Scottish Government

RESEARCH ON APPROACHES TO PUBLIC FUNDING AND DEVELOPMENT OF TERTIARY EDUCATION WITHIN SELECTED OECD NATIONS

CHAPTER SIX

THE SYSTEM OF POST-COMPULSORY EDUCATION IN GERMANY

Background

6.1 Since 1990, the Federal Republic of Germany has been made up of 16 Länder: Baden-Württemberg, Bayern, Berlin, Brandenburg, Bremen, Hamburg, Hessen, Mecklenburg-Vorpommern, Niedersachsen, Nordrhein-Westfalen, Rheinland-Pfalz, Saarland, Sachsen, Sachsen-Anhalt, Schleswig-Holstein and Thüringen. The 11 Länder in western Germany of the Federal Republic were reconstituted or established after 1945. In the Soviet occupation zone (later the GDR) the Länder Brandenburg, Mecklenburg, Sachsen-Anhalt, Sachsen and Thüringen were re-formed. During a move to centralise the administrative system governing the entire state, the GDR, only in existence since 1949, abolished the Länder in 1952 and replaced them with 14 districts. The five eastern Länder were reconstituted under the Establishment of Länder Act (Ländereinführungsgesetz) of July 1990.

6.2 As soon as the unity of the German state had been established attempts were made to bring the political, economic and social conditions in the Länder in eastern Germany into line with those in the western Länder of the Federal Republic. The major policy tasks facing the united Germany are to find a solution to the economic and social problems that are the legacy of the former German Democratic Republic (DDR).

6.3 Despite low birth rates, the population has grown by a total of 4 million since 1970. This is due to the number of migrations as, since 1970, some 6.5 million more people have immigrated to Germany than emigrated from Germany. In 2001, 879,200 people immigrated from abroad, 606,500 left Germany. This represents a growth of 272,700 people. On average between 1991 and 1996, Germany's migration excess was just below 500,000 per year. In 2001, some two-thirds of immigrants to Germany came from Europe, almost a third of these from European Union member states.

6.4 In order to bring about German unity in the areas of culture, education and science, the Unification Treaty (Einigungsvertrag) concluded between the Federal Republic of Germany and the DDR on 31 August 1990 contains fundamental provisions which aim to establish a common and comparable basic structure in education - particularly in the school system - and a common, though differentiated, higher education and research landscape in the Federal Republic of Germany.

The Post-compulsory education system

6.5 As of January 2003 there were the following types of higher education institutions spread throughout the Federal Republic of Germany:

• Universitäten, Technische Hochschulen Technische Universitäten, Pädagogische Hochschulen Theologische Hochschulen;
• Kunsthochschulen and Musikhochschulen (colleges of art and music);
• Fachhochschulen

6.6 As far as vocational training is concerned, the vocational schools are the exclusive responsibility of the Länder and in-company vocational training that of the Federation. Within the Federal Government, the Federal Minister of Education and Research is responsible for co-ordinating issues of in-company training, whilst responsibility for adopting regulations lies with the relevant individual ministries. The Federal Institute for Vocational Training (Bundesinstitut für Berufsbildung), brings together representatives of employers, trade unions, the Länder and the Federal Government on an equal footing. The Institute advises the Federal Government on all vocational training matters. It is here that training regulations (Ausbildungsordnungen) are prepared for the in-company part of vocational training. These training regulations are then coordinated with the framework curricula Rahmenlehrpläne for the Berufsschule between the Federal Government and the Länder (see section 6.16).

6.7 At the level of the Länder vocational training committees are set up which are composed of employers, trade unions and ministerial representatives. They advise the governments of the Länder on vocational training matters.

6.8 In many training companies, the elected representatives of the employees have a say in the planning and conduct of vocational training and the appointment of instructors. This however depends on the size of the company and whether there is a works council operating in the firm.

6.9 Most of the training companies are private training organisations. Currently, some 24% of German companies train in the Dual System (see section 6.36). Not all companies have the entitlement to train (in the craft sector this still depends in most cases on the master qualification). In the new federal states public and private training providers seek to meet unmet demand and are supported by the Federal Labour Agency (Bundesagentur für Arbeit)

6.10 As a rule, institutions of higher education have the status of a public-law corporation and are public institutions under the authority of the Länder. They can also be established with a different legal form, although they still lie within the umbrella of the federal state governments' jurisdiction. They have the right of self-administration within the framework of the law. The higher education institutions draw up their own statutes (Grundordnungen) which require the approval of the Land in which they are situated. Within the Land governments, responsibility for the higher education institutions lies with the ministries responsible for science and research. In addition to the higher education institutions to which access is open to all, there are some specialised institutions with restricted access which are maintained by the Federation and the Länder. These include the universities for the Federal Armed Forces and Fachhochschulen for federal and Land public administration. Finally, Germany has several church-run institutions of higher education, as well as some privately maintained higher education institutions.

