Local Government Education & Training Board
NOTES FOR THE LOCAL GOVERNMENT SUBMISSION ON THE SKILLS DEVELOPMENT BILL To the PORTOFLIO COMMITTEE ON LABOUR
19 August

(Presented by Councillor Nomusa Dube
Chairperson of the Local Government Education and Training Board)

INTRODUCTION
The Local Government Sector is committed to the success of South Africa's Skills Development Strategy and broadly supports the contents of the Skills Development Bill developed by the department of Labour.

Local government stakeholders, interested in the transformation of local government training have worked over the past months to mould the proposed legislation into an appropriate vehicle for raising the human resource capacity of local government.

If local government is to successfully fulfil its new mandate of development and delivery, a human resource development environment, and an entirely new training system will have to be established and maintained.

The Local Government Education and Training Board strongly supports the notion of developing an integrated training strategy for councillors and officials through the local government SETA that will result in a democratic, developmental and economically viable local government sector.

In the past the belief was held that training needs of councillors and officials were vastly different. Recently, it is broadly acknowledged that the training needs of councillors and officials often overlap. This is particularly true when considering the training needs of local government as a distinct sphere of government charged with the tasks of development and delivery.

In this context it is important that the training needs of councillors and officials be considered within the context of the Skills Development Strategy and the South African Qualifications Authority. Training must ensure that both councillors and officials are given the tools to build and sustain democratic, developmental and accountable local government.

A local government SETA will ensure that training received by councillors and officials will be accredited. Each training course attended becomes a stepping stone on a logical career path for each individual. This approach, we believe, will over time raise the human resource capacity of local government. It will also fall in line with the national training initiative that provides for career pathing and portability of skills to all individuals.

There are, however, some remaining issues that are of particular concern to the major local government training stakeholders that we wish to raise with the Portfolio Committee on Labour. The submission that I am presenting this morning represents the views of the Local Government Education and Training Board which is made up of an employer component (S ALGA), organised labour (SAMWU and IMATU), as well as the Department of Constitutional Development (DCD).

The Interim Local Government Education and Training Board has been tasked with the duty of acting as a 'midwife' to the envisaged local government SETA. Much work has gone into building consensus around the proposed future strategy and have made comments on the Skills Development Bill at its various stages over the past months.

PURPOSE OF THE ACT
Broadly we agree with the fundamental purpose of the Act which includes goals such as:
To develop the skills of the South African Workforce
To increase levels of investment in education and training in the labour market and to improve the return on investment
To encourage employers to use the workplace as an active learning environment
To provide employees with the opportunities to acquire new skills
To improve the employment prospects of persons previously disadvantaged by unfair discrimination and to redress those disadvantages through training and education

However, we find that there is a tendency in the ACT to foreground accredited learning and to exclude from perspective other forms of education and training which are necessary for representatives for 'bridging' and for community developmental purposes.

There is within the Act in general a tendency to leave much to regulation by the Minister without it being clear how this may be open to public consultation.

THE NATIONAL SKILLS AUTHORITY
Representation
With respect to the adequate representation of local government on the National Skills Authority (NSA), we have some major concerns.

The National Skills Authority as described in the Bill is the body that oversees the work and functioning of the various Sector Education and Training Authorities (SETAs). The NSA will also administer the National Skills Fund. The National Skills Fund will collect in 20% of the revenue collected from all SETAs and has the responsibility of distributing those funds to the most disadvantaged areas of human resource development in the country for additional provision of education and training.

It appears obvious that local government, that spans many industry sectors, is well placed to identify and prioritise areas of disadvantage and should thus of necessity be represented on the NSA.

The NSA comprises 5 State, 5 employer, 5 employee representatives as well as other community and interest groupings. If one considers that there are currently at least 20 sectors planning to establish SETAs, it is clear that all sectors will not be represented on the NSA. In addition, it was agreed at NEDLAC that the 5 employer seats should be reserved for private employers.

