Quality Review of TAFE SA - Department of State Development
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Quality Review of TAFE SA Department of State Development 4 April 2018
This page is intentionally blank. © Nous Group Nous Group | Quality Review of TAFE SA | 4 April 2018 |i|
Contents
Executive Summary................................................................................................................................................................................ 1
TAFE SA needs to be more effective .......................................................................................................................................... 5
TAFE SA needs to be more efficient ......................................................................................................................................... 6
1 TAFE SA has been operating in a turbulent and challenging environment .......................................................... 7
1.1 The Australian VET market has been re-shaped by competition-driven reforms ....................................... 7
1.2 South Australia has not fully completed its transition from Skills For All to WorkReady ........................ 8
1.3 TAFE SA’s recent performance .......................................................................................................................................... 9
2 ASQA’s report and election of a new government creates the opportunity for a major re-set ................ 13
2.1 ASQA found non-compliances in the quality assurance systems of TAFE SA which damaged its
reputation .......................................................................................................................................................................................... 13
2.2 The response required was of both a technical and strategic nature ........................................................... 14
3 Our review focuses on systemic issues that led to the adverse findings by ASQA ........................................ 15
3.2 Purpose ................................................................................................................................................................................... 16
3.3 Strategy ................................................................................................................................................................................... 17
3.4 Governance ............................................................................................................................................................................ 21
3.5 Resource alignment ........................................................................................................................................................... 26
3.6 Capability and capacity ..................................................................................................................................................... 29
3.7 Workplace climate and culture ...................................................................................................................................... 33
4 TAFE SA must become effective and efficient ................................................................................................................ 35
4.1 TAFE SA needs to be more effective .......................................................................................................................... 36
4.2 TAFE SA needs to be more efficient ........................................................................................................................... 39
Appendix A Terms of Reference TAFE SA Quality Review (Nous Group) .............................................................. 40
Appendix B Satisfaction data .................................................................................................................................................. 41
Appendix C Documents reviewed ......................................................................................................................................... 42
Appendix D Stakeholders engaged ...................................................................................................................................... 43
Nous Group | Quality Review of TAFE SA | 4 April 2018 | ii |Executive Summary
The new government in South Australia faces a challenging set of questions about TAFE SA – how it is to
be governed, resourced and the extent to which (and how quickly) it is exposed to fully contestable access
to the publicly-subsidised training market. This report aims, in part, to inform the Government’s decision-
making on these aspects of TAFE SA’s operations.
This Review was triggered by adverse findings by the regulator
TAFE SA is the dominant provider of vocational education and training (VET) in South Australia, currently
receiving an 85% share of public funding. Its reach and reputation for reliably delivering training of a high
quality has seen it acquire standing in South Australia not simply as a training facility, but as a somewhat
iconic and familiar institution.
While TAFE SA had come under criticism for being slow-moving, inefficient and overly protected, rarely
were there concerns expressed about the quality of its VET delivery. This changed dramatically when an
audit by the Australian Skills Quality Authority (ASQA) concluded that TAFE SA was non-compliant in a
number of areas relating to assessment. ASQA gave notice in early December 2017 of its intention to
suspend 10 qualifications from TAFE SA’s scope of registration.
The shock of this finding, and its implications not only for TAFE SA but for VET in South Australia, was such
that the former government sought the resignation of the TAFE SA Board chair and accepted the Chief
Executive Officer’s offer to step down. It then commissioned two independent reviews: a Quality Review
(to which this report relates); and a Capability Review. While both ultimately address the question of how
to restore confidence in TAFE SA, each approaches this question from a different starting point.
Its focus is on the systemic issues that contributed to this outcome
The purpose of this Quality Review (the Review) is to “make recommendations to ensure the quality,
sustainability and reputation of the state’s public VET provider.”1 It seeks to identify the systemic issues
within TAFE SA that contributed to ASQA’s adverse findings and set out the key reforms that would be
needed to lift performance and thereby restore TAFE SA’s reputation in the market and the wider
community.
This report begins (in Section 1) with a brief overview of the environment in which TAFE SA operates,
noting the impact of successive reforms and the sharp shift in focus to cost reduction from 2015-16. It
discusses briefly (in Section 2) the initial response to the ASQA audit, including Nous Group’s (Nous’) view
on the rigour and thoroughness of that response, and notes the opportunity that the change of
government offers to introduce a major reconsideration of the relevant policy settings.
Section 3 then analyses the different components of TAFE SA’s organisational performance to identify
where there may be systemic weaknesses or failings that contributed to the audit outcomes. It starts with a
consideration of how TAFE SA’s purpose and strategy was interpreted, and how it has been governed,
before then considering issues such as internal culture, capability, systems and resource alignment.
Section 4 offers recommendations that speak to potential improvements in TAFE SA’s effectiveness,
including with respect to its quality systems, and to its efficiency, noting a continuing imperative to ensure
that public investment in the institution provides an appropriate return. Both effectiveness and efficiency
are important to restoring faith in TAFE SA’s ability to: deliver training to a high standard, respond to
evolving industry needs, and to compete with other providers (as and where appropriate) in the market.
TAFE SA’s approach to cost reduction was narrow and short-sighted
The introduction of the WorkReady program in 2015 (as a successor to Skills for All, which had triggered a
dramatic uptake of publicly-funded training places and created significant budget pressures), brought with
it a target to reduce the cost to government of TAFE SA by $50 million by 2019-20. The cost reduction was
expected to be achieved through greater efficiency, a more streamlined course offering, and an increase in
fee-for-service revenue. It was pursued as part of a broader strategy to make publicly-funded training
more contestable.