6.11 The general principles for the legal position of higher education institutions and for the academic and creative arts, including the participation of all members of these institutions in self-administration are laid down in the Framework Act for Higher Education (Hochschulrahmengesetz). It is on the basis of these principles that the organisation and administration of higher education institutions are regulated in detail by Länder legislation for those higher education institutions that come within the purview of each Land. The Länder's freedom of action in the reforming of organisation and administration has been extended considerably through the amendments of the Framework Act for Higher Education of 1998 and 2002. The majority of Länder have already carried out the appropriate reforms of their Higher Education Acts (Hochschulgesetze) or are currently in the process of preparing them.

6.12 In administrative matters there is a co-operative relationship between the responsible Land ministry and the higher education institution. The latter's functions include both academic matters and governmental matters such as personnel, economic, budgetary and financial administration. Legal supervision ( Rechtsaufsicht) and, to a certain extent, academic supervision ( Fachaufsicht), the power of establishment and organisation and authority over financial and staffing matters, all lie with the responsible Land ministry or government.

6.13 In certain states such as Baden-Württemberg university reform has led to the establishment of so-called "university councils". In the case of the University of Konstanz, for example, all members of this council are "external", i.e. there is no university person involved. The council has to counsel the university rectorate and confirm important decisions.

6.14 As part of the current higher education reforms, the Länder have partly restructured the organisation and administration of their higher education institutions. The main aim of the reform is to strengthen the capacity to act and the achievement potential of the individual higher education institutions by the partial shifting of decision-making competencies from the Land ministry and the bodies of participation to the management of the higher education institution or the head of the department.

The System of Higher Education in Germany

6.15 See Appendix 2.5 for the structure of the education system in Germany.

Parliament and Government

6.16 As of 31 December 2001, Germany has been divided regionally and for administrative purposes into 16 Länder (including three city states), 29 administrative regions (Regierungsbezirke), 439 districts (Kreise) comprising 116 municipalities with the status of a district (kreisfreie Städte) and 323 rural districts (Landkreise) and 13,416 municipalities (Gemeinden). The city states of Berlin, Bremen (two municipalities) and Hamburg are also counted as local authorities, as are all municipalities with the status of a district and inhabited areas not belonging to any municipality.

6.17 The Bundestag has formed committees for specific subject areas. Education and research are dealt with by the Committee on Education, Research and Technology Assessment. Of the Bundesrat's 16 committees, the Cultural Affairs Committee, the Internal Affairs Committee and the Committee for European Union Issues are the main committees responsible for science and education. Within the Federal Government, it is the Federal Ministry of Education and Research (BMBF) that is responsible for policy, coordination and legislation regarding out-of-school vocational training and continuing education, training assistance, the general principles of the higher education system, as well as the expansion and construction of institutions of higher education. Education and science are also aspects involved in the work of the Federal Ministry for Foreign Affairs, the Federal Ministry of the Interior, the Federal Ministry of Justice, the Federal Ministry of Defence, the Federal Ministry of Economics and Labour, the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth and the Federal Ministry for Economic Cooperation and Development.

6.18 The scope of the Federal Government's responsibilities in the field of education is defined in the Basic Law, according to which the Federation bears responsibility particularly for the regulations governing the following domains of education, science and research:

• in-company vocational training and vocational further education;
• framework responsibility for the general principles of higher education;
• training assistance;
• promotion of scientific and academic research and technological development, including the promotion of up-and-coming academics;
• youth welfare;
• legal protection of participants of correspondence courses;
• regulations on entry to the legal profession;
• regulations on entry to medical and paramedical professions; and
• employment promotion measures; occupational and labour market research.

6.19 In addition to the division of responsibilities described above, the Basic Law also provides for particular forms of co-operation between the Federation and the Länder such as in the joint task of the Expansion and construction of institutions of higher education, including university clinics (Art. 91a). Federal and Land authorities can also co-operate, on the basis of agreements, in educational planning and in the funding of research projects and institutions of supra-regional importance (Art. 91b).

