New SETA landscape

Meeting report

Apologies were received from the Minister, Dr Blade Nzimande, Deputy Minister Mduduzi Manana, as well as the Chairperson, Ms C September (ANC).

It had been agreed in a previous meeting that in the absence of the Chairperson Mr C Kekana (ANC) would be Acting Chairperson.                                       
Department briefing
Mr Gwebinkundla Qonde, Director General, Department of Higher Education and Training (DHET) said the Department would share developments in the Sector Education and Training Authority (SETA) regarding the processes looking at transforming and integrating the system of post-school education and training. The presentation spoke to the new vision of the National Development Plan (NDP)
Ms Melissa Erra, Director, DHET, said the adaptations to the NSDP arose from the fact that the National Skills Development Plan III (NSDS III)and SETA landscape was due to lapse on 31 March 2016. The proposal was informed by the White Paper for Post-school Education and Training, the Ministerial Task Team Report on SETA Performance and the Human Resource Development Council- Skills System Review. A gazette calling for public comment was issued on 10 November 2015; this is open until 31 March 2018. Different structures were contacted for input, these included the White Paper Task Team, National Skills Authority (NSA), National Economic Development and Labour Council (NEDLAC), SETAs, Quality Councils, and comments from the public and government engagements and workshops.

There was a high response from business associations (24%) and businesses (21%). The NSDP only received support from 2% of the respondents. 59% of the respondents supported changes to the system even though they did not support the NSDP itself. There were also respondents who did not support the proposal but provided recommendations for change (23%) and some who supported no change at all (16%). The following themes became clear after the DHET had analysed all its data:

• Permanency of SETAs
• Shared Services: Received significant support
• Centralisation of Discretionary Grant
• National Skills Fund Managing Discretionary Grant
• Change of SETA Boards to Advisory Boards
• Improvement of Monitoring and Evaluation for better performance
• Quality Assurance and Accreditation
• Support for some change in the SETA system

The following received support from the respondents:

• Permanency of SETAs (This was because the respondents believed that they would have better long term planning that way)
• Changes to the SETAs to make them effective
• Shared Service & Discretionary grants- however,not centralised to the NSF
• Occupation as “lingua Franca” as the respondents believed that there would be better communication this way, however they contended that capacity should be built
• Central skills planning

The following considerations were made through the process:

• How to build a monitoring and Evaluation capacity of the system
• Clarification regarding shared services and centralisation of the funding: these two terms were not understood by everyone and so stakeholders requested that the terms be explained and simplified to be accessible to everyone.
• NSF/ Independent Agency: some responses questioned the use of the NSF and encouraged consideration of an independent agency and vice versa.
• Role Clarification: The respondents thought the DHET had to clarify what the role of the constituencies were and the extent of the involvement of the government.
• The strong role of government was not supported by many respondents
• It was contended that SETABS should not be in the DHET as there could potentially be too much power and that could create complications within governance.
• Governance and accountability should be explicitly stated.
• Funding model: There were requests that further consideration be made around quality assurance for the QCTO and Workplace Integrated Learning.
• Business and labour to play a stronger role in the process.
• There must be a balance between sector and national priorities
• Transitional arrangements questioned: How and when would the changes be implemented?

The National Skills Development Plan proposal is being engaged at NEDLAC and there is a process rolled out for the public to make contributions. The review process was sparked by the need to:

• Address the challenges undermining the efficiency of the post-school system
• Share the revised proposal that the DHET developed for the NSDP and
• Outline the institutional mechanisms and implementation plans to address priorities                                                 

Mr Mvuyisi Macikama, Chief Director: DHET, said the second part of the proposal focused on the National Skills Development Plan. The DHET is moving towards a Longer-Term-Plan which also plays into the vision of the country’s NDP. He highlighted two overarching principles guiding the National Skills Development Plan proposal:

• The need to focus on the integration of the post-school system: Coordination of the systems should not only be focused on the SETAs or levy paying institutions but on the entire post-school system.
• Locating the post-schooling system within the wider context of the NDP:

The revised NSDP seeks to work towards an increase in collaboration between government and the skills system and industry. The DHET is creating the capacity for the analysis of development plans and labour market information so as to gather which occupations are in demand. The DHET will create a landscape for the Skills Planning and the Community Education and Training (CET), Technical and Vocational Education and Training (TVET) and Higher Education on the best way that SETAs can do the following:

• Fund institutions to encourage enrolment
• Design and implement Workplace-Based Learning
• Ensure sustainable funding that will assist long term planning.

