Business Unity South Africa (BUSA) is, however, concerned that Budget Vote 15 does not adequately address funding challenges that face the South African Qualifications Authority (SAQA) and the FET College sector. It would therefore wishes to proactively influence the thinking for 2005/6 and subsequent budget cycles, whilst proposing the refocus of certain short term priorities to provide for urgent needs that have arisen in the 2004/5 cycle.

Business Unity South Africa (BUSA) is an important and committed stakeholder in ensuring the success of the South African Qualifications Authority (SAQA) and the National Qualifications Framework (NQF). BUSA, its members and their affiliates consider themselves to be major beneficiaries of the outcomes of the country’s education and training system. To this end they have already invested a great deal of time and money in the design, development and implementation of the NQF, and continue to do so.

BUSA is, therefore, most concerned about the short-, medium- and long-term sustainability problems that confront SAQA because of its budgetary constraints. This is particularly concerning since a failure to ensure the sustainability of SAQA poses a threat to the goals of the transformation of the South African education and training system. This, in turn, will compromise the tenets of the Growth and Development strategy, the HRD strategy and the Skills Development Strategy.

Since its establishment in 1996, the Department of Education has been unable fully to fund SAQA and its key accountability (the development of the NQF) adequately. This has forced SAQA to rely on foreign capital, largely from the European Union, for more than 85% of its funding requirements. Given the magnitude of SAQA’s funding from foreign sources, it is inevitable that a significant proportion constitutes recurrent expenditure, including that for a large part of its permanent staff.

The stakeholders generally agree that SAQA should free itself from its reliance on foreign funding, an opinion that is confirmed in the "Report of the Study Team on the Implementation of the NQF" that was published in April 2002. It should be noted that this report referred to the SAQA budget as "modest", a sentiment that is echoed by BUSA given the wide-ranging responsibilities assigned to the Authority. The report of the Study Team also pointed out that SAQA is inadequately staffed in relation to similar bodies in other countries. This situation has been exacerbated by the fact that the Centre for Evaluation of Education Qualifications (CEEQ) of the HSRC was incorporated into SAQA in 1998, greatly expanding the Authority’s statutory mandate.

Despite these problems, the South African NQF has gained international renown and SAQA’s development work in this regard has been hailed for the successes it has achieved so far. BUSA believes that it would be a great pity should the pivotal role played by SAQA in our education and training system be undermined by its funding problems.

The Consultative Document on the review of the NQF was published jointly by the Departments of Education and Labour in 2003. This document proposes that the standards generating activities of SAQA be transferred to the Skills Development sector under the Department of Labour in order to reduce the SAQA funding requirement. BUSA believes that this will not reduce the funding requirement of SAQA because SAQA needs to significantly increase the size of its Quality Assurance and its National Learner Records Database Unit to adequately fulfil its national mandate. Such expansion has not been possible due to the ongoing funding crisis in which SAQA has found itself.

In the interim, BUSA would urge that, in the 2004/5 budget cycle, under-spent funds should be identified and channelled to SAQA to enable it to already begin to free itself for foreign funding for recurrent operational expenditure.

Business has, for a number of years, expressed its concern with the inadequate levels of funding afforded to the FET College sector. BUSA believes that the funding framework for the FET College sector is now in urgent need of review. Such a review will, inevitably need to be accompanied by drastic measures to improve the performance of this sector.

FET occupies a pivotal position in the developmental life cycle of lifelong learners, as it is at this point that learners begin to make career choices and select the learning to support these choices. The TVET sector (notably FET Colleges) should be a first career development stop and the basis for further learning for vast numbers of Learners. Evidence in the form of an audit of the FET Sector published in 2003 suggests that of this sector is now the last resort for learners.

This audit found that, between 2000 and 2003, 100 000 Learners in the age bracket of 15 to 19 years entered FET Colleges. Over the same period the number of Grade 12 Learners decreased proportionately and the Senior Certificate pass rate increased. The FET reports published by the College Collaboration Fund indicate that, over the same period, the pass rate for FET in 90% of FET College campuses was consistently below 50%. This bodes the question as to whether or not the increased tendency of youths to transfer to FET Colleges has not been prompted by the need to improve the grade 12 pass rate by "weeding-out" weaker Learners, with negative consequences for the Colleges.

FET Colleges continue to find themselves at the end of the queue for learners as they systematically eliminate their post-FET development options in spite of the national growth in demand for people with Technical and Vocational Education and Training

Further, few unemployed youths are able to access FET Colleges and thus develop skills to become employable. Of concern in this regard is the fact that fewer than 15% of the current Learners on registered Learnerships in the FET sector having been drawn from the ranks of the unemployed (contrary to the intent of the National Skills Development Strategy).

The KPMG report of 2003 found that essential maintenance of certain campuses has been neglected and that these are hampering their ability to perform adequately.

Over the past decade the National Business Initiative has, through its College Collaboration Fund and provision of expertise, filled an important role in the development of the FET College Sector as an extension of the severely understaffed and under resourced National Directorate for FET. Soon this partnership will end.

From the above discussion, BUSA believes that funding priorities for this sector over next three years should be focused on the following three goals:

• Infrastructure refurbishment:

The KPMG report of January 2003 found that the 152 Colleges Campuses throughout South Africa require an immediate once-off cost of R1,919bn to attend to the immediate needs for infrastructure repairs to ensure that they of at least usable.

This is a cost required to address the basic needs of these institutions and should therefore be funded by Government. Refurbishment projects could be initiated as Public Works programmes and serve the additional purposes of providing skills and short-term employment.

• A national Learner Fund:

Potential Learners in the FET College rank among the most vulnerable grouping that require Skills. There is, at present no National Learner Fund similar to that for the Higher Education Sector.

The FET College sector is in urgent need of a National Learner Fund to enable it to support the Skills Development Sector by addressing the institutional component for Learnerships. This fund should, initially be seeded by Government and progressively grown from internal and external donor funding. The magnitude of the initial seed funding will need to be determined by and

• :Continuity of FET College Sector Development due to gap left by NBI

In July 2004 the relationship of the National Business Initiative with the Department of Education comes to an end and the College Collaboration Fund will be closed.

During the second half of 2004 the Department of Education will need to put a structure in place to fill this void and ensure continuity of the initiatives and outputs that were introduced and carried out by the NBI. This will require immediate funding.