6.20 A major characteristic of the federal state is that both the Federation and Länder have the status of a state. One core element of this status is, according to the constitutional order laid down in the Basic Law, the so-called cultural sovereignty (Kulturhoheit), i.e. the predominant responsibility of the Länder for education, science and culture. This element is at the heart of their sovereignty. This means in principle that each Land bears responsibility for its educational and cultural policy, with the proviso that, in accordance with the federalist principle, they lend expression to the historical, geographical, cultural and socio-political aspects specific to their Land and thus to diversity and competition in the education system and in the field of culture.

6.21 Educational and cultural legislation and administration is therefore primarily the responsibility of the Länder. With a view to co-ordinating cooperation in the areas of education and training, higher education and research, as well as cultural matters, the Länder established the Standing Conference of the Ministers of Education and Cultural Affairs ( Ständige Konferenz der Kultusminister der Länder) in 1948, which has served as a forum for permanent cooperation ever since.

6.22 The local authorities are responsible for adult education and youth welfare and help promote and support cultural activities by providing over half of public expenditure in this area. In order to meet these responsibilities, local authorities are entitled to levy their own taxes and charges (property and trade tax, consumer and expenditure taxes). The local authorities also receive a proportion of wage and income taxes, as well as of turnover tax.

NDPB

6.23 The particular body responsible for joint educational planning and research promotion between the Federation and the Länder is the Commission for Educational Planning and Research Promotion of the Federation and the Länder ( Bund-Länder-Kommission für Bildungsplanung und Forschungsförderung), in which the Federal Government and the governments of all Länder are represented with the same number of votes.

6.24 Cooperation extends to the formal creation of training ordinances. Processes on all levels have to be co-ordinated and the governments of the federal states, through the Conference of Education Ministers ( Kultusministerkonferenz), are involved since training ordinances are the basis for the occupational part of the school curriculum used in the part-time vocational school. The Vocational Training Act has put the formal responsibility for training ordinances in the hands of the Federal Ministry of Education and Research (BMBF). However, in material terms, a training ordinance is never the sole product of the government's definition of the terms for initial training in companies. In fact, training ordinances are the result of comprehensive consultations among all social and political groups who have a substantial interest in vocational training, with all employers' organisations and trade unions the principal consultees. It is the job of the Federal Government, through the Federal Institute for Vocational Training (BiBB), to support and administratively coordinate these consultations, which normally stretch over a couple of years.

Providers of Higher Education

6.25 The overwhelming majority of higher education institutions in the Federal Republic of Germany are state-run institutions maintained by the Länder. The Basic Law does not expressly regulate the establishment of non-public higher education institutions. However, their establishment is permitted in principle pursuant to the general guarantee of the freedom of art and scholarship, research and teaching enshrined in the Basic Law (Art. 5, Paragraph 3). The Framework Act for Higher Education (Hochschulrahmengesetz) of the Federation and Länder laws governing higher education stipulate what minimum requirements have to be satisfied if non-public institutions of higher education are to be recognised by the state.

6.26 The Higher Education Institutions Construction Act (Hochschulbauförderungsgesetz) of 1969 aims to develop a comprehensive framework for the expansion and construction of institutions of higher education, taking into account supra-regional aspects, including the geographical distribution of the institutions. The Higher Education Institutions Construction Act regulates cooperation between the Federation and the Länder in carrying out the joint task of Expansion and construction of institutions of higher education on the basis of Article 91a of the Basic Law. It makes provisions for the procedure of joint outline planning.

6.27 Under the Higher Education Institutions Construction Act, the aim of the Federation and the Länder in carrying out their joint task must be for the institutions of higher education to form a coherent system in terms of their functions, range of disciplines, number, size and location, which guarantees an adequate and balanced range of training and research opportunities.

6.28 The Fernuniversität (comprehensive university for distance studies) in Hagen, which was founded in 1974 as a comprehensive university of the Land of Nordrhein-Westfalen, is the sole university in the German-speaking world to offer courses of study by distance learning only and is the largest provider of distance learning facilities at university level in Germany.

