Torino Process 2018–2020 Albania - National Report

Despite a decade of economic growth since the financial crisis of 2007-8, the labour market in Albania faces significant structural issues that impede its development. Opportunities afforded by increased access to EU and international markets have proven difficult to capitalise on, in chief because even with relatively low wages the Albanian labour market suffers from being internationally uncompetitive in many areas. Equally, low national demand for skilled labour, coupled with high levels of informality in the unskilled sector, have historically undermined the normal linkage between educational and labour market outcomes. This has additionally led to high levels of worker migration internally and internationally.

As regards labour force participation, employment and unemployment rates, the Albanian labour market has shown largely positive trends since a low in 2013-2014. 

Activity rates have been on an encouraging trend, with the activity rate of the labour force (20-64 years) increased to a total of 73.9% in 2017 in 2017 (Box 1). However, there are marked differences between males (84.3%) and females (63.5%). While the female activity rate presents a major achievement, considering its low of 57.3% in 2014, we should note that economic inactivity remains strongly gendered: it is primarily a phenomenon of women, young people and people with low education, as confirmed in a recent World Bank/WIIW assessment (2018). (see Box 1 in the report in PDF p.23)

INSTAT data offer a disaggregation of causes of inactivity for demographic groups above 15+, by age group and status. Not unexpectedly, being in education is the main reason for inactivity in the age group 15-29, while domestic responsibilities are the main reason given among 30-to-64-year-olds. In the latter age group retirement/early retirement, disability and discouragement, in the form of having given up jobseeking, are major reasons for inactivity. 

Inactivity causes perhaps explain the significant gender disparities in employment rates across the working age population of 20-64 years old. While the average employment rate rose to a total of 63.9% in 2017, this masks a considerable variance between men (72.1%) and women (55.6%).( see Box 2 in the report in PDF p.25). This merits consideration for labour market and social inclusion policies going forward, since there appears to be more considerable gains to be had in policies that address the issues faced by the major demographic, such as domestic responsibilities and discouragement, rather than only among marginal groups.

Those in employment can face a high degree of precariousness and instability. Well over half (55.9%) of all employed persons were self-employed in 2017, with the male rate being 57.7% and the female rate 53.6% (see Box 3 in the report in PDF p.25).Such engagement is usually in the form of seasonal, ad hoc, informal or vulnerable employment.

Vulnerable employment implies work of a non-decent nature, without access to full employment rights. According to the Eurostat definition, it includes people who work as contributing family members, wage employees who are not entitled to social security schemes, home workers and workers doing casual jobs. Despite falling figures over the years especially for females, the rate of vulnerable employment as a proportion of all employed persons still totalled a very high 52.9% in 2017 – 53.6% for males and 52.1% for females (see Box 4 in the report in PDF p.26). In this context, according to INSTAT, one third of the people in Albania work as unpaid family members. These data suggest that vulnerable employment is not a marginal phenomenon, but a major structural weakness in the Albanian labour market. 

After an all-time high in 2014, the unemployment rate (15+) recently dropped to a total of 13.7% in 2017. Unemployment data (see Box 5 in the report in PDF p.27) shows less marked differences between the male rate (14.6%) and the female rate (12.6%) than other labour market data, such as inactivity levels. 

The youth unemployment rate for young adults between 15 and 24 has been persistently high since Albania began its transition to a liberal democratic model of society. The overriding trend, however, is downwards (see Box 6 in the report in PDF p.28), having recovered from a peak in 2014 to a total of 31.9% in 2017, with a gender split of 34.1% for males and 27.7% for females. While this is encouraging, there are externalities that have contributed to the trend, notably high rates of emigration among this demographic – particularly with high-skilled workers and graduates.

A tracer study with 18% respondents from among 1,778 graduates of public vocational schools  in Albania in 2017 (GIZ, 2017) revealed the following results:
41% of the survey participants are in ‘working relationships’ (p. 14), which is a good result. However, the survey also shows that VET school graduates are employed mostly in two sectors – (i) wholesale and retail, and (ii) the hotel and catering sector. By far the majority of jobs is available in Tirana (and to a lesser extent in Durres). This shows a tendency towards (often low-skilled, low paid) service sector jobs and a major geographical imbalance.
25% of the survey participants continue their education (p. 11), most of them at a higher level of competence (at universities), which is a lower percentage than those in other Southeast European countries but within the range of those from EU member states. The current VET system in Albania has a high proportion of academic subjects and prepares students for State Matura exams. The results of VET students in State Matura exams are considerably lower than those of gymnasium students. The fact that only one fourth of the VET school graduates manage to go on to higher education (or other forms of education), is another argument why State Matura preparations could be turned into one optional track within VET. For the bulk of the VET students, academic contents could be reduced in favour of more practical labour market skills.
The survey suggests that there is an issue with the transition from VET to higher education, as 40% did not get registered in their fields of study. This might be due to the usually lower academic standards and marks obtained through VET programmes, as compared to gymnasia graduates. VET graduates have restricted choices when enrolling in higher education.
27.6% of the survey participants who neither work nor continue education is a worrying figure (p. 17). Roughly one third of them have never worked. 59% of them have already been looking unsuccessfully for a job for more than 12 months (are long-term unemployed).
Over half, or 52%, of the VET school graduates said that there is ‘no demand for people in their trained fields’, while 33% claimed there are no jobs available in their regions or towns (p. 17 of 24 of the Data annex). 45% of the VET school graduates claim that they did not use the knowledge gained from school (p. 14), while 58% consider changing their profession (p. 15). This suggests a VET system, which is still largely out of tune with both labour market demand and students’ aspirations.
However, in those branches and institutions, where donors have been active for many years (p. 18), good results in terms of graduates’ employment have been achieved. 
73% of those who are still unemployed are not registered with the labour office (p. 17), because they either do not know what the labour office does or where the nearest one is, or they consider it too far away, or they don’t believe in the labour office being able to help them anyway (p. 18). This suggests that the communication and services by labour offices be further improved (GIZ, 2017).
A report by the European Commission (EC) and LSE-Enterprise on the labour market success of higher education graduates (2015) holds that “graduates have a precarious entry into the labour market, with many moving in and out of unemployment in their search for a well-matched job. Few employers cooperate with (higher) education institutions, even though they believe that such cooperation would improve the recruitment of graduates. Currently, large and medium sized employers tend to cooperate with (higher) education institutions more than small and micro employers, and policy makers face a challenge to encourage the smaller employers who wish to employ graduates to cooperate. Graduates receive more assistance in finding a job from family and friends than they do from their own career service or the National Employment Service. The important role that is played by networks or connections in finding a job, rather than formal assistance from public bodies indicates that the labour market is not operating transparently to match graduates to the most suitable jobs and make best use of their skills. 
Employers value work experience, yet almost half of graduates bring little work experience with them to the labour market when they complete their studies. Those that do have some prior work experience are more likely to have a well-matched job and less likely to be unemployed. Most employers that take on a new graduate recruit find that the skills that have been taught at (higher) education institutions are inadequate and that large skill gaps are found which are important in the modern workplace. Employers who experience skill gaps find it necessary to provide additional training to their graduate recruits.” (European Commission (EC) and LSE-Enterprise, 2015, p. 46f.)
The same report points to a horizontal skills mismatch: “New graduates often find themselves in routine jobs that do not provide an opportunity to practice the skills they learned at the (higher) education institution. Over one third (38%) of graduates report that they are in a job that is not well matched to their qualifications. The problem is particularly acute for graduates with lower level degrees. Less than half (46%) of graduates with Bachelor degrees report being well matched, compared to 69% of graduates with Master degree (ibid, p. 47). 
At the same time there is a vertical skills mismatch: “many graduates have a job that is not well matched to their level of qualification. More than half (53%) of (higher) education graduates hold a job whose requirements are below or above their level of qualification. This is far above the level of mismatch in the EU, where the highest level of mismatch, found in Italy, is around 34% (Adalet McGowan and Andrews, 2015, quoted in: ibid, p. 48). In Albania, 36% of graduates are over-qualified for the job they hold (or did hold if currently inactive or unemployed) and, interestingly, 16% are under-qualified. The other 47% hold a vertically well-matched job. These results suggest that simply increasing the number of graduates without tackling the underlying causes of mismatch, improving skills attainment and quality of higher education provision, is unlikely to secure a more effective utilisation of the available human capital (ibid, p. 48).
 

See section A3.2.
The bigger number of returning migrants following the economic and labour market crises in recipient countries such as Greece or Italy after 2012 led to the establishment of special desks in regional employment offices. Their aim was to offer advice and services to unemployed returned migrants. Anecdotal evidence has it that the uptake of such services is very low, also because the emigration movement has picked up again in the meantime.
 

