Shake-up for training sector

21/04/2016 - 14:50

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SPECIAL REPORT: The state government is pursuing major reforms to the training sector, at a time when national data on traineeships and apprenticeships tells a surprising story for WA.

COLLABORATION: Terry Durant has been appointed interim managing director of South Metro Tafe. Photo: Attila Csaszar

SPECIAL REPORT: The state government is pursuing major reforms to the training sector, at a time when national data on traineeships and apprenticeships tells a surprising story for WA.

The National Centre for Vocational Education Research is considered the go-to source for information on training in Australia.

Its data shows a marked divergence between Western Australia and every other state in the country.

While the number of people in traineeships and apprenticeships in WA has held relatively steady over the past five years, nationally there has been a 33 per cent drop in the number of people in training.

The divergence means WA now accounts for 14.3 per cent of all people in training – up from 9 per cent a few years ago and well above the state’s per capita share of about 10.5 per cent.

It’s a similar story for commencements.

In the year to September 2015, 26,000 people in WA started a traineeship or apprenticeship, equating to 14.8 per cent of the national total.

NCVER national manager statistics and anlaysis, Mette Creaser, offered two explanations for the national decline, saying the subdued labour market and the uncapping of university places had both affected the sector.

But what about WA?

Payroll tax concessions help to explain what’s happening in WA relative to other states.

Employers in WA can claim a payroll tax exemption for staff engaged in training.

No other state offers this exemption, which helps boost training activity in WA, according to Chamber of Commerce and Industry of WA chief executive Deidre Willmott.

“Payroll tax exemptions support businesses in hiring apprentices and trainees and mentoring the workforce of the future, while younger people get a vital opportunity to get on-the-job experience,” Ms Willmott said.

Looking deeper into the WA data, the Department of Training & Workforce Development has found major shifts in training activity.

Its data shows a fall in the number of people in apprenticeships in WA in recent years – from 19,000 to about 17,300 at the end of December last year (see graph).

That has been more than offset by a rise in the number of people in traineeships – from 16,000 to nearly 22,000.

That number is well below the 2012 peak, when the scaling back of federal government training incentives led to a short-term spike in traineeship numbers in every state.

The overall trend, though, is clear, with the biggest growth area being traineeships in finance, property and business services.

Metal trades down

The department’s data also shows major shifts in apprenticeship activity.

Metals and manufacturing trades have traditionally been the single largest grouping of apprentices in WA.

However this sector has been hit hard by the offshoring of manufacturing activity and the downturn in resources construction, which has resulted in fabrication workshops across WA getting less work.

As a result, the number of apprentices in this sector is down 27 per cent over the past five years (see table).

There have also been substantial falls in trades like automotive, personal services, such as hairdressing, food and hospitality.

The one bright spot has been trades linked to the residential construction industry.

The number of building and construction apprentices is up 14 per cent over five years, while the number of electrical apprentices is also up.

Those numbers would have been underpinned by the surge in residential construction activity to record levels in 2014-15, when dwelling commencements in WA hit more than 31,000.

However, with the number of dwelling starts declining and set to fall to as low as 20,000 next year, it’s likely that apprentice numbers will follow suit.

  

Reform call

The Australian Industry Group last week cited the dire national statistics to support a call for major reform of the country’s apprenticeship system.

Chief executive Innes Wilcox said national apprenticeship numbers were at their lowest level in a decade.

“The proportion of Australian workers employed as an apprentice or trainee has fallen to a worryingly low 2.7 per cent of total employment,” he said.

“This is reflected in the fact that apprentices now only make up 9.7 per cent of all those engaged in the entire vocational education and training system.”

A survey by Ai Group found that only 19 per cent of businesses planned to meet their skill needs by employing apprentices and trainees (see table).

COOPERATION: Deidre Willmott says payroll tax exemptions in WA support businesses in hiring apprentices. Photo: Attila Csaszar

Most businesses plan to retrain existing staff on the job or employ experienced workers.

Mr Wilcox said a continuing problem was that completion rates for apprenticeships were unacceptably low.

This was a major focus for the federal government last year, when it established the Australian Apprenticeship Support Network.

The contracted providers in WA include AMA Services WA, The BUSY Group, MEGT (Australia) and Apprenticeship Support Australia, which is run by CCIWA in this state.

Ai Group said the scheme’s impacts needed to be carefully monitored.

Its main call was for the introduction of incentives for employers not currently using apprentices.

The group also wants Canberra to reinstate funding for the joint group-training program, to support group training schemes such as CCIWA’s Apprenticeships Australia and Hospitality Group Training, which are the largest employers of apprentices in Australia.

Ms Willmott said WA industry would also like a greater focus on boosting commencements.

“Employers must be encouraged to take an apprentice in the first place, but equally encouraged to keep that apprentice on for the full duration of their training,” she said.

Tafe restructuring

It’s against this backdrop that Training and Workforce Development Minister Liza Harvey is restructuring state’s the training sector.