1
Terms of Reference for the TAFE SA Quality Review. See also Appendix A.
Nous Group | Quality Review of TAFE SA | 4 April 2018 |1|The TAFE SA Board embraced this challenge, seeing it as an opportunity to shape TAFE SA into a more
commercially-oriented organisation that was better able to compete with private training providers in the
market. There were a few problems with the organisation’s approach to cost reduction, however:
1. There was insufficient attention to the impact on volume of delivery. The amount of training
declined overall and costs per hour did not improve. (In fact, TAFE SA’s efficiency has steadily
worsened since 2013.)
2. Most of the focus was on staff reductions, which could have been better targeted. TAFE SA
obtained additional funding to enable Targeted Voluntary Separation Packages (TVSPs) to be offered,
which facilitated a reduction in FTE staffing levels of 26% (724 FTE, including 530 who left on TVSPs).
While many high-cost staff left, there did not appear to be strategic consideration of how to realign
organisational resources to improve efficiency and cater best to market demand.
3. The Board, in particular, lost sight of the importance of quality both as an end and a means. The
Board’s single-minded focus on cost-cutting (and to a lesser extent, revenue generation) meant that
quality issues were de-prioritised. Not only did this increase the risk of becoming non-compliant, it
overlooked the need for TAFE SA to maintain a reputation for quality in order to compete effectively.
The absence of a more balanced and strategic approach points to systemic issues
These weaknesses reflected in part the Board’s leadership and positioning of TAFE SA under the former
Chair, who was seemingly insufficiently challenged by either his colleagues or the then TAFE SA Chief
Executive Officer (CEO). (We hasten to add that there has been marked improvement in the approach by
both the new Board Chair and the Interim CEO since their respective appointments.)
In terms of systemic issues, the roots of these problems lay in the articulation of TAFE SA’s strategy, and
the governance arrangements as they pertain to the Board and senior executives.
On strategy, this report concludes that TAFE SA’s strategic plan ‘on paper’ was generally sound but
was communicated and executed in a way that unintentionally downplayed the importance of
maintaining quality and training output. Improving TAFE SA’s commercial performance was seen
primarily in terms of an imperative to reduce costs.
On the question of governance, board membership was unbalanced, the wrong structures were in
place to effectively monitor risk to regulatory compliance and reputation, and performance metrics for
executives were skewed. The most concerning finding, and an indicator of both the poor support
provided to the Board and the limited sense of responsibility of its members, was that internal quality
auditors had made discoveries similar to those later made by ASQA. They reported TAFE SA’s non-
compliance ‘up the line’, but these internal audit findings revealing a high degree of exposure were
not given proper consideration at either the executive or Board level.
Several aspects of organisational effectiveness and efficiency went unattended
Nous was not in a position to engage widely with staff and investigate in detail the different facets of
organisational performance. However, on the basis of targeted interviews, desktop analysis and several
focus groups, this report presents our observations on the following:
Resource alignment – there was an apparent skew towards more staff in corporate functions that
emerged as a result of the voluntary redundancy process (as noted above) and the potential need to
review the spread of responsibilities at senior levels. The implication is that relatively fewer resources
were dedicated to quality teaching and assessment.
Internal governance – responsibilities and accountabilities within TAFE SA seem unclear, delegations
are in need of an overhaul, and the performance management system requires improvement. On a
more positive note, recent attention to building a more robust quality system is encouraging.
Capability – there has been a commendable effort since December 2017 to upgrade the formal
training and assessment qualifications of staff and provide more professional development,
particularly with respect to assessment processes. However, there are questions about the quality of
TAFE SA’s management and leadership, particularly under the previous CEO, which relate to strategic
Nous Group | Quality Review of TAFE SA | 4 April 2018 |2|thinking, communication skills and resource management skills. We also query whether sufficient
focus has been given in recent years to maintaining the industry currency of educational staff.
Culture – this presents both an opportunity and a risk for TAFE SA. There is large contingent of highly-
motivated and loyal staff who want to help restore confidence in the institution of which they are very
proud, but who have felt alienated from and unclear about the overarching strategy and role of TAFE
SA in the wider system. They have also been inculcated into a culture of fixed rules and entitlements
that arguably diminishes a sense of trust, responsibility and ability to ‘lead from below’.
Our recommendations provide the frame for reforms to restore confidence in TAFE SA
To address perceptions (and judgements) of poor quality, TAFE SA must not only focus on improving its
internal quality assurance systems, it must ensure its internal functions operate well so that its services are
well-targeted, well-managed, properly-resourced and appropriately governed. The Review’s
recommendations are listed overleaf and are intended to deliver these outcomes. Taken together they
provide a framework for reforms that would bolster TAFE SA’s effectiveness as a quality training institution,
and its efficiency as an organisation that is more costly than it ought to be.
The immediate focus is to reposition TAFE SA as a provider that can again compete on quality, while also
becoming more cost-effective. Achieving this goal involves addressing the weaknesses highlighted above
as well as improving both its efficiency and agility. This will not be easy and, in our view, will require
continued effort over the next 2-3 years to, among other things, modernise TAFE SA’s internal systems and
its industrial arrangements.
The Review’s recommendations follow a logic that sees organisational performance grounded in a clear
and strong alignment between the driving purpose and strategy, governance systems and a business
model that delivers on strategic priorities. Success is contingent on key elements of the organisation’s
operating model, including its capability, culture and systems.
The recommendations are grouped into those that relate to effectiveness, and those more strongly
focused on efficiency, but they should be viewed as a package. The key to lifting TAFE SA’s future
performance and restoring its reputation lies in pursuing reform across both fronts in an integrated way.
