Bendigo Kangan Institute’s merger has been hampered by poor financial results, which the insitute hopes it can turn around once the merger process is complete.THE increasing loss in market share has been blamed for the $10.4 million operating loss sustained by Bendigo Kangan Institutein the 2013/14 financial year.
The state government released the annual reports for all Victorian TAFE institutes last week, which showed just two of 10 recorded operating surpluses.
Bendigo Kangan Institute was the fourth worst performing financially of the 10.
In his annual review, Bendigo Kangan chief executive officer Grant Sutherland said the financial result was “disappointing” but was confident the merger could help to reverse falling enrolments.
“We operate in a demand driven VET model that is very competitive and to be financially successful we need to generate scale in our student numbers and critical mass,” he said.
“Both Bendigo TAFE and Kangan Institute lost significant market share in 2014.
“Prior to the merger Bendigo TAFE had budgeted for an operating loss as per its turnaround plan noting that some further actions under this plan were put on hold once the merger was confirmed.”
Bendigo Kangan Institute released a strategic intent document last yearto help in the transition to the new merged model.
Minister for training and skillsSteve Herbert tabled the annual reports in parliament on Thursday, and saidstate government contributions to TAFE decreased by more than a third from 2011 to 2014.
He said it was this decrease in funding that hadcaused the poor financial outcomes.
“By ripping more than a third of government funding from our public TAFEs, the Liberals left our TAFE and training system in turmoil,” Mr Herbert said.
The opposition disagreed, and put the deteriorating state of TAFE finances down to the 2008 decision forcing TAFEs to compete with private providers.
Opposition spokesperson for training, skills and apprenticeships Steph Ryan said Labor’s reforms were the “number one cause of our TAFE’s current financial situation”.
““Labor failed to support TAFEs to ensure they could adapt to the new competitive environment it imposed upon them,” she said.
The Greens called on the Coalition to join them in their opposition tothe market model for TAFE.
Greens spokesperson for TAFE and training Sam Hibbins said it was time to stop forcing TAFE to compete against private operators for government funding.
“The Coalition must now back this rhetoric up with action and abandon the failed market contestability model, which they continued in government and exacerbated with funding cuts,” he said.
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