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The number of students enrolled in government-funded vocational education in NSW has plummeted by 86,300 in the past year, new research from the National Centre for Vocational Education Research has revealed.
NCVER found that nationwide about 200,000 fewer people had participated in government-funded skills training in 2015, with the largest decline in students aged 15-19.
The dive in participation could entrench a national shortage of apprentices, as unions warn of a skills shortage in core trades that could drive up costs for businesses and home owners.
At the same time, thousands more students are flocking to university training under the demand-driven system, with university enrolments rising 43 per cent in the past 10 years.
The crash in vocational education numbers comes as another report commissioned by the NSW government into its vocational reform package, Smart and Skilled, found that negative perceptions of the Commonwealth's administration of the scandal-plagued vocational education sector had damaged providers in NSW.
"Throughout 2015, there was significant attention on poor-quality training provision, particularly in the VET FEE-HELP market. This media attention may have led to negative perceptions of VET, which had an effect on students' willingness to engage in training," the report found.
The Nous report, released on Wednesday, made 32 recommendations to NSW Skills Minister John Barilaro on ways to improve the sector.
It identified a "small number" of 18 providers who have been accredited under Smart and Skilled who "may be engaging in high-risk behaviour" and should be investigated, while also highlighting the need to re-examine fee increases of 29 to 81 per cent in Certificate II, III and IV courses.
It found graduate salaries in courses with low lifetime earnings, such as hospitality and printing, did not necessarily match these fee increases.
Despite the finding, the report concluded there was not a clear statistical relationship between the increases in student fees and declines in enrolments.
It recommended the government pursue further deregulation of the market while also urging the government to support TAFE as a competitor to the private sector.
Labor's skills spokeswoman Prue Car accused the Baird government of being responsible for the decline.
"The number of apprenticeships and traineeships is in freefall under the watch of Mike Baird and John Barilaro," she said.
Mr Barilaro said Smart and Skilled was a reform delivered to give more people the career support they needed.
In June, the NSW budget provided an increase of 50,000 government-subsidised vocation training places.
