Continuity and change: employers’ training practices and partnerships with training providers

Government funding for partnerships

The final section of the RTO survey explored the importance of government funding for partnerships with industry and the impacts of changes to Commonwealth and state/territory funding on the amount and nature of training.

Government funding was identified as important or very important for partnerships with industry by three-quarters of all RTOs (n=87). However, significant variation in the importance to partnerships of government funding was found across the three RTO types (see Table 22). Nearly two-thirds of TAFE Institutes (61%) and half the non-profit RTOs identified government funding as very important, in contrast to only a third of for-profit RTOs. Government funding for industry partnerships was identified as important to some extent by all the TAFE Institutes except one, compared with only just over half of for-profit RTOs (55%).
Table 22 Importance of government funding in RTO partnerships with industry

	TAFE		For-Profit		Non-Profit		All RTOs
	N	%	N	%	N	%	N	%
Very important	11	61.1	15	33.3	12	50.0	38	43.7
Important	6	33.3	10	22.2	9	37.5	25	28.7
Not very important	1	5.6	12	26.7	2	8.3	15	17.2
Not at all important	0	0.0	8	17.8	1	4.2	9	10.3
Total	18	100.0	45	100.0	24	100.0	87	100.0

Respondents mentioned a number of funding sources used for their partnerships including: user choice, traineeship funding, Victorian Training Guarantee, Certificate III guarantee, Smart and Skilled (NSW), user choice (Queensland), as well as range for specific programs for example ‘Workready’ funding, LLN funding, Jobs First, and motor vehicle transformation training. They also reported other sources of non-VET government funding such as Centrelink and Indigenous Advancement Strategy funding. Some mentioned specific industry funding such as Construction Skills Queensland and the Tasmanian Seafood Pledge.

Changes to funding

Commonwealth funding

Two-thirds (67%) of TAFE and slightly fewer non-profit RTOs reported impacts of Commonwealth funding changes; however, only a minority (48%) of for-profit RTOs reported impacts. Interestingly, a significant proportion (20%) of RTOs said they did not know if funding changes had had an impact.

Table 23 Impact of Commonwealth funding changes on amount and nature of training provided

	TAFE		For-Profit		Non-Profit		All RTOs
	N	%	N	%	N	%	N	%
Yes	12	66.7	21	47.7	16	66.7	49	57.0
No	3	16.7	11	25.0	6	25.0	20	23.3
Don't know	3	16.7	12	27.3	2	8.3	17	19.8
Total	18	100.0	44	100.0	24	100.0	86	100.0

For those RTOs who identified an impact of Commonwealth funding changes (n=49), the survey asked them to provide more details by selecting one of the statements provided (Table 24). Two-thirds of RTOs (65%) said that Commonwealth funding changes had resulted in employers accessing less training from RTOs, with higher proportions of TAFE institutes (75%) and non-profit RTOs (75%) affected most. A small proportion (10%) of the private RTOs said that employers accessing more training from RTOs. Fewer than 10% of RTO reported employers accessing the same amount of training but paying more for it themselves.
Table 24 More details of the impacts due to Commonwealth funding changes on training

	TAFE		For-Profit		Non-Profit		All RTOs
	N	%	N	%	N	%	N	%
Employers accessing less training from RTOs	9	75.0	11	52.4	12	75.0	32	65.3
Employers accessing more training from RTOs	0	0.0	3	14.3	2	12.5	5	10.2
Employers accessing the same amount of training but pay more for it themselves	1	8.3	2	9.5	1	6.3	4	8.2
Other changes	2	16.7	5	23.8	1	6.3	8	16.3
Total	12	100.0	21	100.0	16	100.0	49	100.0

State/territory funding

TAFE Institutes were affected slightly more by State/Territory (78%) than by Commonwealth (75%) changes in their partnership arrangements with industry. Non-profit RTOs were less affected by State funding changes than by Commonwealth changes, while for-profit RTOS were equally affected (in total) by changes associated by each source of funding.

Table 25 Impact of State/Territory funding changes on amount and nature of training provided

	TAFE		For-Profit		Non-Profit		All RTOs
	N	%	N	%	N	%	N	%
Yes	14	77.8	22	50.0	14	58.3	50	58.1
No	3	16.7	13	29.5	7	29.2	23	26.7
Don't know	1	5.6	9	20.5	3	12.5	13	15.1
Total	18	100.0	44	100.0	24	100.0	86	100.0

The details of the impacts of state funding changes (Table 26) indicated that, compared with the Commonwealth funding impacts, TAFE institutes reported employer being more likely to access the same training but pay for it themselves; while the reverse was true for non-TAFE RTOs.

Table 26 More details of the impacts due to State funding changes on training

	TAFE		For-Profit		Non-Profit		All RTOs
	N	%	N	%	N	%	N	%
Employers accessing less training from RTOs	6	42.9	14	63.6	9	64.3	29	58.0
Employers accessing more training from RTOs	2	14.3	2	9.1	1	7.1	5	10.0
Employers accessing the same amount of training but pay more for it themselves	0	0.0	1	4.5	2	14.3	3	6.0
Other changes	6	42.9	5	22.7	2	14.3	13	26.0
Total	14	100.0	22	100.0	14	100.0	50	100.0

The impacts of state changes appeared more complex. Over a quarter of all RTOs in this case identified ‘other’ changes with almost 43% of TAFE respondents selecting ‘other’ changes as their preferred option. Some of the responses to ‘other’ could perhaps have been allocated to one of the provided options; however the responses were interesting and some are listed below.

There is a mixture of results depending on the individual partner

Drop in funding has made the delivery of courses to the workplace financially unviable. With the course fee being increased employers will not commit if they are not earning from it

Funding eligibility is seen as a complication not a support mechanism for employers and stakeholders within the industry. In addition complexities funding change per state whereby Industry is located nationally

In NSW funding is assigned to individuals as an 'entitlement'. Complicated to reassign entitlement to employers or even to get them to become third party fee payers without some form of entitlement waiver

Employers won’t take on a trainee unless the training is subsidised by Work Ready

State funding in most cases is a subsidy to the RTO only and some employers are resistant to higher contributions

Low levels of funding based on completed units, and cumbersome administrative and reporting requirements make it almost impossible for a small RTO to do this and be financially viable. Add to this, a constant lack of engagement by learners and you see RTO's losing money rather than making a profit. Many RTOs are withdrawing from traineeships, which is something we are about to do

Changes to state funding has impacted on the mandated Course Fees

Some RTOs were managing to cope with the changes, as this example shows:

‘Initially there was much confusion in 2015 because our best partnering employers could not place trainees with us except through Fee for Service as a low rate. Now that has changed. And there was a great deal of confusion. We now have greater knowledge so for us and our best employers most of that has ceased.’

The following response is quite forthright and is not the only one of its nature:

‘As for the Commonwealth. Government funding always changes training from meeting actual needs to meeting perceived needs, usually needs as perceived by people with no current experience of the real industry working environment. It promotes banality and cupidity, not effective training.’