Changing Government policy and participation in contestable markets RMIT VET Link- Informed and Ready – 25 th of September 2009

Changing Government policy and participation in contestable markets

RMIT VET Link- Informed and Ready – 25th of September 2009

RMIT University©2009 Chancellery / Planning Group 2

Change of Preference TAFE First Preferences for Government Funded Places: Market Share

Institution 2007Market Share 2008

Market Share 2009

Market Share

Change 08 - 09

% Change 08- 09

% Change 08 - 09 Market Share

RMIT University TAFE 3,412 27.0% 3,143 27.3% 3,838 32.1% 695 22.1% 4.8%Swinburne University of Technology TAFE 1,556 12.3% 1,538 13.4% 1,529 12.8% -9 -0.6% -0.6%Victoria University TAFE 1,230 9.7% 1,308 11.4% 1,315 11.0% 7 0.5% -0.4%Box Hill Institute of TAFE 906 7.2% 900 7.8% 1,042 8.7% 142 15.8% 0.9%Northern Melbourne Institute of TAFE 1,001 7.9% 899 7.8% 911 7.6% 12 1.3% -0.2%Holmesglen Institute of TAFE 1,291 10.2% 1,028 8.9% 768 6.4% -260 -25.3% -2.5%Chisholm Institute of TAFE 872 6.9% 717 6.2% 641 5.4% -76 -10.6% -0.9%William Angliss Institute of TAFE 941 7.5% 740 6.4% 621 5.2% -119 -16.1% -1.2%Gordon Institute of TAFE 525 4.2% 471 4.1% 505 4.2% 34 7.2% 0.1%Kangan Batman Institute of TAFE 304 2.4% 248 2.2% 309 2.6% 61 24.6% 0.4%Bendigo Regional Institute of TAFE 147 1.2% 126 1.1% 127 1.1% 1 0.8% 0.0%University of Ballarat TAFE 151 1.2% 133 1.2% 114 1.0% -19 -14.3% -0.2%South West Institute of TAFE 52 0.4% 58 0.5% 47 0.4% -11 -19.0% -0.1%Goulburn Ovens Institute of TAFE 58 0.5% 56 0.5% 45 0.4% -11 -19.6% -0.1%Wodonga Institute of TAFE 85 0.7% 53 0.5% 39 0.3% -14 -26.4% -0.1%Sunraysia Institute of TAFE 16 0.1% 23 0.2% 35 0.3% 12 52.2% 0.1%GippsTAFE-Central Gippsland Institute of TAFE 47 0.4% 45 0.4% 32 0.3% -13 -28.9% -0.1%East Gippsland Institute of TAFE 26 0.2% 9 0.1% 24 0.2% 15 166.7% 0.1%Grand Total 12,620 100.0% 11,495 100.0% 11,942 100.0% 447 3.9% 0.0%


Change of Preference TAFE First to Third Preferences for Government Funded Places

