Summary

The paper tracks the development of the Australian vocational education and training (VET) provider market over the last two decades in the context of significant policy changes and generally increased competition. It provides an insight into how the sector has arrived at its current position, painting a present-day picture of great diversity. More importantly, it prompts further, more fundamental, questions about the current structure of the provider market and whether it is optimally placed to deliver the skills and knowledge that students and the Australian economy require.

The now wider scope of the National VET Provider Collection has enabled reports on total VET activity (TVA). TVA data have been instrumental in this initial analysis of provider and student numbers, which builds on the paper Making sense of total VET activity: an initial market analysis (NCVER 2016).

Key messages

• The VET provider market has been relatively stable over the last 15 years, with the number of providers remaining relatively stable during this time, although fewer providers entered and exited the system over the last five years than in the ten preceding years. VET market reforms and changing funding regimes over this period appear not to have driven major changes in provider numbers, despite the underlying turnover of providers.
• In terms of student numbers, the VET sector displays great diversity within and between different types of training organisations. While there are private providers with as many students as the largest TAFE (technical and further education) institutes, there are also many private providers with very small numbers of students. The top 100 providers represent around 50% of the total student population.
• The sector is characterised by a very large proportion of relatively small providers, with almost 2000 providers (around 40% of the total) with 100 or far fewer students. No evidence is provided, nor should any inferences be drawn, about provider quality. However, the challenges of ensuring that students are given sufficient information and regulating such diversity with so many small to very small providers should be recognised.
• The VET sector also has a larger number of providers relative to the higher education sector, noting that the sectors have many differences, including their purpose, funding and regulation, and that VET students are far more likely to be part-time than those in higher education. There are almost three times as many VET students than higher education students in Australia, but at least 35 times as many VET providers.
• Australia also has a larger number of VET providers than comparable markets overseas, based on the number of people of working age per provider. However, there are inherent difficulties in making such trans-national comparisons, particularly in the context of differing institutional arrangements.
• These observations indicate the need to further examine provider output and quality within and across different provider types and, in the light of this, consider whether or not the current provider market structure, as it has evolved, best serves Australia’s future skills and training needs.