FROM THE MINISTER FOR POST COMPULSORY EDUCATION TRAINING AND EMPLOYMENT

DATE: Thursday, August 23, 2001


REPORT RECOMMENDS URGENT CASH INJECTION TO REBUILD VICTORIA’S LARGEST TAFE

The State Government will provide an immediate $5 million cash injection to help rebuild Victoria’s largest TAFE Institute – Chisholm, following the recommendations of an independent investigation into the operation of the Institute.

Post Compulsory Education, Training and Employment Minister Lynne Kosky, who ordered the review earlier this year, said the Bracks Government had agreed in principle to the 172 recommendations of the review.

“The review found that the 1998 merger to form Chisholm Institute of TAFE had been financially disastrous with accumulated losses of $15.9 million,” Ms Kosky said.

“The review also showed that the amalgamation ordered by former Minister Phil Honeywood was a financial failure, badly managed and inadequately funded.”

The Minister said key recommendations and findings of the review included:

· Chisholm Institute’s size and the distance between its nine campuses contributed to cost blow-outs, communications and management difficulties;

· Chisholm had too many layers of management and a lack of strategic direction;

· The Institute had difficulties with poor budget construction and monitoring;

· That the Moorabbin campus should be separated from Chisholm Institute and integrated with Holmesglen Institute of TAFE;

Ms Kosky said the Bracks Government would help to rebuild Chisholm Institute in the community, with minimal disruption to students.

“The Government is determined to ensure a revitalised Chisholm Institute is driven by strong leadership and dedicated staff that is well positioned to serve its dynamic and growing local community with leading-edge education and training,” Ms Kosky said.

“The initial $5 million package to rebuild Chisholm will provide essential support to the Institute, which is the major provider of vocational education and training for Victoria’s major growth corridor – the outer south eastern suburbs.

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Ms Kosky said the Moorabbin area would also greatly benefit from the integration of the Moorabbin campus of Chisholm into Holmesglen TAFE.

“By assuming responsibility for the operations at Moorabbin, Holmesglen will better service the local area and have the opportunity to establish centres of excellence in information technology, hospitality and manufacturing at the campus,” she said.

Implementation committees will be established to oversee the implementation of the various recommendations.

· Please see attached a detailed Government response to the report.







































GOVERNMENT RESPONSE TO THE

REVIEW OF THE CHISHOLM INSTITUTE OF TAFE


Chisholm Institute of TAFE

Chisholm Institute of TAFE was formed by the Kennett Government in 1998, by merging the Casey Institute of TAFE, the Peninsula Institute of TAFE and the Barton Institute of TAFE, following the “Ministerial Review on the Provision of Technical and Further Education in the Melbourne Metropolitan area” (the Ramler Review).

The decision to establish Chisholm Institute of TAFE created the largest stand-alone Training and Further Education Institute in Victoria, with more than 57,000 students and nine campuses across the southern region of Melbourne and the Bass Coast.
Review of Chisholm Institute of TAFE

When the Government came into office a number of TAFE Institutes were found to be in financial difficulty. This was confirmed by the Auditor General’s office.

Immediately on coming into office the Bracks Government announced a rescue package aimed at restoring the financial viability of TAFE Institutes. In the 2000/2001 Budget an additional $127 million was allocated to TAFE Institutes over a four-year period.

On 22 February 2001, following advice from the Chisholm Institute Council, the Minister ordered an immediate investigation into the Institute’s operational and financial position and the subsequent impact on the provision of education and training.

Despite considerable additional funding provided by the Government, the review became necessary due to a history of under delivery, ongoing financial difficulties and deteriorating staff morale.

It became clear that the former Government did not provide adequate funding to successfully complete the merger in the first place.

Chisholm is the only TAFE Institute still facing significant financial difficulty, despite the additional Government funding.

The review was managed by a steering committee comprising the Director of the Office of Employment, Training and Tertiary Education and a senior officer of the Department of Treasury and Finance. Consultants were appointed to assist the committee in examining the Institute’s financial and profile management practices as well as its external relationships, and to recommend changes to address issues identified by the review team.

