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This paper argues that the creativity inherent in the fine arts is at odds with competency-based assessment. It reports on a project conducted by the New South Wales (NSW) North Coast Institute of TAFE in the Certificate IV in Fine Arts. The project aimed to develop a range of strategies to promote 'lifelong' learning skills, 'deep' learning and 'intrinsic' motivation for the learners, while still meeting the assessment requirements in the relevant training package or syllabus documents. The theoretical framework for the project was John Biggs' model of constructive alignment. The project found that the learners' perception of their learning environment and the relationship between internal and external conditions, significantly affects their motivation, learning and creativity. Consequently, a learner-centred approach, where students were consulted and involved in designing learning and assessment practices, was adopted. The key conclusion is that the richness and diversity of fine arts inevitably comes into conflict with systems that generalise and are inflexible.