Back-office jobs will be slashed and TAFE campuses sold off in a multimillion dollar restructure of TAFE that NSW Minister for Skills John Barilaro calls a "once-in-a-generation reform".
Ten autonomous institutes within TAFE will be merged into a single, multi-campus entity, and a new digital education headquarters created in regional NSW to deliver more online and in-workplace training in a move the government says will expand TAFE's reach and reverse the huge recent decline in enrolments.
It comes after years of turmoil in the vocational education sector where state government reforms and funding contestability have been blamed for driving more than 100,000 students away and for over 5000 jobs lost from the 125-year-old public institution.
Mr Barilaro said the reforms would give beleaguered TAFE staff a vision of the organisation's future.
"I've given them that commitment: we're not privatising TAFE, we're backing the public provider, and investing in the resources, the assets and the people," he said.
A report by the NSW TAFE Commission released by the minister Wednesday blamed TAFE's "failure to adapt to changing market conditions" for leaving it with unsustainable costs and inefficiencies and for creating a skills shortage in NSW.
Mr Barilaro said the government's research shows TAFE NSW spends 60 cents in the dollar on administration, and that back-office efficiencies could save significantly more than $100 million, to be reinvested in new facilities and frontline resources.
Some savings would come from slashing the $70 million TAFE currently pays to the Department of Education for administrative support, he said.
He could not put a number on jobs that would be lost but said public training providers in other states are 50-60 per cent cheaper than in NSW.
"Excessive overheads, a large and underutilised asset base and inflexible workforce arrangements are diverting valuable government funding away from the most important job TAFE has – training our workforce of the future," he said.
Mr Barilaro said only about three-quarters of TAFE NSW property is being used, and that revenue from assets sold off would be wholly reinvested into TAFE NSW to build new facilities.
The government plans to open 12 "Connected Learning Centres" throughout 2017, providing digital access to TAFE in regional NSW.
The restructure largely follows the blueprint laid out by Boston Consulting Group in a controversial report into the competitiveness of TAFE that was released by the government in April.
TAFE enrolments have been in steep decline since 2012, and the government's January 2015 Smart and Skilled reforms saw course fees rise.
The Opposition's spokeswoman for skills, Prue Car, said "my concern is that the government has presided over 126,000 fewer students enrolled in TAFE, 5200 teachers and support staff gone, and that this is just a shuffling of the deckchairs.
"At the end of the day there's less students in TAFE, less teachers teaching our students and that comes at a time where there's a skills shortage and a building boom and youth unemployment is in crisis. What the government has done today does not go anywhere in fixing that."
Steve Turner from the Public Service Association called it "the end of TAFE" and said the government had wasted millions in mismanagement, including on the failed LMBR computer system which was finally scrapped last month after a $100 million blowout.
"They created the system that has led to under-utilisation of assets and now they want to sell off the assets that are under-utilised," he said. "What this is really about is a privatisation program that they have no mandate for."
But the NSW Business Chamber welcomed the reforms.
"Far from eroding its central role in the vocational education and training market, a more competitive and consumer focused TAFE will be better placed to provide the high quality training that connects students with jobs and a brighter future," its head Stephen Cartwright said.