Funding

• It would be approved for 3 years within a 5- year programme planning cycle so as to create stability and therefore create space for long-term planning.
• The funding applications would have a standard application template.

The proposed revision of the plan would enable the state to meet the needs of the people who are often marginalised by class.

The Acting Chairperson invited the Chairperson of the board of the Health and Welfare SETA and the CEO of the Education, Training and Development Practices SETA to make comments on the presentation.

Mr M Mbatha (EFF) interjected and questioned the relationship between the DHET’s presentation and the contribution of the Chairperson and CEO.

The Acting Chairperson explained that these guests were invited by the Committee Chairperson to attend the meeting and he therefore figured that a contribution from them would be productive. However, if the Committee was uncomfortable with that it was up to them to decide.

Ms J Kilian (ANC) said the committee was not informed that the SETA would be present and it would therefore be improper for them to speak as Members were more interested in engaging the DHET about the skills development plan, it was not on the agenda.

The Acting Chairperson asked if that was the general feeling and the Committee said yes. The SETA did not speak.

Discussion

Dr B Bozzoli (DA) remarked that the previous presentation by the DHET had a clear plan. The DHET probably became scared after the 121 comments. It seemed that the DHET had lost heart in its ambition to revamp SETAs. There were several problems within the SETAs, particularly that corruption was rife, patronage was a way of doing business, levy payers are sceptical about the use of funds and the fact that they are often raided by the Department to pay, the SETAs underspend, and long periods of time were spent going into skills identification which has proven to be ineffective. She asked how the proposal fixed the problems within the DHET and SETAs as she found the presentation vague.

She also enquired why business was not lobbied when 40% of the responses came from businesses. There are 1 million private sector workplaces in South Africa; this means that if each workplace supported one student then the financial issues of many students would be sorted.
She also raised concern over the expansion of developmental bureaucracy. This was a typical government strategy. What were the roles of SETA boards if they could not give out actual grants? Would they be actual boards? They could no longer be accounting authorities. It was rumoured that the R5bn used to bail universities out had been taken from a Skills fund, she asked if there were truth in that.

Ms M Nkadimeng (ANC) said her question would be on the SETAs of strategic importance such as AgriSETA, which is having low income due to low wages. She enquired what plans would be put in place to ensure that those SETAs are subsidised to help them to execute their mandate. In KwaZulu-Natal(KZN) the AgriSETA was not paid accordingly. She wanted to know what plans the new landscape made to prevent more SETAs from having to be put under administration. During the meeting with Business Unity SA (BUSA) in October 2016, the introduction of SETA grant regulation had a negative impact on the training of employees in business and BUSA took the Minister of Education to court to revise the regulation. She asked whether the unwillingness of some employers in the industry opening up their workplaces for the placement of students could be attributed to the Department’s relationship with BUSA, and also whether the Minister revised the grant regulation after that.

Mr Mbatha enquired about the status of the relationship between the DHET and SETAs that had taken it to court in the past. What was the stalemate? He advised that the issues between the DHET and those SETAs be resolved before the Department creates a new landscape. He noted that the presentation given in the briefing was completely different from the presentation which had been given to the Portfolio Committee on 15 September 2015. He enquired what repercussions there would be if South Africa suspended the journey that it is on with Higher Education and embarked on a different journey seeking to do more effective work at attending to the direction of skills development in South Africa, although he did not specify what the journey could look like.
He mentioned the Central Skills Plan, remarking that there were a lot of players and new activities. Government should use agencies and not go directly through government controlled entities. Advice from organisations such as StatsSA would be always better to get than creating a central skills planning unit. He asserted that the future of SETAs should be based on industrial value chain as it not supposed to be based on a specific chain. The future of international industry tells us that multi skilling of workers is a more sustainable way as it concentrates workers within value chain. This was so that if one industry player closed shop then the skills of the worker would still be attractive to another player. Only being skilled on one thing would cost the worker as well as they would not be flexible.

Ms H Bucwa (DA) remarked that there were no fundamental changes in the proposal. There was no direct correlation between the problem statement and the proposal itself. 21 SETAs are responsible for management and creation of skills development; however they are ineffective because of poor governance and lack of planning and capacity. She asked what processes could be put in place to ensure that those SETAs continue to function. She said there are students in the South African School of Motion Pictures Medium (AFDA) who currently cannot graduate due to funding which has not been paid and she attributed this to the lack of proper governance and corruption within the SETAs. She enquired on an accountability plan that would ensure that students do not suffer because of the corruption of those in power. She noted that 13 of 21 SETAs commented on the proposal and asked why the remaining eight found that their comments would have been irrelevant as she believes that whatever proposal which is implemented would affect all SETAs. Finally, she asked about the time frame of the proposal.