6.29 The regionalisation of higher education is viewed as an aspect in the guaranteeing of equal opportunities for access to study. Accordingly, since 1960 a range of new universities have been set up in the formerly sparsely populated fringes of the Länder in western Germany, which used to be short on institutions of higher education. Constance, Trier, Passau, Bamberg and Bayreuth are typical examples of such peripherally-situated new institutions of higher education.

6.30 Equally, an avowed aim of the process of reorganising the higher education landscape in the Länder in eastern Germany from 1990 onwards was to relieve the concentration of higher education institutions in a few places and to attain a regionally balanced range; the newly established Fachhochschulen in the Länder in eastern Germany are making a particular contribution to this objective. Brandenburg and Mecklenburg-Vorpommern in particular needed to increase higher education provision.

6.31 Fachhochschulen (universities of applied sciences) were introduced in 1970-1971 as a new type of institution in the system of higher education in the Federal Republic of Germany. They fulfil their own specific educational function, characterised by a practice-oriented bias in the teaching, a usually integrated semester of practical training, and professors, who have, in addition to their academic qualifications, gained professional experience outside the field of higher education. In 2000, a relatively high proportion of them, 52 out of 185 Fachhochschulen, were not publicly maintained, but were to a large extent subject to the same legal provisions as state Fachhochschulen. They vary considerably in terms of size, number of students and number of courses of studies, and consequently the individual Fachhochschulen have a specific regional character or particular area of specialisation. A special role is played by the 29 Fachhochschulen for public administration Verwaltungsfachhochschulen which train civil servants for careers in the so-called higher level of the civil service. They are maintained by the Federation or by a Land.

6.32 The characteristic features of the design of the courses of study and the organisation of teaching and studying at Fachhochschulen are the particular emphasis on practical application and the closer links with the requirements of the professional world. The semesters spent outside the institutions to gain practical experience Praxissemester are a vital feature. The teaching staff and course contents at Fachhochschulen are linked with applied research and development projects, which are characteristic of this type of institution.

6.33

In summary, study courses in the following areas of study are taught in the Fachhochschulen:

• Engineering sciences
• Economics/economic law
• Social work, social services
• Public administration, administration of justice
• Information technology, computer science
• Design
• Mathematics
• Information and communication studies
• Nursing and management in the public health system.

6.34 Overall, the range of regional opportunities for higher education studies has increased considerably over the past 30 years, with Fachhochschulen playing a particularly important part in this process. Accordingly, there is now a dense network of universities and Fachhochschulen in the west of Germany along the Münster/Bochum/Frankfurt/Stuttgart line, and in eastern Germany along the Magdeburg/Halle/Leipzig/Dresden line. These lines connect regions with high population densities. Another concentration of institutions of higher education is to be found in the major conurbations of Hamburg, Berlin and Munich. In addition, there are large areas in the north and south-east of Germany with little higher education provision, in keeping with the low population densities in those areas.

6.35 A comprehensive breakdown of HEIs is shown in Table 6.1.

Table 6.1 Institutions of Higher Education by Type and Land (as per the 2001/2002 winter semester)

Source: Grund- und Strukturdaten 2003

Provision of non-advanced Tertiary Education

6.36 The Dual System (duales System) is a well-known and perhaps unique feature of German vocational education. The function of the Dual System refers to initial training of school leavers in a given range of "declared trades" or "recognised occupations" (Deissinger, 2001a). Although the dualism of "learning venues" and legal responsibilities certainly is the striking feature of this "German system" of vocational training (Greinert, 1994), its working principles also comprise at least three more aspects:

• Initial training through the apprenticeship system is a well-understood and socially accepted pathway into employment as it follows a traditional pattern deeply enshrined in the ancient mode of apprenticeship (Deissinger, 1994). This means that training is workplace-led and predominantly practical by stressing the importance of work experience during the training period. It also means that the system works in accordance with skill requirements defined "around the workplace" (Harney, 1985; Deissinger, 1998).
• Despite its traditional basis and long history, the Dual System is determined by the involvement of the state that defines and protects both the nature and quality of occupational standards, as well as the legal conditions of skilled apprenticeship (Raggatt, 1988). Therefore the German "training culture" (Brown & Evans, 1994) is based on the notion that an apprenticeship should not only be dealt with as a contractual duty but should be based on an underpinning pedagogic understanding which sets it apart from "normal work".
• Since the state's function is to secure quality standards with respect to in-company training in a predominantly formal manner other social groups have a major say in the Dual System. The principle of consensus implies that public, private and semi-private institutions work together by using long-established modes of cooperation within the system and that employers and unions normally take the initiative with respect to training ordinances and their revision or modernisation (Benner, 1984; Deissinger, 2001a).

