Financing Vocational Education and Training in Greece

In 2006, Navigator Consulting participated in an international project consortium implementing a review of the national system for financing vocational and educational training in the European Union on behalf of the European Commission. This is one of a series of assessments of the education and training sectors undertaken by Navigator since 2004 in Greece and Cyprus. We take this opportunity here to publish some of our results on this topic. Additional information can be requested from Philip Ammerman on pga@navigator-consulting.com.

This report was written by Philip Ammerman of Navigator Consulting as part of the project consortium for the project: An analysis of progress in relation to select NVE&T priority areas, following the Maastricht Communiqué: Lot 2: Investing in and financing VET in an efficient and sustainable way.

 

As far as we know, this is the most comprehensive inventory of VET expenditure in Greece, divided between different government levels as well as the private sector. The methodology and findings may therefore prove useful to other researchers.

Further information can be requested directly from our company. Please contact us.

 

 

 

Executive Summary

This Country Report Greece comprises the second draft of the national reporting procedure established for the DG Education and Culture project Investing in and financing of VET in an efficient and sustainable way.

 

Our responses in this draft are provisory as regards financing volumes. There are extensive questions on the data integrity and coverage, and we are aware that further research will be needed. The question of whether the time, resources and political consensus exist for continuing this research is a separate issue.

 

A Secondary Review (desk research) of available data was implemented between 17 May and 19 June, based on the project methodology established on 16 May 2006. The main sources for this research included document reviews from ETF, CEDEFOP, Eurydice, the Ministry of Education and Religious Affairs, the Ministry of Labour, OAED, and others.

 

This data review did not yield sufficiently detailed results. There is a real paucity of hard data available. To address this, the Government Public Expenditure for 2006 (which includes 2004 and 2005) was recorded and analysed.

 

In order to complete the analysis successfully, extensive further work will be within Ministries and organizations within the VET sector. This sector is currently in an uproar, with national strikes and work actions in effect brought about by four main events:

 

  1. The 2006 Greek local elections, scheduled for 15 October 2006, will elect representatives to Greece's 3 super-prefectures, 54 prefectures, provinces, and approximately 1,033 communities and municipalities. VET has become an election year issue, as seen in the following three points.
     

  2. The decision to introduce quality criteria for higher education admissions, and specifically by barring higher education entry to students who scored below a minimum platform of 10 points on the national examinations scale has led to a crisis in the VET sector. A total of 17,245 seats at tertiary VET institutions remained empty, of which 14,365 “belonged” to graduates of the unified Lyceum (academic comprehensive secondary schools) while 2,880 seats allocated to graduates of the secondary technical and vocational schools (TEE). In the wake of these results, the fate of regional VET institutions has become an open question, since a large number of these institutions received very low numbers of incoming students. This issue has since been politicised.
     

  3. Further politicisation of the reform of higher education, in the form of opposition to a draft bill tabled by the Ministry of Education. This bill, among others, called for the accreditation of private tertiary education at an equal level with public education, and the implementation of assessment of professors, lecturers and trainers. This proposal would have done much to bring Greece in line with the Bologna process. This proposal was met with a firestorm of protest, including the occupation of over 450 institutions by protestors, extensive street protests in major cities in Greece in June-July. The reform process is currently dead- locked in Parliament, although it is expected that the bill will be retabled after the local elections on 15 October.
     

  4. The commencement of a general teachers’ strike in the week of 18-22 September – only a week after the commencement of classes – was launched among demands for pay rises and the issue of new school- books and training materials. This strike has since been extended for three weeks at the time of writing.

 

With school occupations, academic vacations, and the political fire-storm created in the build-up to the October 15 elections, the tensions, limitations and potential of the highly politicised and centralised Greek state education system are illustrated in a nutshell. The issue of financing of vocational education and training, though critical, appear almost secondary to the real priorities of the political and administrative stakeholders, both in government and outside it.