Digital transformation has an impact on the economy and labour market, and education and VET for that matter, in every country. Internet usage and broadband penetration in Albania grow every year. However, as mentioned before, “the fixed broadband penetration at 38% of the households remains at very low levels compared to other countries in the region and the EU” …“Half of the schools are without or with very limited connectivity”(GoA, forthcoming, p. 41).
Public VET institutions (under the auspices of MoFE) face even bigger problems than general schools (under the auspices of the MoESY) when it comes to Internet connectivity and the use of digital learning tools. An in-depth assessment by the World Bank among 50 out of 231 public, private or non-profitmaking VET providers in 2017 showed that public VET institutions fare the worst when it comes to the numbers of students or teachers per computer (see below). The good news is that for private, including firm-based, training providers the use of computers is already common practice. (see Fig. in the report in PDF p.30),

The International ETF VET Teacher Survey, which targeted (all) 492 VET teachers, 122 instructors and 500 general subject teachers (1,114 staff in total) employed in 34 (out of 35) public VET schools, showed the following results concerning digital and online learning (HDPC, forthcoming (a)):
Quality instruction is hindered by insufficient internet access, inadequacy of computers, and a lack of or inadequacy of software for instruction (p. 24). 39% of the principals from all Albanian VET schools say that the shortage or inadequacy of computers hinders quality provision “a lot”, another 52% say “to some extent” (p. 25). So 91% of the VET schools seem to face problems with computers for instruction.
According to the teachers,
•    students have access to reliable and appropriate computer hardware and software to let them use digital technology in the subject: 9% never or almost never, 37% occasionally, 38% frequently and 15% in all or nearly all lessons;
•    9% never or almost never, 39% occasionally, 38% frequently and 13% in all or nearly all lessons have adequate access to the internet to enable students’ learning;
•    students use a digital learning environment, for example, Moodle or Sakai: 47% never, 30% occasionally, 18% frequently, 5% in all or nearly all lessons (p. 33). This seems to contradict with what principals said above. However, it may be the case that, with specific assignments, teachers rely on the computers and internet that students have at home.
In conclusion, “ICT and multimedia remain the least frequently used method of teaching. Adequate internet access is not the case for 48% of the teachers. 77% of teachers declare that the digital learning environment (using Moodle or Sakai etc) for their students is weak”(p. 37).
73% of the teachers say that, in the past 12 months, they participated in professional development activities on ICT skills for teaching (p.60). When asked, which impact this had on teaching, teachers responded: 15% no/limited impact and 79% moderate/major impact (6% don’t know) (p. 61).
Teachers’ professional development activities included:
•    new technologies, including information technologies: 21% not in any, 37% in some, 31% in most activities and 11% in all activities;
•    using a web-based community or social media to share practice or materials: 33% not in any, 35% in some, 24% in most and 8% in all activities (p. 53).
45% of the teachers who did not participate in specific trainings in the previous 12 months said they have a moderate to high need for training on ICT skills for teaching (55% no or low need) (p. 62).
Based on Law no. 120, dated 24.11.2016, current efforts by the Government of Albania are aimed at developing the digital infrastructure for broadband development. This is a precondition for developing all sectors, innovative industries, e-government, e-health, provision of interoperable services, provision of cross-border services, education, training etc.” (GoA, forthcoming, p. 41).
The National Pre-University Curriculum Framework includes digital competence as one of the key competences.
Various donor initiatives (Swisscontact, Kulturkontakt Austria, GIZ, Italian Development Cooperation) fund IT schools or programmes and the cross-curricular development of IT skills. Some of the initiatives include:
Initial VET:
•    the postsec IT programme as an interesting cooperation between Aleksander Moisiu University (providing the theory) and Beqir Cela vocational school (providing the practice) in Durres;
•    Hermann Gmeiner IT school Tirana and Peter Mahringer IT school Shkodra, supported by KulturKontakt Austria;
•    Swisscontact Skills for Jobs (S4J) project: ongoing teacher training and introducing digital and online learning (DOL) in six VET institutions. This includes preparing digital online materials for the IT, hotel & tourism and business education programmes, involving also teachers. They use the online open-source learning platform metronom.al. Two schools are appointed as CISCO academies, trying to integrate online modules into curricula. A Memorandum of Understanding has been signed with Microsoft (operating system for €1). 'Shape the future' programme is being used. The Microsoft Imagine Academy offers free courses, such as on IT in tourism. In addition, work is being done to develop +2 level IT courses, as well as modules on the repair of eCars. IT programme students undertake practical assignments or projects in schools upon agreement with IT businesses. 
•    The GIZ-supported VET Centre Kamza trained teachers and became a CISCO academy.
An inter-institutional working group on ICT/ digital skills was set up recently, which include representatives from the MoESY and MoFE. Their current thinking focuses on incentives to set up CISCO academies and other measures, as well as on attracting investors. 
The Swisscontact S4J project, jointly with NAVETQ, are working on a updating and improving national ICT qualifications, which shall be introduced in all VET schools in the future. 
This suggests that the current focus in VET is on the ICT sector and related specialisations and curricula. A lot more needs to be done to provide digital skills as a key competence across all VET programmes and courses. 
Continuous VET:
•    PROTIK ICT Resource centre and PROTIK Innovation Centre, to name just one example from among many IT training providers
(Viertel & Brolpito, 2018)
The RisiAlbania Project is funded by the Swiss Agency for Development and Cooperation (SDC) and implemented by a consortium consisting of HELVETAS Swiss Intercooperation and Partners Albania. The overall goal of this project is to contribute to an increased employment of young women and men (age 15-29) in Albania. This goal will be achieved through: (i) enhanced growth and job creation by the private sector in agribusiness, tourism, and ICT, (ii) improved access to job opportunities and labour market information and services (intermediation), as well as (iii) improved skills of young people by improving the offer of private training providers in three sectors including ICT.
In the ICT sector, Risi facilitates:
•    the introduction of a cybersecurity law, which requires companies with a critical infrastructure to invest in IT security and employ IT security specialists. This will create a market demand and supply for IT security specialists and services in the country.
•    IT solutions, enabling the sector to promote its services for businesses active in tourism, agro-processing etc. This will lead to an increase of digital skills in SMEs in the Albanian economy.
•    The development of a) innovative, b) attractive and c) market-driven training offers in ICT through contemporary learning methodologies (e. g online training platform). In order to achieve this, the project works with selected private training providers.
 

Major reforms of general education and higher education sectors have been going on since 2014. 
General (pre-university) education
In general education, reforms focus on the change of curricula to become competence-based, a merit-based recruitment of teachers, improving pre-service and in-service teacher training, as well as the inclusion of children from disadvantaged backgrounds into education. MoESY provides clear leadership on these reforms.

Improvements in the system are expected to show through PISA 2021 results.

Higher education

After the closure, in 2015, of 18 higher education institutions (HEIs) for violations of legal regulations, there are 38 HEIs now, incl. 15 public and 23 private ones. While this step was necessary to prevent fraud, it has restricted access to higher education (HE). In other words, HE has become more competitive, which has put VET school graduates with a reduced number of classes in general subjects and, on average, worse marks in State Exams at a disadvantage vis-à-vis gymnasium graduates. The only remaining option often include enrolling at private universities. However, these charge tuition fees, which presents an obstacle for many students from poorer economic backgrounds.

Following the Law no.80/2015 “On Higher Education (HE) and Scientific Research in HEIs", by-laws were adopted, including those on the establishment of new national agencies. A National Agency for HE Financing (Albanian abbreviation: AKFAL) will be in charge of allocating public funds to HEIs. A National Agency for Research and Innovation (AKKSHI), responsible for allocating public funds for research, has already been established. The Agency for Quality Assurance in Higher Education (ASCAL) has already been operational for a few years and deals with the accreditation of HEIs and programmes. The Centre for Education Services (QSHA) has been established and provides services to citizens in the field of HE. In addition, they keep students' records from all HEIs. There has been a pilot initiative to track online HE students' careers until graduation (and employment), but the project was discontinued. There is no alumni system in place.

Wide-ranging reforms have been introduced, including some (partly contested) British elements, such as institutional and programme accreditation procedures and performance-based financing. The British Quality Assurance Agency in HE (QAA) had helped prepare a manual on evaluating HEIs (QAA and APAAL, 2016). 35 of the 38 HEIs are involved in institutional accreditation procedures (not involving academies of national security interest). Such procedures by law include an internal evaluation part, for which all HEIs have established special units, and an external evaluation part.

The accreditation of programmes is a continuous task. Assessment criteria by ASCAL include e.g. the adequacy of both the institutional infrastructure and staff to carry out the programmes, as well as learning outcomes. Experts from the given HE field are hired to undertake the assessments.

In general, graduates from universities are reported to have very little practical or hands-on experience.

While drafting this report, university students were protesting against the Decision of the Council of Ministers (DCM) 288 from 21 May 2018, whose art. 4 mandates extra fees for students who retake exams. The article was withdrawn, but protests continued. The discontent of the university students covers several issues, including a reform that opened up public education funds to private universities, often linked to political parties, allowing them to compete for funds and students. As a result, public education became both more expensive and less accessible. The University of Tirana received a devastating accreditation report in November 2017, only partially meeting the government’s quality standards. Corruption and plagiarism are widespread, while no visible investments have been made by the government. Thus, for example, dormitories often remain without basic facilities.

University students presented a number of requests to the government, which include:

·         increasing the education budget up to 5% of GDP, as promised during the election campaign in 2013, and halving tuition fees (adopted as from 1 January 2019);

·         full transparency by authorized bodies of the education budget;

·         increasing the weight of students’ votes for electing deans and rectors of universities to up to 50% of the total votes;

·         a complete review of academic titles to fight plagiarisms in Master and PhD theses;

·         including students’ representatives in universities’ administration boards and having equal numbers of Ministry and university representatives in these bodies;

·         issuing students cards to all Albanian students before the end of the ongoing academic year;

·         new libraries for universities that meet European standards and

·         introducing a better evaluation of lecturers’ performance.

The National Employment Service (NES) has 429 staff on its payroll who work at the NES headquarters in Tirana, 12 regional employment offices, 24 ‘local directorates of employment’(i.e. local employment offices) and 10 public vocational training centres. 21 employment offices have been refurbished and most of them aim to function in line with the new service model, which entails a three-tiered approach to service provision for unemployed people - from self-help to individual support. MoFE has made funds available for the ongoing refurbishment of another 12 offices.

The NES information system has seen significant improvements. It now allows for an exchange of information with the civil status information system, the tax system, the compulsory health care system of the health care system, and the economic assistance system. The vacancy database is expanding but employment offices reported problems with the access to this database due to problems with Internet connectivity.

One of the four main functions of the NES is providing labour market information. In this context, to date four skills needs assessments (SNAs) have been undertaken, the latest one in 2017. SNAs are an important tool for reorienting NES activities concerning training and employment mediation. NES monitors and evaluates EPPs. Finally, since 2017 NES is in charge of tracer studies that monitor the further employment or education path of recent VET school and VTC graduates. All activities are undertaken with the help of donors.

(Information taken from: Ministry of Europe and Foreign Affairs (MoEFA, 2018, p. 93f.)

Following revisions to the Law on Jobseekers (no. 146, dated 17.12.2015), NES undertook a cleaning of their registers in 2016. Those unemployed people who failed to report to the NES every month, as per the new regulation, or who refused to take up job offers were deleted from the register. 
This led to major slumps in the average number of jobseekers registered throughout 2016 and 2017, as shown in Table 8 below. The number decreased further to 71,312 in August 2018 (MoEFA, 2018).

