Representing quality private education
providers in Australia

It may be boring – but do we really understand our industry?

Monday, April 10 2017

This week will see the announcement of successful VSL providers from 1 July 2017. With the enormous tumult already being experienced in the industry, one can only approach the announcements with a combination of hope and anxiety.

While many seem to command strong views on private providers and their performance, who really are they? Beyond the hyperbole, who and what makes up the sector?

We will certainly be able to provide a contemporary snapshot of the industry’s profile with the release of the 2016 TVA data that is expected to be released mid-year.

However, commissioned analysis of 2014 Total VET Activity (TVA), undertaken by NCVER provides some insight for now.

Why now? Well, enormous damage has been and continues to be done to the reputation of the sector, and yet when you test the knowledge of many there seems to be a low level of understanding of how it all ticks.

What any cut of the data shows is the sheer diversity of providers, and what is now the predominant role of private providers with 2,557 providers reporting accredited training.

So perhaps that is the first myth. We often here about the 5000 odd providers, but in reality there are around 2500 delivering skills for the future.

However, it is their diversity that surprises.

Much of the hype has been about the fast growth of big corporates.

Well, that is myth 2 - the size  of providers is better reflected in the student range of 1 to 104,581.

Private providers have average student enrolments of 819 with the median number being much lower at 204. In comparison, TAFEs have average student enrolments of 19,577 and a median of 16,661.  

Note: Some providers report data under multiple types, so the number of providers may differ from that reported in other publications. Students were also counted in each provider type in which they train.
Source: NCVER (2014).

When one unpacks this further, the numbers are dominated by smaller private providers. Of the 2,557 providers, 2102 had 1,000 or less students (82% of total).
Just under half of these (904) had 100 students or less.

Number of providers by size band, 2014

Note:  Some providers report data under multiple types, so the number of providers may differ from that reported in other publications.
Source: NCVER (2014).

I think what this tells you is that the strength of the private sector is not in the one-size-fits-all tag. Innovation and flexibility actually stem from the range of niche specialised providers up to those with large scope. This is a real advantage.

It will be worth considering the comparable 2016 data (when available) to understand the impact of program changes of recent times.

Overall, this enrolment pattern is not dissimilar to that of the private higher education providers where around half (49) had 100-1,000 students and a significant number (19) reported less than 100 students in 2015. What is different is the sheer number of small and very small VET providers.

One of the fears for the future is that the changing approaches from regulators and funders will impact disproportionately on smaller providers. This would provide some challenges in producing the skills and knowledge required for the future.

Why I hear you ask – surely bigger is better?

Let’s touch on the views of employers from a few weeks ago.

NCVER research shows employers undertake training to improve the quality of products and services, to respond to new technologies and meet regulatory requirements (such as workplace health and safety) – important indeed. There is also an increasing focus on flexibility, including through the delivery of skill sets over qualifications.

Again, in a plea to underpin decisions with evidence, employers indicate 80.0% satisfaction with private providers, 83.6% with industry and professional associations and 66.1% with TAFE.

The private sector performs well through understanding business needs, government funding availability and building trust. The other key factors identified are the flexibility of providers to alter delivery methods and to customize content.

It is also worth noting that over half of employer respondents rely on providers for their advice on recognise training.

So, what is all this about? The headline message is that employers are very satisfied (80.0%) with the training delivered by private providers, their flexibility and diversity and use providers increasingly to navigate the system.

In what was once an industry led system – let’s hope decisions don’t inhibit the need for this flexibility.

While the VFH issues have brought stronger regulatory and contract management responses, the data shows we need to be careful about getting the balance right and that changes don’t kill off innovation.

By all means we must constantly weed out the poor performers and must set and demand high performance standards.

But we need better information and transparency to guide both student decisions and those of policy makers. Yes, this should be a key focus of a National Data ReviewWe need a strong commitment to skills development, led by and reflected in a renewed National Partnership.

We also need a national system and for States and Territories to reinvest in the sector.

That would be a nice start.

Rod Camm


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