SETAs Briefing Report, Department Budget: Briefing; Committee Budget: adoption

Meeting report

LABOUR PORTFOLIO COMMITTEE
2 November 2004
SETAS BRIEFING REPORT, DEPARTMENT BUDGET: BRIEFING; COMMITTEE BUDGET: ADOPTION

Chairperson: Ms O Kasienyane (ANC)

Documents handed out
Department presentation on Budget Vote 17: Labour
Draft Committee Report on meeting with SETAs
Committee Budget

SUMMARY
The presentation by the Department of Labour outlined its mission statement, its 10-point programme and the relevant legislation applicable to the operations of the Department, the main divisions of the budget vote, the budget breakdown and spending proposals submitted to the Medium Term Expenditure Council, the recommendations made by the MTEC and the anticipated allocations for 2005/6 – 2007/8.

During the discussion, Members asked the Department to explain why it had not requested any funds for the unemployment and skills development programme in the 2005/6 financial year; the areas that would be hit hardest by the inadequate funding provided by National Treasury; whether an integrated approach was being considered because government’s delivery products remained inaccessible to communities; whether the study on casualisation was a once-off exercise; the extent to which the delay in filling the posts within the Department would affect service delivery; whether the Department considered making use of Members of Parliament and their constituency work to assist the Department in delivering on its mandate, and to explain its measures to disseminate information on its programmes as well as worker rights to the community.

The Committee effected technical amendments to its report on its meeting with SETAs before adopting it. The Committee’s budget was also adopted.

MINUTES

Briefing by Department on Budget Vote

The Department of Labour delegation included Dr V Mkosana, Acting Director-General; Mr Van der Merwe, Chief Financial Officer; Ms M Xaba, DDG: Corporate Services; Mr L Kettledas, DDG: Labour Policy; Mr D Kyle, Manager: Finance; Mr F Petersen, Executive Manager: Financial Management and Mr R Ntuli, Chief of Staff.

Dr V Mkosana, Acting Director-General, conducted the portion of the presentation (document attached) that dealt with the mission statement of the Department, its 10 point programme and the relevant legislation applicable to the operations of the Department.

Mr Van der Merwe, CFO, conducted the remainder of the presentation which dealt with the main divisions of the Department’s budget vote, the budget breakdown and spending proposals submitted to the Medium Term Expenditure Council (MTEC), the recommendations made by the MTEC and the anticipated allocations for 2005/6 – 2007/8.

Discussion
Mr M Mzondeki (ANC) asked the Department to indicate the areas that would be hit hardest by the inadequate funding provided by the National Treasury.

Mr Van der Merwe referred to the slide entitled “MTEC Recommendations (3)” and stated that the Department would have liked to be one of the leading government departments with regard to the taking up of interns. It was for this purpose that the Department had requested an amount of R7m, yet the MTEC did not allocate a cent for this programme. The investors in people programme enhanced the training of the Department’s internal staff. This programme had commenced. R3m had been requested but nothing was allocated and this item would therefore have to be re-prioritised. The advertising of posts exercise covered the HIV/AIDS and gender problems in that the Department aimed to create a directorate within corporate services, as a directive was received from the Department of Public Service and Administration and the Presidency to prioritise this. A total of R2m had been requested for this important project, yet no funds were allocated for it by the MTEC, and it would also have to be re-prioritised.

A total of R37.9 million had been requested for the ICT convergence programme. A major part of this programme was not only the enhancement of the Department’s Public Private Partnership (PPP) Programme, but also to establish a call centre. The MTEC only allocated R5 million, and Treasury’s argument was that the Department should phase this programme in slowly. Mr Van der Merwe stated that he was not sure how a call centre could be phased in slowly, as he believed that ‘half a tractor would not do the job’. The Department would most likely have to reprioritise this as well.

The Department had requested R6.7 million for employment services at local level but only R3 million was allocated. This would impact on the Department’s service delivery. A total of R50.3 million had been requested for learnerships as the Minister requested the Department 2 years ago to take on 1 000 learners, but the allocation made it impossible to reach that target. The Department had requested R59 million for its inspection and enforcement services but was allocated nothing, and it would again have to look at reprioritising this matter.

