Proposed Standards for Training Providers
and VET Regulators
Australia needs a vocational education and training (VET) system that is
flexible and responsive to industry and can provide Australians with the skills
they need to do their jobs now and into the future. Skills development is an
important part of any modern economy – for productivity, participation and
growth.
While the Australian VET system has significant strengths and international
standing, increasingly stakeholders express concern that the VET system is
not working as efficiently and effectively as it should.
The Australian Government plays a leadership role in the VET system,
establishing the right framework so that Australian businesses can get the
skills they need and training providers can get on with providing high-quality
industry-responsive education and training.
Reform of the VET system is required in order to establish such a framework.
In November 2013, the VET Reform Taskforce was established within the
Department of Industry. The Taskforce has been working with state and
territory governments, employers, training providers and other stakeholders
throughout 2014 to understand the issues and explore ideas for reform. In all,
the Taskforce has undertaken over 3,750 engagements with stakeholders
including face to face consultations, webinars and written feedback.
Reviewing the standards
A high quality VET system needs clear and relevant standards against which
providers and regulators can be held accountable. These standards should
underpin an effective risk-based regulatory system that ensures the
confidence of learners and employers in the integrity of VET qualifications.
Clear and relevant standards are also critical in ensuring that providers know
what they need to do in order to be compliant and what they can expect from
VET regulators.
In 2012, the former COAG Ministerial Council asked the former National Skills
Standards Council (NSSC) to develop new standards for RTOs and regulators
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to improve quality in the VET sector. The NSSC developed a set of draft
standards for providers and regulators and sought comment from the sector.
Concerns were raised that some of the proposals in the NSSC draft were
impractical and would have added unnecessary cost and regulation on
providers. In addition, the draft standards fell short of meeting the
Government’s new deregulation agenda.
The inaugural meeting of the COAG Industry and Skills Council (with
membership comprising Commonwealth, state and territory ministers with
portfolio responsibility for industry and/or skills) on 3 April 2014, considered
the issues and concerns about the VET sector and agreed on a reform
agenda. The Chair of the Council, the Hon Ian Macfarlane MP,
Commonwealth Minister for Industry, tabled the concerns raised by
stakeholders through the VET reform process.
In response, Ministers agreed to six reform objectives with three priority areas
for immediate action. One of the three key priorities to be addressed
immediately was dealing with the draft NSSC standards.
Priority Action: examine the standards for providers and regulators to
ensure they better recognise the different level of risk posed by different
providers, enable the regulators to deal more effectively with poor
quality in the sector to improve confidence, and meet the Australian
Government’s deregulation objectives.
The VET Reform Taskforce, in conjunction with key stakeholders from training
and support services providers and industry, has revisited the work
undertaken by the NSSC. The Taskforce considered the range of stakeholder
views on the NSSC's draft standards, including revisiting the 300 submissions
made to the NSSC. The Taskforce also took account of the issues raised
during the broader VET reform consultation process, including:

Stakeholders called for a risk-based approach to regulation that
recognises the risk related to the provider (for example, size, type of
provider or type of training delivered) rather than a ‘one-size-fits-all’
approach.

Training providers feel weighed down by red tape, endless process and
excessive regulation. Stakeholders noted that high quality providers
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are not rewarded for their compliance and that low quality providers are
still allowed to operate.

There were concerns about the quality of VET graduates, in particular
that some graduates lack the necessary skills for the workplace. Some
stakeholders suggested that to achieve quality training outcomes there
should be a stronger focus on training and assessment in the
standards, including a greater role for industry.

The standards are ambiguous and the Australian Skills Quality
Authority (ASQA) should have a role in educating training providers on
what compliance looks like. Providers were also after a greater degree
of consistency of auditing within ASQA and between VET regulators.

The standards should be outputs and outcomes focused rather than
inputs focused.
New provider and regulator standards
Following the consultations, new draft standards have been prepared and
support three key themes: industry responsiveness, quality outcomes and
less onerous regulation.
