Changing Regulatory Framework

 “Change is the only constant of life”

Heraclitus of Ephesos (c. 500 BC)


Change is certainly nothing new! And within the world of vocational education, change is definitely the norm. If we just look at the first six months of 2015, there have already been some significant changes:

  • Regulatory—the new Standards for Registered Training Organisations (RTOs) 2015; Higher Education Support Act 2003 (VET GUIDELINES 2015) for VET Fee Help providers; and
  • Funding—Smart and Skilled in NSW; Skills in the workplace funding SA; and Future Skills WA.

So what does this all mean for Registered Training Organisations (RTOs)?

For many small providers, keeping up with all of the changes while keeping an eye on their business can become too much of a burden. The industry is seeing a shrinking number of sole proprietor RTOs, specialist niche RTOs and ‘mum and dad’ RTOs. In 2013, ASQA had 4003 registered RTOs and VRQA 463. In 2014 this number dropped to 3938 and 398 respectively[1]. That is a drop of 3%.

To keep ahead of funding changes, many RTOs are expanding their Scope of Registration to cover a wide variety of industries, thus spreading the risk. This has meant hiring of staff for training delivery expertise outside the owner’s original industry, and also the hiring of compliance staff. This of course provides a number of benefits, but also sets up a number of risks. Keeping an eye on ‘all the moving parts’ can be difficult.

“Ultimately the responsibility for compliance falls on the CEO’s shoulders.”

In Australia, we’ve also seen a growing trend in RTO groups listing on the ASX, with mixed fortunes. By pooling shared services, such as HR, finance, administration and compliance functions, these groups are able to gain economies of scale in what is essentially, a low-margin industry, when providing a quality product.

It’s a sad fact that Australians undervalue training and education, and as with many things, price is often a determining factor in choosing a provider. Websites set up by the Federal Government, to assist Australians to choose a quality provider, such as My Skills and My Future provide learners with information about careers, employment prospects, average prices and course duration, starting salaries, course completion rates and potential government subsidies. The student then needs to research each provider individually. It’s a requirement of registration, that all providers have a copy of their latest regulatory audit present on their website. I suspect very few prospective students are even aware of, or bother to read them, and the reality is that these reports can be up to five years old.

How then does a good, compliant RTO get noticed? 

Recently ASQA, the national regulator that covers all RTOs, except those delivering only in Victoria or WA, invited a small percentage of RTOs to apply for a delegation of regulatory responsibility to manage their own scope of registration. These high-performing RTOs who are being rewarded for high levels of compliance are not highlighted in any way on any official government website. The benefits to the RTO are purely in cost—ongoing compliance costs with regards to extensions to scope.

So what can we take away from all of this?

To not keep up with the changes in the VET industry, is to go backwards. Our world is constantly evolving. The industries we prepare students to enter are constantly evolving. The way we teach is changing, the way students want to learn is changing, and the way governments regulate and fund the industry is changing too. But change is not necessarily bad.

 “You can’t stop the future

You can’t rewind the past
The only way to learn the secret
…is to press play.”
Jay AsherThirteen Reasons Why

Interested in finding out more? Connect with Marie on LinkedIn to keep the conversation going

[1] ASQA Annual report 2013-14, and VRQA annual report June 2014

Marie VassaioMarie Vassallo has more than 15 years of experience in vocational education. She has worked at all levels within a Registered Training Organisation (RTO), including as CEO for a large national RTO. Marie has also worked as a Skills Victoria Auditor. Since 2008 she has managed her own company, Marie Vassallo Consulting, and brings her business and compliance skills to the table, delivering real world solutions for RTOs. Her consulting business provides assistance with regulatory and funding authority audits, contract applications, validation and moderation workshops and professional development workshops for all levels of staff. In 2014 Marie became an Accredited VETtrak Consultant, providing training to administration staff and management in how to gain the most from this student management system.