Financing VET

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Financing VET
Fourth ECA Education Conference Jean-Raymond
Masson Tirana, 26 October 2007
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EU messages on financing education and training
and VET

• Lisbon strategy Call for a substantial annual
  increase in per capita investment in human
  resources (2000)
• With 5.2 GDP (2004), EU public spending on ET
  comparable to its competitors, but clear deficit
  in private funding compared to the US (3 times)
  and Japan (2 times) particularly in HE and in CVT
• Helsinki Communiqué (Dec 2006) Improving
  public and private investment in VET through the
  development of balanced and shared funding and
  investment mechanisms

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Council Conclusions on efficiency and equity
in European education and training systems (dec
2006)

• Main messages to member states
• Adapt present arrangements for funding ET to
  ensure both efficiency and equity
• Ensure efficient targeting of reforms and
  investment by focusing on pre-primary education,
  targeted early interventions and equitable ET
  systems
• Ensure adequate funding for human resources and
  where appropriate increase public funding and
  encourage greater complementarity private
  contributions to secure more equitable access to
  HE
• Ensure adequate funding of adult education and
  CVET
• Encourage research into the outcomes of education
  reforms and investments and into their social
  benefits

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VET financing context in ETF partner countries

• Adapting VET to new challenges is costly but
  limited public and private resources
• Poor attractiveness, VET quality is at stake
• VET looses students when there are skill
  shortages at medium level
• VET provides better transition to work and
  plays crucial role in labour market integration
  of young people
• Little participation of adults in CVT
• VET reforms in all countries, often donor led

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Situation in the Western Balkans from ETF
experience (1)

• VET financing high in political agendas
• Although IVET has a subtantial share of public
  expenditure for education, VET schools lack
  resources
• Budgets based on historical costs more than on
  strategic objectives
• Gaps between planned and realised budgets
• Still rigid procedures in centralised system

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Situation in the Western Balkans from ETF
experience (2)

• Ambiguities and problems related to
  decentralisation
• Little school autonomy
• Income generation of schools not transparent
• Little tax incentives
• Little participation in CVT and low funding for
  labour market training in the context of high
  unemployment

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Recommendations from ETF experience in the
Western Balkans
1 Improve governance and develop partnership 2
Increase motivation and accountability 3 Target
inefficiencies 4 Attract more funding 5 Develop
equity
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Improve governance and develop partnership

• Interministerial coordination
• Consider VET specificities in education systems,
  and its links with other components and embed VET
  in lifelong learning strategies
• Deconcentration and decentralisation if needed
  (for what purpose? at which level?)
• Involve businesses and social partners in IVET
  and CVET developments at all levels
• Encourage private providers
• Develop partnerships public/private,
  national/regional or local

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Increase motivation and accountability

• Greater autonomy for schools
• Incentives for improving teachers performance
• Moving towards output based / performance based
  funding
• Additional activities through co-financing
  schemes and free access to local market
• But under conditions
• Commercial activities should not enter into
  conflict with education/training role
• Develop accountability and reporting

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Target inefficiencies

• Promoting transparent and flexible mechanisms
• Introducing quality assurance principles and
  instruments
• Restructuring VET schools networks
• Optimising teachers/pupils ratios
• Avoiding duplication of public training centers
• Targeting beneficiaries according to social and
  economic objectives (economic sectors, SMEs, low
  skilled, Roma, specific groups, etc)

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Increase funding

• Set up benchmark for public funding in the
  context of development strategy
• Combine national and local/regional strategies,
  introduce co-financing schemes
• Introduce incentives for businesses and
  individuals (tax deductions, payroll tax aimed at
  training funds, ILAs, vouchers, training leave,
  etc)
• Develop schools own resources

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Promote equity

• Use quality assurance indicators
• Make equalisation funds effective
• Combine different instruments according to
  objectives
• Target beneficiaries according to social and
  economic objectives
• Make more effective use of labour market measures

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The challenge
As said during the ETF project in 2006 by one
national stakeholder We have quite complex and
sometimes incompatible recommendations but not
the habits and infrastructure to realise them
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Thank you for your attention !
ETF www.etf.europa.eu
e-mail jrm_at_etf.europa.eu
European Commission, DG Education and
culture http//www.europa.eu.int/comm/dgs/educati
on_culture/index_en.htm