The standards focus on ensuring a real role for industry and improving quality
assurance. Industry responsiveness is a key priority for the Government and
was an important issue raised by stakeholders. To deliver job-ready
graduates that meet the skills and productivity needs of employers, industry
needs a stronger role in the system. The new standards introduce important
changes such as strengthening requirements for registered training
organisations (RTOs) to engage with industry and to use that engagement to
inform their training and assessment strategies.
Another priority area for government and for training providers is reducing the
burden of regulation. Reducing costs and regulatory burden for RTOs is a
key theme of the VET reform agenda. The new standards represent a first
step towards establishing a transparent VET system that rewards high quality
providers. The standards also focus on providing clarity to RTOs so they
have a clear understanding of what it means to be compliant while allowing
VET regulators to better deal with poor providers.
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In line with this approach, the new draft provider standards remove several of
the more contentious reforms proposed by the former NSSC that would have
added to the regulatory burden in the sector without achieving a
commensurate improvement in quality.
The standards also introduce stronger requirements around information
provision and marketing of training courses to consumers to enable them to
make informed decisions about their training. The standards also strengthen
arrangements in relation to subcontracting of training and assessment.
The new standards contain much clearer requirements for RTOs in relation to
advertising and marketing of courses. These address the findings in ASQA’s
Strategic Review of marketing and advertising practices, which was
conducted in 2013.
In addition, the new draft regulator standards provide greater clarity and
consistency around the roles and responsibilities of VET Regulators in
different jurisdictions. This will enable providers to better understand what to
expect from the regulatory system.
The draft provider and regulator standards are the first instalment in the
Government’s commitment to moving towards a more modern and responsive
regulatory model, acknowledging that the “one size fits all” approach is not
working effectively.
In conjunction with the work on the standards, the Government is committed
to ensuring that the national regulator, ASQA, is supported to change their
operating arrangements.
There are three key elements of this new approach that will occur in the short
term. Firstly, the regulator standards reinforce the role of regulators in
providing general education and guidance materials to providers to assist
them to comply with the standards. Prior to the new standards coming into
effect, ASQA will provide sufficient information to the sector so that providers
are clear about what compliance with those new standards means.
Secondly, ASQA will be focusing further on poor providers and will, where
necessary, take action to sanction them.
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Thirdly, ASQA will have a renewed focus on service and will provide better
education and support to training providers.
The Government has indicated that it is looking at options for a different way
of funding ASQA that will support these changes.
These key elements sit alongside the findings of the recently released ASQA
Process Review. This review identified six main themes that will deliver the
highest value to ASQA's efficiency and effectiveness and benefit the VET
sector. The Government is committed to creating a modern regulatory
environment that is responsive to industry needs and reduces burden for high
quality training providers and will work in partnership with ASQA to further
enhance its regulatory service and operations in response to the process
review.
Consultation process
On 25 June 2014, the Hon Ian Macfarlane MP, Minister for Industry, released
revised RTO and VET Regulator Standards for public consultation. The VET
Reform Taskforce welcomes all feedback from stakeholders on any aspect of
the new standards.
There are also a number of key issues within the RTO standards where a
range of views have been put forward previously and there are various ways
the standards could be drafted. These key issues are explored below.
Feedback is also welcome on these specific issues. Interested stakeholders
can submit their feedback on the revised standards to
vettaskforce@industry.gov.au. The closing date for submissions is
17:00 (AEST) Wednesday, 23 July 2014.
Further information on how to connect with the VET Reform Taskforce on the
consultation process is available at www.vetreform.industry.gov.au.
Next steps
Following the public consultations on the draft standards, a final draft will be
prepared for consideration by the COAG Industry and Skills Council. It is
intended that the revised standards will come into effect from 1 January 2015.
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Overview of the RTO Standards
1.
Industry responsiveness
One of the strengths of the national training system is that it is industry-led.
However stakeholders have expressed concerns about the responsiveness of
the system in helping people to acquire the skills that employers need now
and in the future. Employers and industry have made it clear that training is
not always relevant and tailored to their current and future needs and in some
cases is provider-driven rather than industry-driven.
Industry engagement and relevance
The new standards strengthen the requirement for an RTO’s training and
assessment to be relevant to industry and informed by meaningful industry
engagement. The standards define industry engagement to cover a range of
activities such as partnering with local and regional employers, involving
employer nominees in industry advisory committees, embedding staff within
enterprises, networking with peak bodies and developing networks of relevant
employers and industry representative to participate in assessment validation.
