Prof. Valerie Braithwaite of RegNet, ANU
Vocational education and training once held a proud place in Australia’s education system, providing opportunity along a less academically and more practically oriented path. While interest in and need for vocational education and training has not lost currency, the sector has been drawn into a downward reputational spiral. Reforms have been introduced in abundance to reverse the problems of VET, but instead have contributed to loss of status and scandal after scandal. At the heart of the debilitation of the VET sector has been lack of respect for and support for teaching professionalism in the reform process. Industry and government domination over what was to be taught in VET was intended to create opportunity through growth and jobs, but domination is bound to be doomed when the guardians of delivery and quality are not engaged professionally in the process. In these circumstances, a market methodology is likely to attract markets in ‘bads’ that repeatedly dislodge markets in ‘goods’. Regulation also faces a difficult challenge when it is overlayed on a market where there is deep and persistent internal conflict over the values of the sector. Delivery of quality education and training is much touted, but a schism sits below this mantra. The sector divides in its commitment to professional educators and to the aspiration of being a quality education provider in a highly stratified tertiary sector.
Vocational education and training (VET) in Australia is highly regulated. At the same time, government has been keen to increase competition through encouraging private providers to enter the market. To open pathways into the VET sector, government offered vocational education students a loan scheme (VET FEE-HELP) on a par with that offered to students in universities (HELP) with repayment deferred until their income rose above a threshold level. The scheme was expected to create a more equal playing field and a more integrated tertiary education sector. Registered training organizations (RTOs) approved by government received the benefits that previously had only been offered to universities: They were able to enrol students with a VET FEE-HELP loan. An expanded and vibrant market in vocational education training was expected to emerge with improved standards of training and easier pathways for students moving between the vocational and university sectors.
Expected benefits, however, have been overshadowed by unanticipated failures (Senate Inquiry, Parliament of Australia, 2015). The reputation of the VET sector has been marred by high incompletion rates, high student debt, bankruptcy among colleges, and predatory behaviour by RTOs to enrol students and obtain government funding. To outward appearances the intent of a significant proportion of providers has been profit maximization with little regard for delivering educational objectives. Why has this occurred? Answers can be found by scrutinising both the market and the regulatory system in VET, as both have systemic failings.
What about the market?
Australia’s goal is to have high quality skills training that will meet student needs, be valued by employers, and contribute skilled human capital to an economy in transition. To achieve this goal through a market mechanism, the quality of education (acquired skills and job prospects) delivered by various registered training organizations (RTOs) must be known, credible, and relevant to the choices of potential students and their families (Graham 2002, Fung et al 2007). Information about quality of training and job prospects will not be used by students, families and employers if there is no discernible variation in quality; if the data available have the “ring of spin” and are not considered credible; and if the quality of education is less important to those making educational choices than “liveability” factors such as cost of living, housing, transport, employment and family responsibilities. In sum, if potential students do not set much store by information on educational quality that is available – for whatever reason, providers will not be receiving the message from the market that quality matters. Providers are therefore denied one of the most tangible rewards for providing quality education – demand for valuable knowledge and skills that translates into increased student enrolments, committed students and reputational capital with employers, other educational providers, government and the community. These rewards grow businesses.
While registered training organizations (RTOs) may not always see financial reward in competing on quality of education, they compete on other criteria that can improve their sustainability or profitability (Manning 2016; Chapter 3 Senate Inquiry, Parliament of Australia, 2015). Auxiliary markets have emerged in credentialism (Gatenby 2015) and getting a certificate for a qualification as quickly and cheaply as possible (see ASQA strategic reviews for systemic nature of this problem), or in college social life (see higher education documentary film, “Ivory Tower”), or in eligibility for a residency visa (see Davies 2010), or in gifting an iPad or other inducements to students on enrolment (see Elthan 2015; Manning 2016; Senate Inquiry, Parliament of Australia, 2015), or in luring potential students with other support services such as English language training (Senate Inquiry, Parliament of Australia, 2015). Auxiliary markets in themselves are not necessarily a problem. They only become a problem when they displace a market in quality education. For instance, students who are not equipped to undertake a course and have little chance of completion are lured into enrolment with the offer of an iPad. Their enrolment attracts government funding that benefits the provider and they are led to believe that they will never have to repay their fees. They are left with debt and no new skills and Australian taxpayers are defrauded in the process (Senate Inquiry, Parliament of Australia, 2015).