Note that we do not have recommendations relating to TAFE SA’s financial sustainability. While we have
made observations on this, we see the broader question of the organisation’s financial model being highly
contingent on evolving policy.
The starting point is to re-set strategy and governance
Early steps relate to re-affirming the role of TAFE SA in the market to clarify and articulate effectively its
strategic intent (Recommendation 1), noting that doing so requires first, a re-set of the overarching
governance of the organisation (Recommendation 2). While there are individuals on the Board who have
made a positive contribution to TAFE SA’s evolution, as a collective there was a clear failure to fulfil basic
requirements concerning the need to ensure regulatory compliance. A renewed board – though one which
we suggest maintains some continuity, particularly with respect to the involvement of the current Chair
and the one member with a strong background as an educator – should have a clear mandate to drive a
comprehensive uplift in performance, including on quality.
Part of the governance challenge also concerns ensuring that there are the right structures and practices
in place to ensure well-informed decision-making. This includes having sub-committees that can actively
consider risks across all dimension of performance, including delivery, finances and regulatory compliance.
We agree with others who have suggested that consideration be given to a new expert committee to
complement the current Higher Education Academic Board. The new committee would provide an
independent stream of advice on TAFE SA’s quality issues as they relate to delivery of VET qualifications.
Recommendation 3 speaks to the interaction between the Board and the organisation, which has
improved markedly in the last several months, to avoid a return to the opacity and strategic disconnect
that emerged under the previous regime. This recommendation also urges more attention within the
Board to regular self-reflection and critical assessment of TAFE SA’s performance against its strategy.
Recommendation 4 continues the journey deeper into the organisation’s governance by invoking the
need for a thorough review of the level at which decisions are made and producing a less ambiguous view
of where responsibilities and accountabilities lie. This is critical to mitigating the risks both of senior
Nous Group | Quality Review of TAFE SA | 4 April 2018 |3|decision-makers being distracted by low-level issues and of more important matters ‘slipping through the cracks’. A medium-term focus on capability and culture is needed The Review makes two recommendations on capability, noting that the separate Capability Review will doubtless have more to say in this area. Recommendation 5 concerns the educational staff in TAFE SA, most of whom bring considerable expertise and whose quality and commitment to serving the interests of students and employers we would not criticise. Considering the risks of further adverse audits, we nevertheless recommend that there be a concerted effort to ensure that TAFE SA’s lecturers, particularly those who have been on staff for a long time, have maintained industry currency. Given the relatively low turnover of staff, there is a risk that some staff may fall short of the standard. Recommendation 6 addresses the observed and reported inconsistency in the quality of leadership below the level of the current Interim CEO. Both she (and her successor) and the Board Chair require strong support from the leadership team, while the organisation more generally has the necessary direction from senior and middle managers to maintain strategic coherence, foster innovation and promote timely communication of critical information. The solution is not simply to change staff or roles but to develop a comprehensive talent strategy for the organisation, geared towards continual recruitment and development of necessary capability. Recommendation 7 acknowledges the great value of a strong and largely positive culture evident within TAFE SA. It calls for a change strategy that is very much anchored in these strengths, but which aims also to address those aspects of culture that militate against initiative or active engagement in the required shift in performance. We propose the culture change strategy be developed inclusively to avoid the further alienation of dedicated, hard-working and capable educators which could present further risks to quality and delivery. Efficiency improvement will also take time Recommendations 8 and 9 concern the investment required to build more efficient internal systems and processes (Recommendation 8) and to realign resources to better reflect strategic and operational priorities (Recommendation 9). On the former, there is a challenge to fully realise the economies of scale from the consolidation of three TAFE institutes into one (which took place in 2012) through greater standardisation, and to move further away from paper-based record-keeping. This will inevitably take some time; but it would be an important and worthwhile investment. Recommendation 9 derives from the observation that there seem to be too many resources dedicated to corporate work relative to education delivery and quality assurance. To test this hypothesis, Nous recommends a benchmarking exercise be conducted as a first step the then undertaking a more thorough realignment of available resources to the priorities that emerge from the proposed new strategy. Stability through change The recommendations point to the need for fundamental reforms, which for TAFE SA staff will likely represent a continuation of uncertainty and disruption. But with the right strategic frame and leadership, combined with appropriate consultation that leverages existing goodwill, there is every chance that the new government can realise its objectives of a well-regarded and competitive public provider of VET in South Australia. We trust that this report, alongside other input including the Capability Review, represents a positive contribution to this reform effort. Nous would like to put on record its thanks to TAFE SA and the Department of State Development (DSD) for their assistance in providing data and access to stakeholders with whom we engaged. Please note that we have included anonymised quotes in the text to amplify key insights. These should be regarded as illustrative rather than necessarily verbatim quotes. Nous Group | Quality Review of TAFE SA | 4 April 2018 |4|
TAFE SA needs to be more effective
Table 1 | Summary of recommendations
No. Recommendation
To redefine TAFE SA’s purpose and strategy, we recommend that the Board:
a. Develop a new strategic plan to provide both the imperative and the frame for a broader set of reforms to
improve TAFE SA’s performance and restore the public’s confidence.
b. Craft an accompanying forward-looking and compelling narrative so that all parts of TAFE SA understand
STRATEGY
the challenges and expectations of reform, as well as the values and behaviours that the workforce is
1 expected to emulate.
c. Oversee the comprehensive implementation of the new strategy, with strong engagement by executives
and managers to ensure effective translation of strategic priorities into business unit-level actions, for
which those leaders should be held accountable.
d. Ensure that the strategic plan implementation is supported by metrics and data sources that reflect new
objectives and priorities so that the Board, Executive and the Government have a full and timely view of
performance across key dimensions, including quality.