The restructuring follows a lengthy review process that was started by former minister Terry Redman in 2014, when he engaged former University of Western Australian academic Margaret Seares to look at the sector.

That was followed by another review, led by company director and former state government minister Cheryl Edwardes and former CCIWA chief executive John Langoulant.

Their 2015 report made a case for change, saying seven of the eight smallest Technical and Further Education (Tafe) colleges in Australia in terms of student curriculum hours were in WA.

“The small size of some of the colleges, combined with high average cost structures arising from delivering services in regional and remote areas, is placing pressure on the financial viability of WA’s Tafe colleges,” their report stated.

“Structural reform of the colleges is needed to address these issues.

“There is also a lack of clarity around the degree to which the colleges are expected to operate as autonomous institutes in a competitive training environment or to operate as part of a wider network of public training providers.”

Mrs Harvey has proceeded with the report’s key recommendations, including a reduction in the number of Tafe colleges from 11 to five – two in the metropolitan area and three in the regions.

Another ‘reform’ will be the reinstatement of the Tafe brand, nearly seven years after another minister, Peter Collier, signed off on the colleges changing their names to polytechnics or institutes of technology.

The buzz phrase in 2009, when Mr Collier was pushing change, was greater autonomy for the colleges; now it’s greater collaboration.

“Colleges will work closely together to ensure more co-ordinated delivery of training programs across the Tafe system, giving students access to a broader range of courses and higher quality training,” Mrs Harvey said this month.

“This will lead to improved links between regional and metropolitan colleges and will allow resources and expertise to be shared across the state.”

Implementing change

Terry Durant is one of the people charged with putting the new policy direction into practice.

As interim managing director of the newly created South Metropolitan Tafe, she is enthusiastic about the changes, including the revival of the old brand.

“I think that’s a great thing,” Ms Durant said.

“To bring the Tafe brand back to the fore is really important.

“The Tafe brand has a lot of traction and respect in the market.”

Ms Durant said the five colleges were already implementing plans to work more closely.

“The collaboration element is very important and it’s something industry is keen to see as well,” she said.

“We will have five colleges that will be in a position to work a lot closer together, to form partnerships that will benefit everyone.”

One small example Ms Durant offered was the ability of South Metro Tafe to supply specialist lecturers in tiling to regional colleges.

“It sounds very simple and low level but they’re the kind of things on the ground that can make a difference.

“In the old days, it may have eventually happened that way but it would have been a much longer negotiation process.”

Ms Durant believes the move to 5 colleges presents more opportunity for reducing red tape.

“Instead of industry dealing potentially with multiple colleges, there is now an opportunity to reduce that.

“We quite often hear from industry that what they want is a one-stop shop.”

The changes are expected to result in about 230 jobs being cut from back-office corporate services functions.

“The minister made clear this process would save money for the sector,” Ms Durant said.

Ms Durant emphasised there would be no impact on students, training delivery, or number of campuses.

“It doesn’t impact on the front line at all.”

Colleges would continue liaising with industry advisory groups, and existing links between industry and staff would largely continue.

“If there are good solid relationships, those people are still there, because that tends to be on the course delivery side.

“Where it will be easier will be at the back end, getting one invoice rather than two and dealing with one organisation.”

Under the new structure, the colleges will seek to learn from each other’s areas of expertise and reduce duplication of course delivery.

South Metro, for instance, is strong in automotive trades, applied engineering in the oil and gas sector, and aeronautics.

“Over time I would expect the new colleges would have areas of specialisation where they are clearly the leader in that field and broad, generalist courses would be offered by a number of us,” Ms Durant said.

“You wouldn’t see duplication of new areas of specialisation.”

Another area that will be more closely coordinated is the offshore expansion of the Tafe colleges.

“A number of colleges have done some offshore work,” Ms Durant said.

“There will be greater collaboration around whether we are picking the right markets.

“The greater oversight is to ensure the offshore activities are relevant and beneficial to the state.”

One thing that won’t change for the Tafe colleges is variable demand for apprenticeships.

“In the general training areas, demand ebbs and flows but not hugely,” Ms Durant said.

“Where we see significant change is in the apprenticeship market, the economy drives that, and that’s where we’ve seen a reduction in recent years in the number coming on board.

“That’s the area that fluctuates the most.”

Further review

As chair of the training review steering committee, Mrs Edwardes has signalled more changes ahead.

She said the next phase of the reform project would focus on funding models for public and private training providers.

There are about 280 private training providers that access public funding in WA.

Collectively they delivered 28 per cent of student curriculum hours in 2014, with Tafe colleges delivering the rest.

In addition, Mrs Edwardes said that in the course of the review, several matters were raised that were outside the terms of reference but have subsequently been raised with the minister.

These include the future role of the State Training Board, Industry Training Councils, the Training Accreditation Council, and issues related to VET in schools.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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