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Innovative Financing Models for - PPT Presentation

TVET Case Studies from Singapore India Australia and Malaysia Sustainable Vocational Training towards Industrial Upgrading and Economic Transformation December 2013 Beijing Belinda ID: 751997

development training skills high training development high skills providers 100 tvet financing gov

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Slide1

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