Vocational education suffers loss as a result of civic integration

From a financial point of view, 2007 was a poor year for vocational and adult education in the Netherlands. The financial position of regional training centres (Regionale Opleidingscentra, or ROCs), in particular, deteriorated. One reason for this was the introduction of the new civic integration act on 1 January 2007.

Vocational and adult education: operating result

Operating result down

After deduction of all costs, subsidised vocational and adult education was left with an operating surplus of 20 million euro. This was the lowest level for years. One third of educational institutions in this sector closed 2007 with an operating loss.

Loss as a result of financial consequences of civic integration act

Many ROCs suffered losses on adult education because the introduction of the civil integration act on 1 January 2007 had direct financial consequences for subsidised education, and particularly for the ROCs. Because of competition with other schools, they had negotiated sharp contracts with municipalities, while some municipalities in turn had also negotiated contracts with private institutions.

Subsidised education not only lost part of its market share, but was also confronted by extra costs. This was because a much smaller number of people started a civic integration course than the schools had expected. The schools therefore turned out to have much more staff than necessary. Because of the time civic integration procedures take, and the time schools need to change their staffing policy, the effect of the new civic integration act will not yet be visible in 2008 either.

Vocational and adult education: change in net debt position

More debts and fewer assets

The financial position of the ROCs deteriorated as a result of investment in buildings, and furnishing and equipping these buildings. The centres financed these investment with savings and extra loans. They used up 150 million euro of bank balances and savings, and took out 200 million euro in loans.

Broos Brouwers