Smart & Skilled is more like Dumb & Dumber!

PRIVATE and community colleges are reeling after being doled out unviably small contracts as part of the NSW government’s exercise in opening its training funds to competition.

The government has said the new scheme, known as Smart and Skilled, was designed to make NSW vocational education more accessible, transparent and efficient.

But critics said it was destabilising existing user choice arrangements and creating massive red tape in order to create the impression that NSW was satisfying the requirements of a Council of Australian Governments agreement worth more than $500 million to the state.

The National Partnership Agreement on Skills Reform, signed by all states and territories in 2012, required them to guarantee their citizens subsidised training places at “any registered training organisation, public or private”. Smart and Skilled, which begins next year, is NSW’s response. Public servants have rechristened the program “Dumb and Dumber”.

Unlike the other jurisdictions, NSW is not allocating places through a voucher-style mechanism. Rather, places are contracted out centrally from the Education Department’s Sydney headquarters.

The government said it was taking this approach to avoid the budget blowouts suffered in other states, notably Victoria and South Australia. Commentators said the government was also avoiding the political pain of allowing its TAFEs to lose a huge slice of their market share, as occurred in Victoria and the Rudd government’s Productivity Places Program.

But this has generated turmoil for other state-subsidised colleges, particularly community colleges, which offer personalised services largely to disadvantaged students. Their peak body said more than 80 per cent of its members had either missed out completely or had their previous allocations slashed savagely.

The picture is murky because the government has refused to discuss the process, and contracts — which were emailed to successful applicants almost two weeks ago — carry confidentiality clauses. But the Australian Council for Private Education and Training also said its members had been offered unfeasibly meagre contracts.

Acting chief executive Larry Davies said some colleges had been allocated as few as four places in some regions, making it impossible to operate without forcing full-fee and subsidised students to share courses. Other providers had been offered contracts in small towns but not in the major centres crucial for commercially sustainable operations.

“The size of some of the contracts will force some providers to think about whether they really want to take them up, because it’s just not financially viable to do so,” Mr Davies said.

Community Colleges Australia chief executive Kate Davidson said some of her members had been offered as little as 1 per cent of their allocations under the approved providers list, the existing contestable funding arrangement that ends this year.

She said the new market disadvantaged far more community colleges than it benefited, with some managers now wondering how to run registered training operations on government funding of less than $4000 a year.

Ms Davidson said it wasn’t clear how this was boosting accessibility. “I don’t know how this is helping the student,” she said.

The HES has repeatedly asked the Education Department to explain its allocation process, most recently last week. “As the period for negotiation and acceptance of contract offers is still ongoing, it would be inappropriate to comment on this process,” it said.

The HES understands the department has also failed to tell applicants whether there is an appeals process, to outline the scheme’s budget for next year, or to quantify the caps applied at the provider and regional level.

Successful applicants have no right to negotiate the terms of the 100-plus-page agreements, which were due with the department by close of business yesterday. Unsuccessful applicants have not been told whether they missed out because they did not satisfy the assessment process, or because there were insufficient places.

Ms Davidson said it was not clear why the caps appeared so low, given that the NPA was bringing NSW an additional $120m this financial year and a similar amount next year.

NSW said it was increasing vocational education spending by $125m this financial year, representing an 11 per cent increase on its 2011 funding. But Mr Davies said the true situation was “well disguised” in the latest budget, because figures were not directly comparable with previous years.

He said Smart and Skilled was not a genuine market. “It’s what you do when you’re trying to satisfy your internal politics at the same time as trying to satisfy the federal government that you’re going to be doing something.”

Mr Davies said he believed regional TAFEs had done relatively well under the contract offers. But TAFE figures said Smart and Skilled was forcing colleges to cut teaching hours and increase class sizes. “It’s just a massive budget cut,” said NSW TAFE Teachers Association president Phil Chadwick.