To improve overall TAFE SA governance and attention to quality, we recommend that the Minister:
a. Renew and, if necessary, expand TAFE SA’s Board so that there is stronger representation of VET delivery
and management expertise and a clear forward-looking agenda centred on restoring confidence in TAFE
2 SA’s quality, capability, reliability and responsiveness.
b. Explore the establishment of a VET quality advisory committee to complement the role of the Higher
Education Academic Board. This committee would advise the TAFE SA Board on the quality assurance and
assessment mechanisms that TAFE SA employs and potentially assess any SA-specific training products
prior to submission to ASQA for formal accreditation.
To ensure effective and strategic oversight of the organisation and engagement by the board, we
recommend that the TAFE SA Board:
GOVERNANCE
a. Maintain appropriate committee structures and reporting lines so there is high-level visibility and
consideration of all audit and risk issues, supported by wider engagement with TAFE SA executives than
has been the case in the past.
3 b. Undertake annual self-assessments of performance, capability and structures as well as a robust
performance appraisal of the CEO.
c. At least once a year devote time to critical reflection of, and a strategic discussion about, TAFE SA’s
performance across all dimensions, including quality indicators.
d. Develop and implement a stakeholder engagement plan for the Board and its members so that there are
strong and positive relationships with authorisers, funders, industry and other key stakeholders.
To improve organisational decision-making and accountability, we recommend that TAFE SA:
a. Review its delegations to push more decision-making down the line and free-up capacity at more senior
4 levels for strategic leadership and oversight.
b. Undertake a RACI (Responsible, Accountable, Consulted, Informed) assessment of its information flows
and decision rights to remove any ambiguity, blockages and delays.
To ensure TAFE SA training quality and industry responsiveness, we recommend that:
a. The currency of industry experience is mapped and assessed.
5 b. As necessary, a plan be developed to incentivise more exchanges, placements and secondments of
professional development to update teachers’ industry knowledge and exposure.
CAPABILITY
c. TAFE SA consider the need for improved industry advisory arrangements to shape and possibly oversee
these arrangements.
To improve capability of TAFE SA leaders, we recommend that TAFE SA develop a talent management
6 strategy focused on building the leadership pipeline that blends educational experience with the necessary
leadership and management skills.
Nous Group | Quality Review of TAFE SA | 4 April 2018 |5|No. Recommendation
To leverage the strong culture and foster greater productivity and accountability, we recommend that
TAFE SA develop and implement a new cultural change strategy that:
a. Starts with an inclusive engagement process that allows TAFE SA staff at all levels to articulate the key
elements of a productive, cohesive and outcome-focused culture.
CULTURE
b. Links directly to a new strategic plan which acknowledges cultural strengths and sets expectations about
7 values, mindsets and accountabilities in the organisation.
c. Is reinforced and sustained through internal messaging, leadership behaviours, measurement and
monitoring of key metrics, human resources policies and practices, and professional development
programs.
d. Is complemented by a new performance management system that embeds the expectations of leaders
and staff at all levels and provides a more effective mechanism for holding people to account for their
contribution to strategic plan objectives.
TAFE SA needs to be more efficient
No. Recommendation
To improve business processes, we recommend that TAFE SA review its ‘Digital Business Strategy’ and commit
as a priority to:
SYSTEMS
8 a. Explore all opportunities to digitise assessment processes and tools, including by building quality assurance
steps into an online workflow management system.
b. Identify efficiencies that could be gained from investment in technology to support corporate functions and
student services, particularly with respect to enrolment.
To realign resources to reflect renewed priorities, we recommend that TAFE SA:
RESOURCES
a. Undertake a benchmarking exercise of its corporate services functions (including corporate staff in business
units) to identify potential savings that could then be used to fund investment in strategic priorities.
9 b. As a follow-on to the delegations review (Recommendation 4a) and RACI review (Recommendation 4b)
assess whether the disposition of resources, notably in the regions, clearly aligns with responsibilities.
c. Identify any duplicated or non-standardised processes that remain in place as legacies of the former three
institute structure to determine whether further efficiencies can be made.
Nous Group | Quality Review of TAFE SA | 4 April 2018 |6|1 TAFE SA has been operating in a turbulent and
challenging environment
This section provides a brief overview of TAFE SA’s external operating environment. It discusses the policy
context at both the national level – particularly the market-driven reforms geared towards enhancing
competition in the sector – and the state level, with the introduction of Skills for All and the transition to
WorkReady. We consider here also TAFE SA’s performance in the market over the past several years.
1.1 The Australian VET market has been re-shaped by
competition-driven reforms
The Australian Vocational Education and Training (VET) system has undergone substantial reform over the
last three decades. Most significantly, in 2008 the Council of Australian Governments agreed to make all
public VET funding open to competition between public and private providers, thereby creating a market
for the delivery of government subsidised VET training. The expectation was that increasing competition
between public and private providers would promote efficiency and innovation in the delivery of training,
and reduce the cost for government.2 Where accompanied by entitlement models with funding following
the student, the reforms were also expected to give rise to a more agile and responsive system, with
businesses and providers working closely to meet the needs of students as informed purchasers.