 

Several main challenges are identified with the research methodology:

 

  1. Most stakeholders have been unavailable for interviews, or cannot easily share financial information.
     

  2. The total financial resources available for all activities relating to the four countries covered by the author (Greece, Cyprus, Czech Republic, Slovakia) are EUR 15,000. This budget imposes significant limitations to the scope of the research.
     

  3. The current reporting system (UOE, LFS and others) leads to a highly fragmented state of reporting. Education and continuing training financial statistics are collected separately, with a significant time distortion between different survey methods. Few like-for-like non-financial statistics are kept which could be used to determine key ratios on VET spending (such as spending per student, per teacher, etc.)
     

  4. There is a real danger of double-counting within some sources of VET expenditure. On the other hand, it is clear that due to the tax system, there is a much higher volume of resources collected for VET than are actually disbursed. However, if the funds are not disbursed, such as the funds collected by the Institute for Social Welfare (IKA) under the 0.45% LAEK funding rule, it is quite difficult to gain information on the status of financial reserves. A further problem of double-counting is seen in the “Transfers to Third Parties” budget identification system, which is a result of the highly centralized budgeting system used by the Ministry of National Economy.
     

  5. There is a further problem with recording the date of expenditure. Much of Greek VET expenditure is tied to implementation of Operational Programmes co-financed by the EU Community Support Frame- work III. Funding absorption has been extensively complicated by lack of central government co-funding, in part due to Greece’s high public deficit, and in part due to administrative issues. As a result, expenditure budgeted in 2005 may not be absorbed until 12 months later, in 2006, if at all. It is extremely difficult to keep track of what expenditure is Government-financed, and what is EU-financed.
     

  6. There are no standard definitions of crucial terms, such as “effective- ness” or “sustainability” in use for this project. As a result, we have focused on data collection and reporting as established in the Country Report framework.

 

The objective of this report is to provide some insight into how the financial structure of national and European VET systems affects issues of efficiency and sustainability. It is impossible to reach any conclusions in the space of the present project which might answer these issues, since (a) methodological frameworks and agreed definitions do not exist, (b) project resources are not sufficient, (c) the political consensus for reform does not exist.

 

Nevertheless, a politically neutral and financially disinterested observer of the Hellenic educational system would conclude that extensive scope exists for improving the effectiveness and efficiency at all levels. Indeed, the fact that EU funding exists in such abundance should not become an excuse for continuing the system under its current framework. In this case, externally- financed resources contribute to a formula for dependence, and for maintaining what would be an otherwise be an unsustainable status quo.

 

Three main structural issues require reform in order to contribute to financial efficiency and sustainability:

 

  1. A national consensus on VET is required which will focus on competitiveness, productivity and individual achievement, and which removes the role of political affiliations from institutional management and staffing.
     

  2. Legacy issues, such as university asylum, the role of “free” public education, and the role of private higher education accreditation, must be solved.
     

  3. Bureaucratic proliferation and duplication must be reduced or eliminated. The management and administrative structure is too slow and paralyzed by a lack of responsibility, a paper-bound structure and constant duplication and authorization-seeking at every level. A leaner, IT-based system is needed, contributing towards transparency, lower operating costs and better, more flexible results.

 

VET Expenditure Summary

By our calculation, total expenditure on VET was EUR 3.5 billion in 2005, equivalent to some 1.91% of GDP (under the old GDP figures). The Central Government is the largest contributor to VET, followed by EU funding and corporate expenditure.

Client:
European Commission DG Education & Culture

Date of Engagement:
February - October 2006

Countries of Operation:
Greece

Business Function:
Human Resources

Business Sector:

Vocational Education & Training
 

Public Expenditure – Central Budget

 

Total public expenditure from the Central Government Budget is estimated at EUR 2,044 million in the 2005 budget. The total expenditure per Ministry or other central governmental institution has been documented in Annex I: VET Spending Inventory.