Generally, there are many reasons why people do not register with the employment service. These include:
•    gaps in the network of local employment offices  and restricted possibilities to travel to the nearest one due to the poor infrastructure, inadequate public transport and/or financial means;
•    a limited knowledge about the employment service in general and what it can offer and/or a general disbelief in the fact that the employment service can offer attractive jobs; 
•    the lack of necessary contribution history for benefit eligibility;
•    the low benefit levels, and 
•    the above-mentioned stringent conditionality arising from registration and monthly reporting to the office.

Thus, potential labour market entrants are deterred from accessing employment services. It also means that an analysis by the number of registered unemployed jobseekers is not a wholly accurate measure when it comes to identifying vulnerable people who would require assistance and support. The impact of this phenomenon, in particular on poor and long-term unemployed or other vulnerable people, will require close monitoring from a social exclusion/ inclusion point of view. 

The share of male long-term unemployment decreased from 65.8% in 2015 to 64.8% in 2016, while the one for females increased from 66.3% in 2015 to 68.2% in 2016 (NES, 2017). 

Passive measures

Unemployment benefit coverage in Albania is extremely low, compared to other Western Balkan and EU countries (see Box 8 in the report in PDF p.36), falling from 10% in 2000 to 2.2% of registered unemployment in 2017. Given that many of the economically inactive people do not register, this represents less than 1% of the total out-of-work (Tahiraj & Viertel, 2018). 

MoFE allocations for EPPs have seen a major increase between 2013 (ALL90 million) and 2016(ALL 490 million) and stayed at the same level for 2017 and 2018.Table 9 below shows the number of participants by active labour market measure. The substantial decline of this number from 2016 to 2017 can be attributed to the fact that the overall number of registered jobseekers has declined due to the above-mentioned cleaning of unemployment registers. Heitmann & Shkreli (2017) argue that the number of jobseekers completing a VTC course may overstate real participation. An efficient system of monitoring attendance is not in place.

In 2018 a new programme “On the payment of participation in vocational training courses” was approved by DCM no. 162 of 21.03.2018, which targets people who are no longer eligible to receive Economic Aid, following the reform of the scheme in February 2018. The programme provides for their free-of-charge inclusion in training courses at VTCs and for getting monthly instalments of half the unemployment benefit during course attendance (MoEFA, 2018, p. 100).

According to an evaluation carried out by UNDP (2017), participation in a publicly funded Employment Promotion Programme (EPP) in 2014-2015 was in general assessed positively in terms of enhancing participants’ chances to enter the first labour market. On the other hand, only a low percentage of unemployed jobseekers benefit from EPPs, and there are deadweight and ‘creaming’ effects. 

Only 5.86% of (the reduced number of) registered jobseekers participated in EPPs in 2017. EPPs evolve around subsidizing employers for offering jobs and on-the-job training - interventions, which usually carry significant deadweight effects (companies might have hired workers also without state incentives).The most successful EPPs in terms of their gross effect on the employability of beneficiaries are the EPP on young unemployed jobseekers entering the labour market for the first time, followed by the EPP on unemployed jobseekers who graduated from Albanian and/or international universities. The most vulnerable people on the labour market benefit very little: during the period 2014-2016 the share of long-term unemployed (LTU) people participating in EPPs amounted to only 1.5 % of all LTU (UNDP, 2017). 

Training is offered as another active labour market measure. NES provides funds for a restricted number of full- and part-time staff working in the 10 public VTCs. Labour office staff refer registered unemployed jobseekers directly to training in these VTCs. VTCs are located in bigger urban centres. This is an issue, as Berat, Diber, Kukes and Lezhe do not have any VTC. However, some labour offices have started to collaborate with vocational schools, which are planned to become multifunctional in nature and offer also labour market training for unemployed jobseekers. Still, some areas in Albania remain totally uncovered as they neither have vocational schools nor VTCs.
Until recently, training provided by VTCs was typically short and assessed to be rather supply driven and of a low quality, without highly qualified trainers, without much up-to-date practical training and without a major impact on improving people’s labour market skills (Heitmann & Shkreli, 2017).Now, the ongoing GIZ/GFA programme aims at improving VET provision in five vocational training centres across Albania and other measures to get some 2,000 people into gainful employment.
In general, there is an issue of tailoring labour market measures to individual jobseekers and ensure their integration in the first labour market. The Swisscontact-funded Coaching for Employment project is a good example, in the frame of which NES counsellors from all over the country were trained on more individualized coaching approaches that help jobseekers into employment. In principle, NES could contract NGOs with relevant experience to help unemployed people into gainful economic activities. However, such individual support schemes are very resource-intense and costly. Wide implementation is not considered feasible for the time being.
 

In the past years numerous skill needs assessments have been undertaken at national and regional levels and for specific sectors, mostly with the help of donors. NAVETQ has used such assessments to identify (the titles of) vocational qualifications at levels 2, 3 and 4 of the AQF. A few new programmes that meet labour market demand have been introduced in vocational schools, such as a programme for (would-be) miners, trade services, ICT, agriculture, etc. NES uses the results from the SNA referred to in section A3.1 (HDPC, 2017) to steer unemployed jobseekers into certain training measures. However, in general, both the vocational school and the VTC system have been slow to adapt their VET offers to labour market demand. A lack of both State funding and higher levels of autonomy of VET providers impede on the flexibility of VET providers and the diversification of training offers.
A system for the validation of non-formal and informal learning is going to be established. A DCM is being developed for this purpose. 
Qualifications acquired abroad are generally recognised. The MoESY is in charge of procedures for the recognition of higher education diplomas, the MoFE for vocational qualifications. For returning migrants, special desks have been opened in employment services across the country who provide advice on all procedures, including the recognition of diplomas or certificates.  
Sectoral skills councils or organisations do not exist. However, the newly adopted legal framework provides for their establishment with a view to identify sector skills needs and ensure external quality assurance of vocational qualifications. 

Returning migrants, when registered as unemployed jobseekers, can benefit from the same EPPs or training in VTCs like all other unemployed people. 

Secondary VET continues to have a high proportion of academic contents (general subjects) and is an alternative route to taking State Matura exams and higher education. An earlier draft of the 2017 VET law aimed at tipping the balance in VET more towards preparing young people for the labour market. However, the final, adopted version of the law did not follow this suggestion. General subject teachers in VET follow the same contents and cover about 70% of the volume of gymnasium curricula. 

References to the entrepreneurship key competence can be found in the National Pre-University Education Curriculum alongside six other key competences and in the National Employment and Skills Strategy 2014-2020. 
Two separate subjects are offered in secondary VET – i) "Basics of Entrepreneurship" (grade 12 for all profiles, except for business education) and “Entrepreneurial Behaviour” (grade 13 of business education). Entrepreneurial learning activities also take place through practical learning in businesses. NAVETQ is revising the ‘Basics of Entrepreneurship’ curricula to better reflect the required entrepreneurial knowledge and skills.
Specific entrepreneurship knowledge and competences are developed as part of business education programmes, including simulation exercises in so-called training firms.
A project by Kulturkontakt Austria trained Albanian trainers on new and innovative approaches to entrepreneurship learning at vocational schools. Course materials were developed for teacher training on this topic, consisting of three modules. The trained trainers provided all three modules for 65 participants from 35 vocational schools in Albania, as part of the Entrepreneurship subject. A toolkit with methods and teaching instruments was developed and made available to all schools and teachers participating in the project.
 
 

Participation in VET remains an issue for young people from outside bigger urban centres, from poor economic backgrounds, for differently abled people and partly for girls. 
A first concern in Albania is universal access to upper secondary education. Albanian children have short school careers. Only nine years of education, i.e. lower secondary level, are compulsory. This can also be severely curtailed because of dropping out due to socio-economic need, lack of sufficient financial means (e.g. for out-of-pocket expenses), the persistence of traditional cultural values, and a wide variation in provision leading to access issues, such as remoteness or over-subscription of state schools in urban areas. The latter also means that educational professionals may be forced to provide a reduced curriculum and innovate around timetables due to resource and capacity limitations. Resource constraints affect also pupils with special needs and mixed abilities. In addition to the six special needs schools existing in Albania, there are some teachers for students with special needs, but not enough resources to meet demand in the majority of schools. 
In 2017 approx. one fifth of young people aged 18-24 left education without completed upper secondary education, which leaves them in a state of lack of job-readiness and makes them vulnerable in terms of social exclusion. This affects slightly more males (21.6%) than females (17.2%) (see Box 9 in the report in PDF p.39).

According to the MoESY, dropping out from basic compulsory education is mainly related to socio-economic factors, with 80% of the dropouts coming from ethnic minority backgrounds (mainly Roma and Egyptians). Some measures of a smaller scale are being taken. For example, Regional Education Directorates send to the MoESY every year a list of Roma and Egyptian students who do not avail of sufficient financial means. A project by the Ministry called ‘Schools of second chance’ tried to gather street children and provide them with extra tuition.
In 2017 the World Bank Training Assessment Project, through a survey and focus group interviews, assessed the state of play of training provision in 50 out of the identified 231 public, private or not-for-profit training providers in Albania. The summary report quoted “could not afford to continue”, “other” reasons (including emigration and low performance), as well as “family responsibilities (other than financial)” as the main reasons for dropping out from vocational education or training. (see Fig. in the report in PDF p.40).

A second concern is quality in education. Despite considerable improvements in PISA tests between 2000 and 2015, Albania continues to occupy low ranks among all participating countries (see Box 10 in the PDF report p.41). Half (50.3%) of the 15-year olds perform poorly (at PISA levels I or II) in reading and even more than half (53.3%) of them in mathematics. Lacking these basic competences, young people face difficulties with their further learning and risk not to be able to cope with ordinary work and life challenges later on. The quality in schools located in bigger cities is generally assessed to be higher than in rural or mountainous and isolated areas, which are not attractive as working destinations for qualified teachers. 

