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Final VET Sector Report

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Final VET Sector Report IN THE SAME SENTENCE Bringing higher and vocational education together David Gonski AC and Peter Shergold AC MARCH 2021 Publication date March 2021 Contact for enquiries [email protected] Contents Introduction 3 1. A new tertiary institution 9 2. Careers guidance for all 17 3. Making vocational education and training attractive and accessible to secondary school students 23 4. Improve the level and quality of engagement with industry 31 5. Income -contingent loans for VET 37 Conclusion 40 Endnotes 41 APPENDIX A: Terms of Reference 43 APPENDIX B: Stakeholder consultation 45 APPENDIX C: Abbreviations and acronyms 47 APPENDIX D: Supporting evidence 48 APPENDIX E: Bibliography 56 In the same sentence: Bringing higher and vocational education together 1 Introduction Earlier this year the NSW Government asked us to examine vocational education and training (VET) in NSW. We were asked to provide advice on how the state’s VET system could best address ongoing and emerging skills shortages, paying particular regard to its quality, efciency and structural complexity. It was indicated that we should consider how to integrate secondary, vocational and higher education learning opportunities, how to re-imagine industry engagement and how to improve career advice to support lifelong learning. It was also suggested that we should seek to understand any negative public perceptions of VET. The request refects the NSW Government view considering the context of COVID-19, which that an efective and sustainable VET sector is presents a pressing need for a VET sector crucial for providing the skilled workforce needed equipped to support a strong NSW economy. We for a strong NSW economy. We were asked to have considered how the VET sector can aid the identify the challenges that currently adversely COVID-19 recovery by ensuring NSW can efectively impact the ability of the sector to efectively play respond to skills shortages and help workers upskill this role. and reskill in response to changing demand. In line with our terms of reference, we have considered the fndings and recommendations from The challenge a wide range of recent state and Commonwealth reviews. We have consulted educational and VET funding in NSW is signifcant. In 2020–21, industry experts individually and collectively. We total recurrent investment in the NSW VET sector have also met with other key stakeholders. was $2.7 billion. That investment refects the signifcant role of VET in meeting future skill needs As requested, we have identifed underlying and enhancing the productivity of the NSW labour challenges to the VET sector in NSW and made a market. Yet the sector faces signifcant challenges select but far-reaching set of recommendations in deriving maximum returns on that investment. on how they might be addressed. This involved In the same sentence: Bringing higher and vocational education together 3 1. The uptake of VET is declining. have limited uptake. Of the Certifcate I to Fewer students are participating in VET. In 2001, Advanced Diploma qualifcations with at least one 188,943 people were undertaking technical or enrolment in NSW in 2019, 208 had fewer than 10 6 further education in NSW. By 2016 this number enrolments. Rationalisation is necessary. had dropped to 144,103.1 That trend is continuing. 6. Australian employers are becoming less 2. There has been a signifcant shift in satisfed with the quality of VET. student numbers from vocational Satisfaction among employers in NSW who use to higher education. vocational qualifcations as a job requirement There has been a generational shift in the relative has fallen from 85.9 per cent in 2011 to 74.5 per attractiveness of universities. In 2001 there were cent in 2019; satisfaction among employers with 1.2 higher education students for each technical apprentices has declined from 84.4 per cent to education student in NSW. By 2016 this fgure had 78.6 per cent; satisfaction among employers using risen to 2.6.2 This trend, too, is continuing. nationally recognised training has decreased from 89.4 per cent to 79.1 per cent; and satisfaction 3. Despite this, forecasts suggest that there among employers using non-accredited training 7 will continue to be a signifcant number of has dropped from 96.5 per cent to 86.1 per cent. jobs that require trade and technical skills. The most common reasons for employer The NSW Skills List indicates continued shortages dissatisfaction are the perceived poor quality of of workers for jobs that require certifcated training, the irrelevance or outdatedness of skills vocational qualifcations. Many of these have been taught, and VET’s inadequate focus on practical flled previously by the large-scale permanent and workplace skills. It is vital that these concerns temporary migration of skilled workers.3 Given the are addressed. global pandemic, this fow of skills from overseas is