Victoria was the first jurisdiction to adopt the market-based model, with South Australia following through
implementation of its Skills for All program in 2012.3 The policy and funding signals associated with the
national reforms attracted more Registered Training Organisations (RTOs) into the market. There are
currently some 4,556 in Australia, which compares to approximately 400 in 1995. 4 In terms of market
share, the proportion of government-subsidised VET students enrolled with private providers nationally
increased significantly, from 2% in 1996 to 42% in 2016.5
The early response by RTOs to the new market opportunities, and by students to the improved access to
subsidised training, far outstripped expectations, with the consequence that government expenditure on
VET ballooned and students were exposed to low-quality profit-seeking training providers. Governments
responded, which led to:
a sharper focus on regulation
the introduction of higher barriers to entry for the subsidised market
calibration of student training entitlements to industry skills demand (i.e. to provide incentives for
students to enrol in courses with a higher public value)
improved information for prospective students so they could make better judgements
efforts by governments to lock in more sustainable funding arrangements for VET.
The pursuit of a ‘level playing field’ also prompted further reflection on the distinct role of the public
provider, with some jurisdictions acting to bolster funding for TAFEs so that they could meet Community
Service Obligations to cohorts and communities at risk of being under-served by a commercial market.
2
Phillip Toner, public response to Senate “Inquiry into Vocational Education and Training in South Australia”, March 2018, p2.
3
The introduction of Skills for All was a response to COAG’s productivity and participation targets to increase skills and qualification
levels, and enhance accessibility.
4
Training.gov.au, September 2017 RTO and NRT statistics from training.gov.au.
5
National Centre for Vocational Education Research, 2016 VET data.
Nous Group | Quality Review of TAFE SA | 4 April 2018 |7|1.2 South Australia has not fully completed its transition from
Skills For All to WorkReady
The expansion of the government-subsidised VET market under Skills for All was followed by a ‘correction’
under WorkReady, which put emphasis on the financial sustainability of the publicly-funded VET system in
South Australia.
Skills for All delivered market-driven reforms that expanded the training market
Skills for All was a one-off investment made by the then South Australian Government in 2012 to “deliver
skills to support employment participation and productivity growth, particularly in industries that will
contribute to long-term economic prosperity.”6 The program enabled eligible students to access, via a
training entitlement, a government funded training place, with the level of funding and cost to the student
dependent on the qualification. The strategy expanded the VET training market by enabling more students
to access government-subsidised training, and more providers to deliver that training. Under Skills for All
an additional 100,000 training places were offered over a period of three years.
Notwithstanding South Australia’s efforts to avoid some of the unforeseen consequences of similar
reforms in Victoria, students used their entitlements to gain qualifications in areas of relatively low industry
demand. Certain providers entered the market and promoted courses that were cheap to deliver, and to
whomever they could enrol (regardless of suitability). They paid little attention to the quality of the
training they were offering.7 The situation was exacerbated by the Commonwealth’s introduction of
income-contingent loans for higher level VET qualifications, which lowered the financial barriers for
students to enrol. It culminated in significantly higher than expected uptake of training positions,
generating intense pressure on the State’s budget for VET.8
Under WorkReady the VET training market was expected to be fully contestable by July 2019
WorkReady was introduced in July 2015 to replace Skills for All. It aimed to restore stability and ensure a
sustainable system while providing more targeted training opportunities. A key focus of WorkReady was
to streamline the scope of publicly funded courses, with the then government promising to “unashamedly
demand employability and employment outcomes” as a return on its investment.9 The scheme brought
with it specific targets to reduce the costs of training provision by TAFE SA by $50m in the period 2015-16
to 2019-20.
Under WorkReady, South Australia was to transition from a funding model in which the majority of
subsidised training places were tied to TAFE SA, to one in which all places would be offered on a
competitive basis between TAFE SA and private providers (i.e. ‘full contestability’).10 Implementation of
WorkReady was planned as a three-phase process:11
1. Phase 1 (2015-2017): Where majority of new subsidised training places would be ‘TAFE SA only’.
2. Phase 2 (2017-2018): Where the number of ‘TAFE SA only’ training places would be reduced and
contestable places increased.
3. Phase 3 (2018-2019): ‘TAFE SA only’ training places would be phased out and all new training places
for commercial activity would be fully competitive between TAFE SA and the private market.
DSD designed the phased approach to allow sufficient lead time for TAFE SA to implement its new
educational strategy and introduce other changes required to effectively manage the business risks
6
Department of State Development, ‘WorkReady’, p3.
7
Quiggin submission, p4.
8
ABC News, ‘Treasury forecasts more budget blowouts’, ABC News Online, 25 March 2013, http://www.abc.net.au/news/2013-03-
25/dept-budget-blowouts-revealed/4592692.
9
Department of State Development, ‘WorkReady’, p5.
10
Department of State Development, The Facts about WorkReady.
11
Ibid.
Nous Group | Quality Review of TAFE SA | 4 April 2018 |8|associated with increased competition. DSD also made available funding of up to $31.7 million for excess
employee costs for the period 1 July 2015-June 30 201912.
The WorkReady reforms also involved a number of other adjustments to the VET training system
including:
Greater alignment of investment to industry needs, with an emphasis on delivering public value.
Increased obligations for employers and students to share the cost of training.
Capping the number of subsidised training places offered each year, based on labour market demand
and regional training needs.13
1.3 TAFE SA’s recent performance
This section discusses TAFE SA’s performance primarily in terms of student and employer feedback;
training participation and outcomes; and relative efficiency. It starts with brief commentary on changes to
TAFE SA’s scope of registration as further context for the breadth and volume of TAFE SA’s offering to the
market.
