In 21 regional towns, TAFE would be closed or reduced through a partial sale, with classes diverted to other campuses. The document suggests selling off the west side of Belmont TAFE at Lake Macquarie for $2.96 million and replacing classes with a limited "pop-up" service in a leased building. The Chullora TAFE campus in western Sydney is expected to fetch $22 million, while the Belrose annex of Northern Sydney Institute is worth $8.5 million. The document states TAFE NSW requires a $54.5 million increase in capital spending this year, including $32 million for new projects, which are in addition to those approved in the June budget. But more than half of this spending, $17.5 million, is earmarked for IT. Another $10 million is to relocate services from the campuses being sold.

It is understood the sale was prompted by a November report from Infrastructure NSW, which told TAFE NSW to prepare an asset management plan to fund the expansion of online courses. Skills Minister John Barilaro​ told a budget estimates hearing this month the government was looking at "ways of rationalising our asset base and reinvesting every dollar of that into information technology, into fantastic campuses". But NSW Greens MLC John Kaye said the fire sale of buildings revealed in the cabinet document, and the push to cheaper online delivery, would have a negative impact on students. Communities with high levels of unemployment are in line to lose TAFE facilities, he said. "Asset recycling means fewer opportunities for face-to-face teaching and more money squandered on dodgy information technology," he said.

TAFE has been plagued by a blowout in the cost of a $576 million IT administration system known as Learning Management and Business Reform (LMBR). Mr Barilaro has admitted to Parliament the IT system failed during the January enrolment period. The partial sale of campuses at Granville, Wollongong, Goulburn, Forbes, Bourke, Muswellbrook, Ballina, Albury and Glendale are listed in the document. At the Sydney Institute, land at the Enmore design campus would be leased out, and an Ultimo building "repurposed". Asked about the list of sites for sale Mr Barilaro said: "TAFE NSW regularly reviews its assets to ensure they provide the best resources for students and teachers." h The NSW government would invest in "online learning capabilities –not the LMBR system", Mr Barilaro said.

"Businesses and students want a blended learning environment because they provide job pathways for students and deliver options to study online or offsite with industry partners," he said. Dr Kaye said: "The IT spending is largely aimed at cutting teaching staff and replacing face-to-face learning with online packages. Struggling students will pay the price of a government that is trying to reduce its investment in TAFE." The document shows $10 million of the sale proceeds would be spent relocating courses from the Crows Nest TAFE, which was sold in July, and Chullora. Metal fabrication courses were axed at Chullora last year, and teachers sacked.