Mr A van der Westhuizen (DA) said the Committee had not been presented with a solution to the severe skills development problems and backlogs in the country. The country is in trouble regarding the skills development system, and the DHET has been quiet about real issues. He was concerned about the DHET saying it wants to do more monitoring on the SETAs. Monitoring made no difference when the very system being used needed change. What has been planned will not address the real problems in South Africa, such as the fact that industry no longer accepts responsibility for future skills needs in that industry. It is now government's problem and government has failed. All the industry players do now is just pay their levy.
He also stated that the DHET has been quiet about whether they still mean to increase the levy to the National Skills Fund from 20% to 30%, this would just be milking the industry. The DHET was selecting people for training who are not motivated or do not have the necessary skills. He believes that the National Qualification Forum was part of the problem. He was also concerned that the central skills planning will fall flat and that the only positive thing that he heard in the meeting was that changes needed to be phased in and not abruptly implemented. Finally, he raised concern over the increase in corruption and was worried that an increase in the learners’ skills being developed would not be seen.

Mr E Siwela (ANC) noted that according to the presentation the NSLP was not supported.  He enquired whether there were reasons given for this and asked how the Department would move forward. He asked when the new proposals would become effective as it seemed that they might wait for too long. When the DHET talked about the new landscape in the previous meeting it was very promising and yet the Committee found itself sitting with the same problems. He asked how the proposal changed current challenges.

Ms Kilian expressed her disappointment with the proposal; there were serious shortcomings of the current system. Corruption was at the heart of the concerns raised by Members. She also stated that the report seemed to just be making cosmetic changes. She remarked that the proposal suggested a longer life span, which she disagreed with. She encouraged creativity in bringing forth solutions. She understood the problem with the accounting authority as funds were being misappropriated. However, would the accounting authority have any role if it could not approve finances? She commended the idea of an assessor and administrator, the Department need quicker interventions and responses. She asked if the Department was reacting to the fourth wave of the industrial revolution and howSETAs could be permanent with this reality. The thinking was too rigid and made no promise. South Africa is at the tail end of international development whereas the country should be leading Africa on this.

Ms S Mchunu (ANC) said the SETAs were put in place to improve efficiency and move from the last where skills development was the preserve of the few. She also noted that what was presented on 15 September 2015 was not what the DHET was presenting in the briefing. The DHET had been so clear that it identified two clusters of problems regarding efficiency and integration of skills development. Making SETAs permanent was strange seeing that the SETAs were not even performing well, this was not part of the original proposal. How did the proposal cover the fact that the development has not succeeded in getting the skills levy paid by government departments? She asked what mechanisms the Department will put in place to ensure that social partners adhere to the plan, and encouraged DHET to return to the drawing board and come back with a better SETA landscape.

Mr N Khubisa (NFP) said some SETAs were not performing well and Office of the Auditor General (AG) reports were not attended to. Issues mentioned by the AG are always important. In Gauteng, it was said that many are not paying levies and that it was an issue in need of attention.

The Acting Chairperson added to Mr van der Westhuizen’s point, musing about whether the skills being produced are skills that industry is interested in. The success of SETAs depended on the working relationship between government and the private sector. South Africa was still having a hang up in transforming the economy as there is still a perpetuation of Apartheid legacies. It was short-sighted to merely attribute the issues with performance to corruption.

Response by the DHET
Mr Qonde thanked Members for their contributions. He clarified that a Skills Development Act is a product of network processes and not just what the government thinks. Their presence last time was to present the view of the Department. Their presence this time was with respect to the responses to those proposals by the DHET by various interest parties within the SETA system. The DHET is also dealing with vested interests and the proposal was receiving negative feedback as it is shaking the status quo. The presentation indicated how the establishment is reacting to the first proposal and that is why it differed. The Department sought to work towards a robust improvement of efficiency and effectiveness of the SETA system and its response to the challenges the country faces. The milestones and achievements of the DHET have been achieved under constraint. The litigation problem with Wholesale and Retail SETA is that the DHET is dealing with vested interests. The assessment that led to the DHET putting Section 14 of the Skills Development Act under Administration was enhanced and driven by the ADs. This led to the Minister taking decisive action and so all those involved are protecting their space.

