26 June 2018

Braithwaite VET review and consumer protection

The All eyes on quality: Review of the National Vocational Education and Training Regulator Act 2011 report by Valerie Braithwaite has now been released by the Assistant Minister for Vocational Education and Skills.

The report states
Apprenticeships and traineeships; full qualifications, skill sets and micro-credentials: Australia’s vocational education and training (VET) sector provides a vital contribution to the skilling of the country’s workforce and hence its economy.
As the Productivity Commission noted in Shifting the Dial – Five year productivity review: “Not only does the system need to provide broad ranging job-related training relevant to employers, it must do so for a wide variety of students with very different needs. It is expected to be a place where young people leaving school can pursue non-academic pathways, where workers can retrain and gain new skills to keep pace with a changing economy, and where people marginalised by the traditional education system can get a second chance.”
However, as the Productivity Commission also noted, the VET sector has experienced significant disruptions in recent years, most notably the fallout from the VET FEE-HELP scheme, which gave rise to seriously unscrupulous behaviour resulting in significant harm being done not only to the sector’s reputation but to the wellbeing – financial and emotional – of a significant cohort of students.
In 2011, Australian governments agreed to change the regulatory structure for VET. Gone were the majority of state-based regulators, replaced with a new national regulator, the Australian Skills Quality Authority (ASQA), established under the National Vocational Education and Training Regulator Act 2011 (the NVETR Act). Regulating over 4,000 registered training organisations (RTOs), ASQA oversees entrance to the market, continuation within the market, and ultimately the exit of RTOs that choose to withdraw their provision. This report shows that ASQA quite frequently also removes their privilege of offering nationally recognised training.
Six years on, and in the face of evolving regulatory practice and theory and a changing VET regulatory landscape, the Australian Government initiated a review of ASQA’s establishing legislation, as well as the broader VET legislative and quality frameworks. Ensuring that these frameworks support a responsive, effective and efficient approach to regulation to further the quality of the national VET sector was an important motivation for the review.
While aware that the technical terms of reference would guide the focus of the review, it was clear during the review’s commission that the student experience – and more importantly safeguarding desirable student outcomes – would provide the prism for viewing the current regulatory framework and recommendations for improvements. The conduct of the review has been informed by the terms of reference outlined in Appendix A in the sense that the review seeks out principles that inform the interpretation of the legislative and regulatory framework and have implications for student outcomes. It is through these principles that the terms of reference are addressed. The narrative and recommendations arising from the review are unapologetically broader than might be expected from a narrow reading of the relevant legislation. This review recognises that the operations of the regulator are indivisible from the legislative framework under which it operates, and how it interprets that framework.
Chapter 2 provides an explanation of how and why principles are important in ensuring regulatory action achieves desirable student outcomes, that is, competent graduates who have had a positive learning experience. Principles enable regulatory partnerships. Partnerships bring cooperation so that many other parties can become ‘eyes’ for ASQA and broadcasters of quality messages. Chapter 2 sets out the principles for a regulatory framework that can simultaneously build a positive culture of cooperation, reward excellence and embrace innovation, while also curbing unacceptable conduct through a system of controls and sanctions. Subsequent chapters review sector concerns over matters raised in the terms of reference and ASQA’s capacity to respond within the current legislative and regulatory framework. Sector concerns can be addressed through recommendations that strengthen ASQA’s capacity to act within the legislative and regulatory framework while promoting greater use of principles and regulatory conversations (Chapters 4 and 5). Change of this kind would assist ASQA explain its regulatory actions to the sector more clearly and partner with stakeholders in leading the sector through the compliance floor and toward the ceiling of improved training quality and student outcomes.
As described in Chapter 3, the review was informed by meetings with key players in the sector, a public submissions process and visits to a number of RTOs, details of which are outlined in Appendices C and D. It is important to reflect that during the conduct of the review, it was clear that the vast majority of RTOs, trainers and assessors were committed to delivering high quality training. There were examples of high quality curriculum materials, pedagogy, training and learning facilities, in addition to well-articulated visions of what the training was achieving and contributing to the lives of the learners. However, submissions and stakeholders also presented evidence of how students had faced disadvantage. When RTOs closed and failed to provide student records to allow learners to demonstrate to other trainers achieved skills and completed units of competency, the students had no basis for gaining recognition for their prior learning. Some of the worst abuses involved unconscionable contracts between RTOs and students that placed learners at serious disadvantage.
There was acknowledgement that ASQA has a challenging role in maintaining and improving quality in the VET sector. While it has a wide range of regulatory powers at its disposal, the size of the market it oversees is significant. It regulates a continuum of organisations ranging from the highest performers to those acting on the edges of almost criminal enterprise. ASQA has, within a relatively short period of time, evolved its regulatory practice from predominantly simply processing applications to the development of a sophisticated risk-based model, and more recently to the introduction of a five-stage student-centred audit model. Stakeholders commented favourably on this evolution. Equally the review has identified paths to further improvement.
The VET sector would benefit from improvements in the strategic collection, analysis and circulation of data as well as a stronger ability to manage entrance to the market. These issues are discussed in Chapter 5 with recommendations for greater openness and timeliness in relation to access to the National Centre for Vocational Education Research (NCVER) RTO-aggregated data, and a higher bar for gaining and maintaining registration as a VET provider.