As regards disabled people, the legal framework guarantees the provision of health care services, social services, education, recreation, and vocational qualification and employment opportunities. However, failure to put into practice the basic right of disabled children to education continues to be an issue and hampers their life chances. A survey undertaken by the EU Investment Projects Facility in 2011 found that only 4.1% of school buildings in Albania were wheelchair-accessible. Many mentally or physically disabled children stay at home, where they receive no or only a few hours of tuition. 
Support for students at risk and those who struggle academically may be considered inadequate with a view to getting more students into upper secondary education (which is not compulsory) and retain them until completion.
Girls from families who live outside bigger urban centres may face an issue with the participation in VET, due to:
•    the traditional role of females in the family and society;
•    VET course offers that appeal to males rather than females;
•    financial and security issues if getting to the VET institution involves some travelling, and
•    dormitories which are not up to the standards and not seen as suitable for girls.    
A significantly high quarter (25.9%) of all young people aged 15-24 are neither in employment, education or training (NEETs), with a gender split of 24.7% of males and 27.3% of females affected. (see Box 11 in the report in PDF p.42).

On leaving this young group of NEETs, there are few opportunities for lifelong learning, skills and career development. An extremely low percentage (0.9%) of adults aged 25-64 participates in adult learning. (see Box 12 in the report in PDF p.43). Problems include the lack of adequate adult training facilities and offers, especially outside bigger urban centres. As mentioned in the section below, some Albanian regions remain completely uncovered by any type of VET provision. There are no arrangements in place, such as flexible pathways to higher levels of education or the recognition of non-formal and informal learning. Adults, especially older adults and perhaps rationally, do not consider it worthwhile to invest in further training. The generally low skills base also limits the horizons of this group and discourages exploration of further avenues of learning.  

Access to secondary education, including VET, in Albania is not evenly distributed, as mentioned above. In terms of VET provision, there are 1) the well-served regions of Tiranë, Elbasan, Durres, Shkodër and Vlorë; 2) the over-served region of Korçë; 3) the under-served regions of Fier, Berat and Dibër, and the 4) seriously under-served regions of Lezhë, Kukës and Gjirokastër (GIZ and ETF, 2014). 
The regions mentioned in the latter two categories are also among the worst performers when it comes to NEETs rates. They are highest in Gjirokaster (38.6%), followed by some margin by Fier (34.4%), Diber (33.2%), Lezhe (30.0%), Vlore (28.4%), Korce (18.0%), Berat (27.1%) and Shkoder (26.3%). Somewhat surprisingly, Kukes has the lowest NEETs rate with 16.2%, which is most likely due to migration and emigration – although there is scant research to be certain on this. The rates of young people (18-24 years) with at most lower secondary education and no longer being involved in education are highest in Diber (21.0%), Korce (18.7%), Vlore (18.0%), Elbasan (17.8%), Berat (17.1%), Shkoder (16.2%), Fier (15.8%) and Durres (15.1%). It is apparent that lifelong learning rates are reflective of the national picture, being extremely low across the country in comparison to EU member states and countries of the Southeast European region. Tirane and Korce perform somewhat better than the other Albanian counties.(see Table 10 below).

The relevant ministry in charge of VET has been handing out for many years scholarships to attract young people from poor family backgrounds into VET. This has allowed more students to participate.    
NES offers adult training courses free of charge for jobseekers from specific vulnerable backgrounds, albeit on a limited scale and facing restrictions with the access to a public VET institution (see section B1.6).
The report on the Mid-term review of the NESS 2020 (HDPC, upcoming (b)) states that, to date, no progress has been made with regard to Pillar C of the Strategy, which includes the extension of VET and employment services to rural areas. 
 

Apart from the above-mentioned national programme of means-tested scholarships for VET, no other scheme is in place. The specific needs of prospective learners from marginalised and vulnerable groups are not systematically identified and addressed. Currently, VET institutions, employment services or municipalities have limited capacities to reach out to individual NEETs, provide additional incentives, including funds forchildcare, transportation or boarding, etc. and include them in training and other support measures. However, certain projects are being carried out with the help of donors to support the training and employment of people.

Public two, three or four-year vocational education programmes follow nationally adopted frame curricula with broader ‘directions’ in the first year and increasing specialisation according to different ‘profiles’ in the 2^nd and 3^rd years. VTC courses for adults typically last between two and six months. However, this is a not a fully-fledged modular system in the sense that individuals could choose and compose their own courses.

Nationally approved frame curricula for the formal VET programmes are based on learning outcomes. Frame curricula specify the knowledge, skills and competences identified in qualifications, as well as the number of hours suggested for their acquisition. It is the task of VET institutions to translate frame curricula and the respective learning units into lesson plans, adapting them also to local conditions. Schools can alter the sequence, for example, of practical learning units. For the moment, no system is in place that would allow for the achievement of partial (or units of) qualifications.

Thereare intentions to turn public VET institutions into bigger centres of a multifunctional nature, which would cater to the needs of both young people and adults and offer qualifications at different AQF levels. However, to date, there is not much progress with the formal establishment of such Multifunctional VET centres.(see Table 5 in section A2.4).

The EU IPA-ILO 2010 HRD project carried out pilot to test recognition of priori learning (RPL) mechanisms in the textile sector in 2014. In this context, NAVETQ had developed supporting RPL guidelines and instruments. Furthermore, the Albanian National Employment and Skills Strategy and Action Plan (2014-2020) refers to the validation of non-formal and informal learning as one of its priorities. A bylaw on the recognition of prior learning is being developed in the scope of the 2017 VET Law.

Results from the tracer study among 2017 graduates from vocational education programmes delivered by public schools (GIZ, 2017), as well as the rates of early leavers from education have been referred to above (see section B1.2).

Data are collected at national level on the proportion of learners in VET who require additional financial support for participating in VET, but not concerning other forms of support required, e.g. because of a disability or other disadvantage. VET providers experience difficulties in providing the latter forms of support due to financial, human resource and know-how related constraints. 

Individualised learning plans, extra teaching support, free-of-charge remedial lessons, smaller classes, etc. to help every learner succeed in VET are not widespread practices.

Inclusive education, defined as the ability of schools to respond to the educational needs of all their pupils and implying adjustments in physical infrastructure, additional learning support etc. does present a national objective, as reflected also in the overarching goals of the NESS2020 (section A2.4). However, the means to implement these principles are currently limited. 
An assessment by the World Bank (2017) among 50 out of 231 public, private or non-profit-making VET providers in 2017 listed the following reasons for dropping out. The lack of ability to afford training costs, emigration or low performance are among the most-cited reasons. (see Fig. in the report in PDF p.46)
 

The results of the tracer study on VET graduates from 2017 (see section B1.2) testify to an initial public VET system, which is still largely out of tune with the society’s and students’ aspirations. Over half, or 52%, of the VET school graduates said that there is ‘no demand for people in their trained fields’, while 33% claimed there are no jobs available in their regions or towns (GIZ, 2017, p. 17 of 24 of the Data annex). 45% of the VET school graduates claim that they did not use the knowledge gained from school (GIZ, 2017, p. 14), while 58% consider changing their profession (p. 15). 
There is a link between people’s education and their employment status. While males with either secondary general, secondary vocational or higher education have good chances to be employed, for females higher education attainment provides a higher job guarantee. (see Box 13 in the report in PDF p.46).

People with low levels of education (ISCED 0-2) remain at a clear disadvantage when it comes to finding employment. Females with low levels of education are even at a higher risk, compared to their male counterparts. This is why suitable strategies to promote labour market and social inclusion need to start with an analysis of people’s basic skills and include remedial education measures.

See detailed results of the VET graduates’ tracer study above and in section B1.2.

Key reform initiatives that aim to improve the relevance and quality of VET provision are listed in Table 5 in section A2.4.

At present there is no systematic career guidance for students in schools. Parents have a major influence on students’ choices for further education. In many cases, particularly for girls, parents take the decision. However, there are elements of career education in lower secondary school curricula. In 2010/2011 ‘Education for life and career’ was introduced in all secondary schools, comprising two new subjects – ‘Skills for life’ in the 10th grade and ‘Career education’ in the 11th grade. The latter also includes themes on entrepreneurship. Teachers have been trained, but additional training is needed. Some school organise their own career orientation activities.
For secondary school students who complete the Matura and plan to study at university, limited guidance is offered by career offices or teachers in schools. Issues here include: (i) the non-availability of a complete sets of information, compiled by a central agency, which could be used to counsel students, and (ii) the limited abilities of school staff to undertake professional counselling activities.
The VET law (no. 15, adopted on 16 February 2017) envisages career guidance as one of seven new development functions of vocational schools or multifunctional VET centres. To date, no progress has been made with regard to the adoption of the sublegal act for VET institutions or appointing staff for implementing the new development functions. However, the Swisscontact Skills for Jobs project has successfully set up pilot career centres in four VET institutions.   
Labour offices provide some guidance to unemployed jobseekers, to those who intend to enter short vocational training or retraining courses, and those who aspire to be involved in other active labour market policies. With the modernisation of the labour offices, better contacts between labour office staff and local employers, the constant updating of the central vacancy database, as well as major improvements of internet connections throughout the country, jobseekers will increasingly be able to use self-help facilities. 
 

According to the Albanian report of the 2nd International ETF survey of VET teachers and trainers (ETF and HDPC, forthcoming), classical methods of teaching dominate in VET schools. However, other methods such as group work, projects have started to be used. 
ICT and multimedia methods of teaching are used rarely.
Most teachers relate theory to practice and design work-like tasks for their students. However, 25% to 50% of students have very limited direct interaction with employers, e.g. they go on visits to businesses, at best occasionally. About half of teachers seldom visit workplaces and or have contact with employers seeking to recruit students.Access to work-based learning exists for a minority of vocational learners: according to teachers 38% of students have at least 10% of their learning in the workplace.
The teachers are, to a large extent, happy with students’ behaviour in class, but students’ motivation in class is still questionable for 24% of teachers.
National curricula and teachers’ planning and annual and detailed lesson plans are the main drivers of teaching. Teachers are also influenced, but to a lesser degree, by their knowledge of what employers want and by assessment requirements (ETF and HDPC, forthcoming).
 

The Baseline survey of public VET providers in Albania (GIZ and ETF, 2014) provided a detailed account of the conditions in all (at that time) 42 public vocational schools and 10 vocational training centres. The survey states that “due to the generally poor condition of facilities and equipment, learners are unable to familiarise themselves with technologies, tools and instruments used in the workplace. Our in-depth assessment showed that some vocational schools have no equipment at all for the trade areas they offer. Some vocational schools have equipment but do not use it. Tools and accessories nearly do not exist. Equipment available for practical skills training is not enough for all students enrolled in the trade area. Some vocational schools have too many classrooms (or even buildings), but they do not have appropriate workshop facilities. Vocational training centres are generally better equipped and more oriented towards practical skills training”.   