6.37 Craft sector training has a particularly strong tradition (Deissinger, 2001b) as some 570,000 young people out of the present total of the nearly 1.8 million trained in the Dual System are apprenticed in a craft company under the supervision of a master craftsman (although with a decreasing tendency) .

6.38 Since 1974, Berufsakademien, (professional academis), which are to be found in eight Länder, have provided an alternative to studying at an institution of higher education. They form part of the tertiary sector and combine academic training at a Studienakademie (study institution) with practical professional training in the workplace, thus constituting 'academic' version of the dual system. These institutions have contributed to a greater number of courses becoming available and a more differentiated structure of the tertiary sector. Berufsakademien were first set up in Baden-Württemberg as part of a pilot project and are now to be found in Baden-Württemberg, Berlin, Sachsen and Thüringen, where they are state-run, and in Hessen, Schleswig-Holstein, Niedersachsen and Saarland, where they are privately maintained state-recognised institutions. Courses offered at the Berufsakademien include, in particular, business, technology and social services.

6.39 The students at the Berufsakademien complete parallel training with a company in trade and industry, with comparable establishments in other sectors - particularly in the case of the liberal professions, or at institutions maintained by social services. During the training, periods of study at the study institution alternate with periods of on-the-job training in the training establishments. The companies bear the costs of on-the-job training and pay the students a wage, which is also received during the theoretical part of the training at the study institution.

6.40 Training at the Berufsakademie is generally divided up into two years of basic studies followed by one year of advanced studies. Each semester is divided up into on-the-job training and a theoretical part of the course at the study institution that lasts between 10 and 12 weeks. No provision is made for semester holidays within the study plans, but students receive an annual holiday entitlement of approximately four weeks on account of their training contract.

6.41 It would be wrong to describe Berufsakademien as strictly being outside Higher Education or being completely within initial vocational education. With its dual structure of learning and the cooperation between state institutions and firms, Berufsakademien lie somewhere between initial vocational training and university studies. Hailbronner (1993, p.12) characterises the Berufsakademien as a "higher vocational training institution", while Erhardt (CDU, 1994) paints the picture of a "flagship of the dual vocational training system". Berufsakademien are not vocational schools in the normal sense of the Dual System partnership, despite the integrated practical part of the training taken in cooperating firms and Berufsakademien training does not come under the Vocational Training Act (Deissinger, 1996). This is also because this particular type of training is outside the conditions of Article 28 Vocational Training Act ("principle of exclusiveness").

Governance

Development of the System of University Governance

6.42 The tradition of higher education in Germany is marked by a number of basic principles that date back to the university reform of the early 19th century, particularly to the work of Wilhelm von Humboldt. These principles include the internal autonomy of institutions of higher education despite their being maintained by the state, freedom of teaching and research, and the unity of teaching and research. These principles were abrogated during the Nazi era, but reinstated during the reconstruction of higher education in the Federal Republic of Germany founded in 1949.

6.43 Since the beginning of the 1990s, the Federation and the Länder have intensified their efforts to introduce higher education reforms throughout Germany in view of inadequate financial resources and staffing levels and the need to strengthen the management of higher education. The aim of reforming the German system of higher education is to create scope for competition and differentiation, as well as to enhance the international competitiveness of German institutions of higher education by means of deregulation, a performance-oriented approach and the creation of performance incentives.

Funding of Post-compulsory Education

Higher Education

6.44 The funding system of higher education in Germany is undergoing a period of radical change: detailed state control through the Länder is increasingly being replaced by financial autonomy of higher education institutions. For the moment, the attempted reform affects mainly the allocation of funding, without touching on the fundamental decision on the scope and direction of investment in research and teaching.

6.45 Irrespective of the reform on the allocation of funding, higher education institutions receive the majority of their financial backing from the Land concerned, which essentially also decides on the allocation of resources. Public higher education institutions are maintained by the Länder. It is they that supply these institutions with the funds they need to carry out their work from the budget of the Ministry of Education and Cultural Affairs or the Ministry of Science and Research - a total of Euro 15.3 billion in 2000.