However, in response to stakeholder feedback that engagement with industry
should be outcomes rather than inputs focused, it is insufficient for RTOs to
only demonstrate that they have engaged with industry. RTOs will also be
required to demonstrate how engagement with industry has informed their
training and assessment strategies so they are relevant to the needs of
industry. RTOs will also need to demonstrate how industry engagement has
ensured the current industry skills of its trainers and assessors.
Strengthening the link between training packages and
delivery
There have been concerns that some RTOs are not consistently interpreting,
delivering and assessing the requirements specified by industry in training
package units and qualifications. Employers have expressed concerns that
graduates are leaving the system without the required skills to do their job
properly, undermining confidence in the VET system to provide employers
with a reliable signal about the knowledge and skills that an individual
possesses.
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ASQA’s recent strategic reviews have also uncovered poor quality training
and assessment being delivered in some sectors, particularly in relation to the
duration of training programs. Some were found to be too short to enable
students to sufficiently develop the skills required to work in the sectors
examined. This is of major concern to both industry and training providers.
The new provider standards strengthen the requirement for RTOs to design,
develop and deliver training and assessment in a way that will enable
students to gain the skills, build the competencies and knowledge that
industry has defined as necessary to perform effectively in the workplace. The
new standards require RTOs to ensure their training and assessment
strategies and practices are consistent with the requirements specified in
training packages, including any volume of learning requirements.
Industry engagement is covered in Standard 1.
2.
Quality of training and assessment
The VET system needs to deliver high quality training outcomes to provide
students with the skills they need to support them in their current and/or future
jobs and to provide employers with a reliable indicator about the knowledge
and skills a graduate holds, regardless of where they were trained.
Stakeholders have consistently raised concerns about the lack of relevant jobready skills held by some VET graduates and very short courses and training
periods that have led to stakeholders commenting on the delivery of “tick and
flick” training.
There are a range of responses required to improve the quality of outcomes
within the sector and only some of those can be achieved through the
standards. There is also a role for VET regulators to operate on an informed
risk-management approach to ensure RTOs are equipped to deliver good
quality outcomes, training packages that are developed with industry and
include the right requirements, and good consumer information so that
potential students and employers can make informed choices.
The new standards aim to improve the quality of training outcomes through
requiring RTOs to have appropriately skilled trainers and assessors and
ensuring that RTOs are held fully accountable for the quality of training
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outcomes, irrespective of whether they outsource the delivery of training and
assessment.
Appropriately skilled trainers and assessors
To achieve quality outcomes in the VET sector, the delivery of training and
assessment is paramount. Delivering high quality training and assessment
relies on the skills and knowledge of trainers and assessors. This means that
the quality of the training and assessment of to those undertaking the
minimum qualification for trainers and assessors is of vital importance.
Minimum requirements for trainers and assessors
The draft NSSC standards retained the arrangements for specifying the
minimum training and assessment competency requirements of all trainers
and assessors, and industry’s role in specifying any additional qualifications,
experience and/or industry currency required for an assessor through the
relevant Training Package or accredited course.
However, the draft NSSC standards refined and enhanced the minimum
requirements of trainers and assessors by removing the allowance for
equivalence of competencies. This was in response to considerable feedback
suggesting the current standards do not place sufficient discipline on trainers
to attain the minimum qualification (the Certificate IV in Training and
Assessment). The draft NSSC proposal to remove the allowance for
equivalence of competencies would have been introduced immediately had
the NSSC standards came into effect.
In keeping with the former NSSC’s proposal, the new standards seek to
strengthen training and assessment in the system by enshrining qualification
requirements in the standards themselves. The new standards also remove
the equivalence of competencies rules for trainers and assessors. However,
it does this in a phased way giving providers time to manage the transition
while balancing the need for trainers and assessors to hold these important
qualifications.
Minimum requirements for trainers and assessors is covered in clauses 1.111.13 and for individuals training under supervision see clauses 1.14-1.17.