The scope of registration has changed over time but remains large
The scope of qualifications that TAFE SA can offer (noting that this is different to what is actually offered)
has changed in recent years. Figure 1 below shows that the number of qualifications on its scope of
registration peaked at 809 in September 2016 and fell to 548 in December 2017.14
Figure 1 | TAFE SA’s scope of registered qualifications since December 201515
TAFE SA’s scope nevertheless still stands as the largest of all Australia’s TAFEs, as is illustrated in Table 2
over. Additionally, TAFE SA’s scope is well above the scope of private RTOs who are, on average, registered
to deliver just six VET qualifications.16
12
TAFE SA Structural adjustment MAA, 2015-2019.
13
Department of State Development, ‘WorkReady’, p7.
14
ASQA response to written question on notice (6), Inquiry into vocational education and training in South Australia, 2018, p2.
15
Ibid.
16
ASQA response to written question on notice (3), Inquiry into vocational education and training in South Australia, 2018, p3-4.
Nous Group | Quality Review of TAFE SA | 4 April 2018 |9|Table 2 | Top 5 Australian TAFEs ranked by number of qualifications on scope (as at 31 December 2017)17 Ranking Institution Registered VET qualifications 1 TAFE SA 522 2 TAFE QLD 510 3 TAFE NSW – Western Sydney Institute 432 4 TAFE NSW – Sydney Institute 387 5 TAFE NSW – South Western Sydney 378 TAFE SA’s completion numbers fell faster than the national average At the same time, the number of qualifications completed by TAFE SA students each year declined. Figure 2 shows the changing profile of completions following the Skills for All period. In 2013-14 and 2015-16, this decline was sharper than the fall-off in completions nationally. Figure 2 | Percentage changes in completion numbers (count) for government-funded VET programs (exclusive to TAFE and other government providers)18 Enrolments also fell during this period, from 611,655 unit enrolments in 2013 to 309,170 unit enrolments by 201619, a fall of nearly 50 per cent. Interestingly TAFE SA reported in its 2015/16 Annual Report that its completion rate improved from 86 per cent in 2014 to 91 per cent in 2015, but this was not reported on again and we did not have access to data that would reveal whether a decline in participation was partially offset also by a decline in attrition. State-wide student satisfaction has been high, but employer satisfaction has weakened Student and employer feedback for delivery of government-funded VET in South Australia20 over this period tells a mixed story: while graduate satisfaction has been consistently above the national average 17 Ibid. 18 NCVER data, Government-funded students and courses, 2016, July 2017. 19 Ibid. 20 Provider-specific data is not available. Nous Group | Quality Review of TAFE SA | 4 April 2018 | 10 |
(sitting just below 90 per cent in 2017), employer satisfaction21 dropped off in 2017 (from 76 to 69 per
cent). Figure 3 below compares student and employer satisfaction with VET training (government-
subsidised places only), in South Australia with the national average over the period of 2013-2017.22
Figure 3 | Proportion of government-funded graduates and employers satisfied with the quality of
VET23
95
90
Gradaute - SA
Satisfaction (%)
85
Graduate - national
80 average
Employer - SA
75
Employer - national
70 average
65
2013 2015 2017
It may be that negative publicity around Skills for All and changes in government subsidisation affected
employers’ views, but that is unlikely to account for such a sharp drop. This warrants further investigation
through engagement with the business community (which was beyond the scope for this Review, but
which will likely be considered in the Capability Review).
The efficiency of South Australia’s VET system has deteriorated since 2014
The Report on Government Services 2018 uses ‘government expenditure per annual hour of training
delivered’ as a proxy to measure and compare VET system efficiency across jurisdictions.24 An increase in
expenditure per hour indicates a system that is operating less efficiently. Table 3 below summarises the
cost per annual hour of training delivered in each state, and shows that the cost of delivery in South
Australia steadily increased from 2013-2016.
21
Employer satisfaction data is collected based on a survey of a sample of employers conducted every two years. Approximately 8,000
to 9,000 employers are interviewed each survey.
22
Report on Government Services 2018, Table 5A.12; Table 5A.14. Note this only reports on satisfaction every two years.
23
Ibid.
24
Expenditure includes all transactions that affect the financial performance, financial position and the financing of the government-
funded VET system. Annual hours are the total hours of supervised training delivered based on the standard nominal hour value for
each subject.
Nous Group | Quality Review of TAFE SA | 4 April 2018 | 11 |Table 3 | Total government real recurrent expenditure per annual hour (2016 dollars) 25
Skills for All WorkReady
2012 2013 2014 2015 2016
VIC 12.94 11.64 9.55 10.32 11.79
QLD 18.06 20.57 14.83 14.10 15.07
WA 17.34 17.71 17.18 18.13 16.72
NSW 15.01 16.90 15.52 24.69 18.00
SA* 13.07 13.00 16.10 17.66 18.96^
TAS* 17.02 20.97 19.69 19.41 19.98
ACT* 21.02 19.96 19.07 20.27 23.03
NT* 27.34 32.40 23.47 26.40 23.12
*Indicates states or territories with a single TAFE provider.
^This number has been adjusted to correct an anomaly in the ROGs report resulting in South Australian expenditure
figures being under-reported for 2016.
South Australia is the fifth most efficient VET system in Australia, and only sits above the other single
public provider jurisdictions – Tasmania, the ACT and the Northern Territory. The decline in efficiency from
2014 reflects in part the containment measures introduced under in 2014, which saw the number of
government-subsidised places at TAFE SA fall by one third in the space of a year (see Table 3, above).