likely to decline in the short to medium-term. 7. Large numbers of those undertaking tertiary education either fail to complete Already, NSW has a higher overall skills shortage their qualifcation or take many years to than either Queensland or Victoria. It is estimated do so. that, pre–COVID-19, there were more than 30 skills shortage areas in NSW.4 Many of these are in Around half of VET students fail to complete. the trades. Overall, 47.5 per cent of those who participate in vocational education in NSW fail to fnish 4. Career advice, guidance and support their course.8 is inadequate. Non-completion is also an issue for higher Information on labour market demand is hard to education. Around a third of those who participate interpret. The 2019 Joyce Review, Strengthening in higher education in NSW fail to complete their Skills5, found that: course. Nationally, only 62.4 per cent of Bachelor students who began their course in 2014 had “[a]lthough a great deal of information is completed it by 2019. In NSW the fgures range published, it is fragmented across diferent from 80.4 per cent (University of New South Wales) websites, it is not always complete and is to 47.2 per cent (University of New England).9 difcult to navigate… It is difcult to fnd reliable information.” 8. Funding and fee arrangements are biased Little help is available. Too few people entering against VET in favour of higher education. the labour market, upgrading skills or changing The recent NSW Productivity Commission Green occupations are able to receive professional Paper, which emphasised how the state economy support to make informed career decisions. would beneft from a more ft-for-purpose and responsive VET sector, identifed that at present, 5. While a wide range of VET courses are on “funding and fee arrangements are biased against ofer, many are not attractive to students. VET in favour of higher education.”10 There are 1,400 VET qualifcations (and 17,000 Students can receive an income-contingent units of competency) across Australia, around loan for any Bachelor’s degree course from a half of which are government-subsidised. Many 4 In the same sentence: Bringing higher and vocational education together public university for the full cost of the course. By contrast, income-contingent loans are only SNAPSHOT available for diploma or higher level VET courses, with a cap on the loan amount and a 20 per cent loan fee for many students. This contributes to a sub-optimal distribution of students between the VET and higher education sectors. The uptake of VET is declining 2001 2016 The reform process A number of recent reviews have highlighted 188,943 144,103 deep-seated problems in Australia’s delivery of vocational education and training. These have emphasised the need to integrate it better with Of the Certifcate I higher education. to Advanced Diploma Already, NSW has introduced a range of reforms. qualifcations in NSW The government has recognised that the 1,400 in 2019 success of these new initiatives is fundamental VET qualifcations to achieving one of the key goals of its 2040 208 Economic Blueprint, which is to increase skill had fewer than levels and productivity, particularly in the state’s 10 enrolments. high-growth industries. Signifcant progress is taking place to lift performance. Satisfaction among employers in NSW who use TAFE NSW is being put on a sounder fnancial vocational qualifcations as a job requirement footing through controlling expenses and addressing declining revenues. The One TAFE 2011 2019 operating model is simplifying management structures and improving asset management. This has been accompanied by an expansion of online delivery models and greater emphasis on workplace-based delivery. From the start of 2019, TAFE NSW has operated as a single Registered 85.9% 74.5% Training Organisation (RTO). Meanwhile, the introduction of the Smart and Skilled program in 2015 has provided a much- needed overhaul of the NSW VET system through Most common reasons for its provision of targeted government-subsidised training entitlements. It is a demand-driven and employer dissatisfaction are: contestable funding model. It has increased • the perceived poor quality industry-focused training participation, particularly of training, for disadvantaged students, and is creating a • the irrelevance or outdatedness competitive market. of skills taught, and More recently, the government has updated its • VET’s inadequate focus on legislation to improve the state’s apprenticeship practical workplace skills and traineeship system. The Apprenticeship and Traineeship Act 2001 was amended in 2017. As a consequence, safeguards have been introduced for employers, apprentices and trainees. Key processes are being simplifed and red tape is being removed. Levels of subsidy have been increased. NSW 2. The inadequacy of career information currently has a commitment to provide up to and guidance. 170,000 fee-free apprenticeships or traineeships.
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