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6. FINANCING OF VET

6.1. DOMESTIC SOURCES OF VET FINANCING

Financing of VET

The share of education expenses in the gross domestic product increased at the beginning of the 90’s and was more than 6% in previous years. However, GDP and state budget has decreased by about twice their value in comparison with the end of the 80’s whereas prices have increased several times. As a result, the financing of education only manages to continues to maintain education.

In 1996 education expenses as a share of GDP was 6.5%. State financing of VET was 0.8% of GDP.

Financing of VET in Latvia is still based upon curriculum, number of students and groups. Educational institutions of Latvia are financed from the state budget, the budgets of the municipalities, as legal and physical bodies as well as from some international foundations and projects.

Institutions of higher and vocational education are mainly under the authority of central state institutions - the Ministry of Education and Science or other ministries. They are financed according to the budgetary sources of the appropriate ministries of those educational institutions.

The municipalities also have some vocational institutions, however the fees and social taxes are covered by the budget of the Ministry of Education and Science also for these institutions. Financing of VET has increased practically only in line with inflation in recent years. Financing covers expenses for maintaining an educational institution, excluding the expenses for repairs, fees for the employees of the educational and administrative staff, scholarships, and transportation expenses.

In 1997 total expenses foreseen for VET were altogether 26.71 million Lats. Of this 84.9% came from the state budget. Breakdown of the VET budget by ministries is presented in tab. 8.

Fig. 24. Education expenses of GDP

Table 8. VET budget of 1997 - breakdown by supervising ministries

 

 

Authority

 

Total budget

Out of that

Subsidies from the State budget

Own income of VET system

mil. Ls

mil. Ls

%

mil. Ls

%

Ministry of Education and Science

11,75

10,25

87,3

1,49

12,7

Ministry of Culture

2,51

2,46

98,0

0,05

2,0

Ministry of Agriculture

10,91

8,46

77,5

2,45

22,5

Ministry of Welfare (medic. schools only)

1,54

1,51

98,1

0,03

1,9

TOTAL:

26,71

22,68

84,9

4,02

15,1

 

Reforms in the principles of VET financing have begun to stimulate the policy of taxing employers to invest in VET and VET schools- and to use these investments rationally to increase the independence of schools. The financing of VET schools is planned to be based upon the number of students.

6.2. BILATERAL AND MULTILATERAL DONORS CONTRIBUTION TO THE VET REFORM

The main financial investment in the development of VET is made from international joint projects. Under these projects new VET programmes are developed with a wide basic knowledge in vocation/speciality and integrated content of general education, teachers and school managers are trained, and technical equipment is modernised.

Currently the following Phare programme projects are being realised: "Vocational Education and Training Reform" (see annex), "Business Education Reform", "Higher Vocational Education and Training Reform". The preparatory activities for access to the EU Leonardo da Vinci programme are continuing.

Management and realisation of these projects is ensured through the Agency for Vocational Education Development Programmes (VEDP) established by the Ministry of Education and Science.

Together with German assistance the "Development of the Centre for Vocational Education" and "Entrepreneurship in agriculture" is being realised.

PHARE programme "Vocational Education and Training Reform"

Programme period: May 1995- December 1997

Programme budget: 3 MECU

Aim of the programme: To stimulate the reform of VET system, structure and content, modernisation of education process and improving education quality.

Programme tasks:

  • to develop modern curricula in 10 profiles for secondary level vocational education and training according to labour market requirements (tourism- hotel and restaurant services, rural tourism; agriculture: agribusiness, forestry, meat and milk processing; building and construction; heating, water supply and sanitation, interior/exterior works; metal work; car mechanics; health care: nursing education, social care) and 5 general education subjects (applied informatics, English language, communication skills, environment sciences, small business development)
  • To begin the implementation of new curricula in 18 selected pilot schools
  • To train teachers, to provide consultations in curriculum development methodologies and in the development of teaching materials
  • To organise the development of new teaching materials
  • to organise partnerships for pilot schools with schools in EU member countries
  • To provide pilot schools with the necessary technical equipment and teaching materials, to train teachers in the effective use of new equipment in the teaching process
  • To promote the improvement of vocational education development strategies and policies

Results of the programme:

Curricula for 10 profiles for secondary level vocational education and training developed, implementation of new curricula in 18 selected pilot schools has started. New teaching materials developed, pilot schools have received the necessary technical equipment and teaching materials. Conceptual framework of VET reform and strategic programme of reforms developed.

PHARE programme "Business Education Reform Programme"

Programme period: August 1996- December 1998

Programme budget: 1 MECU

The Business Education reform in Latvia has been initiated under a Latvian- Danish bilateral project. During the period from autumn 1994 to spring 1997 3-year business education curricula for 9th grade graduates and a 1-year curriculum for 12th grade graduates have been developed. 15 schools are running these programmes. All of them have implemented a 3-year curriculum, 6 of them are running a 1-year curriculum.

