Budget blowout prompts ACT government to rein in Vocational Education Training spending

It is now slashing the number of courses which attract government support - potentially affecting thousands of students - in an attempt to rein in spending.

New details have emerged on the reason behind the government's shock changes to vocational education funding, which sparked a wave of anger and confusion across the sector after they were quietly introduced earlier this month.

The peak body for private training schools, which was blindsided by the move, has warned the changes threaten the viability of some providers and could worsen the skills shortage in Canberra.

The changes were revealed when the government published details on what qualifications would be subsidised under the ACT's Skilled Capital program and the federally-funded User Choice scheme in 2020.

The funding is allocated to providers, which subsidise the cost of courses to students and employers.

The ACT government last year subsidised 107 qualifications under the Skilled Capital initiative. That number has been cut to 40 in 2020.

Qualifications in early childhood, construction, hospitality and cyber security have all be axed from the scheme, with the total number of student places eligible for a subsidy slashed from 3530 to 1000.

Subsidies for dozens of courses supported through the User Choice program have also reduced, or axed entirely.

The Canberra Times can reveal the scale of changes to the User Choice scheme initially appeared far worse, after the government published the wrong subsidy amounts for 30 courses. The error has since been rectified.

Responding to questions last week about the changes, the government said the cuts were made because of an increase in student demand for subsidised courses.

That response, which was reported in The Canberra Times, bemused some in the sector, who questioned the logic of cutting funding for courses essentially because they were too popular.

Pressed for a more detailed explanation on the changes, a government spokesman said high student demand resulted in the Skilled Capital programs being "oversubscribed".

As a consequence, it spent $6.2 million on student subsidies, more than $3.8 million over budget.

The government has actually allocated more money this financial year to Skilled Capital - $2.5 million - but appears to be cutting the number of funded courses in an attempt to avoid another budget blow out.

"The government is now returning the spend on skills subsidies delivered through User Choice and Skilled Capital to a sustainable rate of growth to reflect the increased training demand and ensure we can support all sectors, particularly for skills required in the ACT," the spokesman said.

The highest level of subsidy would be retained for courses in community services and individual support, early childhood education, ageing support, disability, mental health and allied health qualifications, the spokesman said.

The list of taxpayer-subsidised qualifications is updated annually and is approved by tertiary education minister, which is currently Chief Minister Andrew Barr.

Many of the qualifications are also taught at Canberra Institute of Technology, meaning the changes will also affect the government training provider. The government said it was working with CIT to "minimise the impact of these changes on students and small businesses that cover the costs of employees training".

The government last week hastily arranged a meeting with the peak body for private training providers, Independent Tertiary Education Council Australia, to explain the changes.

The organisation's chief executive, Troy Williams, remained concerned about the short and long-term implications of the changes.

"Compared to last year it's clear that the ACT government is still proposing a substantial funding cut for 2020 over what was delivered last year," he said.

"There continues to be a remarkable lack of transparency and accountability to students and their employers when it comes to vocational education and training funding this year.

"Based on the little information that's available, the territory is going to struggle to train the skilled workforce required to support business."

Mr Williams said students and providers in Canberra were now at a competitive disadvantage as a result of the changes.

"A student living, working and studying in Queanbeyan will, for many qualifications, attract subsidies from the New South Wales government twice that which the ACT government is offering a local student," he said.