The review has not found that, at this stage of the evolution of the regulatory framework, there are major deficits in its functions and powers that disable ASQA from appropriately regulating the current VET environment. There is a strong expectation that quick and effective regulatory action be taken against providers whose non-compliance is harming students, employers and the reputation of the sector. But the review has found that providing ASQA and other regulatory agencies have better access to data that is as close as possible to real time, there is scope for ASQA to use its current powers to sanction such RTOs while drawing on back-up support from partnership networks in the sector. Deepening the quality of regulatory conversations in ways that sharpen and refine existing tools is the imperative rather than creating a wide range of new formal powers. As discussed in Chapters 4 and 5, the sector broadly supports ASQA working in partnership with it. There is readiness to embrace opportunities to connect the formal regulator with other experts and partners in the regulatory culture to lift standards.
Equally important and aligned with these developments is the principle that ASQA cannot mandate quality: As a regulator its role is to motivate RTOs to reflect on their performance, what they might do better and how they might go about improving their performance. Recommendations in this review favour continuous improvement over mandating quality standards that all RTOs must achieve. Ultimately, the way ASQA should regulate for quality (as opposed to sufficiency) is to look at how well RTOs go about setting their own higher standards, checking if such standards are met, motivating through praise and encouragement and support when they have achieved improvement, and advising on options when they have not.
The dominant theme that has emerged can be captured by reference to the ethos of the regulatory framework, and more tangibly, ASQA’s regulatory philosophy and culture (Chapter 4). There were concerns about the compliance burden on RTOs, the inconsistency of audits and auditors, the difficulty in making sense of ASQA’s regulatory approach, and a disconnect from what RTOs considered important for regulation of the sector. In short, ASQA’s regulatory task is made more difficult and the sector’s anxieties are increased by a lack of supportive regulatory conversations. A new path for restoring some balance in this regard has been opened through a general appreciation of ASQA’s move to its new audit model that recognises the need to prioritise the student experience and outcomes. As this model is fully rolled out, there is opportunity to address some of the sector’s concerns that are summarised in Appendix D. More regulatory conversation to pre-empt compliance audits, using partners to regulate on issues where RTOs admit non-compliance, the inclusion of more people who can help with compliance in post-audit conversations are essentially cooperative strategies that can give ASQA more time to focus on the hard cases (see Chapter 5). Transparency of ASQA audits is a further recommendation in Chapter 5 to widen and inform the sector on where systemic weaknesses lie and where strengths may be found. With timely data and a sector that has an improved understanding of how ASQA operates, ASQA will be better positioned to encourage compliance and sanction when compliance conversations fail.
Deepening VET professionalisation and the commitment of the teaching workforce to continuous improvement in the quality of teaching and learning are also imperative. During the conduct of the review, the Australian Government Department of Education and Training referred recommendations three and four from the Training and Assessment Working Group Report, recommendations that focused on improving the quality and professionalisation of the VET workforce. While this review did not find that the actions contained in the two recommendations would, by themselves, lead to significant improvements in VET quality, they did mirror two of four emerging issues that were concerns and challenges for the sector’s future – training quality and teaching professionalism (RTO ethics and student protection and wellbeing being the other two emerging issues). Convincing RTOs to invest in quality teachers and providing career paths for VET teachers gave rise to three recommendations in Chapter 5. Requiring RTOs to reflect on and report their progress in lifting the quality of teachers in their RTO is a recommendation buttressed by sector engagement in finding ways to reward quality teachers. The review recommends kick-starting efforts to create a more vibrant labour market in VET teaching through creating the position of Master Assessor. Master Assessors are also master trainers who adopt a leadership role in professional development and provide a service in what is essentially external assessment for high risk VET industries in the sector. ASQA can interrogate an RTO’s success in delivering desirable student outcomes through engaging the services of a Master Assessor.
Throughout the review, stories arose of students whose experiences of their VET journey could be classed as disappointing if not demoralising. Stories were told of students incurring enormous debts for training they did not start or were unlikely to be able to successfully complete. Many were unable to secure refunds when their circumstances changed. Abuse and exploitation were seen as persistent problems. Consumer protection has not kept abreast of the increasing commodification of students and the business practices that have exploited them. Chapter 6 focuses on essential reforms to protect vulnerable students and their wellbeing, including reforms to tuition assurance schemes and the establishment of a Tertiary Ombudsman to deal with the fragmentation of consumer protection across the country.
The review accepts that the establishment of ASQA under the NVETR Act has, on balance, been a helpful start to establishing a VET regulatory framework to clean up such abuses. It has reduced overlap and duplication across the country, and the reforms to ASQA’s audit model augur well for the future. It is also acknowledged that ASQA performs its essential role in a complex and challenging environment. Few regulators in Australian history have cancelled registrations for such a large number of businesses in a relatively short period of time; yet few have faced such major challenges of profound importance to Australia’s future.
