Guidance Note: ETF Financing Prism

A Guide to the ETF Financing Prism – A Tool for Innovation in Policy Dialogue

A governance tool for developing policy, collaborative analysis and discussion with stakeholders on VET financing reform.

Short description:

This document guides the reader through the ETF ‘VET Financing Prism’, a methodological tool to assist the dialogue between public and private sector stakeholders involved in the reform of VET financing systems. The dialogue between these actors in the financing of VET service provision has become standard practice in advanced economies. The adequate resourcing of the VET system generally relies on a complex ‘chain’ of providers that supply both financial and in-kind support from a variety of sources. Typically, this includes VET contributions from stakeholders in central and regional government, regional authorities and city-level administrations, as well as employers and students. It also entails the allocation of resources throughout the VET system, including down to the VET provider level, to cover the range of policy priorities and foster a more performance- and results-oriented system. Managing all of this presents a challenge to traditional approaches to VET financing, and requires awareness as well as measures to develop appropriate capabilities at different levels of the VET system and among stakeholders from the private sector.

The Prism methodology models VET financing as comprising three essential functions, symbolised through the three facets of the prism, namely: resource mobilisation, resource allocation and management of the financing chain. The execution of these three functions relies on cost analysis and the systematic gathering of relevant data. The Prism process for developing dialogue is articulated around:

• stakeholder involvement, from public and private institutions as well as individuals;

• policy objectives such as access to/participation in VET, and ensuring quality, relevance and equity;

• principles of good governance such as transparency, accountability and efficiency.

The actual dialogue related to VET finance reform can then develop along four-steps, comprising:

• preparatory work such as analysis of the status of VET finance and stakeholder identification;

• an initial awareness-raising workshop, to establish a common understanding, obtain the commitment of all the necessary stakeholders and kick off the dialogue process;

• exploration of scenarios for VET financing reform;

• the elaboration of policy options as a basis for decision making on VET financing reform.

You may read the document here.