The Local Government Education and Training Board agrees that SALGA should be one of the state representatives as the representative of local government. SALGA supports this view.

With regard to the issue of representation of local government as part of the Skills Development Act, the Board is also concerned that the Bill does not require the Minister of Labour to consult with other Ministers on matters relating to a SETA in their sector. The role of the Ministry for Provincial Affairs and Constitutional Development within the framework of the Skills Development Bill, is in our mind, rather unsatisfactory.

Constitution of the NSA
· It is our understanding that the NSA is to act as an advisory body to the Minister. Clause 7 (5) that refers to regulations states that a "supporting vote of at least two thirds of the Authority's members is required for advising the Minister on regulations to be made". It is not clear why it requires a two thirds majority to do so in terms of clause 7(5). It seems reasonable that the Minister would be interested to hear the recommendations or advice of the majority view of the NSA on the issue. Perhaps as local government stakeholder we are not clear on the rationale behind such a decision and thus seek clarity in this regard.

SECTOR EDUCATION AND TRAINING AUTHORITY
Establishment of a SETA
· The Local Government Education and Training Board fully supports the establishment of a SETA for local government. We believe that this legislation will allow local government training to utilise the Skills Development Strategy as a vehicle for transforming local government in line with the National Framework.

· We are satisfied that this section of the Bill supports grounds for demanding a local government SETA. In fact as it stands we happen to be one sector which the Act privileges by determining that we will have a SETA [14(7) of Transitional Measures].

Functions of a SETA
· The Board broadly agrees with the functions of a SETA but asserts that the legislation should not be prescriptive or bind a SETA to only those functions. If a SETA is able to perform other functions not yet envisaged that would enhance the quality of outcomes of that SETA and that are in line with the ACT, then it should be allowed to do so. An enabling phrase such as "any such other functions as are consistent with the objectives of the Act" that would allow for this would be useful.

Chambers of a SETA
· SALGA envisages provincial Chambers to work on the implementation, monitoring and evaluation of much of the actual training. We support the notion of centralising the responsibilities of a SETA to the national structure. We believe that this will allow for equitable redistribution of funds across provinces to ensure that adequate provision of training occurs throughout local government in the various types of municipalities.

· Clause 12 (4) that dictates that "a chamber of a SETA is entitled to such percentage of the skills development levies collected in its jurisdiction as the Minister after consultation with a SETA determines" causes some concern to us. This clearly undermines the powers of a SETA to work within the prescribed limits of Act as a reasonably self governing body.

· The ACT could find some formula for a constitutional requirement that obliges a SETA with Chambers to utilise or disburse its funds on an equitable basis with reference to:
· Income received from the area of any Chamber
· Due regard to the sector's Skills Development Plan
Priorities identified within the National Skills Plan
· Indicators of sub-sector capacity to manage learnership programs

· To force each SETA into consultation with the Minister of Labour over disbursement of funds after a National Skills Plan has already been approved appears to be too rigid.

· This seems to us a case where the Department of Labour is unwilling to recognise that the system will only work if SETAs are given some self-governance responsibilities.

Constitution of a SETA
· The Local Government Education and Training Board agrees that the ACT should set out the framework for a Constitution of a SETA. This framework should be enabling. It should provide guidelines for the minimum requirements of a SETA, but should allow it to expand beyond its minimum requirements. For example, the ACT cannot prescribe through a standard constitution that all sectors should engage in employment services. However, should the local government SETA see scope for the co-operation between some municipalities and the Department of Labour around employment services, the Constitution should not be so prescriptive that it would prevent such an activity for the SETA. We believe that is should be possible for the SETA to perform additional policy and developmental functions should it see fit and have the capacity to do so.

· We propose that to create a more enabling environment 13(3) b (ii) be changed to read: "any other matter necessary for the performance of the SETA’s functions or the attainment of the objectives of this Act".

LEARNERSHIPS
· The Board supports the introduction and development of learnerships in local government broadly, though other methods of training for councillors through the SETA will be more appropriate.