New approaches to teaching and learning, open educational resources, peer learning and support, etc. are being introduced in vocational schools and programmes supported mainly by donor experts. 
Following pilot initiatives by different donors and the 2017 Law on VET, the Ministry has put a strengthened focus on the introduction of work-based learning. The aim is that schools arrange for internships of VET school students in companies, wherever possible and as a structural part of the VET curriculum. Good practices exist, and a national regulation is being drafted. The state of play is described in Table 6 in section A2.4. To introduce the scheme in more vocational schools and for more learners, the national regulation needs to be adopted, tools/instruments for work-based learning agreed and made available, and training needs to be provided for key staff from vocational schools and training centres. 
 

As Table in section shows, the Albanian government has stepped up efforts over the past years to invest into the rehabilitation of school buildings and new pieces of equipment. Problems with the former include that works have at times been delayed and were of a low quality, requiring additional investments by donors. Dormitories have largely remained untouched, as it is local government authorities who are in charge, but financially not in a position to do so. As regards equipment, the Ministry bought furniture, labs for delivering general subjects in vocational schools, such as physics, chemistry and biology, as well as technical equipment for tailoring, IT and food technology classes.
Donors are the main source of investing into the upgrading of generic and technical school equipment, but they do so only in a few VET institutions and programmes.   
As mentioned before, there is a need for an overall national VET provider development plan, which outlines the future network of public VET institutions and what types of training they are going to offer in line with national and regional labour market needs. Following this, there is an issue of designing strategic development plans and, linked to that, strategic investment plans for each public VET provider. The latter would need to consider also investments into the modernisation of the ICT infrastructure for school administration and learning purposes. Currently, such a grand plan does not exist, which would establish a mid-to long-term perspective on the development and investment needs of public Albanian VET institutions.
 

The VET sector in Albania is small, as evidenced also by the total number of teachers or instructors working within the system.

* Notes: 1) The table considers staff working in 34 (out of 35) vocational schools and 10 VTCs. The status of the one missing school is unclear. 2) As a rule, VTCs hire teachers or instructors on an ad hoc basis and pay them by hour of teaching. 
In 2018 Albania participated in the 2nd International survey of VET teachers and trainers, which the ETF carried out in nine countries. The below-quoted data and findings refer to the final report by HDPC, draft version of 07.01.2019.
The survey sample considered all teachers from public VET schools, but only the 59 VTC teachers who work full time as well as 41 (randomly chosen) part-time VTC instructors of practical training – 1,241 persons in total. 701 responses were received, which corresponds to a response rate of 57%. The following data refer to this sample.
The large majority (72%) of the teachers are females. 
The average age of teachers in vocational education schools is 41.7 years. 

Roughly one third of the respondents had between 0 - 5 years and another third between 6 – 15 years of work experience. Close to 10% of the teachers have more than 25 years of work experience.

As many as 48% of the teachers have no job experience in the industry of the vocational subject they teach at school, while 9% of the teachers have between 1-3 years of experience in the industry. However, the share of teachers who declared to have no experience in the industry corresponds almost fully with the percentage of general subject teachers for whom such experience (in the Albanian system) is considered irrelevant.43% of the surveyed teachers declared to have more than 3 years’ experience. 

36% of the teachers responding to the survey were specialized in general subjects, such as languages, mathematics, social science, science etc. 17% of the teachers teach engineering subjects, including electrical, mechanical engineering, car mechanics, civil construction etc., followed by 12% of the respondents who teach hospitality, tourism, catering and travel and ca. 10% business retail, law, economy, management and administration. 8% of the respondents teach subjects related to agriculture, veterinary, forestry and fishing.

(ETF and HDPC, forthcoming)
 

There are general competence standards and standard recruitment procedures for all teachers in Albania. These are not specific for VET or the various vocational profiles and are centrally managed for all new teacher recruits through the Ministry of Education, Sports and Youth. VET teachers typically have a degree or (advanced) diploma in a technical field, such as engineering, and so do partly instructors (of practical classes). For the latter category of staff, however, a university diploma is not obligatory. Teachers’ and trainers’ competences and performance are not systematically assessed.
Qualification
VET schools’ teachers report to have a high level of formal education. Teachers with the degree of master or equivalent constitute 80% of the total number of the teachers in the survey. Only 7% of the teachers result to hold a qualification lower than Bachelor degree. 

44% of the teachers participating in the survey declared they have completed pedagogical training as part of their degree studies, while 41% of respondents did not complete any initial pedagogical training before they started teaching. 

77% of the teachers declared that their formal education courses included content elements related to the courses they currently teach, while 66% say that their formal education included practice/laboratory work related to what they teach now. (see Box 14 in the report in PDF p.54).
22% of the teachers/instructors report that they teach at least one course for which they did not get any training on content during their formal education, and 33% of teachers report they received little or no knowledge on the practice of teaching during their initial education.
 

Teachers and instructors employed in public VET schools work on a full-time basis. Salaries for all teachers in Albania have seen substantial increases over the past years.

The situation at VTCs is different; only 59 VTC teachers are employed on a full-time basis. All other VTC staff are hired on an hourly basis.

According to an earlier Concept paper on in-service training for VET teachers and instructors in Albania (GIZ and ETF, 2015), “a significant proportion of the teaching staff needs to upgrade their pedagogical and didactical competencies. In general, the pre-service and in-service training of the vocational teachers/ instructors is weak. Currently, the professional development of VET teachers is practically reduced to the acquisition of credits for some days of training with a view to proceed in their careers … Three days (18 hours) of professional training per year are compulsory and are granted with one credit for career progression. Career steps following professional development, among others, are associated with a salary increase. However, the training is short, and teachers do not necessarily attend the training that they would need to attend. There is no recognition of teachers’ achievements outside the compulsory training. There are no further financial incentives for teachers to increase their qualifications and competences after 20 years of service” (p. 9).

Some donors working with selected vocational schools have signalled a shortage of VET personnel, in particular in donor-supported programmes that enjoy high levels of attractiveness. Currently, the Ministry does not have an adequate staff planning mechanism in place, which would plan staff resources in line with projected demographic developments and enrolment figures. Enrolments would also need to be adjusted to labour market demand.
VTC teachers/ trainers are hired on the basis of legal procedures. However, they receive very low levels of remuneration. This is an issue as, for the salaries offered, it is difficult to attract highly-qualified experts to work as VTC trainers (see also Heitmann & Shkreli, 2017). 
There are currently no incentives for public VET schools to generate own income, for example, by opening new programmes or courses against a training fee in line with local demand. Officially, they would have to declare and weigh their income against the cheques received from the Ministry. Thus, schools do not have the means to hire additional teachers. The issue needs to be addressed, if vocational schools are to diversify their training offers and become multifunctional in nature, offering courses e.g. also to companies or any adults. 
 

VET teachers and trainers
Responsibilities for strategic leadership, coordination and encouraging provision, quality assurance and recording with respect to the continuous professional development (CPD) of VET teachers and instructors are shared between the Ministry of Finance and Economy, NAVETQ and the Institute for Educational Development. However, none of these organizations currently has full authority and capacity to implement a systematic provision of CPD for vocational teachers and instructors.
The new VET Law assigns to NAVETQ the function to coordinate VET teacher training. A respective draft by-law on the NAVETQ has not yet been adopted, i.e. until now no institution is formally in charge. NAVETQ would require additional human and financial resources to fulfil its new responsibilities. Funding for teachers’ training remains a serious constraint and is not enough to satisfy needs. 
International donor organizations are active, in partnership with national agencies, in providing CPD as part of larger VET development projects. 
There are very few national organisations that provide specialized CPD to vocational teachers in Albania. Employers, higher education institutions and teacher associations make little contribution to CPD for vocational teachers.
An obligatory 24-day course on ‘Basic Didactics in VET’ has been designed in 2016. NAVETQ aims to involve in the training all VET teachers and trainers currently in the system. Respective numbers of participants have been agreed as performance indicators for the years 2017, 2018 and 2019 of the IPA Sector Reform Contract for the employment and skills sector. Implementation is partly supported by Swiss Development Cooperation, GIZ and Kulturkontakt.
Thanks to this, the survey provides strong evidence that levels of participation by vocational teachers in CPD in Albania have improved since 2015. 80% of vocational teachers participated in formal in-service training (62% organized in schools and 70% out of schools) up from 65% in 2014/15. The average duration of CPD has also gone up: the percentage of participants with 30 hours or more in-service training per annum has increased from 33% in 2015 to 47% in 2018. 53% of vocational teachers say that they accessed CPD which addressed their specialist vocational profiles (up from 23% in 2014/15). However, the duration of this training was relatively short (30 hours or more for only 25% of participants). CPD involving business and observation in other schools also increased.
About one third of teachers reported an unmet training need for particular kinds of CPD.  Training gaps were highest for CPD addressing new technologies in the workplace (60%), teaching students with special needs (54%), teaching cross-curricular skills (53%) and approaches to developing cross-occupational competencies for future work (52%). 
Participation in CPD is affected by ‘external’ factors. Younger teachers obtained more hours of CPD.  Large cities, followed by towns, have the highest participation of teachers in in-service training and the largest share of those with more than 30 hours of trainings. Small towns and rural areas have the lowest participation and volumes of trainings.
Modern methods, such as active learning, collaboration and new technologies, are present in CPD.  However, there is much CPD that offers little active learning for teachers and the use of collaborative learning and new technologies are occasional rather than normal. 
Schools have a formal responsibility to research training needs, plan and organise CPD but in practice, unless they are involved in a donor-funded project, this responsibility is not fulfilled and little training is implemented. Legislation has been passed to set up School Development Units (SDUs).  However, SDUs cannot become operational without by-laws, funding and appointments.
70% of teachers have taken part in some kind of induction at their new school. However, less than 50% of teachers obtained a formal induction to their school. Team teaching, mentoring by experienced teachers and scheduled meetings with principal and or colleague teachers are the most often used activities for induction program while peer review, networking are the least used. Mentoring is available in about 50% of vocational schools. 
Feedback for teachers’ performance is commonly provided by the school principal, there is relatively little feedback from mentors, other teachers or external bodies.
The introduction of comprehensive in-service teacher training and assessment, including (i) peer mentoring programmes and (ii) instruments to track teacher effectiveness, remains a challenge. 
Participation in CPD is a formal condition of career progress.  However, there is little or no relationship between the competences developed through CPD and the responsibilities of higher career teachers
The barriers that exist for a significant number of teachers are: lack of incentives for participating in CDP (40% of teachers); no relevant professional development offered (37% of teachers) and the time requirement conflicting with the work schedule (33%). The main barriers for principals to participate in CPD are: time requirement conflicting with their work schedule (37% of principals), lack of employer support (29%) and no relevant professional development offered reported (28%).
In general, a significant minority of teachers the cost is unaffordable and CPD does not bring an adequate benefit.
Directors of VET institutions
Research has taken place to explore the needs of VET school directors and managers. Some training activities have been organized and a Network for Directors was established. According to the survey, more than 90% of principals participated in CPD aimed at principals. The latter can afford the CPD and they think that it is worthwhile. There is a Government initiative to set up a ‘School Directors’ Academy’.
(ETF and HDPC, forthcoming)
 