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Delivery of the Certificate IV in Training and Assessment
The NSSC consultation process also raised the issue of the quality of the
delivery of the Certificate IV in Training and Assessment and noted that this
has attracted concern and poor audit results for some time.
The draft NSSC standards proposed to increase the scrutiny and monitoring
of providers that deliver the Certificate IV in Training and Assessment. This
included introducing independent and external validation and increasing the
minimum qualification of those delivering the Certificate IV to the Diploma
level.
Given the importance of training and assessment qualifications in enabling
trainers to effectively design and deliver industry-current skills training, the
new standards retain the NSSC requirement that RTO’s who deliver the
Certificate IV in Training and Assessment to undergo independent and
external validation of their assessment system in relation to the Certificate IV.
The new VET regulator standards also include a requirement that the provider
must have been registered for two years before being eligible to add that
qualification to their scope.
The new standards do not include the requirement that those delivering the
Certificate IV Training and Assessment to hold the Diploma of Vocational
Education and Training or the Diploma of Training Design and Development.
While those delivering the Certificate IV are encouraged to hold these higher
level qualifications, the new standards refrain from making this a requirement.
This is in response to some stakeholder feedback that such a requirement in
and of itself may not improve the quality of Certificate IV level graduates but
would impose a significant cost on the provider to up-skill and possibly pay
higher wages to existing staff. Other stakeholders have put forward the view
that mandating the Diploma level would be an important component in
responding to the quality issues related to the Certificate IV level qualification.
The Certificate IV in Training and Assessment is also currently under
consideration by Innovation and Business Skills Australia (IBSA) who are the
relevant Industry Skills Council responsible for maintaining the Training and
Education training package. Public consultation on the training package was
undertaken earlier in 2014 and the new package is coming forward for
endorsement later in the year.
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Minimum requirements for delivering the Certificate IV in Training and
Assessment are covered in clauses 1.18-1.20.
AEO versus strengthened RTO responsibility
The NSSC draft standards included a requirement for the training provider to
nominate an Accountable Education Officer (AEO) who should have influence
over the decision making of senior management in relation to training
assessment, strategies and practice. The AEO would also have been
required to hold a Diploma or higher level qualification in education and
training and demonstrate pedagogical expertise.
There has been some feedback from the sector in relation to the value and
practicalities of such a role. In particular, some RTOs have raised concerns
that the AEO concept did not fit their business model and did not take into
account the delegation that occurs within an organisation for which the RTO is
not its main function. There was also some concern that the potential costs of
finding or upskilling someone to fill the AEO role, which could be a significant
impost on smaller providers.
These standards do not include the NSSC’s proposed requirement that an
RTO must have an AEO. The removal of this proposal acknowledges
stakeholder concerns about the potential costs of engaging people with the
requisite qualifications or up-skilling an existing staff member to fill the role
and also of the different organisational structures that enterprises and the
government, universities and those in the not-for-profit sectors may have.
However, there remains overwhelming support for the strengthened focus on
the quality of training and assessment and recognition that training
organisations must have the educational expertise to ensure such quality.
The new standards would see the leadership of the RTO being clearly
responsible for the quality of all training and assessment delivered to learners.
This maintains the quality requirement while delivering flexibility to RTOs in
determining the most appropriate organisational structure for their business.
Systematisation of an RTO’s quality training and assessment strategies will
be also be strengthened through the introduction of an annual declaration of
compliance with the standards, in particular in relation to training and
assessment. This will focus RTO activity on this key indicator of quality and
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also provide important information as the VET regulators move to a risk-based
regulatory approach.
Strengthened RTO responsibility and quality assurance is covered in
Standard 2 and the annual declaration is covered in Standard 8.
Subcontracting
Submissions from a number of RTOs to the former NSSC highlighted that
subcontracting limits transparency and accountability and can obscure poor
quality training.
The current standards allow non-RTOs to deliver and assess training on
behalf of an RTO but do not specify how this should occur and if any formal
arrangements must be in place. As a result, RTOs are not currently required
to make subcontracting arrangements explicit to either learners or regulators.
Further to this, if an RTO elects not to register delegation arrangements with
their regulator, there may be insufficient information available to the regulator
to implement a risk-based regulatory approach.