The difficulty in creating a meaningful market in quality education in the VET sector should not be underestimated, nor should it be underestimated in the university sector. For-profit higher education has been referred to as the new subprime market (Kroll 2010) with students accumulating huge debts for qualifications that are without substance and are discounted in the jobs market. Australian critics of for-profit tertiary education have voiced their concerns for a long time (Elthan 2015, Quiggin 2004). But for the Australian VET sector there are some additional problems.
In a reputational sense, VET (including the public TAFE system) loses out in “status” rankings to more academically oriented institutions such as universities. And universities themselves have their own status system that bestows on graduates of elite universities lifelong advantage and privilege. John Quiggin in his submission to the Senate Inquiry into the Higher Education and Research Reform Amendment Bill 2014 (Quiggin 2014) observed the strata separation of Australia’s hierarchical higher education system. Drawing on work by Marginson and Considine (2000), Quiggin observes that the hierarchy has been stable over decades: at the top of the ladder are Australia’s sandstone and red brick universities (G08 and University of Tasmania), next down are the Unitechs (formerly Institutes of Technology), then the gumtrees (post-war universities founded between 1960 and 1975), and then the new universities (formerly Colleges of Advanced Education). Quiggin points out that the relative standings are buttressed by entrenched and long-term sources of relative advantage evident in the institution’s history of excellence, successful and/or famous alumni, high quality centrally-located campuses and the like.
Competition may occur on a modest scale within the four status bands, but it is unrealistic to expect competition across bands. Historical reputations outweigh real-time data on performance in delivering quality education. For a period of time, the Australian National University had a marketing billboard at the entrance to Canberra airport with the message “Prestige counts”. While disturbing to anyone who believed the market should respond to how well an institution was developing and transferring knowledge to students and society in real time, the message on the billboard reflected a deep truth about education. Where you graduate matters to your future career, regardless of how much you learn in the process or what kind of grades you achieve.
This means that scandals may come and go for educational providers but the status hierarchy holds firm over the long term and resists disruption. The same can be said for prestigious private schools. It is unlikely that enrolments will decline from the most prestigious schools, even in the light of the reputational damage inflicted on several of them in the wake of the Royal Commission into Institutional Responses to Child Sexual Abuse. The reason for this is social. The status of our educational providers becomes a benchmark for assessing the worth of individuals – how bright they are, how well networked they are, how likely they are to be successful and influential. As individuals are competing for social approbation, educational institutions acquire reputations as standards of worth. They take on the character of status bastions. Their role is to define individual identity, not to have their corporate identity re-defined by what individuals think of the quality of education they offer. Moreover, once individuals claim alumni status, they have a vested interest in preserving the institutions that “made them”.
Status culture therefore places significant constraints on how a market in education works. Where there is a status culture, there are elites, middle performers and the lower ranks. With this in mind, consider the place of vocational education in the tertiary education status system: VET colleges are at the bottom of the pecking order, below the universities. If John Quiggin is right about the stable nature of the educational status system, providers of VET cannot realistically aspire to improving their position in the pecking order. Some try to move up the ladder through working for accreditation as a provider of university degrees as well as vocational training (Dow and Braithwaite 2013). Making that leap is a strong motivator for improving quality and complying with the higher education standards as well as VET standards. But it is not easy for an RTO to move up to university level. Many VET providers do not have the capacity to make this leap into the higher education space. Their main ambition will therefore likely be to maintain status - not losing their position within their band of “look-alike” institutions.