In compiling the inventory, we have taken a broad definition of IVET and CVET expenditure. Thus, the expenditure of the Police or Fire Departments, which concerns vocational training, has been included. The expenditure categories that have been chosen for inclusion are the following:

 

282 Compensation for Staff undergoing Training
345 Internships and Apprenticeship Compensation
355 Social Insurance for Interns and Apprentices
385 Professional Training at Public Institutions
517 Hourly Trainers and Other Instructors - Compensation

5342 Vocational Training and Education Expenditure 545 Expenses abroad, including higher institute
881 Training, Retraining and Education Compensation

 

In the case where a discrete budget exists for a government training institution, such as the Pedagogical Institute, the total expenditure for the institution has been included.

The Table of Contents of the Report is provided below:

List of Acronyms
 

  1. Overview
     

2.   The National VET System of Greece

2.1  Economic and Social Indicators 

2.2  The Greek Educational System 

2.3  Educational Infrastructure 

          2.3.1  School Units

          2.3.2  Enrolment 

          2.3.3  Teaching Staff

          2.3.4  Ratios 

          2.3.5  Post-secondary, Non-tertiary Education

          2.3.6  Tertiary Vocational Education

          2.3.7  Tertiary University Education 

          2.3.8  Lifelong Learning 

3. Country Fact Sheet

          3.1  Methodology: Sources, Coverage, Assumptions 

          3.2  Summary of National VET Expenditure

          3.3  Public Expenditure – Central Government

          3.4  Public Expenditure – Public Investment Budget

          3.5  Public Expenditure – Regional Budget 

          3.6  Public Expenditure – Prefectural Budget

          3.7  Household Expenditure

          3.8  Corporate Expenditure

                   3.8.1  ESYE Labour Cost Survey Data

                   3.8.2  LAEK Contribution 0.45%

                   3.8.3  Corporate Contribution to EU co-financed Programmes

                   3.8.4  Total Corporate Expenditure on VET

          3.9  EU Expenditure

          3.10 National Spending on IVET and CVET

          3.11 Public Expenditure Type by VET Level

4. Actors Involved in VET

4.1  Ministry of Economy and Finance

4.2  Ministry of National Education and Religious Affairs

          4.2.1  Organisation for Vocational Education and Training (OEEK)

          4.2.2  Vocational Training Institutes (IEKs) 

          4.2.3  Technical Vocational Educational Schools (TEEs)

          4.2.4  Technical Educational Institutes (TEIs or A TEIs)

          4.2.5  Higher Non-University Education

          4.2.6  Other VET Institutions

          4.2.7  Other VET Administrative Institutions
 

4.3 Ministry of Labour & Social Affairs  

         4.3.1  Manpower Employment Organisation (OAED)

         4.3.2  Vocational Training Centres (KEKs)

         4.3.3 Fund for Employment and Vocational Training (LAEK)

4.4  Regional & Local Authorities

        4.4.1  Regions

        4.4.2  Prefectures

        4.4.3  Municipal Authorities

4.5  Households

4.6  Companies

5. Financing Trends

6. Financing Mechanisms

6.1  Legal Framework

         6.1.1  History and Current Politics

         6.1.2  The Draft Law on Secondary Vocational Education

6.2  EU Funding

         6.2.1  Management Structure

         6.2.2  OP Education and Initial Vocational Training (EPEAEK) 

         6.2.3  OP Employment and Vocational Training (EPAEK) 5

6.3  Innovative/Alternative Financing Mechanisms

7. Sustaining VET Attractiveness

8. VET Market

9. Insights into Best Practices

10. Current Challenges and Impact on Financial Efficiency

10.1 Lack of a National Strategy on Education and Training

10.2 Legacy Issues

10.3 Administrative Complexity

10.4 Other Issues

 

11. List of Sources

12.  Annexes

Annex I: National Inventory of VET Spending

Annex II: Focus on Kozani

Annex III: EU Funding Description

Annnex IV: Summary of OP Employment & Vocational Training