Despite efforts to reduce spending, TAFE SA still does not appear to provide a strong return on investment
from its training funding. In 2016 TAFE SA received 87 per cent of government VET funding, yet only
trained 64 per cent26 of total government funded students (see Table 3, above). Even when incorporating
the additional costs of being a public provider, these figures point to inefficiencies in the organisation’s
operations.
25
Report on Government Services 2018, Table 5A.2.
26
Based on NCVER data of 70,900 total SA government funded students; and 45,259 total TAFE SA government funded students,
supplied by TAFE SA.
Nous Group | Quality Review of TAFE SA | 4 April 2018 | 12 |2 ASQA’s report and election of a new government
creates the opportunity for a major re-set
In May 2017, the Australian Skills Quality Authority (ASQA) undertook an audit of TAFE SA. It sampled 16
qualifications delivered in 2016, focusing on TAFE SA’s quality assurance system and requirements set out
in its delegation agreement.
2.1 ASQA found non-compliances in the quality assurance
systems of TAFE SA which damaged its reputation
ASQA identified a number of non-compliances relating to the Standards for Registered Training
Organisations (RTOs) 2015 (the Standards).27 It issued a notice of intention to suspend a total of 16
qualifications from its scope of registration based primarily on weaknesses in TAFE SA’s assessment
practices.
TAFE SA had 30 days to respond to these findings and did so in October 2017. The response detailed TAFE
SA’s efforts to update assessment materials that fell short of ASQA’s requirements. However, ASQA’s
position remained largely unchanged; in December 2017 ASQA formally advised that it intended to
suspend 10 qualifications from TAFE SA’s approved scope of registration. It also directed TAFE SA to rectify
minor non-compliances in two further qualifications. The remaining four of the original 16 qualifications
audited had since been superseded nationally and were no longer offered.
The findings against TAFE SA and decision to suspend a number of courses received considerable
attention in state and national media and references to TAFE being in crisis.28 While the ASQA findings
were not necessarily atypical, they were significant given it was the first audit of a public provider by the
regulator which heretofore had been focused on private providers. The conventional wisdom was that the
public provider inherently offered a higher-quality training experience in most qualification areas. The
ASQA report and the commentary that ensued challenged this assumption.
Before ASQA, we were fairly dysfunctional. After the audits, our problems were magnified.
Staff feel increasingly devalued and responsible for the events that happened.
We no longer feel proud to tell people we work at TAFE SA.
The scrutiny and attention placed on TAFE SA may have contributed to a decline in enrolment numbers in
2018. Figures for semester 1 so far this year indicate that TAFE SA’s registered training hours have fallen
5.5% compared to the same time last year, from 4.90 million hours to 4.63 million.29
While TAFE SA’s registered training hours have been falling since 2015, qualifications that saw a decline in
this year’s training hours are have been in qualification areas that were growing or stable. This suggests
ASQA’s audit findings may have adversely affected the public’s perception of TAFE SA as a quality
provider.
27
ASQA, Audit report – VET Quality Framework, ASQA, Melbourne, 2017.
28
ABC News, ‘TAFE SA crisis: Compensation scheme demanded for students affected by course suspensions,’ ABC News Online, 6
December 2017, http://www.abc.net.au/news/2017-12-06/compensation-scheme-for-students-affected-by-sa-tafe-crisis/9229618,
(accessed 31 January, 2018).
29
TAFE SA, TAFE SA Enrolment Data, Adelaide, 2018.
Nous Group | Quality Review of TAFE SA | 4 April 2018 | 13 |2.2 The response required was of both a technical and strategic
nature
The immediate concern for TAFE SA was to seek a reconsideration of ASQA’s decision to suspend 10
qualifications, and to shore up its quality systems so that further weaknesses would not be identified in
another planned ASQA audit (to take place in the second half of 2018). Early action was taken also to
address more strategic issues.
Development of a case to have the ASQA decision reversed
In December 2017, TAFE SA undertook an intensive process to review the assessment tools and processes
related to each of the 23 units of competency within the 10 qualifications that were targeted for
suspension. A ‘war room’ was set up before Christmas – staffed by many people who had forsaken their
leave – to review, update and validate all the relevant assessment materials. It was overseen by a newly
appointed Director for Quality Teaching and Learning and supported by specialist consultants Quorum.
Nous documented this process and also played a ‘critical reviewer’ role for TAFE SA to assist in preparing
the submission to ASQA seeking reconsideration of its decision. In the latter capacity, we worked primarily
with the Interim CEO and the TAFE SA Board chair on the overarching argument about TAFE SA‘s
compliance with respect the qualifications in question.
We concluded that the process was rigorous, and confirmed that we saw evidence of substantial
improvement in the detail and comprehensiveness of the sample of assessment materials that we
reviewed. The processes designed for this initial response then carried over into a broader review exercise.
Implementation of a plan to review all qualifications on the scope of registration
The medium-term plan, currently being implemented, focuses on reviewing and updating the remaining
units of competency that TAFE SA delivers. Each of the relevant business units are mapping the training
packages to assessment materials to expose any gaps or deficiencies. They then follow the same steps
reviewing, updating and validating revised assessment tools, with each business unit’s approach tailored
to suit their respective requirements. The goal is to complete this process by the end of the financial year,
which is challenging given the number of units of competency concerned (4,600). TAFE SA has engaged
consulting firm Escient to assist them through this process.
The intention of these exercises is not just to minimise the risk of future adverse findings by ASQA, but to
build capability within TAFE SA to critically review and to maintain assessment processes and tools of an
appropriate standard. This is a critical element of TAFE SA’s improved quality system.