Institution 2007Market Share 2008

Market Share 2009

Market Share

Change 08 - 09

% Change 08- 09

% Change 08 - 09 Market Share

RMIT University TAFE 8,216 24.8% 7,691 24.9% 9,256 29.4% 1,565 20.3% 4.5%Swinburne University of Technology TAFE 4,528 13.7% 4,529 14.6% 4,385 13.9% -144 -3.2% -0.7%Victoria University TAFE 3,645 11.0% 3,946 12.8% 3,859 12.3% -87 -2.2% -0.5%Box Hill Institute of TAFE 2,609 7.9% 2,627 8.5% 2,877 9.1% 250 9.5% 0.6%Northern Melbourne Institute of TAFE 2,876 8.7% 2,650 8.6% 2,594 8.2% -56 -2.1% -0.3%Holmesglen Institute of TAFE 3,514 10.6% 2,845 9.2% 2,374 7.5% -471 -16.6% -1.7%Chisholm Institute of TAFE 2,321 7.0% 1,891 6.1% 1,699 5.4% -192 -10.2% -0.7%William Angliss Institute of TAFE 2,234 6.8% 1,829 5.9% 1,414 4.5% -415 -22.7% -1.4%Gordon Institute of TAFE 1,086 3.3% 974 3.2% 1,029 3.3% 55 5.6% 0.1%Kangan Batman Institute of TAFE 865 2.6% 740 2.4% 925 2.9% 185 25.0% 0.5%University of Ballarat TAFE 343 1.0% 344 1.1% 331 1.1% -13 -3.8% -0.1%Bendigo Regional Institute of TAFE 247 0.7% 241 0.8% 222 0.7% -19 -7.9% -0.1%South West Institute of TAFE 104 0.3% 146 0.5% 114 0.4% -32 -21.9% -0.1%Goulburn Ovens Institute of TAFE 131 0.4% 126 0.4% 105 0.3% -21 -16.7% -0.1%Sunraysia Institute of TAFE 35 0.1% 90 0.3% 98 0.3% 8 8.9% 0.0%GippsTAFE-Central Gippsland Institute of TAFE 113 0.3% 97 0.3% 84 0.3% -13 -13.4% 0.0%Wodonga Institute of TAFE 151 0.5% 109 0.4% 77 0.2% -32 -29.4% -0.1%East Gippsland Institute of TAFE 54 0.2% 45 0.1% 51 0.2% 6 13.3% 0.0%Grand Total 33,072 100.0% 30,920 100.0% 31,494 100.0% 574 1.9% 0.0%


CONTESTABLE MARKETS FOR GOVERNMENT SUPPORTED PLACES (GSP)

Much remains the same. We are used to competition – for government grants, international students, AFP students, research grants…

…but now the market allows for greater mobility of demand and supply of GSP.

FROM

Government ‘bulk’, passionless purchasing

Institutions deliver to an agreed GSP ceiling with relative certainty in discipline and location

Students apply for available places

TO

Students (enabled by government) make purchase decisions (program, institution, location)

Institutions vary supply based on demand and strategy

Governments set broad performance targets (quality, socio-economic)


Market Design / Managed market reforms for a National Tertiary System

StudentsStudents

GovernmentsGovernments Intermediaries

Intermediaries

IndustryIndustry

Education institutions

Education institutions


STATE OF THE NATION (and State)

Public providers Private providers*95.50% 4.50%

692,933 EFTSL 32,959 EFTSL

*Based on DEEWR data. ACPET claims double this amount

Government Fee-for-service62.40% 37.60%

452,910 EFTSL 272,982 EFTSL

Universities Private42* 74

*Includes 3 for-profit providers

Providers

Delivery

Fund source

Public providers Private providers88.50% 11.50%

111.4m SCH 14.5m SCH

Government Fee-for-service67% 33%

84.2m SCH 41.6m SCH

TAFE Private Not-for-profit20 857 468

Institutions

Delivery

Fund source

Government 5,550 76% 15,160 43%Domestic 6,180 17,650Onshore 6,750 25,000Total 7,310 35,430

VET HE

Victorian VET market

National HE market

RMIT load (2009)

(m SCH) (EFTSL)


GOVERNMENTS

Federal / Higher education

Focus on quality, student choice and increased engagement

•40% of 25 to 34 y.o with a UG qualification by 2025•24,000 new graduates per annum / 360,000 over 15 years •Increased focus on equity with 20% of students low SES

State / VET

Industry led with student choice

•Performance driven funding•Eligibility rules for a GSP:

•Under 20 – open•Over 20 – only for a higher qualification•Very limited exemptions

•VET FEE-HELP (the student pays – albeit in the longer term)

CoAG targets / entitlements:•Halve those of working age without a Cert III or higher•Double those with a diploma or advanced diploma•90% of young people 20-24 will have a year 12 or equivalent

•15-19 yo will be entitled to an education or training place for any government subsidised qualification; •20-24 yo will be entitled to an education or training place for any government subsidised qualification resulting in a higher level qualification

