Financing TVET: Policy Options that Promote Synergy through Partnerships By Patrick Bulundo (BA, MPA) Presented at the IVETA World Conference Cape Town 2018
Motivation “Higher Education institutions should prompt the dynamics of social development and lead society towards a better future” Goksu & Goksu (2015:23)
Introduction ▪ Public Policy & TVET Financing ▪ Main Actors in the TEVET – Stakeholder Analysis o Government o Industry & Private Sector o Learners & Parents
Introduction Cont’d ▪ Funding Options & Partnerships ▪ Policies To Support Funding ▪ Conclusion
Public Policy & TVET Financing ▪ What is the Connection between Public Policy & TVET Financing? ▪ The Political Systems & Philosophy defines Higher Education Financing ▪ Political Power & Influence in the Policy discourse ▪ How is Policy achieved -Public Policy is achieved through Collaborative efforts using the concept of Public Value. ▪ Policy Formulation + Implementation = Public Value
Public Policy & TVET Financing ▪ Public Value is concerned with Social Outcomes or Utility ▪ Social outcomes accrue to Individuals & Society ▪ Public value concept justifies public investment in education & the Role of Government ▪ Intrinsic value of education & Utilitarian responsibility ▪ Public Policy design is influenced by the above
Policy & Financing Cont’d ▪ Why is funding linked to Policy -Lack of sufficient funds cited for policy failures: Need for funding options to drive policy ▪ There is no perfect single model for funding TVET ▪ Many combinations exist ▪ Public + Private + Leaners ▪ Private + Learners ▪ Private only ▪ Public + Private
Who are the main actors in TVET Financing? Government (Public Sector) ▪ Government Considers TVET as being an Important driver of economic growth ▪ TVET is a Public Good ▪ Socio-economic obligation – Supplying skills ▪ SDG # 4 = Education and Training can Bridge the gap between skills and employability ▪ Lack of skills lead to inequality that breeds social vices
Role of Government Cont’d ▪ Positive externalities of Skills Training: These Accrue even to those who did not pay for education ▪ Education and training for its intrinsic value ▪ Public Value of skills ▪ Investment in TVET infrastructure is high only Government may afford
Industry and Private Sector ▪ Enterprises reap profits from well Skilled employees o Increased Efficiency o Reduced wastage of materials ▪ Benefits of Apprenticeship Training o Proprietary benefits (brand protection) o Employee Loyalty to Brand & Technology ▪ Apprenticeship deliver lifelong learning o Skills that can be used even in the informal sector
Industry & Private Sector Cont’d ▪ Private Sector can own TVET Colleges o Limited Capacity of Public Sector o New Public Management – Government divesting their interest in many sectors (Privatisation) o Proprietary interest and protection of technology
Learners and Parents ▪ Skills increase learners position on the labour market ▪ Skills reward learners with higher earnings ▪ Skills increase capacity to survive economic and social hardship ▪ Skills increases self esteem ▪ Skills reduce the gender parity gap
Financing Options &Public Private Partnerships ▪ Financing Options Available are: Unilateral & Costs Sharing mechanism Unilateral ▪ Also known as Arbitrary Consisting of Budgetary or other Appropriations ▪ Driven by input based formulae ▪ Unit Cost of Training multiply by Enrolment = Funding o The Unit Cost is pre-calculated
Unilateral Funding ▪ Can be used by Industry & Government ▪ Industry : Where the benefits of training are direct eg Propietary benefits ▪ Government: To Protect ‘unpopular’ Courses yet important and to support equity & Access ▪ Downside ▪ It is Supply Side driven ▪ No built in incentives for efficiency and quality
Output Based Financing ▪ Alternative Model to Unilateral based Financing ▪ Mainly used by training funds where Industry may be a contributing member ▪ Pre-employment training funding ▪ Funding is tied to targets set in the formula o Formula may involve enrolment, completion rates, equity, cross cutting issues, placements etc ▪ Promotes quality delivery of training and equity
Output based financing cont’d ▪ Promotes quality assurance ▪ The downside is that it does not absorb budgetary shocks when eg enrolment is reduced ▪ Does not support courses where enrolment is traditionary low/courses that are not socially attractive but are of significant value to the country ▪ Policies here should include national priorities to be considered for funding
Cost Sharing Financing Options ▪ Why cost sharing? o Supplementation of financing on traditional sources o Spreading the cost of training ▪ Can involve Government, Private Sector and or Learners ▪ Where does Cost Sharing happen? o Apprenticeship schemes, dual learning schemes, levy grant systems user fees schemes etc
Cost Sharing in Apprenticeship Schemes ▪ Apprenticeship defines relationships between industry & training providers ▪ Can help define quality in training through CBT ▪ Can also mobiles alternative funding ▪ Levy Grant systems ▪ Output based funding benchmarks – industrial attachment as a funding output
Policies that Support Partnerships ▪ Getting Industry into the loop – Priority No. 1 o How can industry derive synergy from training o The Profit Motive Vs Training Industry Profit Labour Mkt Signals Trademark CBT work Curriculum Design Industry/ TVET Schools TVET Training Learning Systems outcomes
Policies that Support Financing Partnerships ▪ Emphasis must be placed on competences and not qualifications ▪ This does not mean elimination of qualifications by simply placing emphasis on life skills – human centred approaches ▪ Recognition of Prior Learning : Most of which happens in Industry & informal ▪ Employability linked to lifelong learning ▪ TVET & Industry’s role in RPL and CBT ▪ Competences are not only demonstrable through formal exams ▪ Industry is key here to define competences
Governance ▪ New Public Management – Provides an entry point for industry ▪ Transparency & Discipline ▪ Trust & Confidence - industry must have confidence in Govt ▪ Inclusiveness – Who is involved in Governance of TVET ▪ New Strategic Plans/Service Charters ▪ M & E and Reporting
Qualifications Frameworks ▪ What do Qualifications Frameworks have to do with Funding? o Standards Setting o Assurance of Learning Outcomes o Anchorage for Performance Base Funding ▪ Confidence Building in Stakeholders =Assurances ▪ Emphasis on competences and defined pathways with international recognition ▪ Qualifications Frameworks can be used as symbols of Trust ▪ A must in Funding policies – Qualification Frameworks have been quite successful in stakeholder engagements
Transparency & Policy Predictability ▪ Who is involved in policy design ▪ Bottom up approaches in policy design encourages Industry input ▪ Policy must be known and clear to avoid misrepresentation and opportunistic prey ( The dark side of bureaucratic discretion is that it creates opportunities for wilful misinterpretation of directives, sloth and self aggrandisement, Mintron & Luetjen 2017:173) ▪ New Public Management instruments to measure performance ▪ Performance based contracts ▪ Strategic plans reflects industry expectations as a major stakeholder
Policy Coherence ▪ Fragmented Policy results in implementation Gaps ▪ Policies must go together with implementation strategies ▪ TVET Financing Policy needs to be consistent with; o Training Standards & Systems (Assessments, Teacher Training, Curriculum design, quality Assurance, Qualifications Frameworks) ▪ Ability to Train is impacted by ability to Claim funds, Train learners and deliver life skills
Inclusive Policy ▪ Why are employers still looking at Training levy as another Tax? ▪ Mainstreaming of Industry must be clear and not just about incentive
Conclusion ▪ Development of Sound policies depend on development of training systems (Chicken and Egg?) ▪ Policy should carry with it all the TVET systems ▪ Stakeholders must be included in bottom up policy design ▪ Sustainability of policies ▪ TVET Outputs should assure sustainability of funding
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