The government received the report from the review team in August 2001 and has responded promptly to the recommendations.
Key findings

After extensive consultation and rigorous research the review found that “the merger had been unsuccessful from a financial perspective. Chisholm’s current financial position is not sustainable” with accumulated losses of $15.9m and a projected deficit for 2001 of $4.8m.

The report found the causes of Chisholm Institute’s deteriorating position were numerous but included:
- Governance arrangements that have not been fully effective;
- Lack of appropriate performance culture;
- Difficulties with budget construction;
- Less than optimal relations with the community, especially with disadvantaged groups, industry and universities.

Findings also concluded that:
- The number of management layers and incompatible management information systems created confusion and wasteful duplication;
- The Institute’s size and geographical spread contributed to its cost control, communications and management difficulties.
Recommendations and Government response

The report makes a number of specific recommendations concerning the future of the Chisholm Institute of TAFE. They covering structure, governance of the Institute, financial and management practices. Recommendations, aimed at improving the relationship between Chisholm Institute and its external stakeholders, have also been made.

The Government has accepted, in principle, all of the recommendations of the report.

The review considered a number of options but concluded that the Moorabbin campus should be separated from Chisholm Institute and integrated with the Holmesglen Institute of TAFE.

It recommended that Chisholm Institute should adopt a new, more geographically compact and community focused organisational structure.

The report indicates that both Chisholm Institute and Holmesglen Institute will benefit from the integration of the Moorabbin campus with Holmesglen Institute.

Both institutes will serve a more natural, geographically-compact area, making them more aware of and responsive to local industry and community needs.

Growth and investment opportunities will be shared. An improved Chisholm Institute will provide much-needed education and training opportunities in Victoria’s major population growth corridor.

For Holmesglen, which has a reputation for successful financial management, the acquisition of additional space for expansion will provide improved education and training provision in the Moorabbin area.

Specifically for Chisholm Institute, a more defined geographical spread will alleviate many of the difficulties associated with travel, communications and management and will encourage a more outward focus to better position the Institute to meet the rapidly growing educational needs of the communities it services.

Holmesglen Institute will have the opportunity to develop centres of excellence in information technology, hospitality, business services and manufacturing in Moorabbin and this redevelopment should substantially invigorate local business activity.

An implementation committee will be established to oversee the implementation of the various recommendations.

The Government is determined to restore the reputation of Chisholm Institute as a major provider of vocational education and training within the broader community by ensuring it provides the skills needed to create economic growth and enhanced job opportunities across the southern region and the Bass Coast.

The Government also recognises that Chisholm’s high quality teaching staff will play a crucial role in the rebuilding, supported by strong leadership and good management. The director Ms Virginia Simmons, appointed during the review, will be crucial to that strong leadership.

In recognising the importance of Chisholm to educational outcomes and job growth in the region, the government has committed a substantial funding package to underpin the reform agenda. Chisholm must be responsive as a financially sound centre of educational excellence.

It is also recognised that education provision in the Moorabbin area needs to be expanded and enhanced.

In achieving this, the Government will:



· Assist the Chisholm Institute of TAFE by providing an initial $5 million rebuilding package;
· Support the recommended staffing arrangements, the redevelopment of management systems and learning resources, as well as new capital works;
· Establish an internal Chisholm Institute Review Implementation Team, comprising the Director and representatives from the teaching staff, managers and other employees will oversee these changes;
· Support in principal the recommendation that the Moorabbin Campus, previously known as the Barton Institute of TAFE, be integrated with the Holmesglen Institute of TAFE;
· Establish an external Holmesglen-Moorabbin integration implementation committee to manage the proposed amalgamation.


Once the reforms have been implemented, Chisholm Institute of TAFE will be a vibrant organisation at the leading edge of Vocational Education and Training in Victoria, inspired by a new strategic vision and the dedication of its staff.