This explains another observation that John Quiggin (2013, 2014) makes and that others have made (Beddie 2010). Competition in the tertiary sector has not brought greater diversity in offerings for students, but rather greater homogeneity. If an educational provider is aspirational, wishing to move up a status band, behaving like others in the aspirational band becomes important. If the most realistic aspiration is to maintain one’s position within a status band, it becomes important to do as others in one’s band are doing. If this involves cutting corners to maintain a profit margin, then this will become the norm for organizations in this band. Within a well-differentiated class system, there is survival value in taking one’s cue from similar others.
What about regulation?
The above description of the higher education system in Australia reveals a cultural system of social regulation. Market ideology has proven unsuccessful in dislodging it. Similarly, the formal regulatory system, imposed on top of the cultural regulatory system, has proven disappointing in lifting the quality of education in the vocational educational and training sector (Senate Inquiry, Parliament of Australia, 2015).
For regulation to be maximally effective it needs to provide both a safety net at the bottom and an impetus to lift standards at the top, inching standards gradually upwards across the sector. For this to happen, regulatory standards must be central to the activities and aspirations of RTOs, and to the evaluations of students and business. Regulations can be seen as a nuisance and sidelined as unnecessary red tape by those being regulated (Dow and Braithwaite 2013). Compliance audits can become reporting rituals (Power 1997) with a compliance officer assigned to go through the checklist for an organization before an inspection or reporting period with the job of getting the documentation right to keep the organization out of trouble. But the purpose of regulation is not to report well, rather to perform the central task of providing education well. For this reason regulation needs to be mainstreamed into how the business operates. If it is to do its job of lifting standards in a sustainable cost-effective way for the organization, regulation needs to be part of the educational and business culture.
A framework useful for evaluating the success of a regulatory system is a version of a social change program developed by Clifford Shearing and his colleagues (see, for example, Peterson et al 2015) in the context of environmental sustainability, RAMP: R represents the rewards accrued through compliance (or better still beyond compliance) with regulatory standards; A represents awareness of standards and rules; M represents motives for complying (related to benefits, justice or moral obligation related to enforcement below); and P represents having access to pathways for compliance. The RAMP model brings together a body of research on what is necessary for successful implementation of a new compliance agenda (see Bardach and Kagan 2002, Mitchell 1994, Braithwaite 2004).
The prime reward offered by the VET regulatory system is approval for an RTO to enrol FEE-HELP students. Having taxpayer dollars to provide some security for a for-profit educational business venture is a privilege. As the recent Senate Inquiry concludes, the reward has turned into a basic expectation for operation. To correct this problem, VET FEE-HELP needs to be restricted to programs offered by RTOs with certification as a high quality provider based on assessments by government, industry and educators. If VET FEE-HELP is to flow into an RTO, the bar for admission to the scheme should be high, even if this means the market philosophy of an equal playing field is eroded. As we have seen above, there is no equal playing field in education and access to FEE-HELP has not created one. The first principle of RAMP – reward for not just basic compliance but for going beyond compliance to produce quality education provides regulatory authorities with the means to set a high bar and re-define quality in vocational education and training. Needless to say, failure to meet these high standards should result in the removal of the privilege of being able to enrol VET FEE-HELP students (Quiggin 2015).
The second RAMP principle of awareness of standards is arguably over-serviced in vocational education and training in Australia. The formal regulatory system is intrusive and prescriptive (Dow and Braithwaite 2013). Formal regulation extends from course organization, stipulating what constitutes a qualification and what qualifications can be issues by an RTO, right through to classroom content of course units and how that material is assessed. Qualifications are defined by the Australian Qualifications Framework (AQF). Training packages developed through industry skills councils detail the skill sets required for various qualifications and propose appropriate assessment procedures to ensure students complete their units or course “work ready”. Training packages are constantly updated and revised to meet new demands. If there is a problem with the VET sector being less aware than they should of the regulatory standards set by government and industry, it is a problem not of lack of direction but of too much direction, with the result that RTOs turn away and ignore expectations or make mistakes from cognitive overload.