No funds were requested in the 2005/6 financial year for the Department’s national qualifications framework, but funds would be needed in the second year. The Department had requested R21 million and was allocated R18 million, and it was thus not that concerned. This was however an important matter and would need attention shortly. All the labour policy and labour market programmes listed on the slide would have to be reprioritised, and some could be phased in over a period.

Mr S Rasmeni (ANC) stated that the Committee would have to wait until the Department had reprioritised to check whether the Department would be able to properly execute its mandate. He asked the Department to explain why it had not requested any funds for the unemployment and skills development programme in the 2005/6 financial year.

Secondly, Mr Rasmeni asked the Department to explain the extent to which it was engaging both with other government departments as well as the other spheres of government in addressing job creation and skills development. He asked whether any steps had been taken to begin the integrated system of service delivery.

Mr D Kyle, Manager: Finance, responded to these two questions by stating that when the MTEF was being compiled, the spending proposals that were sent through to the MTEC were additional requirements over and above the baseline which was already reflected in the Estimates of National Expenditure (ENE). When the Department conducted this exercise it consulted all the branch managers and got all the inputs regarding the spending proposals, and these were then consolidated into the 2 proposals that were forwarded to Treasury.

The employment and skills development branch manager indicated that it would be funded within the already existing baseline. Their only problem was with the national qualifications framework coming into existence in the outer years, as this was not fundable within the baseline. It was for this reason that the Department had not requested additional funding in the 2005/6 year, because it would only come in the two outer years, starting in 2006/7.

Dr Mkosana added that the National Skills Fund (NSF) also contributed to the development of skills, and this programme was thus not solely confined to the Department’s budget vote. The Department was satisfied that these measures would adequately fund the skills development programme.

He agreed with Mr Rasmeni that integration was one of the government’s greatest weaknesses. An integration concept that sought to cluster government departments had emerged as a move to do away with the silos in which government departments operated independently of each other, and which undermined service delivery. The concept was however at an early stage. The Department of Provincial and Local Government was interacting with local government and provincial structures to ensure that a national programme permeated the last tier of government as well.

A further problem was that each government department had its own vote and certain prioritised programmes that were specific to that Department. The Department had consulted Industrial Development Programmes (IDPs) at local government level and had assessed the province’s skills development programme. This had facilitated service delivery to a significant extent.

Mr Rasmeni stated that government’s delivery products remained inaccessible to communities, because they insisted on addressing the problem single-handedly instead of exposing the problem and working together to address it.

Ms M Xaba, DDG: Corporate Services, replied that the Government Communication and Information System (GCIS), the Department of Public Service and Administration and the State Information and Technology Agency (SITA) were working together to reach out to communities in a collective government effort. The Department of Public Service and Administration had devised a gateway portal to disseminate information on all government services and contact details via the Internet.

She stated that she had raised the issue whether each Department needed a call centre to provide accessibility to the public, or whether a single government call centre should not be established. If separate call centres were established, they would have to be capable of integrating into the broader government system. The Department was the lead department in this technology advancement area.

The Department was looking at the provision of services via the Multi-purpose Community Centres (MPCCs), as well as the mobile labour centres, visiting points and satellite offices.

Prince N Zulu (IFP) asked whether the Department had knowledge of how other government departments were fairing with Treasury in requesting funds, and whether they were also having trouble in receiving funds.

Dr Mkosana responded that a broad picture indicated that a ‘small cake was cut for all these departments’. Treasury indicated that it was not able to raise the amount of revenue it had hoped to accumulate, and this meant that all government departments would feel the pinch. This was an unfortunate situation, but also taught the Department to budget very seriously.

Prince Zulu stated that there was nothing more to do but for the Committee to support the Department in its reprioritisation exercise, because the Department was hit “under the belt” by the insufficient funds allocated by Treasury.

Mr O Mogale (ANC) asked whether the study on casualisation was a once-off exercise, as the presentation indicated that R7 million had been budgeted for internships over the following three years.

