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15 Apr 2015

In Search of Sustainable TVSD Financing: It’s Not (Only) About the Money, Money Money By Robert Palmer

By Robert Palmer, NORRAG

moneyTechnical and vocational skills development (TVSD) spans many domains; in many countries it exists in schools and institutes under the authority of multiple ministries, including of course the ministry of education and ministry of labour; it exists in the private sector in enterprises and private vocational institutes; it exists at pre-tertiary and tertiary levels; and there are huge amounts of TVSD in both formal and informal economies.

The financing of TVSD is equally complex, and can come in the form of public funding from national government (e.g. via the direct payment of teacher salaries or grants to institutions, or by tax incentives, scholarships, training vouchers), from individuals (via training fees), from enterprises (e.g. via fee payment, in-house training, levy-payments and other means), and from national or sectoral training funds (e.g. via grants, levy exemptions etc).  TVSD financing can equally come from development partners – both DAC and non-DAC – in the form of project grants, soft loans or budget support.

Sustainable TVSD financing is not simply about getting more money for the pot, or even about using the money in the pot more efficiently. TVSD financing is intimately linked to the development and sustainability of quality, relevant and equitable training systems. TVSD financing mechanisms can themselves be used to promote TVSD policy objectives. It is therefore imperative that TVSD financing issues be discussed alongside TVSD objectives. However, more often than not, policy makers and politicians may view them more separately; and this degree of separation appears to have been carried into the post-2015 discussions on technical and vocational skills.

TVSD financing and post-2015 financing: in different silos

Over the last 10 years, the issue of technical and vocational skills has been rising on the policy and political agendas of many governments around the world (e.g see NORRAG News 48). In the post-2015 development agenda discussions over the last three years, technical and vocational skills have featured in many of the proposals put forward (see NORRAG working paper #6 Education and Skills Post-2015: What Evidence, Whose Perspectives?), and in the latest formal proposal of the Open Working Group on Sustainable Development Goals (SDGs), technical and vocational skills are the topic of three targets under the education goal. Accompanying this interest in securing ‘technical and vocational skills’ as part of a post-2015 education target have been some more recent discussions about what kinds of indicators might be used (e.g. see UN Statistical Commission, UNESCO Global Monitoring Report 2015, p.285-290, UN Sustainable Development Solutions Network). Inevitably, thinking on indicators for technical and vocational skills has been accompanied by discussions about lack of data and problems of monitoring (see the 2015 UNESCO GMR, p.127); an issue that has long been raised, including by this author (e.g. see 2008 paper on monitoring skills, and in earlier NORRAG blogs here, here, and here).

Meanwhile, the wider education post-2015 discussions have moved beyond talking just about indicators and monitoring to also talking about financing. Discussion has tended to focus on two main types of financing; including from governments (e.g. % of government budget allocated to education) and from donors (e.g. % of ODA or its equivalent allocated to education), with financing from other sources including the private sector being mentioned, but getting less attention. For general education, delivered in schools, this kind of financing focus on government budgets and donor money might make sense. But for technical and vocational skills financing, this focus is very narrow. It ignores what in many countries is the largest source of technical and vocational skills financing; direct and indirect financing from enterprises, including for on the job training in apprenticeships.

Forget about the price tag

Meanwhile, the April 2015 Education For All Global Monitoring Report 2015 provides the latest cost estimates for part of the proposed post-2015 education agenda – achieving universal pre-primary, primary and lower secondary education completion – but does not attempt to cost other aspects of the proposed agenda, including technical and vocational skills.

Indeed, no-one seems to be even talking about the financing needs of technical and vocational skills in the post-2015 agenda, let alone trying to estimate what they might be. There are obvious reasons for not trying to estimate the cost of technical and vocational skills in the post-2015 development agenda; there is no clear focus (on what kind of technical and vocational skills should be measured), no real target (the OWG proposed target talks of a x% the number of youth and adults who have technical and vocational skills), and insufficient data.

However, standing back from a focus on trying to cost a post-2015 technical and vocational skills target – which for reasons above is not possible – it is still worrying that the post-2015 financing discussions appear not to have addressed the mechanisms and framework of financing of technical and vocational skills, including continuing vocational education and training (CVET). And the July 2015 Financing for Development (FfD) conference in Addis Ababa also does not look like it will cover this; the draft outcome document of the Addis Ababa Accord, simply refers to the need to ‘enhance technical and vocational education and training’.

TVSD financing discussions among the TVSD constituency  

But we should perhaps not be too harsh on the post-2015 and FfD documents. The TVSD community’s own documents are not well developed, or not up to date, on TVSD financing.

For example the 2012 Recommendations of the Third International Congress on TVSD, simply noted the need to: ‘diversify sources of funding by involving all stakeholders, in particular through the use of appropriate incentive mechanisms’, and to ‘promote targeted funding schemes to facilitate access of disadvantaged groups’.

Meanwhile, the draft revision (2015) of UNESCO’s normative instrument concerning TVSD, goes only a little further on the specifics of TVSD financing, noting that: ‘Incentive mechanisms and regulatory frameworks should be set up to diversify sources of funding and involve all stakeholders’, and that such stakeholders include enterprises, individuals, local authorities and public-private partnerships. It notes the importance of giving TVSD institutions greater operational and financial autonomy so that they can build partnerships and generate revenue. And, critically, it notes the need for more financing mechanisms that can increase efficiency, stimulate the demand for TVSD, and promote better outcomes by ‘shifting the traditional input-based models to more performance-based financing ones’.

There have certainly been several recent initiatives with regard to TVSD financing; for example: CEDEFOP’s work on financing training, including setting up a database on financing adult learning in EU countries; a European Commission organized workshop on ‘Financing VET’ in November 2014; and reviews of TVSD financing in developing countries. And there are several older pieces that are still key reference texts on TVSD financing (e.g. Falch and Oosterbeek, 2011; Johanson, 2009; Ziderman, 2002).

Just as we need to see a stronger connection between the technical and vocational skills community who are already working on improving TVSD indicators, and the technocrats who are drafting post-2015 education indicators, we need to see a stronger connection between the TVSD financing experts and the financing for development experts. This currently does not look like it will happen unless the international TVET community moves rapidly to make its voice heard.

Robert Palmer is an independent education and skills consultant. He also supports the Editor of NORRAG News and runs NORRAG NEWSBite. Email: Tweets @SkillsImpact

>>See all NORRAG Blogs on TVSD

NORRAG (Network for International Policies and Cooperation in Education and Training) is an internationally recognised, multi-stakeholder network which has been seeking to inform, challenge and influence international education and training policies and cooperation for almost 30 years. NORRAG has more than 4,200 registered members worldwide and is free to join. Not a member? Join free here.

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