With so many requirements, rules, and guidelines, it may be the case that many responsible for compliance in their organization fail to see the wood for the trees. It is not unusual for an organization’s compliance officer to become embroiled in some brouhaha about non-compliance around minor administrative details when serious breaches may be occurring elsewhere, for example, teachers are not turning up for classes. One might hope that transparency would serve as a regulatory tool here – someone in the RTO would notice teacher and student absence and would do something about it. Even here, however, what one might call a natural socially-based regulatory system has been supplanted largely by external audits of internal processes of documentation.
Registered training organizations (RTOs) are not left to their own devices to establish priorities and run their businesses. They are regulated through a set of 8 compliance standards covering training and assessment, obligations to learners and clients, and governance and administration. These standards ensure the organization displays financial probity and business viability, offers quality tuition that meets learner and industry needs, provides transparent and accurate information about its services, and has processes to evaluate and regulate its performance. The Australian Skills Quality Authority regulates RTOs: RTOs must comply if they are to maintain their registration and offer educational services. ASQA also provides strategic reviews of industry segments where there is reason to believe that there are systemic problems in training quality which pose risks to public safety.
On top of these regulatory standards are additional regulatory requirements imposed by licensing boards and professional bodies. In an era where regulation comes from many different sources (professional bodies, insurance companies, banks for example as well as local, state and federal governments), the task of being across all regulatory demands can be daunting. This proliferation of regulation is known as regulatory capitalism (Levi-Faur 2005). Alignment of standards across the various bodies that regulate training in a particular sphere (for example, optometry, electrical trades) should be encouraged to ease problems of cognitive overload for teachers and RTOs and streamline processes of registration for new graduates. This may help in the ‘awareness’ dimension, which has been observed as a problem for teachers (Harris 2015). Even so, greater awareness on its own is unlikely to solve the debacles that we have seen in VET in recent times.
There are reasons for thinking that the problems in regulation in VET congregate around motive and pathways in the RAMP model. There are many compelling reasons for suggesting that motivation to provide quality education is lacking in the VET sector. Loss of experienced teachers, reliance on a casual workforce, poor rates of pay and low morale are all likely contributors to a poor educational experience for students (Atkins and Tummonds 2015, Harris 2015) Feelings of injustice, failure to see benefits in what one is required to do, constant change and cynicism around the whole regulatory effort to enforce standards is likely to de-motivate teachers and trainers and challenge their commitment to quality teaching. A teaching curriculum, no matter how detailed and prescriptive, is not going to translate into a positive educational experience if teachers are poorly motivated. Revival of a professional culture is synonymous with motivating quality teaching in the VET sector. This raises a further regulatory question, above and beyond factors affecting teaching quality mentioned above: Is there a risk of highly prescriptive training packages and course definitions crowding out (Frey 1997) the intrinsic motivation of teachers to innovate and experiment in the presentation of course materials? Is the regulation crowding out the professional culture that leads educators to accept responsibility for the quality of the programs taught and take pride in their course delivery?
For the dedicated teachers in the VET sector who do their best to maintain standards, any suggestion that teachers are to blame for the problems will be repugnant and rightly so. Committed teachers and providers are doing an extraordinary job keeping the sector going in spite of the problems the sector is experiencing (Seddon 2009). Recognition of their efforts, however, does not negate the proposal that there are not enough of them to steer the VET sector out of trouble. This raises the question of pathways. What is it that committed VET teachers can do practically to steer their colleges and their industry into the space they want it to occupy – good quality provision of education that makes a difference to the lives of students, their families and the nation? An effective regulatory system should identify these positive pathways and support them - and reward those taking them every bit as enthusiastically as they close down illegitimate pathways that undermine quality education (Braithwaite et al 2007). The regulatory mission includes tending the pathway of recruitment and retention of teachers, trainers and managers who have high professional standards. After all, they become the internal benchmark for staff development in the organization.
