VET BI Report 2019: The year in review

Brave New World

If there is one change that characterises 2019, it is the long overdue purging of many large and serious fraudsters from the industry. The involvement of law enforcement agencies at the heavy end of the regulation process, meant that many of the large players exploiting the weaknesses in the regulation regime have been caught (and jailed in some cases). With many others deftly fleeing the heat or quickly cleaning up their act before being caught out, it is clear that there has been a major reduction of blatant fraud in the industry, making more space for genuine training organisation of all sizes.

Most honest training providers will be relieved to hear that this has finally happened after decades of competing against these slick organised crime outfits. It took the federal treasury noticing a few billion dollars of bad debts in the budget to force the federal and state governments into action, but they finally understand the scale and nature of the problem.

New RTOs in 2019

Despite gloomy predictions for the sector from established sources and complaints about the difficulty of complying with VET regulations, there was a steady stream of new RTO registrations from start-up businesses. There were 101 new RTOs registered in 2019. The pathway of experienced trainers going out on their own and taking on the challenge to “do things the right way” is as strong as it ever has been. Interest from large private and listed business aggregators has been lower, due mainly to the tightening up of the VET Fee-Help system (rebranded as VET Student auto loans for bad credit) and a general downturn in business sentiment. As always happens in a capitalist economy, small business activity keeps the country going (and even growing) when the “fat cats” pull back.

The “Ins” and “Outs” of Compliance

In a welcome contrast to the heavy approach to the serious fraudsters in the industry, ASQA have pulled back for their hard approach of “put them out of business first, and let them appeal if they can afford it” and adopted a more conciliatory and measured approach to regulation.

Many serious restrictions were limited to partial scope, allowing genuine RTOs to continue to deliver the courses they were getting right, while they work to improve those deemed to have serious non-compliances. For non-compliances which appear not to impact the quality of training, ASQA might require detailed retention of records for an extended period, to enable the auditor to make a better determination, and for the RTO to improve their marketing, record keeping and quality improvement processes. All in all, it is a strong but more proportional response to non-compliances. The appeal process appears fairer, with restrictions and conditions being negotiated in the Administrative Appeals Tribunal rather than an absolute win/lose outcome.

The formal requirement to notify ASQA when commencing delivery or national courses appears to now be a regular part of the new RTO registration process, possibly when the new RTO delays commencing operations.

209 RTOs had restrictions added and 64 had them removed in 2019. Taking out an estimate of the non-sanction commencement notifications, this would indicate that around 160 RTOs have had serious compliance problems and nearly half of those corrected the problems or have continued to operate with a reduced scope or closer monitoring. This doesn’t take account of those voluntarily ceasing registration which (anecdotally) is a significant figure this year. As ASQA increases scrutiny on record keeping and assessment standards, even as they soften their enforcement process, some providers find that RTO compliance is not worth the benefits for the business they are in. Some choose to deliver only non-accredited training or deliver their courses under the auspices of a partner RTO effectively outsourcing and aggregating the compliance work.

There were 221 RTO de-registrations in 2019 in total. 132 (60%) of those were forced to close by the regulators (“Cancelled” status), with the remaining voluntarily ceasing their registration or not renewing their registration when due. How many of those made their decision to withdraw, or not to renew, because of pressure from the regulators is uncertain but it is likely to have been a factor in some of those as well. The nett effect in any case is that there are 120 fewer RTOs at the end of 2019 than at the beginning.

Training component changes

After the failed attempt to curb the ridiculous number of unit coding changes a few year ago by removing the “version suffixes” from all unit codes, the madness continues with bulk updates to training packages where the entire code changes instead of just incrementing the suffix. This is effectively the same thing in terms of compliance cost and disruption, without the useful association with previous versions. Code changes still occur for the most inconsequential changes such as clarification on the wording of the unit to convey the same meaning better, or often with no changes at all – just because the entire package needs to be reviewed so everything in it is given a new code.

Another big change in 2019 was the addition of codified “modules, part of a recognised course” to training.gov.au. There are more than 8,300 modules already codified from among 699 current accredited courses. There are over 18,000 accredited courses and 13,000 modules on training.gov.au if you include deleted and superceded courses, so it is clear that there has been a major culling of accredited courses along with this formalisation process. These recognised courses are generally defined and supported by niche industry organisations aiming to improve the quality and consistency of products and services in their industry. Even so, the number of current qualifications, units, courses and modules provide some indication of the extraordinary diversity of the Australian VET system.

It is more important than ever that RTOs keep themselves up to date with these changes. VET BI can help you do that, by notifying you of changes based on a broader subject category rather than just tracking changes to individual components, which (in a minority of cases) may not be deemed equivalent to a new component.

Funding changes

A review of the funding numbers for 2019 shows a stark picture. SA substantially increased the number of funded RTOs by 30% (mainly in the latter half of the year), while ACT dramatically cut the number of funded RTOs by 32%. The other states/territories showed normal churn to maintain steady numbers.

Many of the QLD providers were both added and removed or visa versa so this indicates an administrative glitch rather than a policy trend. By contrast, WA had a genuine churn, with many providers dropping out and new ones being added. NT had no changes to funding at all.

Annual Reports for 2019

You can view the reports below for all details on recent activity and changes.

• RTOs Added
• RTO Type Changes
• RTO Restrictions
• RTO Scope Changes
• RTO Locations
• RTO State Funding
• Training Components