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Industry Clusters: How is this reform changing VET?

Industry Clusters Blog Image - Precision RTO Resources

As you may already know, massive changes are coming to the VET landscape with the removal of Skills Service Organisations (SSOs) and Industry Reference Committees (IRCs), and the introduction of Industry Clusters. The aim of this change is to streamline the creation of training products and updating of training packages to ensure they match current market needs.

During late September 2022, we reached out to several SSOs, Skills Reform, ASQA, and other related bodies for information on the progress of Stage 1 and insights into who might be moving to Stage 2. However, none of these organisations had any updates on the status of the current bid process. What we do know right now is that whoever gets the grant opportunity during Stage 2 will move on to negotiation and finalisation stage.

As of writing this, no public announcements have been made yet on which bodies are participating in Stage 2. With the Industry Clusters expected to be fully implemented by January 2023, there’s a surprising lack of information, and potential progress, in determining who will be appointed as the new Industry Clusters, taking on the SSOs portfolios. Will this mean a delay in transitioning to Industry Clusters?

 

What do we know so far about this VET reform?

We contacted some SSOs and government bodies to see if they could provide us with an update and reviewed their websites for news related to this change. What we do know is:

    • Digital Skills Organisation (DSO) is working with PwC’s Skills for Australia to take on the Finance, Technology, and Business Sectors.
    • Skills Impact plans to take on the Agribusiness, Food, and Fibre related sectors.
    • Artibus Innovation has put in a bid for the Building, Construction and Property Industry cluster.
    • HSSO could be taking on the Early Educators, Health and Human Services Industry Cluster.
    • Australian Industry Standards has sent a submission that covers the logistics, wholesale, transport and retail industries.

No formal announcements have been made on whether these organisations will be the official Industry Cluster, and whether their bids have been approved or not.

Whilst the names of Industry Clusters appear to be finalised, we’re still unsure who will be taking on which industry and whose portfolios will be transferred to which bodies. According to ASQA, they are waiting on the Department of Education’s decision regarding who will take on the new industry clusters. The reform is still expected to be fully implemented by January 2023.

 

Industry Clusters:

    • Agribusiness and Food Production
    • Arts and Personal Services
    • Building, Construction and Property
    • Early Educators, Health and Human Services
    • Finance, Technology and Business
    • Government, Education and Public
    • Manufacturing, Print and Textiles
    • Mining, Resources and Energy
    • Wholesale, Retail, Transport and Logistics

 

Most of the public announcements we found are at least a few months to years old. No major news has been released since March 2022 and information sheets from Skills Reform only have basic information about the Industry Clusters.

It is a bit concerning that only 3 months before Industry Clusters are up and running and fully operational, there is still little information to inform VET stakeholders about what is going to happen next and if this reform process is on track or delayed. Time is running out and a lot of us are still in the dark on the current status of the reform and where it is at exactly.

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What’s the timeline of the move to Industry Clusters?

The Industry Cluster VET industry reform was announced back in July 2021 and officially started back in December 2021. There were attempts previously to reform the VET system through other means such as the Skills Organisation Pilots system.

The Skills Organisation Pilot covered Digital Technology, Mining, and Human Services. This system started in 2020 and will not extend beyond its funding period that lasts until mid-2023. Not only is the Industry Cluster system replacing the current VET system but the new Skills Organisation Pilots system as well.

If any of the organisations involved in the Skills Organisation Pilot system want to become an Industry Cluster, they apply through the open competitive grants process. At the moment, the Industry Cluster industry reform is well underway.

It has been almost a year since Stage 1 began of the Industry Cluster system and we have not been updated about the progress of any grants, bids, and negotiations which is supposed to be happening right now. Stage 2 started on 20 January 2022 with grant opportunities opening mid-end of 2022.

Considering the Skills Reform Industry Cluster Implementation and Transition Timeline show that approved Industry Clusters will be established in January-March 2023, it seems to be unlikely the transition will be completed by January 2023, as stated by Skills Reform.

 

What does this mean for VET stakeholders?

In the short term, SSOs are working urgently to wrap up any final projects and submit to AISC for endorsement at their October or November 2022 meetings. This means more changes coming in many training packages later this year or early 2023.

Once those projects are endorsed though, the potential delays to the new Industry Cluster system getting up and running means there could be a long delay before the next phase of training package development begins.

For RTOs, this may come as a welcome reprieve from the rapid and extensive changes to training packages over the past few years. It may be less welcome news for those that see the need for reform and revision in their training package, with no recent updates and nothing on the horizon for now.

Longer term, one of the goals of Industry Clusters is to lead and drive the performance of the national Vocational Education and Training (VET) system to meet the evolving skills and training needs of industry and employers. The goal is improving the speed of training product development and getting qualifications – meaning there could be more frequent changes to training packages and more frequent course transitions.

 

What can the VET industry expect to see in January 2023?

The plan is for the new Industry Clusters to be fully operational in January 2023. But it is important to understand that they will not be effective immediately. They will need to start new projects from scratch, developing new cases for change (or the equivalent process) to start reforming qualifications and training packages. It’s not clear at the moment how long this will take. Months? A year or more?

 

What current projects could be affected by the move?

Skills Reform stated that no new training products will be commissioned during 2022. However, there are existing training package projects due between October and December 2022 which will continue to move forward.

Some of the remaining projects as of September 2022 include:

Project  SSO  Status 
Community Sector and Development Training Package Project  SkillsIQ  Endorsed and Awaiting Publication 
Diploma of Financial Counselling Training Package Project: Endorsed  SkillsIQ  Endorsed and Awaiting Publication 
Aged Care Training Package Project  SkillsIQ  Awaiting Ministerial Endorsement 
Allied Health Assistance Training Package Project  SkillsIQ  Endorsed and Awaiting Publication 
Complementary Health Training Package Project  SkillsIQ  Endorsed and Awaiting Publication 
Aboriginal and Torres Strait Islander Health Worker Training Package Project  SkillsIQ  Submitted to AISC 
Ag & Horticulture Core Skills Project  Skills Impact  Final Draft Validation 
Sport, Aquatic and Recreation Training Package Project  SkillsIQ  Submitted to AISC 
TAE Training and Education Training Package Review  PwC’s Skills for Australia  STA Review 
Infection Control Training Package Project  SkillsIQ  Submitted to AISC 
Construction Waterproofing Design and Survey  Artibus Innovation  Submitted to AISC 
Bushfire Protection Assessment  Artibus Innovation  Submitted to AISC 
Prefabricated concrete element installation  Artibus Innovation  Submitted to AISC 

 

A handful have already been approved by the AISC and awaiting endorsement, but there are some that are still yet to be submitted to AISC at their final meetings.

There is pressure on SSOs right now to complete current projects before this VET reform is implemented. Any projects that are not completed at the final AISC meeting in November will be handed over to the relevant Industry Cluster to complete, but the project will need to be restarted from the case for change step again – adding extensive delays.

 

Final Thoughts

The latest industry reform is the biggest change to Australia’s VET industry in many years. We’ll go from 6 SSOs and 67 Industry Reference Committees (IRCs) to just 9 Industry Clusters. The existing SSOs and IRCs will continue to operate until the end of 2022 to finalise existing training product updates. But as it stands, some product updates might not be finished on time.

We understand that the purpose of the new system is to streamline the VET processes and react to the needs of the industry quicker. However, with only three months left before this system and the new Industry Clusters are meant to be fully operational – with Christmas holidays in the middle – it’s worrying that there is so little information available, and the Industry Clusters haven’t even been announced.

Hopefully, there is a lot going on behind the scenes and everything goes to plan.

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