Mr L Kettledas, DDG: Labour Policy, responded that the copy of the Report would be made available to Members. The study had been finalised and was currently being discussed at NEDLAC with the social partners. The spending proposals referred to the findings and recommendations that emerged from the study as to how do deal with the phenomenon, and various measures would be implemented to deal with the problem. Some were legislative amendments that would close the gaps that allowed the development to take place, others were non-legislative which required Codes of Good Practice on how to deal with the issue of casualisation. The reality of the matter was that there would always be forms of temporary work, and the study indicated that there was a growth in this phenomenon worldwide and that it took various forms.

It was for this reason that the Department had requested funding for the implementation of measures to deal with the phenomenon. Follow-up studies in certain identified areas might be needed to deal with the issue.

The Department was currently engaging the recommendations made by the study in the NEDLAC process.

Mr Mogale asked the Department to indicate where its poverty alleviation funding was located in the budget.

Dr Mkosana replied that the mission of the Department dealt with this very matter. The Department did not have a dedicated budgetary item that dealt with poverty alleviation, but would release funding when a specific programme of project was presented to it. The Department addressed poverty alleviation indirectly, as it created conditions that improved job creation.

Mr Mogale sought clarity on R3 million that was allocated each year for the Department’s investing in people programme.

Ms Xaba responded that this was a standard that would promote and encourage training in organisations broadly throughout the country. It was thus not a standard that was used by government only, as corporations and institutions at large were registering to be recognised as an investor in people. They were then accredited by the Department, who had introduced the standard. People were thus being trained in their career path so that they could play a significant role in the organisation.

The R3 million requested by the Department was for an assessment in which the building blocks that were put in place would have to be qualified and assessed. This was a requirement for funding the status quo of the various branches within the organisation. The assessment had to be redone because not all branches within the Department were at the same level. Yet this had not been catered for, and thus the R3 million was requested.

Mr Mogale asked whether NGO’s had emerged as advice centres that specialised in labour matters and, if this was the case, where this funding was provided for.

Mr Kettledas replied that this related to the Strengthening of Civil Society Fund which was budgeted for within the labour relations programme and had a dedicated budget of approximately R8 million. This was quite separate from the investment in people programme located inside the Department and focused on the development of its own personnel, and the assessment referred to by Ms Xaba thus focused on the success of this programme.

Mr Mzondeki stated that the delay in filling the posts within the Department would affect service delivery.

Dr Mkosana added that the Department, more than any other government department, trained its people. He stated that he did not mean to sound arrogant but the Department was able to produce better quality employees from within the Department than most other government departments. The Department’s middle managers had university degrees up to postgraduate level, which were done in partnership with the University of the Free State. This middle management course was offered each year, and 30 inspectors were trained each year.

The problem was that they were trained so well by the Department that immediately upon the completion of their training they would be poached by the private sector, and the Department thus constantly chased a moving target. Its staff were taken up by several government departments, and it could not ‘buy that person back’ because its budget would not allow it. It was thus a very big problem but the Department had identified a strategy that aimed to maintain its vacancy rate at about 14%, which was an internationally acceptable level.

Mr Mzondeki stated that the Department should make use of Members of Parliament and their constituency work to assist the Department in delivering on its mandate.

Mr Rasmeni asked the Department to explain its measures to disseminate information on its programmes as well as worker rights to the community.

Dr Mkosana replied to these two questions by stating that a strategy had been developed that considered how the Department communicated its work to the public. Radio was used because it reached the poorest communities more so than television, but there were still South Africans who did not even have access to radios. In addition, the Department had to use local languages and was consciously moving in this direction. The use of constituency offices would be ideal to get the Department’s message across to communities.

The Chair stated that the problem with insufficient funding of the Department would be taken up with other government departments as well as with the relevant MEC’s. She stated that it was clear that Members were disappointed with the insufficient funds allocated, but the reprioritisation process would have to be undertaken.

Committee Report on meeting with SETAs
The Committee effected a few technical amendments to the report (document attached) before adopting it.
 
Committee Budget
The Chair noted that the Committee adopted its Budget (document attached).
 
The meeting was adjourned.