· There are some questions that we wish to raise and problems that we wish to put forward with respect to the process of determining the nature of learnership employment contracts and the resolution of disputes about learnerships.

· It is quite acceptable that the Minister through the Employment Conditions Commission established by section 59(1) of the Basic Conditions of Employment Act plays a directly regulating role in sectors or parts of sectors that are weakly unionised or do not have a bargaining council. The Commission can also have a general advisory role in the area of appropriate standards and contracts. However, in sectors with well functioning Bargaining Councils, such as local government, we believe that this is the correct structure for collective agreements and learnerships must be subject to regulation through the Bargaining Council collective agreements.

· In issues of dispute relating to learnerships, we cannot see reasoning for excluding Bargaining Councils from jurisdiction. The LRA deems bargaining councils suitable for the resolution of other types of disputes and this type should be included. It should be noted that a Bargaining Council's disputes machinery has to be approved by the CCMA and thus is in a position to handle such disputes.

SKILLS PROGRAMME
· A skills programme, according to the Bill is one that is occupationally based, will constitute a credit towards a qualification registered in terms of the National Qualifications Framework (NQF), uses accredited training providers, and complies with prescribed requirements. Any person that has developed a skills programme may apply for a grant to a SETA or a subsidy from the National Skills Fund.

· SALGA has already started considering the type of accredited training that could be funded for councillor training through a SETA. SALGA envisages skills programmes for local government councillors initiated, guided and funded through the local government SETA.

EMPLOYMENT SERVICES
· The Department of labour must establish labour centres and appoint any person in the public service to these centres. The centres are to provide employment services for employees, employers and training providers. The centres must register work seekers, register vacancies and work opportunities, assist prescribed categories of persons with special education and training and try to find them employment through special programmes. The centres must support communities to start income generating and training projects for prescribed categories of persons.

· It will be fruitful to explore local government's relationship, if any, to the employment centres of the department of labour. It may be possible that some of these centres be hosted within our municipalities. However, this should not become an obligation placed on municipalities, but an agreement entirely based on the will of a municipality. It also cannot be an unfunded mandate. The necessary financial, human and infrastructural resources would have to be considered and provided by the Department of labour should such an agreement take place. The important point to be made at this stage is that the ACT should not preclude such explorations in the future.

FINANCES OF THE SETA
The Ability of Local Government to pay the 1% Levy as prescribed by the Bill
· The Board is cognisant of the fact that the clauses relating to the levy have been removed from the Skills Development Bill and will be contained in a separate Skills Development Money Bill. However, the issue of ability to pay the levy is central to discussions around the success of a local government SETA and the success of local government training as a whole. The Board would like to stress that it agrees that the amount of a 1% levy should not be up for debate. However, we need to raise questions and possibilities to ensure payment of 1% should local government find that it is not able to pay all of it.

· The Board recognises that if South Africa is seriously going to address the lack of human resource capacity within local government, far more resources are needed for education and training than currently exist. In light of this, it supports the figure of a 1% levy to fund local government training. The levy amount for each SETA is calculated as 1% of an employers payroll per month. This is a much higher levy than we currently collect through the two existing local government training levies. If 1% of payroll is collected it will allow for more intensive and widespread training to take place throughout the local government sector.

· However, the currently reality is that municipalities may not be able to afford the 1% levy. The Skills Development Bill goes some way in addressing this by introducing some transitional arrangements for phasing in the levy in local government over 3 years. This does not, however, put all our concerns to rest. Firstly, there is no guarantee that the whole of local government will be in a position to pay the levy in 3 years. Secondly, even if that does happen, the question remains of how local government will fund training for the next 3 years whilst the full levy is not flowing into the SETA. This is of grave concern to us.

· A mechanism needs to be sought that will cater for the shortfall from municipalities unable to meet the 1% as a result of the realities facing local government. We need to consider where the shortfall of funds could be derived from. We submit that it could come in the form of a National Grant from the Department of Constitutional Development, as a portion of the Equitable Share of Revenue to Local Government (which would have to be increased accordingly), or from the National Skills Fund.

