1 Introduction

The financing of vocational education is of increasing concern to governments as well as, in many countries, to industry. This renewed interest is often due to adverse economic and financial conditions, but it is also linked to the search for cost-effectiveness in a context of intense international competition.

Over the past decade many countries have been forced to introduce economic adjustment and stabilisation policies. Such programmes have had serious effects on patterns by which governments finance education (Samoff, 1994). In many cases, adjustments led to drastic measures aimed at minimising government spending and transferring costs to other actors. This orthodox policy has not left vocational education unscathed. In this context, higher unit costs constitute an additional handicap in the financing of training.

It is difficult to measure the bulk of spending allocated to vocational education and training. Official data, such as those published by UNESCO, usually refer to central government expenditures, overlooking spending made by decentralised units, such as local governments which, in certain countries, may play a significant role in financing training. In addition, the integrated nature of secondary education in some systems does not allow for the easy differentiation between the vocational and general components. In fact, the lack of clear definitions makes it difficult to produce comparative data. Finally, a large share of investment in vocational education, by companies and individuals, often remains invisible. As data on the different sources of financing are not always recorded in an exact manner, it is possible that the overall financial effort involved in training is underestimated.

In a context of financial scarcity, vocational education has to provide clear evidence of economic and social returns. In many countries, such evidence is lacking, which is threatening the sustainability of the system and leading to a thorough questioning of vocational education. At the same time, in a period of high unemployment, political pressure to expand vocational education often becomes more intensive.

Vocational education has been an important component of international assistance to education (Middleton; Ziderman, 1993). However, project support has often been preferred to a more integrated sectoral approach. Recent shifts in international assistance seem to seek sustainability through a long- term strategic approach. Current directions include institutional capacity-building, strengthening private training and training by the employer, improving the management and efficiency of public institutions as well as their capacity to raise funds. At the same time, support for general secondary education seems to be considered as a priority for the fostering of flexibility, the increasing of “trainability” and the achievement of equity (Hallak, 1990).

Although the reference to so-called ‘models’ is frequent, the overall management and co-ordination of national training systems is quite varied, ranging from centralised planning to market-oriented regulation (Caillods, 1994). Similarly, financing training modes are very diverse and far more complicated than a simple choice between public spending and earmarked payroll taxes. Such a diversity, combined with the constant evolution of national systems, makes overall comparisons somehow difficult. However, it is worthwhile identifying and analysing the range of options available. With this in mind, this chapter reviews the main issues and focuses on selected country experiences, illustrating different kinds of strategies and instruments involved in the financing of vocational education.

The assumption of this chapter is that funding policies for vocational education should not be considered as purely a combination of financial devices and mechanisms commanding the collection, allocation and spending of resources. They also reflect and have an impact on the distribution of authority throughout the system: controlling finance is always a major asset in influencing the decision-making process (Atchoarena, 1994). Furthermore, if one also considers that the training system must prove highly adaptable to economic, technological and organisational change, the financial participation of various kinds of partners and, in particular, industry, may not only increase the availability of funds but, eventually, have a positive impact on training volume and content.