Money makes the world go round…

Vocational education and training may be the best game in town when it comes to economic growth and social inclusion, but, as everyone knows, you have to pay to play.

Vocational education and training (VET) continues to gain momentum as a driving force for employment, productivity, and international competitiveness across the diverse contexts of ETF partner countries. But as its importance for economic growth and security grows, so do questions about how to organise its financing. A technical approach, based on monetary and resourcing aspects, is unlikely to be as successful as a strategic approach based on a holistic, policy-oriented vision. And, as more partner countries move from policy analysis to implementation, there will be greater demand for strategic insights in the area of financing.

At the same time, the rise of systemic approaches reflects increasing participation by employers and other social partners in VET reforms. In turn, this highlights VET’s complex, multi-stakeholder environment, which contributes to it being relatively expensive compared to other parts of the education system. In an economic climate still dominated by budget cuts, particularly for social policy areas like education and training, policy makers urgently need to change the view that VET is a cost borne by the State. Instead, policy makers responsible for VET are urged to make a robust business case for VET as a shared investment in human capital development – with all its potential economic and social benefits – is the first step towards more integrated and robust policy choices. This in turn will open a fundamental discussion about the role of the state in VET.

The ETF has been studying the funding and financing of VET systems over the past few years, in order to respond to the range of challenges partner countries have identified. A powerful new set of concepts and tools aimed at helping partner countries explore VET financing is being developed. The ETF has now developed a working definition of the term ‘financing’, and proposed an innovative methodology to support policy dialogue. The overarching aim is to help partner countries change the way they address VET financing, and start to make the move from a technical to a systemic approach.

Through its position within the European Commission and wider international networks, the ETF is also well-placed to share case studies which illustrate the structure, implementation, and impact of different methods of raising funds and managing finances. The Torino Process analytical framework has included VET financing as an area for progress monitoring since 2012, and in 2015 the ETF published Cost and Financing Analysis in VET, a guidance note to identify the financial aspects of different reform scenarios and to inform the policy-making process. This has been followed by a formal Position Paper, The Financing of VET and Skills&Development. The ETF can also facilitate national awareness-raising workshops on financing for partner countries.

While there is no simple route to a holistic perspective, making good decisions on financing at the outset of the policy process will greatly enhance the resilience of the whole system. With its combination of up-to-date information, technical and methodological support, and exposure to international good practice, the ETF is here to help partner countries make those good decisions.

Article features in the June Issue of Live&Learn here.