Rimantas Dumčius Programme manager Public Policy and Management Institute

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2. ESF investment into development of non-formal adult education in Lithuania:increasing effectiveness and assuring equal opportunities Rimantas Dumčius Programme manager Public Policy and Management Institute

3. Content of the presentation • This presentation is based on the study “The development of non-formal education in Lithuania: analysis of financing alternatives” prepared by the PPMI for the Ministry of Education and Science (2007). • It consists of: • Description of the main problem; • Structure & methods of the analysis; • Conclusions & recommendations for the ESF programmes in 2007-2013. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

4. The main problem of NFAE in Lithuania Source: EUROSTAT Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

5. Reasons for under-investment in NFAE (1) • There are several sources of market failures that may lead to sub-optimal levels of participation in NFAE: • Labour market imperfections: • Employers do not invest in training as their investments are not duly guaranteed (eg. poaching): • to improve the labour code. • Employees do not participate in training as acquired competencies do not (will not) bring higher wages to them: • to develop existing vocational orientation system. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

6. Reasons for under-investment in NFAE (2) 2. Training market imperfections: • Lack of information about training services, their quality and general value: • to raise the quality of pre-school and general education, develop VET. • The non-contractibility of training: consumers can easily monitor the quantity, but not the quality of training: • regulate and monitor the quality of training services. • Imperfect competition: existing barriers to entry for new service providers: • stimulate competition among providers by giving individuals greater choice (liberalise the market). • Missing markets: under-provision of services for which consumers are ready to pay (eg. remote access): • public production/provision of services or subsidies. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

7. Reasons for under-investment in NFAE (3) 3. Financial market failures that make it difficult for individuals to borrow in order to invest in their human capital: • State financial incentives to increase private investment in NFAE. • However: in 2007-2013 Human resources development operational programme great amount of funds is foreseen: • min 292,800 persons to be trained; • ~ 1.5 billion LTL for 2007-2013 or >200 million LTL per year. • The main problem: • How to use these funds in the most efficient way? • How to assure equal opportunities? Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

8. How to ensure “efficient use of resources”? • The maximum output is obtained from given inputs: • Not to replace, but to stimulate private investments. • The optimal combination of means is selected given existing consumer possibilities and tastes: • Prior to approval of financial rules one should evaluate the needs and possibilities of the target groups • Consumers allocate their income in a way which maximizes their utility: • To assure the proper information process. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

9. How to “ensure equal opportunities”? • Eliminate labour market and training market imperfections in order to achieve: • Greater confidence among employers and employees, among service providers and consumers; • Healthy competition among businesses for talent in the labour market (higher price for competences) and among service providers (training services provided at lower cost). • Neutralise financial market failures: • State subsidies or subsidised loans should be allocated first of all to those members of society, who have limited or no resources to pay for education and training services. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

10. Structure of the research • First, three main aims in the area of non-formal adult education are indicated; • Then, the following aspects are analysed for each aim: • Major training inequalities; • The present financing system and its drawbacks; • Best possible alternative for 2007-2013 according to the following criteria: • Impact on effectiveness; • Impact on equal opportunities; • Complexity of implementation. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

11. Methods • Multi-goal qualitative cost-benefit analysis is the decision making tool…: • …applied when qualitative costs and benefits are as important as the quantitative ones’; • …which allows to evaluate, how the implementation of different alternatives can possibly help to reach several inconsistent goals. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

12. Basic financing alternatives • Supply-side financing (subsidies provided to service providers): • Result-based schemes; • Non result-based schemes. • Demand-side financing (support provided to the consumers of training services and/or their employers): • Grants-based schemes; • Tax-based schemes; • Government guaranteed loans. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

13. The aims for non-formal education of adults • To raise the overall level of life long learning; • To assure equal learning opportunities to persons, who experience social exclusion; • To improve the qualifications of employees in public administration and public services. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

14. Aim1: “to raise the level of life long learning”The major training inequalitiesThe present financing systemThe best alternative for 2007-2013Recommendations

15. The major training inequalities • Blue-collar employees as well as employees in small and micro enterprises have relatively very few non-formal learning opportunities; • The levels of participation in non-vocational and non-job oriented adult learning is relatively low among all adult groups. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