The Institute for Education Development has the responsibility for designing the Teacher Qualification Standards, Teachers’ Qualification Programme, accredit training providers, and organize exams and certification. However, this applies to general subject teachers from basic and general secondary schools only. For VET teachers, including general subject teachers in VET, these responsibilities have not been clear defined. Hence, currently no specific quality assurance policies and measures are in place to monitor and evaluate VET teacher effectiveness and to address ineffectiveness. 

NAVETQ staff hold that the national frame curricula for the individual VET programmes offered by vocational schools are based on nationally approved qualifications. However, the level of capacity of vocational schools and teachers to implement these frame curricula, in particular the practical learning components, differs to a great extent. Vocational schools with an impoverished infrastructure and no structured contacts with employers for offering internships are by and large not in a position to develop the practical skills of learners, as prescribed in qualification descriptions and frame curricula. 
The results from the VET graduates‘ tracer study 2017 (GIZ, 2017 - see section B1.4) testify to a VET system that is not fully in line with labour market demands and VET learners‘ aspirations. This is to do also with the fact that (a) vocational schools continue to enrol into programmes in numbers, for which there is no or insufficient labour market demand and (b) a large part of VET focuses on continuing general education (general subjects) and preparing (some students) for university entrance.
Adjustments to VET programme offers are gradually being made. The following list of VET student enrolments by VET programme for the academic years 2016/17 and 2017/18 shows that these are not entirely in line with labour market demand. Problematic are, for example, the programmes in agriculture, mining and construction, for which too few students enrol. Too many students enrol in car mechanics and hotel-tourism, where graduates face bleak labour market prospects. For some of the analysed skill needs, as mentioned in section A3.2, no VET programmes exist. Some of them are covered through shorter VTC courses, which are however not available in many parts of the country.

Labour market relevance and social inclusion are declared goals of the Albanian VET system. However, in essence, a major pillar of the system is academic achievement and progression towards higher education, no matter whether these build on the given VET profile area.
A by-law on quality assurance procedures for the VET school system has been adopted and a manual completed in 2017. Procedures include the self-assessment of schools and related development planning. 
 

To date, the above-mentioned procedures have not been implemented, also because funds would be lacking to implement school development plans and schools are not autonomous. However, such procedures are planned to be rolled out and involve all vocational schools with donor support in 2019.
Standards for State Matura exams and item/question banks are developed centrally by the Centre for Educational Services(QSHA). They apply equally for students from gymnasia and vocational schools who take State Matura exams.
A Regulation of the MoES from 2011 specifies that employers’ representatives should be involved in students’ tests, but in reality this rarely happens. VET teachers or instructors currently carry out students’ tests. At each level of the (2+1+1 or the 2+2-year) vocational education system, final exams in Integrated Theory are carried out through written and oral tests, while Integrated Practical exams take the form of practical tasks. The Matura exam, including the Integrated Vocational Theory examat the end of the 3rd level, are mainly theoretical. A conclusive assessment of the practical skills acquired, for example through students’ producing a final product or project, is not universal practice. Certificates for all levels of vocational education include the list of subjects taken and the results (grades) achieved in all subjects, practical modules and the final exams. VTC graduates get certificates of attendance for a course, rather than a record of the skills acquired. The Swiss-funded AlbVET project piloted a new form of certificates, which listed the knowledge and skills covered by the course.
The inspection system for vocational schools has been dysfunctional since 2014. Standards for VET inspections would have to be revised, a by-law be drafted and State inspectors be trained and equipped to take on their new roles.
The respective by-laws for the quality assurance of qualifications and programmes, as well as the accreditation and external evaluation of VET providers have not been adopted, yet. Guidelines for student assessments exist, which suggest the involvement of employment. These guidelines are however not fully implemented by all vocational schools. 
 

To date, NAVETQ is in charge of designing and updating VET programmes. To do so, they consult sector experts and/or teachers on an ad hoc basis. In addition, it is often donors’ experts who design, jointly with NAVETQ, and introduce new programmes at school level. 
Learning-outcomes-based qualifications are reflected in the design of VET programmes. However, not all vocational schools are able to deliver these due to the partly poor conditions in schools and the lack of adequate teacher skills.
 

The National Curriculum Framework for Pre-University Education from 2014 lists seven key competences:
•    Competence of communication and expression
•    Competence of thinking 
•    Competence of learning to learn 
•    Competencies for life, entrepreneurship and the environment 
•    Personal Competences 
•    Civic competences 
•    Digital competences 
These key competences are for a large part already included in the new competence-based curricula for general subjects in primary education, as well as secondary general and vocational education. However, teachers have a high amount of academic subject-matter to go through and may not be sufficiently trained on using active types of learning, which presents an impediment to developing key competences.  
The core curriculum for general subjects in VET and respective guidelines are prepared by the Institute for Education Development (IED) and approved by MoEYS. The core curriculum is not directly related to the occupation, but provides for broader knowledge, skills and competences which include many of the transversal skills. The core curriculum creates conditions and opportunities for students to
(i)    build and develop knowledge, skills, attitudes and values required in a democratic society;
(ii)    develop in an independent and holistic manner; 
(iii)    contribute to building personal wellbeing and to the Albanian society; and 
(iv)    face life challenges in a constructive way. 
The students cultivate personal and national identity and cultural belonging; absorb general cultural and civic values; develop intellectually, ethically, physically, socially and aesthetically; develop responsibility toward themselves, others, society and environment; gain skills for life and skills in different social and cultural contexts; are skilled for lifelong learning; develop entrepreneurial spirit; and use new technologies.  
All education programs in pre-university education are currently being reformed. Previously, curricula were organised in programmes of different, stand-alone subjects that stress the theoretical knowledge but lack horizontal and vertical coherence, are overloaded and not always relevant for students’ development. The new curricula promote inclusion and aim at developing the European key competencies, in order for the students to be able to solve complex problems. The curricula are structured in key competencies and learning outcomes for each competency and organized in learning fields. The key competencies are: 
•    communication and expression;
•    thinking; 
•    learning to learn; 
•    life, entrepreneurship and environment; 
•    personal, civic responsibility and 
•    digital skills. 
The fields of learning are: 
•    language and communication; 
•    math, natural sciences; 
•    society and environment; 
•    arts; 
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The transfer of responsibilities for VET from, first, the Ministry of Education and Sports to the Ministry of Social Welfare and Youth (MoSWY) in 2013 and, then, to the Ministry of Finance and Economy (MoFE) in 2017 and major staff cuts at Ministry level have compromised to some extent VET system management and capacities for VET reform. The handling of financial and management issues of the 35 vocational schools was re-assigned from Regional Education Directorates back into the Ministry, with all the ensuing consequences for the workload of (now) only 3 VET specialists in the MoFE. The link to teacher training schemes offered by the Institute for Education Development was cut and inspections of vocational schools did not take place anymore. 
The process to complete the new VET Law started in 2014 and led to its final adoption in February 2017. In principle, the Law paves the way for structural reforms, including the eventual unification of the VET school and VTC systems in terms of management, provider network, qualifications, support to curriculum or course development, teacher training etc. and the formation of (17) multifunctional VET centres. 
 

The NESS 2020 and its related Action Plan with its 52 measures have set out the reform path for both the VET system and the employment service/ employment policies. Due to the scarce budgetary resources, the main contributions to innovations in the VET system have remained restricted to the above-mentioned capital investments into the rehabilitation of some school buildings and the purchasing of some school labs and furniture. Foreign donors and their experts are in the lead when it comes to introducing innovations in pilot VET institutions. Donor coordination meetings under the leadership of the Ministry take place rather infrequently. Once these projects expire, it is difficult for the Ministry to sustain or even expand the innovations introduced. The extent and speed of innovations suggested by donors are necessary, but clearly exceed local leadership, financing and implementation capacities. However, the IPA Sector Reform Contract for the employment and skills sector, which was approved in 2016 and has a budget of €30 million, changed the modus operandi in that it shifted the responsibility for reform implementation to local counterpart organisations. Key implementing partners, such as NAVETQ and NES, are doing their utmost to achieve the agreed performance indicators, although their financial and human resource capacities are highly restricted.
For example, the important process to do a proper financial and human resource planning and making available resources for setting up a redesigned network of (17) multifunctional VET centres has been very slow. The Ministry sees this as a cost-neutral operation, which of course it is not, if such centres are to expand VET provision and bring it up to modern standards, as cost estimates e.g. by the IPA 2013 VET project for Elbasan have shown. In addition, there are forces at national level who are against giving increased autonomy to VET providers.
One major issue is that, with the transfer of responsibilities for VET from the education to the labour ministry, the system lost capacities also for a systematic data collection and monitoring of the system. Basic data on vocational schools, such as the number of participants per year of tuition, dropouts, equipment needs etc., are not readily available. Earlier donor-induced attempts to establish a VET-MIS (management information system) have not been pursued further. 
 

