VET financing: a condition and component of reform

An ETF report on  "Assessing Governance and Financing of Vocational Education Strategies: a Methodology" confronts the complexity of VET financing as a multilevel governance issue and provides a strategic framework for VET finance reform, as well as a range of methodological tools to support policy dialogue. A series of detailed policy guidance notes on instruments such as formula fundingcompany incentives, and training levies complements this report.

What is VET financing?

VET financing is distinct from other VET-related policy domains in that it is both a general condition and a specific area of VET reform. VET finance requires a larger set of dedicated governance tools.

What is the ETF strategic framework?

More holistic and more reform-oriented in nature, the ETF VET Financing Prism is a framework methodology that enables partner countries to move from a systemic analysis of their VET financing system to policy dialogue on needed reforms involving public and private stakeholders. Rather than merely a technical issue, financing is considered as a tool for steering policies.

What is an effective VET financing system?

An effective financing system relies on governance principles, such as transparency, accountability and efficiency, translated into rules, procedures and mechanisms. It needs to be supported by robust data gathering, including information about costs, and a rigorous approach to budgeting. Its functions are fulfilled by a range of stakeholders from the public and private sectors. It is anchored in national priorities and objectives.

How can the ETF approach help?

Using the VET Financing Prism encourages reflection about specific financing measures seen from a policy perspective that take account of the key policy goals of the VET sector. It verifies whether and how a country’s VET strategy has been costed, if there is a clear and realistic identification of resources to be mobilised to cover these costs, and if the financing mechanisms in place can guarantee effective implementation.

It can also be used to identify strengths, risks and areas for improvement in governance and financing, as well as an input to policy dialogue between the EU and partner countries. Finally, it may be used as a method for measuring policy progress over time in these two areas.

Who can benefit?

The European Commission services and delegations, and other international partners and donors intending to participate in VET financing. The ETF partner countries’ governmental teams will also find this report and complementary guides a valid resource for analysing their current VET systems and identifying areas for improvement, or to conduct a critical examination of their VET strategies from the governance and financing perspectives. In addition, all professionals working in the field will find the report and guides of interest.

Where can I find more information?

Join the ETF’s virtual platform Open Space where you will find a dedicated section on VET costing and financing within VET multilevel governance community.


This assessment methodology was designed by the ETF at the request of the European Commission’s Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR).  In 2018, the assessment methodology was piloted in Montenegro on the VET Strategy 2016–2020.

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