16. The present financing system • The present financing system supports both supply and demand side of training... • ...however it does not assure effectiveness, efficiency and equal opportunities of ESF investment: • EU structural support has (so far) had no visible effect on the major training inequalities mentioned above; • Private sector financial contribution to non-formal education has remained too low to have a significant and lasting effect on overall life-long-learning levels. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

17. The best alternative for 2007-2013 • Direct demand as well as supply side financing through the improved EU structural support system; • Generous amounts of EU support are expected; • The best alternative - tax-based schemes would require substantial reforms. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

18. Recommendations • Lower rates of assistance and higher private contributions. • Prioritised training of blue-collar employees. • Prioritised support to training through broadly represented business associations and trade unions, • including investment in their capacity to take care of training needs of their sector or profession. • Increased access to training for employees of small and micro enterprises. • Increased involvement of employers in the planning and implementation of the supply side projects. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

19. Aim 2: “to assure equal learning opportunities to persons who experience social exclusion”The major learning inequalitiesThe present financing systemThe best alternative for 2007-2013 & recommendations

20. The major learning inequalities • The socially excluded by definition have little or no access to learning. • No official statistics for most of the socially excluded groups and targeted research is scarce. • The overall cost of learning for socially excluded is always higher. • the members of the group are difficult to identify; • disability or other complex learning difficulties; • notably lower motivation to learn. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

21. The present financing system • The current financing system is poorly adapted to the needs of the target group: • Supply side financing from the state budget is too low to assure financial stability and adequate coverage of service providers; • ESF-subsidised projects loose flexibility due to heavy administration system. • The lack of adequate indicators, support criteria and monitoring: • Service providers tend to target the easiest cases of exclusion. • NGOs are not involved in the mainstream policy delivery; evidence from Equal shows that they are sometimes much better prepared to address the needs of the socially excluded. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

22. The best alternative for 2007-2013 & recommendations • Supply-side model with: • More active involvement of and capacity building for NGOs; • Engagement with employers in ensuring the relevance of training and individual traineeship or work placements; • Capacity building and more stable financing for weak public service providers; • More flexible ESF project administration. • Result-based supply-side financing models could become viable only when: • The worst circumstances and types of exclusion are eliminated; • The competition between service providers becomes realistic. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

23. Aim 3: “to improve the qualifications of employees in public administration and public services”The main findingsThe recommendations for 2007-2013

24. The main findings • Significant differences in the legal regulation of qualification improvement across different sectors of public administration and public services; • Training inequalities arise not only among the employees of different sectors, but also among those employed in the same sector; • Training centres established by the different ministries retain the dominant position in the training market. • Generally poor training needs assessment and planning within institutions. Training often depends on many incidental circumstances. • The training financed from the ESF and other public sources is poorly co-ordinated. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

25. Recommendations for 2007-2013 • Individual projects financed by the ESF should be integral part of broader qualification improvement programmes. The same training quality assurance mechanisms should be applied. • The planning of training needs should be separated from financing and provision of training. • The capacity for identification of training needs and planning of training in public administration and public service providers should be improved. • Training quality assurance mechanisms should be introduced and equally applied across all public administration and public services. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

26. Institutional framework for financing non-formal adult educationThe main challengesThe policy cycle, key institutions and their functionsRecommendations

27. The main challenges • Many different stakeholders are involved in the policy definition, design and implementation process: • There is a need for a better co-ordinated action. • Financing of non-formal adult education is relatively new to Lithuania’s education policy: • There is a lack of well-developed public policy instruments as well as administrative capacity. • Funds for non-formal adult education will increase considerably in 2007 - 2013. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

28. The policy cycle, key institutions and their functions sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

29. Recommendations • Strengthen the coordination of non-formal adult education policy. • Create proper administrative capacity for quality assurance and methodological support functions. • Strengthen the provision of vocational guidance. • Create administrative capacity for validation and recognition of competencies acquired in non-formal settings. • Improve the existing legal framework in order to reduce the risk to private investment in training. Administrative capacity should become adequate to disburse unprecedented public funding for training in both an efficient and equitable way. Rimantas Dumčius sdafasdfasdfasdf ESF investment into development of non-formal adult education in Lithuania

30. Thank You! Public Policy and Management Institute Viešosios politikos ir vadybos institutas http://www.vpvi.lt sdafasdfasdfasdf