AFP raids Australian Careers Network

A NSW government minister has promoted a report highlighting the business results of a collapsed private college network whose headquarters were raided last week during a fraud investigation by the Australian Federal Police. ​

The 60-page report, to be released by NSW Skills Minister John Barilaro on Wednesday, was commissioned to look at how to make public vocational education provider TAFE more efficient.

Instead it has highlighted the difficulty the collapse of the scandal-plagued private vocational training sector is causing for the state government's privatisation agenda.

Commissioned by the NSW government through TAFE NSW and completed by the Boston Consulting Group, the report labels TAFE NSW as "inefficient" and "uncompetitive" compared to private providers. It names only the private education operator NAVITAS and Australian Careers Network as comparators to the public network.

More than 20 federal police officers raided Australian Careers Network last week after 16,000 students were left in limbo and hundreds of jobs were lost at the company. The action came after the ACCC launched action in the Federal Court in November against one of ACN's colleges to recover $106 million in taxpayer funding,

The ACCC has alleged the college acted unconscionably in enrolling students with intellectual disabilities and preying on people in Aboriginal communities while enrolling them in up to $18,000 in public debt. It also allegedly signed them up to online courses despite not having access to the internet.

The allegations could help to explain why Boston Consulting found ACN to be 224 per cent more efficient than TAFE in its use of physical assets.

Boston Consulting's report shows that while TAFE had property worth $4 billion and a revenue of $1.89 billion in 2015, ACN turned over $41 million in revenue with only $4 million worth of property.

"TAFE NSW's cost structure is uncompetitive," the report found.

The report puts the assets of at least three NSW TAFE institutes in the firing line. It identifies New England, Riverina and the Western Institutes as too "sub-scale to successfully compete" with the likes of ACN. Between them the three institutes educate more than 80,000 students across NSW and take in $150 million in revenue.

Across the state, teachers, managers and administrators have all been targeted for low productivity compared to their counterparts in the private sector, with costs up to 50 per cent higher than comparable providers.

Mr Barilaro said ultimately it will be the student who choses where they want to study.

"The report projects that there is likely to be increased competition for vocational education services due to market factors and student choice, which will put pressure on TAFE to be more competitive in the market," he said.

After Mr Barilaro's office was alerted to the use of ACN as a comparison in the report it had promoted, a spokesman said it was not intended to represent the views of the NSW government or TAFE NSW. Mr Barilaro declined to comment on whether there had been any communication with the federal department, which initiated the AFP's fraud investigation, or whether the sources in the report had been properly reviewed.

A spokeswoman for Boston Consulting said the report was completed in 2015 using publicly available source material.

The comparison has outraged teachers, who have labelled the report a "flawed hatchet job".

"So the standard by which TAFE is going to be measured is a company that is being investigated by the ACCC?" asked NSW Teachers Federation president Maurie Mulheron.

While the report labels the public provider as uncompetitive, the national vocational market is set to soar to $10 billion by 2019-20. The forecast points to a boon for the private sector, despite being beset by impropriety over the past year.

Three different federal vocational education ministers have overseen a portfolio that has witnessed spiralling public debt through allegations of unscrupulous providers recruiting illiterate, disabled students into courses they had little hope of completing.

As well as ACN, the ACCC is pursuing three Sydney private colleges in the Federal Court for the return of more than $300 million in taxpayer funding.