TVET Case Studies from Singapore India Australia and Malaysia Sustainable Vocational Training towards Industrial Upgrading and Economic Transformation December 2013 Beijing Belinda ID: 751997
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Innovative Financing Models for TVET: Case Studies from Singapore, India, Australia and Malaysia
Sustainable Vocational Training towards Industrial Upgrading and Economic TransformationDecember 2013 BeijingBelinda Smith TVET PPP Specialist Asian Development Bank Consultant
Disclaimer:
The views expressed in this document are those of the author, and do not necessarily reflect the views and policies of the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this document, and accept no responsibility for any consequence of their use. By making any designation or reference to a particular territory or geographical area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area.Slide2
Four Basic Allocation Models
Decentralised
market driven
Approaches
Centralised
(regulated) Approaches
Input Orientiation
Outcomes
Orientation
Centrally planned
allocation to
providers
Student
disbursement
through vouchers
Performance-based allocation to providers & government
Purpose specific
purchasing from providers
Program orientated may support specific targets and groups
Contract
based requires clear objectives
Budget orientatedmay be backward looking
Consumer driven requires informed decision making
International Trend
Outcomes-oriented
allocation motivates VET providers to align closely to industry needs.Three reform models: Financing of VET programmes (performance-based)Tender-based purchase of VET servicesConsumer driven financing model
Adapted from
Heitmann, W. VET System Financing, GIZSlide3
Engaging employers
Levies
Use existing systems to collect
Relatively simple “one shoe fits all”
Participation may or may not occur
Training quality may not improve
Levies and incentives mix
Use a mix of collection and monitoring systems
Relatively simple “one shoe fits all”
Encourages participation
Behavioural and quality changes
Incentives
Proactive participants
Smaller impact
Encourages good will
Behavioural and quality changes
Low
Collection
High
Low
Participation
HighSlide4
TVET System strengthening IncentivesSingapore Continuing Education and Training
Exemptions for employers
for students who are on full-time industrial attachments arranged by
TVET
institutions, universities
Singapore’s Blueprint model of replicating good practice workplace training
WorkPro encourages recruitment of older workers, back-to-work locals,or employee flexible work arrangements (FWAs)
Skills Development Levy 0.25% all remunerationA
ll employees: full-time, casual, part-time, temporary and foreign workers Skills Development Fund The collection of SDL and disbursement are managed separatelySDL contribution is
not limited to the amount of funding the employer can obtain from SDFEqually available for public and private trainingLifelong Learning Endowment Fund
Gov’t Funding
Private funding
Workforce Development AgencyCentral Provident FundCollects for WDA
Income from protected investmentTeacher training, training, infrastructure, admin, etc
$3.6 billion$200 MilSlide5
Rapid Capacity development in IndiaA private training market
Ministry of Finance
National Skills Development Corporation
5 Gov’t 9 Private
150 Million target
26
SSCs
Private Training ProvidersLoan or equity
Service tax exempt75% of costsNational Skills Development Fund100% Gov’t owned
Financing and incentivesDeveloping support servicesCreating and shaping a private market
Approved by NSDCPrime Minister’s National Council for Skill Development Target 500 Million trained workers 2022National Skill Development Coordination Board
17 Government Ministries involved in
TVET
Gov’tPrivateCentral Bank of India student loans for NSDC
-funded institutionsSlide6
Developing a training market remote areas of India
Meghalaya Skills Challenge FundADBGov’t
Gov’t training facilities
strengthen, teacher training, incentives for industry partnerships
etc
Contracted
training inside and outside Meghalaya
Meghalaya State Employment Promotion Council Outcome Employment inside and outside State
Refurbished Gov’t buildings for trainingSkills for Work;
Enterprise Development Skills; andSkills for Workforce GrowthSlide7
Australian Workforce Development FundSCOTESE*
*Standing Committee for Tertiary Education, Skills and EmploymentDepartment of Industry
Workforce Development Fund
SSC
/
ISC
Training
New & existing workers unemployed
Business co-funding Small 33%Med 50%Large 66%
Accredited training qualificationsHigh demand areas identified with industrySSCs identify high demand areas in their sectorsSlide8
Australia Apprenticeship Incentive Programme Direct subsidyCovers costs
for recruiting, employing and training an apprenticeThe benefits of the AAIP are: High apprenticeship commencement rates.
High
levels of satisfaction
.
High rates of progression into employment
.. staged, tax-free incentive to employers
completion incentivesLimited impact on competition between providers. A preference for traditional providers and high costs of market entry limits competition among providers Central Government
State Government subsidy to training providers & exempt payroll taxFunding for tools and uniformsProvider funding follows the employer Slide9
Aim to
achieve a high income economy based on knowledge and innovationHuman Resources Development Levy.5-1%
Human Resource Development Fund Malaysia
Collection
Public
Bank
Berhad
and RHB Bank Berhad
Employers who paid levy equal to the funds in their levy accountRecognition of Prior Learning for workers with no formal learning
Up-skilling 100%Reskilling 100%Functional skills 100%Cross-skilling 100%
Future workers 100%Soft skills 90%Overseas training 50%Equipment 100%Training room 100%
English
100%Slide10
Vouchers
Efficiency
Low
High
Low
Viable training market
Government
Coherent strengthening of the total system
Status Quo
Levies & incentives
Levies
High
Co-operation
Effectiveness
Efficiency and effectiveness of
TVET
co-financing policy
Efficiency
:
Easy to access
and
choice
Effectiveness
:
High collaboration with quality built in
Both
are needed for
sustainable TVET Slide11
Thank you for your attentionbelinda@smithcomyn.com.au