The DG appealed to the portfolio Committee to acknowledge the forms of resistance encountered by the Department. The DHET has to make a point that some key measures are put into place despite constraints. It has had to look at establishing cost effective measures e.g. shared services. Common practices need to be established and standardised processes. What was being presented had yet to be gazetted and therefore the portfolio Committee should take interest and put forward their views during the process.

On the skills planning unit, various entities in the country are conducting surveys. However, the DHET thought it important to develop a labour market intelligence for the entire country; it is in its final stages.
The DHET cannot suspend the skills development journey as it is required by law.

The DHET is responding to the fourth industrial revolution. Skills development caters to this. The Department also needs to dedicate a lot of energy into technical and artisanal skills development.

The issue of levies is not on the competence of the DHET. It is the responsibility of National Treasury under the Minister of Finance. All the Department can do is make recommendations.
The skills being produced by the DHET are relevant in that the higher the attainment of education by an individual, the higher their job prospects and attainment.

The R5.2b used for the bailout of universities came from money not spent in skills training. The DHET had committed to the expansion in the TVET sector through infrastructure and operational requirements and enhanced artisanal development in the country. However, as a result of #FeesMustFall demands, those funds had to be reduced and redirected. The DHET also funded postgraduate programmes in South Africa to accelerate them.

At this stage, the board is responsible for the strategic and annual performance plans but is also responsible for distributing the plans, which means that the board has the power to decide who gets projects. If the board is too involved in operations,then it becomes questionable.  That separation of power is necessary.

Ms Killian asked for confirmation from Mr Qonde that DHET had everything in order with NT regulations, specifically with whether the funding for students is in order. The committee would like to be seen as the oversight committee and not as participants as stakeholders; to be asked to participate through the white paper process does not regard the Committee as such.

Dr Bozzoli echoed these sentiments, the DHET delegation need to respond to the dissatisfaction of the portfolio Committee. They have to respond to unhappiness. She enquired on the standing of NEDLAC in relation to the use of SETA funds as they were seeming like the oversight committee.

Mr van der Westhuizen asked Mr Gwebinkundla about the structure of the National Qualification Forum (NQF); the way in which unemployed people are being recruited for training. The National Skills Fund was developed to support working class people and so that is who he thought the government should be attending to. DHET must involve the private sector as more than levy payers- as entities taking an interest and responsibility in the people who would contribute to their industry.

Mr Mbatha did not believe that there was anything wrong with taking away from funds for university education. He argued that there is more transparency that way.The complication with the presentation was that they had been expecting to use the new landscape to address poverty and inequality.  He highlighted the importance of unravelling opportunities for those who will never be able to enter formal schooling.

Ms Mchunu reiterated the displeasure of the Committee with the presentation and was also critical of the Committee’s role being reduced and being advised to participate in the white paper process as the oversight committee.   

The DG reassured the Committee that their work as the oversight committee was not being undermined or invalidated. He acknowledged the suggestions. The DHET needed to go back and revise the proposal as it was different from the initial one.

The Skills Development Act states that the DHET has to go through NEDLAC processes if there are proposed amendments. This mandatory process cannot be bypassed.
What is essential is that the views expressed by the Committee must resonate in that process itself.
The DG agreed that there's no way of offering programmes in TVET colleges without the participation of industry as that would be redundant. The DHET is having structured engagement with the industry through a human resource development council. The Minister of Education also has sessions with organised business and individual companies such as SABreweries, the insurance industry and the automobile sector which has even donated cars for training.

Structured occupational teams comprising of SETAs, the department and industry representatives, looking at how curricula can be redesigned especially in vocational skills area have been formed. This is to ensure that the skills being produced do speak to the needs of the industry. Prior to the introduction of the Skills Development National Strategy III, some training was only kept at NQF Levels 1-3, which only allowed people to get certificate of attendance. This is why the Department decided to train people towards a qualification instead.

The DG agreed that education and training systems had to be transformational in naturel. DHET had heard that the Committee was not pleased with the presentation and committed to reconsidering and returning to the Committee to account.

The Acting Chairperson thanked the DHET for all contributions and released them.

Committee business
The Acting Chairperson notified the Committee that on 21 and 22 March they would be having a skills development strategy conference in Pretoria. The Committee would be doing oversight in Limpopo. The last oversight they did in Kwa Zulu-Natal had left him inspired as people still made do although there were battles. The Committee would be going to the University of Venda, which was the first black university to offer an Engineering faculty. They would also visit the University of Limpopo to see the medical school and the agriculture department, and visit TVET colleges in Mokopane.

The meeting was adjourned.