The marketisation of TAFE

LH Martin Institute    | 17 July 2013

Associate Professor Leesa Wheelahan on why learning is about more than mere supply and demand.


invisible_hand_of_the_market1-300x199TAFE is not a ‘provider’ of vocational education and training; it is an educational institution which, like schools and universities, is essential to Australia’s social cohesion, productivity and international economic competitiveness. But TAFE is being wrecked.

Victoria is leading the charge. TAFE’s share of publicly funded students in Victoria declined from 67% in 2008 to 42% in 2012, while private providers’ share increased from 16% to 46% over that time.

Private providers are now the majority providers in 11 of 19 industries in Victoria, and they dominate in industries where programs can be run cheaply and in high volume.  For example, they now have 92% of publicly funded enrolments in financial and insurance services, 74% in administration and support services, 78%  in public administration and safety, 75%  in retail trade, 72%  in transport, postal and warehousing, and 83%t in wholesale trade.
In contrast, private providers have only 4% of enrolments in mining, 6%  in professional, scientific and technical services (which includes a lot of engineering) and 11% in information media and telecommunication.  Why? Because it costs a lot of money to run programs in these areas and monstrous profits can’t be made.

TAFE’s share of publicly funded students is declining nationally, and this will accelerate as the other states catch up to Victoria and implement similar policies. For example, in 2008, TAFE taught 74% of all publicly funded students nationally; this declined to 60%  in 2011.

The Victorian government seeks to put TAFEs and private providers on an “equal footing” in the market that it has created, but TAFE is clearly being hammered.  The Victorian government has stripped millions of dollars from TAFE institutes and then told them that they have to become just like private providers, just another provider that doesn’t do anything particularly special.

The Victorian government made this clear in its submission to the current House of Representatives Inquiry into the role of TAFE saying, “TAFE institutes should no longer assume that they are required to deliver community service obligations that are not explicitly required and funded by government”.

Instead of supporting TAFE, the Victorian government is reducing it to a residual institution that provides programs private providers do not, will not or cannot do. This is what markets do to TAFE, when it is required to compete with private providers that can choose what to teach and who to teach, while not providing students with the kind of support that TAFE provides.  The Victorian government is prepared to wreck one institution – TAFE – so another institution – the market – can dominate.

There is no evidence anywhere in the world that fully contestable markets in education have delivered the outcomes governments seek.  The evidence is, in contrast, that the pursuit of markets is driven by an ideological belief in their fitness for purpose for all areas of social life.

In a frank article in Campus Review in 2008, Robin Ryan, who was involved in the development of marketisation policies in VET, argues that these policies were developed on the basis of little evidence.

He says ‘the fundamental point of the desirability of market forces in VET has almost always been resolved simply by assertion, often with reference back to a report which had previously made the same act of faith’.

The question that market proselytisers are not able to address is:  how are the social and public good purposes of VET to be articulated, implemented and advanced?  They seem to believe that these purposes will be met through Australia’s 5300 VET providers all responding to market signals.

It is based on a belief that because VET provision is a ‘product’ like any other product (for example, widgets), then all that is needed is for ‘customers’ to articulate their demands and entrepreneurial providers will respond.  However, rather than consolidation, this is leading to fragmentation.

The key difference between education and a market in widgets is that educational institutions have a key role to play in responding to society’s needs, in articulating what those needs are and developing appropriate responses which are further developed and changed as society changes.

Universities do this through research, the creation of knowledge, serving as society’s conscience and critic and education for the professions.  Schools do this by ensuring that young people have the foundational knowledge they need for their lives as citizens and as workers.  This changes as society changes.

TAFE does this through its support for disadvantaged students and in developing the knowledge and skills that are needed for an innovative, competitive workforce.  It anticipates, develops, codifies and institutionalises knowledge and skills needed the workforce now, but also in the future.  It is not just a matter of responding to existing demand and to work as it is currently.  TAFE’s role in workforce development is not limited to relationships with employers; it supports industries and the workforce more broadly and anticipates the future.

Reducing all relationships to market signals is to reduce them to transactions and there is no role for these developmental purposes.  For example, all TAFE directors and senior staff are on local regional economic development committees and they play a role in supporting and developing the economic and social infrastructure in their communities and in workplaces.  TAFE teachers are engaged in their industries, in workplaces and with their communities.

This is the ‘invisible’ work that TAFE undertakes, yet this is at stake in current marketisation policies and funding cutbacks.  A transactional basis for the provision of VET narrows the role that institutions are able to play in supporting students from disadvantaged backgrounds.  Markets in VET will result in institutions (including TAFEs) pursuing activities that result in a profit, and this will become the most important criterion in deciding what provision should be offered.

Governments may be prepared to fund specific activities when there is market failure or thin markets and they perceive that this is having negative consequences for equity and for regions.

However, this moves working with disadvantaged communities from being an intrinsic part of what TAFEs do, to being ‘extra’, requiring additional funding, and TAFEs won’t be able to do this work without additional funding.  It isn’t just a matter of government providing specific funding to run a program at a loss for a disadvantaged group to try to address these problems;  rather, current policies removes working with disadvantaged students as a key defining purpose of TAFE and all that it does.

Governments should think very carefully before they wreck an institution, because once it’s gone, it is very hard to put it back together again.  The Howard, Rudd and Gillard governments have tried very hard to reintroduce technical high schools without real success.  If a whole sector is fragmented, we lose institutional capacity for the future.

This article  by  Leesa Wheelahan first appeared in Campus Review, 15 July 2013.Leesa

Leesa Wheelahan is Associate Professor at the LH Martin Institute for Tertiary Education Leadership and Management at the University of Melbourne.  She has published widely on lifelong learning, tertiary education policy, student equity, recognition of prior learning, credit-transfer and student articulation between the sectors of post-compulsory education and training, cross-sectoral relations between the VET and higher education sectors, and the role of theoretical knowledge in curriculum.

 Wheelahan has taught in tertiary education for approximately 19 years, which includes time as a TAFE teacher in policy development, an academic developer at a dual-sector university and as a higher education teacher in adult and vocational education teacher preparation programs.

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