· With respect to the phasing in of the levy SALGA and the Unions share a similar concern. Whilst phasing in is part of a solution to the harsh reality that municipalities simply may not be in a position to pay the 1% levy immediately it is not the answer to the problem of ability to now or in the medium to long term. Nor does it answer the question of where top up funding to ensure that this necessary sum of money for training will come from in local government now, in three years or perhaps even further into the future.

· We submit that National Government has to share some responsibility in this regard. In addition, we recognise that it is incumbent on us as local government to run an effective awareness campaign in municipalities that illustrates that the payment of the levy is a valuable investment in human resource development. We also need to start an awareness campaign amongst municipalities around their role in preparing a Skills Development Plan which will be key in feeding into the National Skills Development Plan of the SETA.

CONCLUSION
· In conclusion I wish to reiterate the commitment of the Local Government Education and Training Board to its central task of preparing for the establishment of a local government SETA. This duty is part of our role in implementing the Local Government White Paper and its vision of democratic, developmental, accountable and sustainable local government. In this light we will strive to establish a training environment. that will be able to respond to the human resource development needs of a local government system in the throws of transformation.

PRESENTATION BY THE TRAINING BOARD FOR LOCAL GOVERNMENT BODIES TO THE PORTFOLIO COMMITTEE ON LABOUR ON THE SKILLS DEVELOPMENT BILL: 10:40 – 11:10, 19 AUGUST 1998

(a) Representation
The Board is concerned about the absence of local government representation on the National Skills Authority (NSA). It proposes that local government must be represented as part of the State component. This would mean that SALGA as the representatives of local government should have one of the seats assigned to government representatives. Failing this, DCD must ensure that it obtains a seat from the same pool.

(b) Dispute process under Learnership
The Board should seek clarity as to why these disputes are to be referred to the CCMA rather than the Bargaining Council. Disputes should be referred to the Bargaining Council which is accredited by the CCMA.

(c) Employment Services
The Green Paper on Skills Development talked about a relationship between the Department of Labour and local government in the establishment and functioning of employment services. This has disappeared in the Bill. As many of the functions of employment services could be carried out at municipal level, the Bill should make provision for municipalities (as well as other bodies) to provide such services at their discretion, on an agency basis. The function should not become an obligation for local government. It must be done at the discretion of local government and with adequate resources to match the responsibility.

(d) Levy
The Board agrees that the levy must remain at 1%. A reduction is not acceptable. However, the Board supports the need to look for a mechanism or mechanisms that will cater for the shortfall from municipalities unable to meet the 1 % as a result of the realities facing local government. The source of funds to meet the shortfall could be derived from local government's share of the equitable share (which would have to be increased accordingly), national government grants, or from the National Skills Fund itself. This provision should be included in the transitional arrangements for local government contained in the schedule of the Bill.

As a general comment it is not possible to evaluate the Bill properly without
having seen the Skills Development Levies Bill.

(f) Ad clause 6(2): No clear indication is given in paragraph (d) that local government will be accommodated specifically. If the group referred to in paragraph (e) is a general group and not according to sectors, local government training providers may not have a voice at all.

(g) Ad clause 9: The criteria listed are not really suitable for local government.

(h) Ad clause 10; The section referred to in clause 10(1)(e) is not identified in respect of the correct Act.

(i) Ad clauses 16 and 20: The requirements for learnerships and skills programmes would not allow for councillor training to be attended to by the local government SETA.

(j) Ad clause 35(1); The power to make regulations is not specifically excluded from the delegations that may be made.

(k) Ad item 14 of Schedule 2: In view of the fact that the speedy establishment of a local government SETA is envisaged, and the fact that learnerships and skills programmes are not designed for councillor training, the provision for councillor training provided for in item 14(6) will be of a short duration.