Vocational Training

6.1 Industry provides a considerable proportion of funding for schemes under which people can obtain and improve vocational skills and qualifications. The Dual System with its 350 recognised occupations absorbs the majority of all 16-19 year olds. The number of training places offered by employers in recent decades has consistently ranged between some 600,000 and 700,000 per year. Once a training contract has been signed this means the principal financial responsibility of companies for the training process includes, besides training allowances, all direct and indirect costs such as training personnel, machinery, training administration and social insurance contributions. The fact that the "system is financed principally by employers" (NCVER, 2001, p. 38) reflects the principle of self-government re-affirmed a law dating back to the late 19th century. Therefore, companies provide training opportunities on a totally voluntary basis. In terms of the financial burden, companies shoulder the lion's share of training cost: in 2000, companies invested nearly € 28 billion into the Dual System. The average training outlay per apprentice is currently rated at € 16,435 p.a. (Beicht & Walden, 2002). For this reason cost can be found among the most important reasons which companies report for not entering training. A recent panel survey published by the German Labour Office Research Unit reports that the financial aspect of training is an issue for 38% of companies, 28.6% of companies say that training is too burdensome and complicated for them, while 12.5% complain about applicants' educational background or social skills.

6.47 In the past decade, the German Dual System has become increasingly exposed to criticism as to its obsolescence in the face of a rapidly changing economic and social environment. Moreover, both in the political and scientific community, the serious situation on the training market, above all in the east of Germany, has emerged as a permanent issue of public concern. In 2002, the task of providing all applicants with a training place was once again associated with major challenges. At 572,227, the number of new training contracts was down 42,000 on the previous year and, decreasing by 6.8%, reached an unexpectedly low level. For the training year that began in autumn 2003, the Federal Labour Office reported a 8.1% decrease of available training places in the western states against the preceding year which means that by early October 2003 there were still some 35,000 young people seeking an apprenticeship place. Most obviously, both the industrial and the craft sector, being the two strongholds of training provision, suffered major declines.

6.48 Companies also spend substantial funds on continuing education for their staff. This spending came to an estimated € 9.5 billion in 1999.

6.49 Further training schemes designed to meet the needs of the labour market, which are targeted especially at the unemployed and those facing the threat of unemployment, are funded under the Social Security Code III (Sozialgesetzbuch III) from the unemployment insurance fund. A total of € 5.2 billion was spent from this fund on further training, retraining and integration into the labour force in 1999.

6.50 The Federation and the Länder provided some €134 million in 1999 for the promotion of further vocational training as laid down in the Career Advancement Training Promotion Act (Aufstiegsfortbildungs-förderungsgesetz), which serves, among other things, to further training to become a master of industry or handicrafts, as well as to promote future business founders.

6.51 Social groups (churches, trade unions, and so on) also bear a proportion of the cost of running their continuing education institutions. They guarantee the widest possible access to continuing education by setting their fees at an appropriate level.

Funding of students

6.52 The amendment of the Framework Act for Higher Education (Hochschulrahmengesetz) of 2002 provides for all institutions of higher education in the Federal Republic of Germany that no fees are charged for higher education up to the first academic degree qualifying for an entry into a profession, and for a consecutive course of study leading to a second academic degree qualifying for an entry into a profession. This does not exclude the possibility of administration fees for registration and tuition fees for a second course of study or for long-term students.

6.53 Those attending continuing education courses also make a contribution towards their cost. This contribution can be subsidised by tax relief and by assistance for low income groups and for special courses. For example, between 30 and 50 % of the cost of Volkshochschulen courses (especially general continuing education) are covered by course fees. In particular, those on career development courses within continuing vocational training bear a large proportion of continuing education costs themselves. Additionally, costs are partly covered by enterprises within the framework of personnel development measures.

Establishing Alternatives on the Training Market through State Intervention

6.54 The reasons for the serious situation on the training market may be seen in the following factors:

• the weak economy
• insecurities about the future demand for skilled employees
• lack of training maturity among school leavers
• regional and occupational imbalances on the training market.

6.55 The Federal Government has made it clear that it considers the Dual System as being in a critical state and has announced a number of compensating measures to cure the unstable situation on the training market. These measures will encompass, for instance, an awareness-raising campaign and marketing initiative regarding VET, addressed to non-training companies in particular. It will also include the reorientation or extension of existing training and economic programmes to develop customised in-company training courses and training schemes organised by external providers in close co-operation with local enterprises in problem regions.

