Fit for purpose: Is the structure of Australia’s training provider market well placed for future skills needs?

Media release

18 July 2016

New analysis of the vocational education and training (VET) provider market explores whether its structure is optimal for Australia’s current and future skills needs given the distribution and demographics of the labour force, the variety and the requirement for uniform, quality training.

Research by the National Centre for Vocational Education Research (NCVER) tracks the development of the VET provider market over the last two decades in the context of significant policy changes and increased competition for government funds. It is based on training provider registration data and last year’s release of total VET activity (TVA) data.

“This report builds on NCVER’s recently released analysis ‘Making sense of TVA’ and provides an insight as to how the VET provider market has evolved over time and its present day diversity and complexity”, said Dr Craig Fowler, Managing Director, NCVER.

It finds that VET market reforms and changing funding regimes, such as the National Partnerships Agreement on Skills Reform, do not appear to have driven major changes in provider numbers comparing recent trends with registration data for the past 20 years. Over the last five years there have been fewer providers entering and exiting the system than in the preceding 10 years.

Looking at the composition of registered training providers across the sector (based on the 2014 TVA data), the analysis finds there are private providers with as many students as the largest TAFE institutes and the top 100 providers represent around 50% of the total student population.

At the other end of the scale, the data reveal about 40% (almost 2000) of all registered training providers are small, with 100 or fewer students. This presents challenges for informing ‘student choice’ and regulating such diversity with so many small to very small providers. The large number of relatively small training providers is a market structure not seen in Australia’s more consolidated higher education market and, on preliminary analysis, is different from structures in overseas economies noting the inherent difficulties in making such comparisons.

In terms of more a recent policy initiative, VET FEE-HELP, the data show that the top 20 VET FEE-HELP approved providers covered over 75% of all loans in 2014 with 19 of these registered prior to the introduction of the scheme. This indicates most VET FEE-HELP activity growth occurred in established providers.

“As future releases of TVA data and further research based on this vital dataset are published, a more complete view of the sector will emerge about provider size, output and training quality within and across different provider types”, said Dr Fowler.

Copies of VET provider market structures: history, growth and change, are available from www.ncver.edu.au/publications/2871.html.

This work has been produced by NCVER on behalf of the Australian Government and state and territory governments, with funding provided through the Department of Education and Training.

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