The new standards clarify subcontracting requirements and require the RTO
to take full responsibility for ensuring the quality of the training and
assessment delivered on its behalf.
If an RTO enters into a subcontracting arrangement or changes an
arrangement with a subcontractor they must:

ensure compliance with the standards including where it has
subcontracted the delivery of training and assessment services;

have sufficient strategies and resources in place to systematically
monitor any training and assessment delivered on its behalf;

notify the VET regulator so that it can factor the subcontracting
arrangement into its risk assessment;

notify the student, so they can make an informed choice about their
training; and
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
ensure that the subcontractor co-operates with the regulator including to
enable the regulator to interact with subcontractors in the course of an
audit.
Subcontracting is covered in Standards 2 and 8.
3.
Cutting red tape
Stakeholders have consistently provided feedback that they feel there is a
significant regulatory burden imposed by VET-related regulation and that the
current standards are unclear, making it difficult for providers seeking to be
compliant and placing a significant cost burden on them. Stakeholders also
provided feedback that several features of the NSSC draft standards, namely
the learner agreement and Licensed Training Organisation concept, would
add to the regulatory burden in the sector.
The new standards also propose that a number of the more contentious
regulatory changes proposed by the NSSC not proceed.
Providing greater clarity in relation to compliance
There is an acknowledgement that the ‘ambiguous’ language used in the
current standards, places a high evidential burden on providers to
demonstrate they comply and a large ‘grey area’ where compliance is unclear
and open to interpretation. This has created uncertainty and confusion, and
has resulted in standards that are unwieldy and difficult to enforce. Further,
while the current standards provide a statement of policy intent, the vague
nature of the language has resulted in some regulatory decisions that are
overturned when challenged in courts and tribunals.
The new standards introduce greater clarity to regulatory requirements and
expectations. This is in conjunction with the VET regulator standards which
will require regulators to provide general education and guidance materials to
assist RTOs to understand what they need to do in order to be compliant.
Learner Agreement versus improving consumer information
With over 4,700 providers operating in the system it is often difficult for
students and employers to identify the provider that delivers the training that
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best suits their needs. Information about the quality of providers and the
potential outcomes of training needs to be readily accessible for students and
employers and available at the right time so they can make informed
decisions about their training options.
The new standards propose to clarify the type of information that should be
provided to students prior to or at the time of enrolment, as well as setting the
standard for accurate and ethical marketing of training courses in response to
the findings of ASQA’s strategic review into RTO marketing practices.
While it is important to ensure all students are provided with appropriate
course and consumer information in a format that is understandable for the
student, this can be done in a range of ways. Feedback from RTOs was that
it was administratively burdensome to prescribe the format in which this
information needs to be provided. The draft standards remove the NSSC
proposal to require all RTOs to have a learner agreement with each student in
favour of a less prescriptive approach while still ensuring the information is
available.
Improving consumer information is covered in Standards 4 and 5.
Licensed Training Organisation
The former NSSC were of the view that introducing the 'Licenced Training
Organisation' (LTO) concept would emphasise a break from the past and
communicate to purchasers of training that the VET system comprises of
organisations committed to operating as part of a new higher quality system.
However, it is considered unlikely that a change in nomenclature would
deliver such an outcome in the short term and feedback indicated that the
change would cause administrative and cost burdens for RTOs with no clear
benefit to match the costs. Based on this feedback the LTO concept has not
been retained in the new draft standards.
The standards have retained the existing ability for the VET regulator to
exercise its discretion at initial registration to register RTOs for a shorter
period of time than the full registration period. For example, where an
applicant cannot demonstrate previous experience in the field or is considered
high risk the VET regulator has the flexibility to limit the duration of the initial
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registration. If the applicant is able to demonstrate significant previous
experience or is considered low risk the VET regulator has the flexibility to
register the applicant for the duration of the full registration period.
Governance arrangements for providers
The former NSSC proposed that RTOs, who are non-government and not
registered under the Australian Charities and Not-for-Profits Commission Act
2012, should be a registered Australian body within the meaning of the
Corporations Act 2001.