Further evolution of the regulator’s philosophy and practice, broader partnerships with informal regulatory forces informed by the principles in the regulator’s statute, and improvements in the provision and use of data are likely to pay higher dividends than merely technical changes to a legislative framework that already provides significant ‘teeth’. Focusing the ‘eyes’ of all the sector – government bodies, funders, employers, professional associations, peak bodies and students – on quality is essential to ensure desirable student outcomes and return Australia’s VET sector to its previously enviable international standing. The review suggests that the Government commit to evaluating ASQA according to its success in driving continuous improvement in the quality of education and training and protection of the rights of students, both of which are integral to desirable student outcomes.
The recommendations in the report are -
1. ASQA develop and implement processes to enhance its capabilities and opportunities to proactively engage in regulatory conversations with students, teachers, RTOs, industry and other interested stakeholders. The desired outcomes are to improve the value of the student-focused regulatory approach and involve the sector in developing the regulatory culture that drives ASQA’s use of its legislative powers. 
2. In order to enhance transparency and consistency in the use of the legislative framework, ASQA should build on its regulatory conversations and practice reflections to develop and clearly articulate to the regulatory community the principles applied to the interpretation of legislation and the use of powers. 
3. ASQA works with RTOs to develop positive assurance flags to include in the ASQA risk matrix and develop a mutually agreed method of communicating this information publicly without increasing the compliance burden on RTOs. 
4. The Australian Government amends the legislative framework to ensure that entrants to the registered training market be required to clearly demonstrate educational commitment and knowledge of how to provide best practice support to students. This statement of commitment should be required as a condition of registration and include quality performance objectives, which, if breached, could lead to sanctions and ultimately de-registration. 
5. The Australian Government strengthens the fit and proper person requirements and change notification requirements under the NVETR legislation and where appropriate aligns them with TEQSA and ESOS Act provisions and any other relevant legislation. 
6. The Australian Government amends the legislative framework to ensure greater scrutiny of new providers to: • provide that where an RTO without reasonable justification does not commence providing training within 12 months of being registered, or during its registration ceases to provide training for a 12-month period, its registration automatically lapses, meaning that it would no longer be registered. • prevent RTOs changing the scope of the courses they deliver where an RTO has been operating for less than 12 months. 
7. The legislative framework be revised to require an RTO to assess the quality of its teaching workforce and develop teacher quality improvement actions, which must be submitted to ASQA annually as a part of the Quality Indicator Annual Summary report. 
8. The Training and Education Training Package be reviewed with the purpose of creating a career path for teaching excellence in vocational education and training. 
9. The Australian Government leads a process to raise the standards of teaching and training excellence and professionalism in the sector through creation of the role of Master Assessor. A Master Assessor would be placed at the pinnacle of the VET teacher/trainer career path with the responsibility to mentor through professional development programs and assess the quality of an RTO’s next cohort of graduating students. 
10. The legislative framework be amended to increase the frequency of data provision to the National Centre for Vocational Education Research to quarterly for all RTOs. 
11. The Australian Government prioritises the improvement of policies and systems that allow for transfer of real-time data for timely use by other agencies with regulatory responsibilities for identifying and responding to emerging sectoral and provider-based issues. 
12. a. The Australian Government and the National Centre for Vocational Education Research explore ways to increase student response rates to the Student Outcomes Survey, and b. The National Centre for Vocational Education Research, ASQA, and the sector identify a module of questions that directly addresses the quality of the student journey in the Student Outcomes Survey. 
13. The legislative framework be amended to enable the National Centre for Vocational Education Research to make the RTO level data it holds publicly available and identifiable. 
14. The Australian Government explores ways to strengthen the regulatory framework by expanding the circle of dialogue around improving the quality of the student journey pre- and post-audit to include all stakeholders who could contribute to future improvement in an RTO’s performance. 
15. The National Vocational Education and Training Regulator Act 2011 be amended to require ASQA to publicly release audit reports. 
16. The legislative framework be amended to require RTOs to publish nationally consistent consumer information that is accessible and meaningful to students and meets the basic needs for decision making (for example, course entry requirements, course length, employment outcomes, and fees, including subsidies and course cancellation fees). 
17. The legislative framework be amended to strengthen ASQA’s ability to take action under a general prohibition against misleading or deceptive conduct which reflects Australian Consumer Law requirements. 
18. The legislative framework be amended to require RTOs to strengthen consumer protection in student enrolment agreements through the adoption of contracts that avoid unfair terms as defined in Australian Consumer Law. 
19. The legislative framework be amended to require RTOs to keep electronic records showing a minimum of student completions of units, courses and qualifications over the life of the RTO, preferably using an AVETMISS-compliant student management system. 
20. The Australian Government investigates ways in which, in cases of administration and liquidation, priority is given to the timely provision of student records to ASQA and the protection of students’ investment in their education. 
21. The legislative framework be amended to explicitly address student safety and wellbeing in alignment with the Higher Education Standards Framework (Threshold Standards) 2015. 
22. The Australian Government considers strengthening tuition assurance by assuming responsibility for the operation of all tuition assurance and protection arrangements and ensuring that the scope of these arrangements protects all VET students. 
23. The Australian Government establishes a national Tertiary Sector Ombudsman.