Aim of the programme: To help the Latvian Government to reform and develop the business education system, including secondary and higher professional business education and further education.

Programme tasks:

  • To develop 2-year business curricula at college level according to the requirements of the labour market with specialisation in 4 profiles: 1. Economy. Accounting and taxation; 2. Marketing and sales; 3. Transport and logistics; 4. Marketing and advertising.
  • To develop programmes for adult vocational education
  • To prepare proposals for the introduction of multi-level business education in vocational education and training and to begin implementation
  • To train teachers, to provide consultations in curriculum development methodologies and in the development of teaching materials
  • To provide training for school managers and administrative staff
  • To provide pilot schools with the necessary technical equipment and teaching materials, to train teachers to make effective use of the new equipment in the teaching process
  • To expand the network of schools providing business education equally across the territory of Latvia
  • To popularise business education

Results of the project:

Draft concept for professional business education developed, 2-year business curricula at college level and programmes for adult vocational education created, teachers and school managers trained, pilot schools have received the necessary technical equipment and teaching materials, the network of schools providing business education has been expanded.

PHARE programme "Higher Vocational Education and Training Reform Programme"

Programme period: May 1997- December 1998

Programme budget: 1,5 MECU

Aim of the programme: To promote further development of Latvia’s human resources and institutions according to the requirements of a modern democratic society and market oriented economy in the spheres of secondary, post-secondary and higher professional education

Programme tasks:

  • Further development of 4-year professional curricula commenced under the previous "Vocational Education and Training Reform Programme" and completion of development of new teaching materials
  • The provision of 18 pilot schools with the necessary technical equipment to assist the teaching of general subjects
  • Development of higher professional education strategy
  • Development of a methodology for a national occupational and educational standards system
  • Strengthening of the capacity of the Centre for Vocational Education
  • Development of the concept for regional education and examination centres

Results of the project:

Pilot schools have been provided with the necessary technical equipment, new teaching materials have been developed, the conditions and requirements for qualification examinations have been developed, the draft concept for strategy of higher professional education and the draft concept for methodology for national occupational and educational standards system have been developed, the plan for the development of the Centre for Vocational Education has been defined, and the concept for regional education and examination centres has been developed and 2 pilot centres selected.

PHARE programme "Vocational Education and Training 2000"

Programme period: June 1998- 2000

Programme budget: 1,5 MECU

Reform programme "Vocational Education and Training 2000" based on the results of the reforms of secondary and higher vocational education carried out in the recent years. The target of the programme is the further development and implementation of national strategy for secondary and post-secondary vocational education, including the modernisation and reform of the higher vocational education system.

Aim of the programme: To help the Latvian Government to ensure the development of an effective, competitive and flexible labour force, able to compete in the EU market.

Programme tasks:

  • Development of education policy
  • Improvement of the mechanisms of management and administration of VET
  • Development and implementation of national occupational and educational standards system
  • Development of efficient vocational education management system
  • Arrangement of the content of education at college level

Results of the project:

New model for administration of Ministry of Education and Science (MES) have been developed, 40 employees of MES have been trained in strategic planning, management and administration, office equipment has been modernised in 6-7 departments of the MES. 2-3 functioning models of standard committee have been developed, analysis of the requirements of labour market in 2-3 branches has been carried out, qualification standards have been developed in 2-3 branches, 2-4 college level study programmes have been developed.

Latvian- German joint project "Development of the Centre for Vocational Education"

Programme period: 1996- 1998

Aim of the programme: To improve the function of the Centre for Vocational Education and to improve the professional skills of its employees

Programme tasks:

  • analysis of vocational programmes with regard to requirements of labour market and the development of new education programmes
  • development of a quality control system for education results. Provision of examination centres with methodological materials
  • organisation of the development and publication of teaching materials
  • Training for teachers and employees of the Centre for Vocational Education

Results of the project:

New education programmes have been developed, development and publication of teaching materials has been carried out, requirements for professional qualifications have been defined, the methodological and material basis for examination centres has been developed, teachers and employees of the Centre for Vocational Education have received training.

Latvian German joint project "Entrepreneurship in agriculture"

Programme period: 1994-1996

Programme budget: VET TRANSFORM programme (approx. 25 thousand Lats in 1998)

Aim of the programme: To ensure the agricultural sector of Latvia receives qualified specialists with up-to-date education in agricultural technologies and entrepreneurship and ability to manage agricultural enterprise independently.

Programme tasks:

  • development and implementation of an education programme
  • organisation of qualification courses
  • development of teaching and methodological materials
  • purchase of technical equipment
  • teacher training

Results of the project:

Implementation of the programme in agricultural secondary "specialised" schools (tehnikums) in Laidze, Priekuli and Smiltene. Adaptation of the programme for 4-year education in agricultural secondary "specialised" schools (tehnikums) in Smiltene, Saulaine and Vecbebri.