The idea is to turn the National Employment Service into a National Agency for Employment and Skills (NAES), which would deal with both VTC and VET school management in the future. This would allow also for economies of scale concerning the network of public VET providers and for expanding their training offers to target both young people and adults. Long planned, concrete initiatives to set up the agency are being taken only now with the Law on Employment Promotion that will regulate the setting up of the NAES. The Law has been adopted by the Council of Ministers at the end of 2018 and is awaiting approval by the Parliament. It is not clear at this stage whether the NAES will be set up in 2019, immediately after the Law has been approved.

In an attempt to meet the eligibility criteria for receiving IPA budget support, a Prime Minister‘s Order from 2016 established an Integrated Policy Management Group (IPMG), including for the employment and skills sector. The key ministries and agencies, as well as certain social partner organisations, are members of this IPMG. The group meets rather infrequently and only when it is convened by the (now) Finance Minister. It is a forum where actors are informed about certain strategy or progress report issues. No real discussion on policy takes place.

There are no dialogue structures at regional level.

The National Labour Council has been a functioning structure for many years. The Ministry convenes and consults council members on strategies/action plans and key pieces of legislation, such as the Labour Code, the Law on Employment Promotion and pieces of secondary employment legislation. 
The National VET Council is mentioned in the 2017 VET Law as the relevant tripartite structure for VET. However,it has not met for many years. 
There are no financial incentives for the participation by non-state actors.
A by-law to implement the 2017 VET Law deals with the inclusion of employers‘ representatives in school boards. Those have already existed before or been established. However, it is unclear in how many vocational schools employers are indeed represented on such boards and how the latter are functioning. As mentioned above, decision-making powers of school directors and school boards are restricted when it comes e.g. to opening new programmes or courses, hiring additional staff or generating and re-investing own income.
Some schools, in particular those supported by Swisscontact, GIZ and Kulturkontakt, have started to sign bilateral agreements with individual employers for the provision of company internships to VET students.
Sector skillscouncils do not yet exist. A respective by-law has been drafted, but not yet adopted.
 

Expenditures are planned mainly on historical data, plus a certain increase of the budget. The planning takes into account the numbers of staff employed and students enrolled, but not the real costs of a specific VET programme. These costs are not assessed at the level of NAVETQ who are in charge of frame curricula. After the transfer of schools under the Ministry of Labour and then Finance, there was a recentralisation of funding and financing mechanisms: VET providers deal directly with the Ministry on any budget planning and disbursement issues.

Budget planning would need to establish and take account of the costs of implementing specific VET programmes, as well as the investment and professional development needs of staff. As national funds are not likely to cover all such needs, VET providers should be allowed to generate and re-invest their own income. However, respective requests have been rejected by the Ministry of Finance and Economy on several occasions in the past.

The state budget is the main source of funding of public vocational schools, as well as of basic staff costs (salaries of the director and a few full-time staff) of VTCs. In addition, participants who are not registered unemployed jobseekers pay small tuition fees for VTC courses. 
Local governments are responsible for dormitories and ought to maintain them and invest into their upgrading. However, due to an insufficient local tax and income base, most local governments are currently unable to do so.
Donor funding exceeds national funding resources for VET.
Employers contribute to initial VET in kind, i.e. by offering internships to VET students.
Private training provision is at the expense of the learners.
 

There are no policies or measures in place that aim to influence the current mix of funding sources for VET.

The following issues and recommendations from a report by Dibra (2015) on funding and financing mechanisms of the public Albanian VET system still remain valid (see pages 23ff.) .
“VET system is underfunded
For many years now, analyses of the VET financing system have shown a high level of underfunding. Students’ enrolments have partly increased. In addition, more funds would be required to accommodate the following identified needs:
•    Providers require highly trained teachers and instructors but salary levels, that follow the fixed grading scheme of the public system, are not attractive. Furthermore, there are no funds for teacher training at providers’ level.
•    The needs for operating/running costs of the VET providers are not fully met, particularly for consumables. The situation deteriorated in the years when the budget for operational costs decreased. Before January 2015, there were vocational schools who had not received funds for operational costs for many years, which hampered the implementation of the institution-based practice hours of curricula, if not making them impossible.
•    Higher investments in infrastructure would be needed especially in vocational school buildings and workshops (new buildings or reconstruction). 
•    Investments are needed for generic (PCs, copiers, telephones etc.) and workshop equipment.
•    NAVETQ, with a view to be fully operational and support the system with updated frame curricula for both vocational education and vocational training, qualification and certification standards, etc. needs more human and financial resources.
•    Funds for extra guards and cleaners in vocational schools operating in shifts need to be covered as well.
•    No funds are available for extracurricular activities.
•    Scholarship amounts are too low and not attractive, and so is the level of services in dormitories.
•    Dormitories do not offer optimal conditions for students’ accommodation. Most of the buildings are in dire need of repair, while new dorm buildings are needed close to some vocational schools.
•    Students coming from rural areas,who need transportation, pay for transport themselves.
•    Students’ social and health contributions, as well as accident and life insurance premiums during business internships should be planned as part of the budget.
Additional sources of funds need to be explored to cover this long “shopping list”. Sustainable solutions are needed through higher budgetary transfers, which could be topped up by additional revenues generated by VET providers through offering training products and services, participation in projects and various kinds of support from businesses. The latter could be given fiscal incentives for such contributions. 
Lack of national VET planning system based on skill needs 
The state budget for VET is planned mainly based on historical data by adding or subtracting figures from different programmes and items, in line with given budget ceilings. It is not used proactively as a basis for internal management and control. Decisions on the opening of new profiles or new schools were in some cases not linked to regional or sectorial needs, as identified e.g. by the Skills Needs Analyses carried out by the NES, and are not based on cost/student or cost/trainee analyses. The MoFE doesn’t have accurate background information on the costs for opening new programmes or providers or increase the number of students. It is unclear whether there isa procedure at the MoFE to prioritise investment projects.
VET providers’ financial autonomy
Public VET system budget formulation and management is centralised at the MoFE level. Dependent economic units have limited delegated functions, mainly on budget execution, with the latter being strictly controlled by the MoFE treasury system. They control expenditure documents and invoices, delaying this way disbursement (influenced by the cash flow plan and availability of liquidity). On a provider level, the lack of financial autonomy has been widely discussed, however rather with a view to enhance the possibility to generate and retain revenues to directly cover expenses. By law VET providers are allowed to generate income, and they are exempt from taxes for economic activities. However, as per the existing legislation, there is both ambiguity to generate such income and limited possibilities to use related revenues. The highly centralized nature of VET system management is another impeding factor when it comes, for example, to opening additional programmes or courses. Figure 3 below shows the level of revenues, which had been planned to be generated by both VTCs and VSs for the 12 years between 2004 and 2015, as well as the budget expenditures these additional revenues were supposed to cover in vocational education and in vocational training (here called ‘labour market’). (see Fig.3 in the report in PDF p.64).

The basis for income generation and use in the Albanian budgetary system is predictability. The level of income expected to be generated and the destination of this income has to be predicted and reflected in the budget plan. As can be noted, both vocational schools and VTCs had planned additional revenues for the period 2004-2012, while only VTCs continued to plan for 2013-2015. Generally, the forecasted income level decreased over the years. For the years 2012-2015 vocational schoolswere not planning additional revenues, while the income generation level of VTCs decreased due to the labour market policy offering training courses with a zero fee for jobseekers. If in 2012 only 5% of trainees benefitted from zero fee training courses, in 2014 this figure rose up to 62%. The number of jobseekers trained almost tripled in the period 2012-2014 (NES statistics, 2015).
In absolute figures, the planned revenues of VET providers varied in different years. VTCs have generally aimed to generate an average level of 100,591 Euros from training fees per year. In contrast, vocational schools planned 59,646 Euros of extra income per year, mainly through the sales of products. (see Fig.4 in the report in PDF p.65).

