Training providers accused of just “following the money” as vocational training fails to meet industry needs

Industry groups have voiced their concerns that other states and territories will follow Victoria’s lead by rolling out student demand-driven vocational training systems, leading to an oversupply in areas like personal training and undersupply in other areas.

Victoria has curbed its voucher-style system in response to ballooning budgets and students attaining qualifications of little value to employers, but other states are set to adopt a similar model after an agreement signed with the Federal Government in March.

Jenny Lambert, director of employment, education, and training at the Australian Chamber of Commerce and Industry, told SmartCompany there was a need for national consistency in vocational training as states had “quite a bit of latitude” to interpret the system.

“We strongly advocate an industry-driven system as opposed to a demand-driven system. They used to be the same thing but now demand-driven is student-driven,” Lambert says.

“Demand-driven relies on a highly informed market making sure students are well aware of where the jobs are, if it is uncapped demand-driven you get some distortions in the market as some training providers are just following the money.

“The absolute critical issue for us is quality; if you have a contestable system you must have a well-regulated system.”

Lambert says the problem with Victoria’s entitlement demand-driven system is a range of providers providing training that is not up to industry standards.

“If necessary, in order to control costs, should be capped based on what the labour market needs,” she says.

Megan Lilly, director of education and training at the Australian Industry Group, says the business group is “very concerned” about funding reductions to vocational systems in Victoria.

“The cuts in the Victorian training system are a major concern and the job losses will be very high,” Lilly warns.

“Our concern nationally is that lessons are learnt from the Victoria reforms, whilst we think there needs to be reform nationally we need to learn lessons from Victoria.”

Lilly says better control is needed in training system to ensure high levels of quality and adequate funding.

“You can have an industry demand driven system that is the balance we would look for, you do need to meet the needs of the individual but that needs to be in the context of industry,” Lilly says.

She is calling for more targeted funding and a better public return on the expenditure.

“Some areas have receive really excessive amounts of funding given the number of jobs out there like the service skills area and recreational type programs like fitness trainers,” says Lilly.

“You need some provision in those areas but you just don’t need high levels of them.”

Andrew Rimington, senior policy manager, at the Victorian Chamber of Commerce and Industry acknowledged there were problems with the Victorian system.

“We fully supported the move to a demand led system on the basis that industry skill needs were met and training was prioritised to meet those industry demands,” he says.

“The difficulty with the current system is that it does have a focus on a student-led system, which led to the market behaviour of training providers marketing and promoting to use all sort of enticements to fund courses that didn’t necessarily address industry needs. They have been well documented as personal fitness or hobby-type courses.

“Many private providers were using cash inducements, trips to Bali, iPads and that sort of thing, seeing it as a marketing ploy to gain position in the marketplace, although that behaviour seems to have been stymied by the latest changes”.

Rimington says VECCI does not want to see the same sort of behaviour again where training providers switch to courses which offer a higher level of government assistance.

“Then we run the risk of over-supply in courses that are not where skill needs are,” he says.

Rimington says it may be too late to effect significant change to the vocational training system in Victoria but the opportunity is there for other states.

“There’s a view that these changes are now set in place, they are in the budgetary cycle, but we want to ascertain the real impact and bring the voice of industry to the government to have a frank discussion about what further modifications need to be made,” he says.