers Differentiated Subsidies Unbalanced public investment Supply-driven system Gaps in quality assurance and market oversight Government policy constraining market-driven industry restructuring Gaps addressed

4 All aimed at building a training system that supports a modern Victorian workforce Our aims for Victoria’s training market:  Helping as many people as possible to get a job  Qualifications on offer provide pathways into careers  Quality training is delivered  Business and industry has access to the skills they need  Government funding is targeted to areas of need  Public money is spent efficiently  The training system can adapt as learner and industry needs change

5 Our changes are delivering positive outcomes for Victorian learners…..

6 …including through an increase in TAFE enrolments… TAFE % change % change Government subsidised 253, , , , ,39211%7% Domestic fee-for- service 89, , , , ,87140%22% Total 342, , , , ,26318%11% Government subsidised enrolments rose by 7 per cent between 2011 and 2012 Domestic fee-for-service enrolments were up 22 per cent over the same period Government subsidised enrolments rose by 7 per cent between 2011 and 2012 Domestic fee-for-service enrolments were up 22 per cent over the same period

7 …helping to deliver skills that align with the jobs of the future Enrolments in training are aligned with the changing industry profile of the Victorian economy and labour market Since the introduction of the VTG, there has been consistent enrolment growth in specialised occupations and occupations in shortage

8 New price signals introduced in July 2012 are already having an effect on provider and student behaviour towards courses with greater public value From July 2012, five subsidy bands were introduced based on assessment of public value of courses (eg. value to the economy and cost of timing delivery). For example… Band A Apprenticeships Band A Apprenticeships Band B Foundation Skills, Cert III Aged Care Band B Foundation Skills, Cert III Aged Care Band C Diploma of Children’s Services Band C Diploma of Children’s Services Band D Diploma of Graphic Design, Events Band D Diploma of Graphic Design, Events Band E Fitness, Process Manufacturing Band E Fitness, Process Manufacturing Data from the second half of 2012 already shows positive shifts in training uptake. For example Bands A and B account for 65% of post July 2012 commencements compared with 49% pre-July

9 TAFEs begin decade administered by Dept Control transferred to TAFE Board Victoria only State to separate TAFE from Dept Performance agreements introduced Profile funding TAFEs established as self- governed statutory authorities Boards employ staff but subject to multi-party agreement Limited commercial powers Dual sector universities created Consolidation of specialist colleges into larger multi- purpose institutes Better define reporting & accountability Broader commercial powers enabled Transitional financial & capacity building support Enhanced broadband and business systems More partnerships with & diversification into ACE and higher education Smaller, skills-based Boards Clear commercial expectation & framework for operations Reclassification of dual sector universities Legacy constraints removed Structural adjustment support to build financial sustainability & competitive strengths The RVT reforms continue a long journey toward competitive neutrality and operating and commercial autonomy for TAFE’s and Dual Sector Universities Goal: Full operational and commercial autonomy Goal: Greater autonomy Goal: Separate TAFE from other education sectors Goal: Adjustment to a more competitive environment 1980s Historical Mid 1990s – 2000s Devolution 2008 – 2012 Competition 2012 – 2013 Commercial

and beyond A strong, sustainable TAFE sector Since Refocusing Vocational Training, we have been working with TAFE institutes on transition risks and opportunities May 2012 Refocusing Vocational Training in Victoria June 2012 Independent TAFE Reform Panel established September 2012 Business Transition Plans submitted December 2012 Reform Panel report provided to Government January to February 2013 Government considered the Panel’s advice March 2013 Release of Government’s response to Reform Panel’s recommendations 2013  Implementation

11 The Government’s response to the Panel’s report is an important next step in securing a strong and sustainable TAFE sector for the future The TAFE Reform Panel made 19 recommendations. The Government fully supports 12 of these recommendations, supports six in principle and does not support one.

12 Clearer accountabilities and fit for purpose governance, monitoring & reporting Supply commercial objectives to provide a clearer understanding of Government’s expectations Working with Chairs and Boards on: Modern constitutions, commercial guidelines & strategic planning guidelines Reconstituting skills-based Boards Greater control over assets, including proceeds of sale More flexible borrowing arrangements (case-by-case) A new compact defining the relationship between TAFEs and DEECD Streamlined financial reporting and providing benchmark data Ceasing separate reporting on TAFE operations of Dual Sector Universities Strategic directions Reforms Key reform directions – Commercial and Operating Autonomy

13 Removal of constraints Allowing TAFE institutes to take more control over workplace relations Removing the restriction on TAFE institutes being registered as Group Training Organisations Continuing to call on the Commonwealth Government to extend streamlined visa processing for international students Continuing to support a wide range of choices for students in higher education, including through TAFE/University partnerships, and TAFE delivery of higher education courses Strategic directions Reforms Key reform directions – Commercial and Operating Autonomy

14 Key reform directions – Strengthening Regional TAFE provision Sustainable solutions for rural and regional Victoria TAFE Reform Panel recommended integrated governance and management structures for: Hume region: Wodonga and Go TAFE Gippsland region: GippsTAFE and Advance TAFE Barwon South West region: The Gordon and South West TAFE Loddon Mallee region: Bendigo and Sunraysia While accepting greater scope and scale is required for financial security, Government will not impose amalgamations on regional institutes Rather, regional institutes will chart their own course to financial sustainability, supported by the: Appointment of independent facilitators to work across each region $150,000 for each TAFE to engage strategic advisors – either individually or on a shared basis Strategic directions Reforms

15 Structural adjustment support $200 million contestable funding over 4 years to support innovation, collaboration, structural reform and business transformation $100 million for asset solutions to support better asset utilisation and return on assets, and equip institutes to service loans and be self- sufficient in the future Focus on solutions that increase revenue, decrease costs and right- size the institute’s asset base Examples - master planning, adaptive re-use, building refurbishment and building replacements $100 million for business transformation activities, for example: Adoption of new business models Redesign of business systems and processes Self-identified structural reforms and other collaboration activities Strategic directions Reforms Key reform directions – Transitional funding support

16 5. Other recommendations of the TAFE Reform Panel Strategic directions Actions Conduct a review of the initial impact of the new market settings, focusing in particular on prices and access to training. Funding review Conduct a review, part of the whole-of-department look at youth engagement and successful transitions, and is assessing the effectiveness and efficiency of vocational pathways for senior secondary students with a particular view to resolving issues regarding funding for VET in schools. Vocational pathways review The Government will advocate to the Commonwealth to ensure that a wide range of choices for students in higher education, including through vocational training providers. The Government will also continue to push for the extension of streamlined visa processing to other appropriate settings. Advocacy to the Commonwealth

17 Questions?