Commonalities

Student choice, industry engagement, labour market / socioeconomic objectives, governance, funding mechanisms, quality / performance


EDUCATION INSTITUTIONS – VU Case study

Undergraduate Australian

FT Workers

2nd Generation Australians

International students

Aspiratio

ns

Work

circumstances

Socio-economic

status

Migrant s

tatus

/ language

•Understand need

•Target services

•Develop pathways

•Understand need

•Target services

•Develop pathways

Professor Elizabeth Harmon, Vice-Chancellor, Victoria Univedrsity. Higher Education Summit. Malbourne, April 2009


STUDENTS

Factors of importance for deciding where to apply

Student group Cluster of most important factors (in descending order)

Young (under 21 years) Offered the right subject, overall image, social life, teaching reputation, employment prospects, entry qualifications

Older mature (25 yrs+) Offered the right subject, attitude to mature students, teaching reputation, academic support facilities, distance from home

Vocationally qualified/access Offered the right subject, teaching reputation, academic support facilities, employment prospects

Connor et al (1999), Making the right choice: How students choose universities and colleges. Institute for Employment Studies / Universities UK.


STUDENTS

14 factors influencing choice

• Curriculum and course availability• Location / distance from home• Relevance of course to chosen career path• Reputation of the institution• Job placement and careers counselling• Costs associated with attendance• Admissions criteria• Prestige and status of the institution• Educational facilities• Campus size and type• Extra curricular opportunities (clubs, sports, etc)• Campus facilities• Student welfare programs• Teaching and research staff, qualifications and experience

Brennan, L. (2001). How prospective students choose universities: a buyer behaviour perspective, PhD thesis, Centre for the Study of Higher Education, The University of Melbourne.


THE OTHER MARKET PARTICIPANTS

Industry

Key agent in purchase decisions

Suasion with governments and regulators

Collaboration with providers

Support for education industry reform (qualified)

Intermediaries

GUG

VTAC

Rankings

Unions / professional associations

Peak bodies (eg ATN, TDA, UA)


CHALLENGES

In the shift to the demand side we will need a very good understanding of the market, motivations of the individual and activity of competitors.

Understanding our position/s in the market and responding:•Nimble cherry picker•‘Base load’ provider•Discipline specialisations•A combination

How will we manage the tension between contestable markets, institutional objectives and government expectations (equity, engagement, age based targets)?

In the convergence of government policy (State / Federal, VET / HE) how do we optimise our dual sector status?

Systems and processes that can manage greater load and capacity changes than has been the case historically.


EDUCATION INSTITUTIONS

“…you can’t afford to do this in the typical research intensive universities or universities that have a significant research function”

Professor Alan Robson, Go8 Chair and Vice-Chancellor of the University of Western Australia

“…if you give these sorts of entitlements to students and let them go where they want to go, that will determine the structure of the sector”

Professor Ross Milbourne, ATN Chair and Vice-Chancellor of UTS

Higher Education supplement – AFR, Monday 4th of May, 2009


Questions to think about and action!

• How do we contribute to the Governments targets?

– Possibly in improving on our 20% Tafe articulation to Higher Ed would help in the 40% degree, 20% Equity and increasing the number of completions.





• How can we engage better with industry in increasing our brand and accordingly our commitment to WIL?






• How do we continue the work on ensuring we improve Quality, Viability and Relevance? Hence maintaining our market position and demand and revenue.







• How do we position ourselves when a large number of students (in particular programs) have become ineligible (Higher Level Qual)?








• In preparation for the increase in contestable load (approx. 25%), what is it that you can do to “contestable-proof” your program?









• How quickly/effectively do we respond to government initiatives (Extra hours on offer)?









• How quickly/effectively do we respond to government initiatives (Extra hours on offer)?

• Where do you see your program/school in 5 years time?

Documents

Changing Government policy and participation in contestable markets RMIT VET Link- Informed and Ready – 25 th of September 2009