Commissioning of two strategic reviews
The former government engaged Nous to undertake this Quality Review to “make recommendations to
ensure the quality, sustainability and reputation of the state’s public VET provider”.30
A second review was also commissioned and has been running in parallel. This second review (the
Capability Review) seeks advice on “the role of the Public Provider in meeting the skills needs of students
and industry and ensuring quality training outcomes across the state.” 31 The new government has
committed to extend the terms of reference of this latter review to encompass potential legislative reform,
improvements to quality assurance processes, income diversification, and whether TAFE SA facilities can be
more fully utilised as public assets.32
30
Full terms of reference are in Appendix A.
31
DSD, Terms of Reference TAFE SA Strategic Capability Review, p1.
32
‘A fresh start for TAFE’, https://strongplan.com.au/policy/a-fresh-start-for-tafe.
Nous Group | Quality Review of TAFE SA | 4 April 2018 | 14 |3 Our review focuses on systemic issues that led to
the adverse findings by ASQA
The Quality Review focuses on the systemic issues that may have contributed to ASQA’s finding that TAFE
SA was non-compliant in the majority of qualifications audited. We used a framework to guide our analysis
by invoking several lines of inquiry about TAFE SA’s strengths and weaknesses as an organisation. This
section first explains our approach and then details our key findings.
We have used Nous’ organisational performance framework to guide our analysis
To diagnose systemic issues that contributed to TAFE SA’s apparent failure to maintain appropriate quality
systems in TAFE SA, Nous employed its organisational performance framework, illustrated in Figure 4
below. This framework shows the core elements of an effective organisation and how they interrelate to
support delivery on the overarching strategic intent. For this report we focused on the elements of the
framework that were most likely to have led to TAFE SA’s current set of challenges. These are highlighted
in the figure below.
Figure 4 | Nous' Organisational Architecture Framework
The key lines of enquiry we pursued were as follows:
To what extent has confusion about TAFE SA’s purpose interfered with its performance as a
government-owned business?
How appropriate has TAFE SA’s strategy been to ensure the ongoing provision of quality training?
To what extent did the governance arrangements enable effective performance monitoring and
oversight, information sharing and risk management?
How has TAFE SA’s resource alignment and structure worked to support effective strategy execution
and quality assurance?
Were the necessary capability and capacity requirements in place to enable TAFE SA to deliver
results?
To what extent has organisational culture affected TAFE SA’s performance?
Were TAFE SA’s systems and processes effective at enabling success?
Nous Group | Quality Review of TAFE SA | 4 April 2018 | 15 |These questions evolved as we undertook our analysis. The key inputs and data sources we drew on
included: interviews with TAFE SA executives and stakeholders, meetings with the Training Quality
Taskforce and TAFE SA Board targeted interview with staff involved in developing the response to ASQA’s
December report, two focus groups and desktop analysis of public information and materials supplied by
TAFE SA and DSD. More details are provided in Appendix D
3.2 Purpose
A purpose provides a clear rationale for why the organisation exists or its reasons for being. It establishes
the identity of the organisation and provides an anchor to which all other aspects of the organisation
should align. Purpose is particularly important to an organisation as dispersed and complex as TAFE SA. In
this case, without clarity of purpose there is a risk it could lead to poor alignment of services, capabilities
and resources to enable its strategic goals.
The role of the public provider is the subject of the Capability review, but we comment here on the current
framing of TAFE SA’s purpose, as articulated in the Ministerial Charter, its strategic plan, and the Asset
Management Framework.
Purpose Key insights:
There is an inherent tension in the ‘dual purpose’ that TAFE SA serves
By emphasising commercial drivers the Board inadvertently created a disconnect with TAFE SA’s
delivery and quality obligations
3.2.1 There is an inherent tension in the ‘dual purpose’ that TAFE SA serves
TAFE SA’s functions are set out in Section 6 of the TAFE SA Act 2012 and include the provision of technical
and further education “in a manner that is efficient, effective, and responsive to the needs of industry,
students and the general community.”33 TAFE SA’s functions and purpose are set out more substantively in
the Ministerial Charter (the Charter). Under the Charter, TAFE SA has a dual purpose:
a. To aspire to be a leading Government-owned provider of TAFE. This includes delivering high quality
training in a manner that is financially viable while building TAFE SA’s brand and a reputation for
quality.
a. To actively assist the Government in meeting its strategic objectives for TAFE. This includes
delivering training that meets South Australia’s skills needs, implementing services that meet specific
priorities identified by the Minister, and contributing to the development of the South Australian
economy.34
There is tension between financial viability and the obligation to service thin markets. While the tension
can, to some extent, be managed through government funding of defined Community Services, it can
nevertheless generate a tug-of-war between expectations of TAFE SA to be: on the one hand,
commercially savvy, agile and efficient in its response to business needs; and, on the other, to be a highly
reliable, stable and effective provider to higher-cost communities and cohorts. This is not unusual for
public providers around Australia to experience a similar ‘split personality’. But in South Australia, it has
particular resonance in the context of the TAFE SA’s ‘corporatisation’ and the move towards greater
commerciality and contestability. It prompts such questions as whether it is TAFE SA’s role to compete
with private providers on a level playing field, with diminishing market share as a likely outcome, or if its
role is to set the standard for quality VET in South Australia and to continue as the dominant player? It is
possible for TAFE SA to reconcile its dual purposes and fulfil both, but careful consideration of these
foundational questions is first required.
33
Section 6, TAFE SA Act 2012.
34
Ministerial Charter 2016-17, Part 2.
Nous Group | Quality Review of TAFE SA | 4 April 2018 | 16 |You can also read