Participation in EU programme Leonardo da Vinci

In December 1996 the agreement was signed with the EC on the activities involved in the Leonardo da Vinci programme. This is an EU programme for developing VET. The mechanism of operation of this programme is project based at the level of the state and at the EU for:

  • pilot projects for creating teaching materials and methods for education programmes;
  • student exchange
  • research and analysis of problems.

Preparatory activities for participation in the Leonardo da Vinci programme have been carried out from 1996 onwards. Office premises have been arranged, employees have being trained. Information events on the progress of the programme and on the possibilities of participation have been organised .

Financing for preparatory activities:
415 thousand ECU

Programme period: 1996- autumn 1998

Latvia entered the Leonardo da Vinci programme in autumn 1999.

Programme budget: 2 760 000 ECU

Programme period: autumn 1998- 2000

Special Preparatory Programme (SPP) for European Social Funds (ESF)

Apart from a national SPP action plan for 1998-1999, targeted at preparing administration for the implementation of ESF activities from the year 2000 onwards, the European Training Foundation will manage a Phare horizontal SPP on ESF. It is addressed at all ten applicant countries in Central and Easter Europe including Latvia. The project establishes a set of training activities focused primarily on civil servants, mainly those who will be concerned with the design and implementation of European Social Fund programmes, but it will also extend to the associated organisations which constitute the "social" partners in any given country. The first phase of activity (foreseen to start in October-November 1998) includes the training of 1-2 civil servants from the ministries of education and labour.

VET should benefit from ESF in that it will be part of the HRD component in the Strategic Planning Document within the national employment action plan and re-skilling of the labour force. The Document will be an integral part of National Development Plan within the SPP, and will be prepared during the 1999 and will identify priorities for action, key projects or lines of intervention, target groups and implementing authorities for the implementation of Funds from year 2000.

6.2.1. Consequences, possible future Phare projects.

The VEDP Agency, which manages all Phare initiatives in the field of VET, during the annual round for Phare 1999 programming, has prepared and presented for the Ministry the "Regional Training Centres" programme application, which the Ministry submitted to the Ministry of Finance.

The immediate objectives of the proposal can be summarised as:

  1. To contribute to regional development policies in the area of human resources development as a decisive element in competitiveness, growth and the expansion of employment.
  2. To contribute to the mobilisation of human resources by increasing the availability of qualified human potential with the skills needed to master changes in the labour market.
  3. To contribute to the further development of meaningful continuing training and employment promotion by the establishment of Regional Training Centres (RTC) for initial and continuing training.
  4. To raise training quality, standards and relevance to the regional labour market needs by decentralisation and rationalisation of regional training providers in the framework of RTC network/consortiums, considerably improving the training organisation and management in the regions.
  5. To support institution building in the field of initial and continuing training by establishment of the appropriate and EU compatible certification and qualification awarding system and structures at national and regional levels.

The aim of the project is to enhance the capacity of the Regional Training Centres (consortia) to bring education and training systems closer to the regional economic activity, to improve the responsiveness of training providers to economic and technological developments in the regions, to develop networks and exchanges between the main stakeholders of a modern education and training system: training establishments, enterprises and local/regional self-governments, and to extend the provision of RTC educational services to adults (employed and unemployed).

Importantly, a nationally agreed concept of RTC will be prepared by the Phare 1996 programme on "Higher VET" and will be concluded by June 1999. The draft concept is already defined within the new VET law, as of the 2nd reading in Parliament. This application is to be seen as a follow-up and implementation tool of well-planned and thoroughly considered innovation.

The project involves both dimensions: institution building and investment.

To achieve this immediate objective the following actions undertaken will include

  • Regional training centres (consortia) will be set up
  • Social dialogue between regional stakeholders will be activated and institutionalised
  • Staff in a selected number of regional training centres (consortia), regional governments and employer’s and employees organisations will be trained to raise the level of organisation, planning and management of initial and continuing training in the regions and to meet regional labour market training needs. The topics will include - needs identification in dialogue with social partners (local employers, employees and their organisations) and local authorities, modular curricula for adults, training methods, assessment etc.
  • Equipment will be upgraded at a selected number of regional training centres to bring the training environment closer to the work of life

Another aim of the project is to make operational the certification and qualification awarding structures for skills acquired in initial and continuing education (on-the-job and unemployed training) . This means that the nationally agreed system, conceptually developed and, piloted by the Phare 97’ programme " VET 2000" will be implemented by the establishment of regional and/or a central network of qualification award bodies.

This will be achieved by following activities:

  • Qualification award bodies (branch committees) will be set up
  • Staff of the qualification award bodies (branch committees) and staff from relevant training providers will be trained in methodological aspects of qualification awards (assessment and certification). Training will carried out through twinning arrangements with similar institutions (networks) in the EU

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