This was an attempt to lessen the duplicative burden of administrative
regulation, particularly where the same regulation is applied by other
regulators. However, while such an approach may give the VET regulator
confidence that the provider has met governance, financial reporting and
accountability requirements under other regulatory schemes, the VET
regulator would still have responsibility for assuring things such as financial
viability as well as auditing compliance with all aspects of the standards.
The new standards do not include the incorporation requirement. This is in
response to stakeholder feedback that this requirement would place an
unnecessary regulatory burden on those training providers not currently
incorporated and would provide only limited benefits to those training
providers who are. The requirement would not lessen the responsibilities of
the VET regulator and is unlikely to contribute significantly to any
improvements in quality.
The NSSC's draft standards also included financial viability requirements for
RTOs. The new draft standards do not contain financial viability requirements
as they are already provided for in a legislative instrument maintained by
ASQA. However, in support of a more risk-based approach to regulating the
financial viability of RTOs, ASQA has announced that, from 1 July 2014, it will
cease the requirement for many existing RTOs to undergo a financial viability
assessment as part of their re-registration. This will ensure that an existing
RTO that has demonstrated its capacity to meet the requirements will not be
subjected the process again except in exceptional/particular circumstances.
Given the importance of encouraging the sustainability of RTOs and the
durability of their investments in their business, the new standards clarify the
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application of the fit and proper person test. Feedback received is that in the
case of some larger organisations, these requirements can inappropriately
apply to persons who are somewhat removed from the training and
assessment operations. The standards retain the requirement for executive
officers or high managerial agents of RTOs to meet the fit and proper person
requirements but remove the confusion that this role is always fulfilled by the
Chief Executive of the RTO.
The Fit and Proper Person Test is covered in Standard 7.
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Overview of the Regulator Standards
Risk-based approach
The new VET regulator standards provide greater clarity and consistency in
relation to the roles and responsibilities of the VET Regulators in regulating
the sector. The standards maintain the requirement for regulators to adopt a
greater risk-based approach to regulation. However the approach is to be
consistent with the Risk Assessment Framework made by the relevant
Minister following agreement by the COAG Industry and Skills Council. This
framework will be developed by the VET regulators and then made available
for consultation.
This is in response to feedback from some stakeholders who reinforced that a
responsible regulatory approach recognises that RTOs are different and carry
different levels of risk and the costs of a "one size fits all" system to low risk
compliant providers.
The risk-based approach is covered in Standard 1.
Educative function of VET regulators
Some training providers have put forward strong concerns that despite their
best efforts and intentions they are unsure of what they need to do in order to
be compliant with the RTO standards. This places RTOs in an invidious
position in terms of ensuring that they meet the necessary requirements.
To address this, ASQA will be revisiting its service charter and the new
standards highlight the role of VET regulators in providing general education
and guidance materials to assist RTOs to understand how to be compliant.
This is a necessary function to ensure that RTOs are able to understand what
is required of them and to lift the level of RTO compliance against the RTO
standards and VET accredited course standards.
The educative function of VET regulators is covered in Standard 1.
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Complaints processes, codes of practice and
external review
Modern and effective regulatory systems place requirements on the regulator
to have clear and transparent complaints processes and be subject to the
external review of their actions.
The proposed standards require VET regulators to implement policies to
better manage and respond to reports of RTO non-compliance. This includes
an important requirement for VET Regulators to be held accountable for how
they manage such complaints, including through the provision of quarterly
reports to the relevant Minister.
The standards will also require the VET regulator to have a service charter
that they must meet and a policy to manage and respond to complaints about
its own regulatory practices, including timeframes for finalising complaints.
There has also been feedback from some stakeholders in relation to the
performance of ASQA's auditors. The standards will require VET regulators
to have a code of practice for auditors and course accreditation assessors
which they must meet and a requirement that auditors and assessors adopt
modern best practice in undertaking their functions.
VET regulators will also be required to report on their activities against the
standards to the COAG Industry and Skills Council. The COAG Industry and
Skills Council will also be able to require a VET regulator to participate in an
external review process.
The complaints handling requirements are covered in Standard 3, the Code of
Practice is covered in Standard 6, the requirement to report on their activities
is covered in Standard 4 and the external review requirements are covered in
Standard 5.
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