Rethinking the Welfare State: The prospects for ... - e-Library

Rethinking the selfare state 198
assigning participants to courses. 76 In 1993, the training market was made fully
contestable, incorporating both private and public providers. By 1995, the market share
of government-run labour market training centres fell from 75 percent to 36 percent,
while the share held by private providers climbed to 45 percent. 77 Further, the average
course cost per participant fell by 20 percent—meaningful competition resulted in a
significant reduction in government expenditures. 78 Unfortunately, international
comparisons are less flattering. Per-capita expenditure on training is approximately
$7,500 in Sweden, while this figure is between $2,000 and $3,000 in the United States. 79
Although publicly run training centres compete with profit-oriented as well as nonprofit
organizations, most courses are operated by the state. 80 This difference seems
particularly relevant in distinguishing vocational training from “classroom” training, and
indeed participants may also follow courses in the regular school system on top of their
labour market training program. 81 Given the savings already realized by increased
competition, it seems likely that costs could be further reduced by the introduction of
more private participation. There appears to be a (not uncommon) bias in favour of public
service provision in areas more traditionally associated with “education” than labour
market training, even when the distinction is of little utility and the benefits of private
provision may be considerable. Funding for both ALMPs and PLMPs in Sweden comes
primarily from the state budget, with a small contribution from unemployment insurance
society membership fees. 82 Any further reduction in costs would therefore result either in
better services, expanded services, or lower taxes.
Australia
Prior to 1998, private job-placement agencies were active, but the dominant share of the
market was held by public employment agencies run by the Commonwealth Employment
Service (CES). In 1998, “the CES was abolished and replaced by the Job Network (JN),
in which practically all public employment services were contracted out to private or
community organizations.” 83 Three types of services are now contracted out to private
providers through a tender process: job-matching, job-search training and intensive
assistance (IA) programs. A newly formed agency, Centrelink, is responsible for
administering income support as well as registering unemployed persons, assessing
eligibility, and determining in which of the three programs an unemployed person should
take part. The main aims of these reforms are to
bring about a national approach to training; ensure that there is
competition between training providers; and make training demand-driven
(rather than supply-driven), so that enterprises (industry/business) are in
partnership with the Government to improve the relevance, effectiveness
and efficiency of training. 84
Individual consumers are free to choose which of the approved private suppliers they
approach for services. After receiving government referral to one of the three services
types, “job-seekers may choose individually among the suppliers already approved in a
competitive tendering process.” 85 While the range of suppliers is admittedly limited