6.56 According to the 2003 Vocational Training Report, initiatives to tackle the critical situation on the German training market read as follows:

• Vocational training campaign by the Federal Government - together with workers, employers, Länder governments and others responsible for VET - focusing on the creation of training places;
• identification of other tools and organisation of PR campaigns which in regions with a considerable shortage of training places could help to introduce non-training companies to VET under the dual system;
• stronger support of sectoral, regional and in-company training place initiatives and collaborative vocational training ventures as well as training schemes organised by external providers in close co-operation with local enterprises with a view to developing sustainable VET structures, also in problem regions in the western part of the country;
• pooling and strategic repositioning under a single umbrella of ongoing programmes launched by the Federal Ministry of Education and Research and designed to create training places and improve regional vocational training and co-operation structures;
• more company-oriented design of the training place programme for eastern Germany launched by the Federal and Länder governments and of the supplementary schemes of the new Länder;
• connecting all training place programmes with regional innovation promotion measures and with structural and economic development schemes;
• continuation of the JUMP ( Jugend mit Perspektive (Youth with Perspectives)) programme with more flexible implementation rules, thus targeting a greater number of young people.

6.57 Despite its support of privately funded apprenticeships the government has been forced, due to the fragile economic framework in eastern Germany, to subsidise training schemes created for the purpose of establishing alternative ways of vocational preparation and integration. In 1998, against the background of rising youth unemployment, the JUMP programme was initiated in order to bring young people into training beyond the regular training market. In 2002, special training place programmes for eastern Germany led to 14,000 additional training opportunities, mostly provided by external providers ( Bildungsträger) in co-operation with local employers. Some 138,000 young people joined the Immediate Action Programme for Young People which is supposed to lead to regular training places. The Federal Training Report puts the number of schemes launched in 2002 to 196 and the number of newly created apprenticeships to some 10,000. Since 1999 a total of 60,259 training places have been created under the various schemes using public money. This illustrates that the Dual System in its traditional form featuring employers as training providers and funders of apprenticeships can no longer be seen as the direct and one and only non-academic route into employment.

6.58 To address the training market problem more clearly the federal government has recently introduced the concept of training place developers ( Ausbildungsplatzentwickler) in order to secure the long-term provision of training places and detach it from the contingencies on the labour market. This includes helping companies to cope with administrative work linked to an apprenticeship, to establish co-operation with vocational schools and to set up company-specific training plans. With another programme called 'STARegio' regional joint training provision is to be promoted which means that companies pool together resources in order to enable young people to achieve all the competences within a given occupational training scheme.

Introduction of a Training Levy System

6.59 The introduction of a training levy seems to become more and more likely as the two ruling parties in the Federal Government (Social Democrats and Greens) have in principal agreed on introducing such a scheme. This could mean that companies not engaged in training would have contribute 1% of their payroll to be put into a fund out of which additional training places could be created. The so-called Act to Secure Provision of Training Places ( Berufsausbildungssicherungsgesetz) would become effective once the training supply fails to exceed the demand by 15% at the beginning of a training year. In this case all companies with more than 10 employees and with a training quota of less than 7% (apprentices among all employees) would have to pay a levy, which would be redistributed to companies engaged in training.

6.60 This political move has to be seen against the background of the fact that at the end of September 2003 only 6,500 school leavers out of 35,000 still searching 35,000 for a place could be provided with a training opportunity. German employers, however, have always refused a training levy (and continue to do so) fearing that this could eventually lead to even fewer training places. At the moment the leadership of the Social Democratic Party (SPD) are trying to get the SPD prime ministers of three crucial federal states (Nordrhein-Westfalen, Schleswig-Holstein and Rheinland-Pfalz) on their side to support the training levy legislation. If these efforts fail the states could bring the law down in the Federal States Council ( Bundesrat) with a two-third majority which would mean that the Federal Parliament ( Bundestag) would not be able to reverse it with a second vote. As early as in 1976, training levy legislation ( Ausbildungsplatzförderungsgesetz) had failed as it was declared to be contravening the constitution by the Federal Constitutional Court. The present government has been the first one since then to try to steer the training supply in the Dual System in this problematic way.