According to current legal provisions, additional revenues generated by the provider should be used to cover expenses in line with their mission and activities that produce these revenues. In other words, the income can be used, up to a maximum of 90%, for the payment of teachers’ and instructors or part time instructors’ extra hours, for consumables used, and investments (in the form of equipment depreciation or low value investment). Analysis shows that a maximum of 2.2% of costs for goods and services (operational costs) were expected to be covered in vocational education in 2009 and 30% of salaries in VTCs in 2004. 
In general, VTCs generated a higher income (which forms the basis for planning in the following year). Their main source of income are training fees, which are easy to predict and collect. Furthermore, a joint decision of the Ministry of Social Welfare and the MoF regulated the planning and use of these revenues. For vocational schools, is more difficult generate additional revenues by selling goods produced in the workstations of industrial, agricultural or economic schools, because of required access to the market. The regulation that specifies how to use these revenues is not comprehensive and restricts the possibility of income generation by schools to what they produce at their workstations. According to this regulation, providers were allowed to open a current bank account. The low financial management capacities in vocational schools, which was partly due to the absence of accounting staff in most vocational schools until 2015, prevented providers from income generation. Uncertainties in connection with ongoing reforms in the system, including staff turnovers, were a further impediment for schools to generate income through economic activities.
Current legal procedures require that own-generated income should be debited to the VET provider’s treasury account, and could be used only after MoFE approval of the expenses coverage plan (as part of the budget plan) and the cash flow plan. Revenues generated fall under the category “income within the limit”, which means that unspent funds cannot be carried forward to the following year. The low capacities of VET providers to estimate their extra income, alongside with liquidity issues at central level which causes delays in the transfer of monthly instalments, discourage these institutions from engaging in income generation activity. 
Informality and scattered information on funding sources and expenses
The high level of centralization in the VET financing system, a limited understanding and application of legal provisions due to the lack of accounting staff in some vocational schools and the immediate need to cover costs, led to ad-hoc solutions for vocational schools (while processes in VTCs are highly formalized). In several cases, additional income were deposited into bank accounts, sometimes in the name of the vocational school director if the vocational schools did not have a tax identification number (NIPT). In these cases, all records are kept at the provider level. Transactions are registered, not following standard procedures, and reported to the vocational school board, but not to the central level. The same procedure is followed for students’ contributions and/or donations. 
Several VET providers benefit from contributions by local businesses or international donors operating locally (e.g, in Korça the Dorcas assistance for all providers) and paying for items such as consumables, equipment etc. There are cases of providers who manage funds generated through projects (e.g. EU/EC project for inclusive education in Beqir Cela and Isuf Gjata). In most of the cases, these contributions are not reported and not integrated in a comprehensive system, showing all the funding sources and destinations. Vocational schools have never been audited.
Since January 2015, under (then) MoSWY management, all VET providers have received a tax identification number and an accountant (full time or part time). Although progress has been made and things are being formalized, there is a big need for capacity building in financial management and clear rules and procedures. 
Low accountability of local government
In the context of decentralization, local government units (LGUs) have a joint responsibility for pre-university education. To accomplish this role, each year, LGUs receive an annual budget from central government in the form of unconditional transfers to be used for the maintenance of school buildings’ and utilities; conditional transfers earmarked for dormitories and scholarships; and conditional grants from the MoFE, or on a competitive basis, from the state-financed regional development fund for investments in school buildings. The use of unconditional grants for education does not follow a “per student” formula and, in most cases, obligations with regard to school maintenance are not met. 
This applies to all school buildings in pre-university education, but is particularly evident for vocational schools, which are generally regarded as second priority due to their low number in each LGU compared with other pre-university institutions, the higher cost per student, and exceptions becoming rules. Some vocational schools had a national status, which meant that they managed their own budgets (excluding capital expenditures) and had a direct reporting line with the MoES. Although never formally decided, some of the vocational schools were considered central government priority. National schools were the biggest and better equipped vocational schools. In cases where LGUs did not cover maintenance and utility costs, funds were covered by the MoES, as a remedy solution. 
LGUs do not report on the unconditional transfers used (or not used) for vocational education and are not audited in this respect. Reports are missing for the services offered in dormitories, as well. With regard to capital investments in vocational education, LGUs are not proactive in terms of applying for regional development grants. The territorial reform is expected to delegate more functions to LGUs, but for the time being, responsibilities in the fields of education, or vocational education for that matter, are still to be defined. To date few LGUs fulfil their tasks with regard to vocational education. LGUs do not have any responsibilities for vocational training.
Lack of business participation
In many advanced VET systems, such as in German-speaking countries, the private sector contributes to VET in a dual system, by offering facilities for practice, by making available instructors and by supporting the design of standards and curricula, teacher training, exams etc. In countries where the business sector has been less proactive, different schemes were designed to generate funds from businesses and make them more aware about the benefits that this system could offer to them. In Albania, a National Employment and Skills Development Fund (NESDF)was proposed to be created in the frame of the revised Employment Promotion Law. Businesses are expected to contribute to this fund with a certain percentage of their profit-tax (if an agreement with the fund is signed). It is not clear at this stage whether this fund will be set up, whether it will support only vocational training as an active labour market policy or vocational education as well.
Businesses often refuse to accept interns/apprentices because of restrictive labour regulations. Changes to the labour code (2015) require businesses to pay students during their internship/apprenticeship period, but respective remunerations have to be decided by a DCM that has not been issued, yet. Costs for the insurance of vocational school students are not always covered by the responsible institution, while, for VTC trainees, no formal regulation is in place. The completion of the legal framework in this regard is an indispensable step towards getting the business sector on board.
Inefficient capital expenditure
Investments in the VET infrastructure, including both buildings and major items of equipment, are not in line with the needs. This is so not only because of the limited funds available, but also because of the low level of procurement capacities, the low quality of construction, and the inefficient use of facilities compared to the number of students served. Investment funds were absorbed only partly, especially in vocational education, as a result of the low interest of local governments to apply for the Regional Development Fund, and the failure of tendering procedures due to the bidding construction companies not being able to fulfil the standards, especially when donors applied international bidding procedures (WB case). Several new school buildings were not suitable for VET (space for workshops is lacking, an insufficient number of plugs, no washing rooms in dormitories etc.) and there were major problems with the quality of works carried out for new or reconstructed buildings (e.g. the vocational school in Lezha had to be rebuilt, the dormitory for Arben Broci school could not be used). The contracting authority (MoES in the case of IPA I investments) did not publish any specifications for how VET buildings should be constructed, and there was a lack of accountability. 
Furthermore, there is an issue of vocational school or VTC buildings being underutilized. This inefficiency is partly the result of incomplete and not formative budget reporting and monitoring system in public sector, which based on previous OECD assessments , is mainly financial and not containing full information about performance.
Lack of a coherent vocational education and vocational training financing system
The budgets for vocational education and vocational training continue to be planned under different MoFE programmes. Vocational training and vocational education providers still follow different financing regulations, which has been the heritage of the two types of institutions falling under the jurisdiction of different ministries – the (then) MoES and MoSWY. VTCs operate under the auspices of the NES and have fairly consolidated financial management systems, even if there is room for increased efficiency. In contrast, vocational schools depend directly from the MoSWY; they have multiple sources of funding, different statuses and differ a lot in terms of their capacities. Vocational schools rely much on LGUs. Some of the joint schools, who offer vocational education programmes, operate under the MoES. Former vocational schools with a local school status do not have any experience in managing funds and depend on the MoES for investments, REDs for teacher salaries and office equipment, LGUs for maintenance, utility and even inventory keeping. This is overly complex and has led to a lack of capacity to deal with delegated responsibilities. As discussed before, income generation rules in place are different for VTCs and vocational schools. For the latter, such rules are even incomplete. An integrated network of unified VET providers with the ultimate goal of becoming Multifunctional Centres requires a comprehensive and unified legal basis.
Incomplete, fragmented and partly unclear legal framework.
Below attached is the list of laws and by-laws (DCMs or Ministerial Instructions) that regulate VET financing.

Dibra (2015) holds that “there is an issue of revising the legal framework to regulate, among others, VET financing issues with a view to lay the ground for reforms toward creating a VET system, which is unified, decentralized and responsive to labour market needs”. Suggested solutions are as follows:

“Budget planning for VET system:

•    The entire budget for VET is planned through an integrated budgetary programme called “Vocational Education and Training”.
•    Funds planned for vocational schools, which are currently part of the unconditional transfers to local governments, become part of MoFE’s “Vocational Education and Training” budgetary programme. 
•    All funds for VET shall be channelled through the NESDF. 
•    Local Governments are allowed to contribute to VET providers’ budgets, or ’order’ and pay for specific training measures, using their own budgets and/or donor projects.
•    Global budget planning for VET by the MoFE should take into consideration labour market and sectoral priorities and is, over time, based on realistic cost indicators and a “per programme/ course” and “per capita” funding formula.NAVETQ calculates, and regularly updates, these financial indicators and MoFE makes them public (capacity building and international expertise are needed in this regard).
•    NAES elaborates, and MoFE approves, standards for the required infrastructure/ facilities for each VET programme area. After having reorganized the VET providers’ network in line with existing recommendations and making economies of scale, MoFE creates a technical secretariat to prioritize investment needs to upgrade the VET infrastructure (both buildings and workshop equipment), based on clear criteria (point system) and a transparent process. 
•    MoFEand/or other institutions or donors make available, through the NESDF, additional grants for VET providers for specific innovation and development projects that contribute to increasing quality in VET. VET providers are able to benefit from such funds, following a competitive and transparent procedure. 
•    More effective incentives are given to companies to share the costs of education and training or to receive interns or apprentices. Incentives/ rules/ procedures could be modelled on those for the subsidised employment promotion programme for jobseekers, which is managed by NES.
•    Dormitories are considered part of the VET providers’ premises and structures and, hence, are integrated into the budget management system of VET.

Budget allocation for VET providers:

•    There is one Fund for the entire VET budget and one institution responsible for managing this Fund, including budget transfers to VET providers.

VET providers’ financial autonomy:

•    VET providers generate income through trainees’ fees, products sold as a result of their activity or services offered to third parties within their mission (skills development), through renting out facilities or other forms allowed by law.
•    The income generation activity has the ultimate goal of improving the service offered by the VET institution in question (it should by no means aim at making profits).
•    VET providers can apply directly for funds from different national or international programmes and manage these grants.
•    VET providers fix training fees for planned courses.
•    The State budget guarantees the offering of programmes approved at national level. However, VET providers are allowed to offer additional programmes or courses and are self-responsible to cover financial costs through training fees, own revenues, public-private partnerships, donor projects or other sources.
•    A VET provider opens and manages one bank account through which all transactions are done, following the rules of sound financial management (manuals, templates, IT systems and training are needed for that).  
•    A VET provider prepares an annual financial plan, which also includes expected own revenues, which is discussed and endorsed by the VET steering board. The plan might be adjusted midway through implementation (by 1 July).
•    VET providers can use 100% of the income generated.
•    VET providers should be able to carry forward undisbursed funds to the next year. This requires that, in the annual budget execution law, these incomes are classified as “outside the limits”.  

Reporting:

•    VET providers operate, and follow the legal including accounting procedures, as non-profit-making public institutions.
•    VET providers report to their boards about budget execution at the end of each quarter and submit their annual budget execution report to NAES once per year (by 31 January of the following year).
•    Budget management and execution may be inspected by the State Supreme Audit and the MoFE audit.
•    NAES provides instructions, templates, IT systems and training on VET provider financial planning and reporting.

Students’ benefits:

•    Contributions to national social, health and pension systems, as well as accident and life insurance premiums for students or trainees undertaking practice periods in companies are planned as part of the MoFE budget for VET. NAES transfers these funds to VET providers, while VET providers pay them out to companies.
•    The DCM on scholarships is extended to cover all students/trainees in need of assistance with a view to increase enrolment or to support excluded categories. 
•    Partial or full subvention of transportation for students/trainees in need of assistance is considered to help them get to their places of learning (including to company practice places).

Other issues:

•    DCM No. 500, date 22.05.2013, and DCM No. 77, date 28.1.2015, is updated and include trainees;
•    A Grant on VET is included as a separate grant on the annual law for budget, Annex 3/1 of the Regional Development Fund (pillar I, point c);
•    The supportive legal framework for the NESDF is developed. All types of VET providers are able to benefit.”

(Dibra, 2015, p. 29-31)