Training provider collapses into voluntary administration as concerns over vocational education system grow

Several large vocational education and training providers have collapsed into voluntary administration after their parent company appointed external administrators earlier this week.

Global Intellectual Holdings Pty Ltd entered voluntary administration on Tuesday, with Richard Albarran, Blair Pleash and Shahin Hussain from Hall and Chadwick appointed as external managers.

Global Intellectual Holdings is the company behind several private Australian training providers, including Aspire College of Education, The Design Works College of Design, RTO Services Group and the Australian Indigenous College, according to The Age.

At least 500 employees are expected to be affected by the collapse.

RTO Services Group, for example, operates more than 20 campuses nation-wide and offers courses in business management, community services and interactive media, according to its website.

The first meeting of creditors is scheduled for later this month in Brisbane.

Is the vocational education and training system in “crisis”?

Global Intellectual Holdings is not the only private training provider to enter voluntary administration during the past six months.

In September, Melbourne-based training provider MWT Institute was placed under external management.

In November, publicly-listed provider Vocation appointed external managers just over 12 months after it was forced to hand back almost $20 million in government funding.

The collapses come at the same time as concerns are raised over the tactics used by some private colleges to attract students, as well as the funding model for private providers.

In December, the Australian Competition and Consumer Commission initiated legal action against private education provider Empower Institute for allegedly making false and misleading representations while marketing its courses to people living in remote communities and disadvantages socio-economic areas.

On the same day, New South Wales small business minister John Barilaro flagged his concerns about the VET-FEE HELP funding scheme.

Peter Strong, chief executive of the Council of Small Business Australia, toldSmartCompany this morning the number of private training providers appointing administrators in the past few months is indicative of a “very unwell VET system”.

“This is an outcome that wouldn’t surprise a lot of people,” Strong says.

“But this doesn’t just hurt small business, it hurts the people we employ and the customers and people we service. It’s an absolute crisis. When are we going to confront it properly?”

SmartCompany contacted Hall and Chadwick for comment, but did not receive a response prior to publication.