Reform of the Vocational Training Act

6.61 The core of any preparation for VET pursuant to the Vocational Training Act could in future consist of a number of qualification modules for coherent qualifications pertaining to recognised training occupations. The central objectives of the Federal Government are nationwide transparency and quality standards as well as reliable recognition and credit transferability to subsequent vocational training pursuant to section 29 of the Vocational Training Act (reduction, on application, of the training period if it is likely that the purpose of training will be achieved in the shortened period). The purpose of qualification modules geared to vocational training is to improve substantially the opportunities of transition from vocational preparation and school-based VET to vocational training courses. The orientation of this training is to create a better basis for entry into employment for those young people who cannot make it to vocational training at the first attempt or do not go at all in spite of all the support they receive. A regulation to be adopted shortly will regulate the uniform certification of qualification modules throughout Germany. Moreover, the Federal Government wants to ensure that - irrespective of the necessary and desirable flexible gearing of qualification modules to the regional demand for qualifications by employers and local players - the objectives of transparency, quality and marketability of qualifications will be attained.

6.62 In the 2003 Vocational Training Report ( Berufsbildungsbericht) the Federal Government underlined its intention to make transition routes from vocational training preparation to vocational training and from initial training to continuing or upgrading training more flexible and linked more closely with each other. The Second Modern Services on the Labour Market Act (Zweites Gesetz für Moderne Dienstleistungen am Arbeitsmarkt) integrated the preparation for VET of socially disadvantaged adolescents and young adults and those with learning impairments into the Vocational Training Act as an independent part of vocational education in addition to vocational training, continuing vocational training and retraining. The Federal Government thus made it clear that the preparation for VET was an integral part of vocational education and as such could in future also be provided by training companies.

6.63 In consequence, the Federal Government plans to amend the Vocational Training Act. Its reform will include:

• the inclusion of the vocational training preparation schemes and the development of an appropriate system of qualification modules;
• a more intense internationalisation of VET by providing opportunities for trainees to undergo part of their vocational training abroad;
• an ongoing modernisation of examinations by including the "extended" final examination in the list of recognised types of final examinations;
• the transferability of vocational school credits, based on agreements between the federal states and the federal government.

Future Skills

6.64 In the European Centre for the Development of Vocational Training (CEDEFOP) publication 'Info about Vocational Training in the EU' no. 2/2001, an account of the current position in relation to skills gaps in Germany is given and replicated below in paragraphs 6.56 to 6.59. In these sections the Central Board of the Federal Institute for Vocational Training ( Bundesinstitut für Berufsbildung - BIBB) comments on the draft 2001 Vocational Training Report presented by the Federal Ministry for Education and Training, it notes an overall improvement in the training market. More detailed analysis is provided thereafter.

6.65 The Central Board reports that for the first time in years the number of apprenticeship vacancies now exceeds the number of unplaced applicants and notes a 'positive trend', with a gratifying 2.6% increase in the number of new industrial training contracts to a total of 564 400. It points out that the 4% fall in the number of applicants registered with the job centres has also helped balance supply and demand, whereby the emergency youth programme which has removed a number of the previous applicants from the market is evidently one of the reasons for this decline. On the other hand, many young people have found a training place through the electronic information services of the Federal Employment Agency (Bundesanstalt für Arbeit - BA) and are no longer represented in the job centre applicant statistics. The Central Board expressly welcomes the extension of the special training place programme for eastern Germany up to 2004 as the only way of reducing the 'evident gap' in the training place market in eastern Germany.

6.66 The Central Board, noting that the reform process is well under way, with a total of 36 new and 106 restructured training occupations already created, calls upon all the stakeholders to accompany the introduction of new occupations by targeted and coordinated action and appeals to all the participating players not to miss the opportunity to reach a broad consensus on the further structural development of the dual system of vocational training.

6.67 In view of the successful establishment of new occupations, not least in the IT field, the Central Board expects that industry will be able to fulfil its pledge to create some 60 000 IT training places by 2003, underlining however that the new occupations require a considerably higher input in terms of continuing training effort. Early recognition of made-to-measure and sector-specific skilling requirements is becoming increasingly important. A greater willingness to engage in continuing training, linked with a higher level of financial commitment, is essential. In this context the Central Board calls for, among other things, better continuing training counselling, a user-oriented quality assurance system and equal status for general and vocational education.

6.68 The Central Board moreover attaches considerable importance to the development and dissemination of learning and cooperation networks, calling upon the social partners and politicians to tap all talent reserves and focus greater attention on disadvantaged youngsters. New occupations should be created with low levels of requirements in those cases in which there is an evident demand in this respect.