These pathways to lifting standards through actively supporting high performers are not discussed in the VET regulatory space. Part of the explanation is policy makers’ blind faith in markets. But part is also likely to be regulatory constraints on course structures and delivery that discourages innovative teaching and experimental partnering with industry. Pathways for building professional culture and teaching innovation are obstructed by administrative compliance. Sharing new teaching and practice methodologies with other providers is not in public view to signal an avenue for collective hope to restore respect to the sector. Peak bodies are locked into a “few rotten apples” analysis of the sector and defending their patch, rather than openly leading reform of the sector. Terri Seddon (2009) provided a prescient warning for the vocational education sector that still needs to be addressed 7 years after the Rudd Government Summit to find ways of improving Australia’s productivity:
“Organizational control and authority in VET has denied occupational authority and expertise. The renewal of occupational expertise has been hollowed out by the failure to recognise the ‘teaching’ expertise required to build capacities for innovation” (p. 57).
The VET landscape seems to be trapped in a pattern of attack and defensiveness, with little trust between those who need to work together to repair the sector: governments (at different levels), teachers and trainers, business and industry, RTOs, unions, the regulators (ASQA as well as the consumer protection regulators), peak bodies, licensing bodies and professional associations. The continuing tussles for dominance between these groups is puzzling because their complaints about the sector are strikingly similar (see Senate Inquiry, Parliament of Australia 2013). There clearly is less agreement on whose responsibility it is to fix the problem. It seems likely that each of these players resents deeply not having the resources to provide the pathways to quality education. They all want more resources or more power to do their jobs – presumably from government.
In a period where resource gains to one are likely to mean losses to another, and after a decade of control and domination has done little to bring educational quality to vocational education, a radical change of approach has been proposed. Experts in vocational education and training have suggested ideas for redesigning curricula and bringing more educational coherence to what has become a modularised skill delivery structure. Along with these reforms, regulatory reforms are necessary to establish a sensibility of best practice training and teaching in the sector. Three stages are begging attention: (a) legitimizing ASQA; (b) building a public coalition around ASQA and best practice standards; and (c) using enforcement to sanction poor practice that puts students, government funding, industry and the public at risk.
Underpinning reform is a change of culture from conflict and domination to collaboration and resource pooling. Possibilities for resource pooling are best identified and trialled within the VET sector. The 2015 Senate Inquiry recognized collaboration between ASQA and the Australian Competition and Consumer Commission in relation to the misleading advertising of RTOs and the consumer scams that many RTOs initiated to increase enrolments and access to government funding. But other coalitions are just as valuable when the performance of a whole sector is in such disrepute. The reputation of VET is such that RTOs appear to be dismissing government regulators as bodies that can be ‘moved around’ rather than listened to. Regulators have failed to build confidence and credibility that they are effective enforcers of standards.
The most important repair job reputationally and substantively is to recognise and praise quality education. In the current situation, regulators can only do so by co-opting professional teachers and trainers onto their panels for site visits and opening up regulatory debriefings to students and other stakeholders when plans of action are formulated for correcting compliance problems. There is no suggestion here that professional educators and trainers and other stakeholders (industry, consumer bodies) replace auditors and business advisers. Expanding the regulatory evaluation team and making their deliberations with RTOs more transparent is the concluding message of this paper. Including others strengthens the regulator’s legitimacy as it plays a leadership role in lifting standards in the sector. This is not to challenge the regulator’s independence as a decision maker, which in governance speak needs to be safeguarded. The issue is the process by which decisions are made and how a shared sensibility for high standards is developed and shared, not just in terms of understanding, but also practice. High standards become embedded in the culture. Leadership for protection of this culture then occurs within organizations and outside. At the outset, however, leadership for change demands a resourced alliance of knowledgeable and respected vocational education devotees, in and outside government.
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 This is a common problem for market failure in health as well as education (see transparency literature, in particular Graham (2002) and Fung et al (2007)).
 See ASQA strategic reviews for evidence of courses that are too short to impart required skills, for example:
early childhood education and care
aged and community care
 see Footnote 3
 Having a suite of sanctions that can be applied in real time to underline the importance of delivering quality education would help the sector regain confidence. Focused regulatory measures such as removing commissions for student recruitment, heavily sanctioning the first RTO discovered to have breached a targeted standard are not the subject of this paper but warrant systematic review though examining ASQA’s enforcement process case by case (what was done when with what results, and then the next steps).