What Will VET Funding Look Like in 2019?

Funding within the Vocational Education and Training (VET) sector has kept the system ticking for many years. It has also been the cause of embarrassment to the industry, plus there is a running debate as to whether VET is the, “left out middle child” of the eduction sector.

The shakeup that happened in 2017, which included the scrapping of VET FEE-HELP and the commencement of the Student Centred Audit Approach, seems to have sifted out the bad from the good. Even though there are still challenging times ahead for Registered Training Organisations (RTOs) to maintain their licences, including the mandate for all Trainers and Assessors to meet the new requirements of the TAE 40116 Certificate IV in Training and Assessment by April 2019, there’s still a buzz in the industry. 

Has the shakeup been enough and what does VET funding look like now for RTOs…

Why is there funding?

While we can’t completely predict the future of work, the government engages with industry to ensure a community of skilled people for the jobs that exist now and into the proceeding years. Transferable skills that can be taken from job to job and in some cases across industry. For this reason, public and other funding models are used to inject interest into these significant sectors.

In 2017, states, territories and the Commonwealth spent $6.1 billion on VET. Of this, $4.6 billion went directly to RTOs for VET delivery. Some argue that this is still not enough to ensure a robust and highly skilled workforce. The Mitchell Institute highlights the discrepancy between the funding of each education sector below.

Where is the funding?

1. Directly to the student

VET Student Loan (VSL) program

The Australian Government’s VSL program commenced from 1 January 2017, replacing the “VET FEE-HELP” scheme. All grandfather agreements for this have now expired.

In an interview last year, Senator Hon Simon Birmingham stated, “Policy decisions taken prior to 2013 had set education on a path of limitless, ballooning, poorly structured spending with little consideration to the quality of that investment. The … new VET Students Loans program sets a higher bar of entry to training providers, limits loans to courses with strong industry links and employment outcomes, and caps the amount that students can borrow to stop the blow-out in fees.”

In essence, the VSL scheme is a highly regulated lending scheme that spells out to the students that it is a loan. RTOs have to apply to be a VSL course provider.

To become an approved course provider you need to keep up to date with when the application rounds take place. At present, the next round is likely to be in August 2019.

If you would like to apply, you need to ensure you have checked that the course you are delivering is on the approved course list.

The following table is taken from NCVER and shows, the top 10 training packages supported by VET Student Loans are shown below. The Health training package had the highest loan value in 2017, with $114.5 million.

The VET Student Loans Act 2016 and the VET Student Loans Rules 2016, set out the requirements that must be met for an organisation to be approved as an approved course provider for the VSL program.

2. In Tasmania

2019 Apprentice and Trainee Training Fund (User Choice)is now open to RTOs who wish to offer Fund-subsidised places to apprentices and trainees who commence training in 2019. 

3. In Queensland

The Queensland Government provides targeted investment through a number of different VET investment programs. 

RTOs must be pre-approved by the department as a pre-qualified supplier (PQS) to deliver training and assessment services. Read more on becoming a PQS.

Becoming a PQS means greater performance monitoring and evaluation including achieving a minimum outcome for students.

Programs Available include:

• User Choice

The User Choice program is a public funding contribution towards the cost of training and assessment services for eligible Queensland apprentices and trainees.

Planned to be providing funds until 2020 the program recognises that employment based training aligned to skills shortages is a critical priority for the Queensland Government.

The investments cover the following fields:

• Apprenticeship and Traineeship training
• Foundation skills training
• Industry pre-apprenticeship programs
• Registered trade skills pathway
• Trade skills assessment and gap training

Certificate 3 Guarantee

The Certificate 3 Guarantee provides a government subsidy to allow eligible Queenslanders to obtain their first post-school certificate III qualification.

Higher Level Skills Fund

The Higher Level Skills program provides a government subsidy to help individuals gain the higher level skills and qualifications required to secure employment or career advancement in a priority industry or to transition to university.

Skilling Queenslanders for Work

RTOs with PQS status can partner with funded community-based organisations to deliver components of Skilling Queenslanders for Work projects through the following training and skills programs:

• Community Work Skills
• Work Skills Traineeships
• Get Set for Work
• Youth Skills

Regional Skills Investment Strategy (RSIS)

This is a $9 million initiative that supports some regional communities to identify current and emerging jobs in key industries and ensure sufficient supply of skilled local people to meet this demand. Where the training to be provided is nationally recognised, the RSIS project will link with an approved PQS to access subsidies already available under the Annual VET Investment Plan.

Other funding and incentives

Information on funding and incentives available for employers for training, including from the Australian Government and industry groups.

In addition to receiving funding through the programs above as a PQS your RTO can also apply for Skills Disability Support (SDS). This is a scheme whereby specialised technology and support services are supplied to assist learners with disability to gain nationally recognised skills and qualifications.

4. LLN

The Skills for Education and Employment (SEE) program provides language, literacy and numeracy training to eligible job seekers, to help them to participate more effectively in training or in the labour force. The program is delivered across Australia, from metropolitan and regional areas, right through to remote communities.

5. Skilling Australian’s Fund

Skilling Australians Fund focuses governments’ efforts on apprenticeships and traineeships in the following areas (but not limited to):

• tourism
• hospitality
• health, ageing, and community and social services
• engineering
• manufacturing
• building and construction
• agriculture
• digital technologies
• trade apprenticeships
• rural and regional areas
• targeted cohorts
• industries and communities experiencing structural adjustment.

Where employers are needing to bridge a gap in skills and employ from overseas, a levy will be applied when sponsoring the worker which will go into this fund.

What does the future hold?

The independent VET Funding Review in 2016 recommended the system be reformed to better protect the interests of students, support improved training quality, and give employers and industry confidence in the skills and expertise of the Australian workforce. There has definitely been a positive shake up of the system to provide funding where it matters. Whether it has been a success could come out int he current review that is being carried out by the Hon Steven Joyce. The report will be delivered to the Government in March 2019. Watch this space!