User Choice is a national policy governing the flow of public funds to registered training organisations (RTOs). The purpose of User Choice is to make vocational education and training (VET) more responsive to the needs of industry and employers.

User Choice policy works in conjunction with the Australian Apprenticeships system  enabling employers and apprentices/trainees to:

• choose an RTO to best provide them with training services
• negotiate key aspects of training, such as where, how, and when it is provided.

The choices made by employers and apprentices/trainees influence the flow of public funds to individual RTOs.

How User Choice operates

User Choice is applied differently in each state and territory, according to regional and industry training needs and budget constraints.

Generally, RTOs compete for User Choice funding, either through direct funding applications or an electronic tender or bidding process.

State and territory training authorities (STAs) decide which Australian Apprenticeships are eligible for User Choice funding. The level of funding and how and when funds are allocated vary according to:

• state or territory strategic initiatives
• the changing demand for training
• budgetary constraints
• thin markets – qualifications with low enrolments of apprentices or trainees.

Applying for funding

RTOs can only tender for funding for training they are registered to deliver.

When applying for User Choice funding, RTOs will be asked to provide the following information:

• scope of registration - the vocations and related qualifications to be offered
• state and national codes for all qualifications · the proposed numbers of students for off and on-the-job
• the proposed number of off-the-job hours to be delivered during the application year.

An RTO can apply for User Choice funds in a state or territory other than the one they are registered in if they delivering training in that state or territory. They can only apply for funding for training they are registered to deliver.

Enterprise RTOs

In some states and territories, enterprise RTOs (whose core business is not training) are funded differently to RTOs whose core business is training. In South Australia, for example, enterprise RTOs are funded at 50% of User Choice funding rates for non-enterprise RTOs.