Financing Vocational Education and Skills Development

Financing Vocational Education and Skills Development – A Policy Area for ETF Support

An ETF strategic positioning paper which describes the challenges faced by partner countries and offers a methodological framework for understanding, analysing and designing reforms of VET financing.

Short description:

Although VET reform is primarily about new and better qualifications, improved courses and innovative teaching methods, it also concerns new ways of managing public sector organisations, in particular new systems of governance and fresh approaches to VET financing. VET management is complicated by the large number of stakeholders, including those from the private sector, which either do or should contribute to incurring responsibility for, and costs of, VET provision. All of these factors create important new challenges for the management and financing of the VET system.

The ETF has developed an analytical framework for understanding VET finance and for approaching the challenge of VET finance reform. This approach facilitates a move away from a bureaucratic approach to VET financing, with traditional ideas such as budgeting based on increments to historical costs, towards a more holistic evidence-based, policy-driven approach. In this latter approach finance is seen as an essential element of VET governance. On the one hand, this responds to a need to involve a broader group of stakeholders in finance and resource-related decision making; on the other hand, it recognises the potential for using finance as a lever for achieving specific policy goals.

The ETF ‘Prism’ for analysing VET finance focuses on three main elements – the mobilisation and allocation of (financial) resources, as well as the management of the financing chain. Effectively implementing these three ‘functions’ requires careful attention to stakeholder engagement, the pursuit of well-defined policy objectives and the application of good governance principles. All of this is expected to build on the systematic gathering and analysis of relevant data and new approaches to costing.

This document describes the overall ETF methodology, and explains and illustrates the overall approach based on the ETF ‘Prism’.

You may read the document here.