made to it, reports as follows:

1. Introduction

The Committee met with six SETAs and officials from the SETA Co-ordination

unit of the Department Of Labour (DOL) on 23 and 30 August. The delegation

from the DOL was led by Messrs S Morotoba: Acting-Deputy Director-General:

Skills Development and F Prinsloo: Acting - Senior Executive Manager: Seta Coordination.

The SETAs which made presentations were the following:

Services Sector Education and Training Authority (Services SETA)

Public Service Sector Education and Training Authority (PSETA)

Financial and Accounting Services Sector Education and Training Authority

(FASSET)

Food and Beverage Sector Education and Training Authority

(FOODBEVSETA)

Chemical Industries Sector Training Authority (CHIETA)

Manufacturing, Engineering and Related Sector Education and Training

Authority (MERSETA)

1. Monitor progress and establish problems in the implementation of the Skills

Development Act (Act No 97 of 1998).

2. Determine the level of performance of Sector Education and Training

Authorities (SETAs).

3. Identify the challenges and constraints faced by the SETAs.

4. Monitor the level of compliance with the PFMA.

5. Assist in formulating proposals which may assist in developing a way

forward

The Committee agreed that a report would be compiled and tabled in Parliament

after all the information had been collated and analysed.

3. Overview by DOL

The Committee received a broad overview from DOL on the SETA

landscape for 2005-2010 and the provisional overall SETA performance

results. The department indicted that there had been some improvement

in the performance of SETAs and government representation at senior

levels in the SETA boards. However, the scale used for performance

management had been based on compliance rather than performance.

Performance approach would be implemented in the future.

The review of the SETA landscape that was finalised in 1 July 2005, resulted in

the amalgamation of some SETAs. The department has clustered SETAs for

internal management purposes, with each of the five clusters headed by a

manager.

SETAs are mandated by the Skills Development Act to drive the National Skills

Development Strategy (NSDS). Although there was a significant improvement in

the focus of SETAs, they are still faced with a challenge of meeting the NSDS

equity targets. Each SETA was expected to have a number of learners registered

on learnerships. The department was concerned at the lack of understanding by

some of employers who used funds meant for learnerships for their salary

budgets. However, organisations such as NACTU, BUSA and FEDUSA were

approached to assist in dealing with some of the problems on learnership

implementation. The DOL had ensured that business unit managers in provincial

offices are capacitated to understand the learnership determination which is meant

at protecting learners. A learnership guide for unemployed people was published

in all the languages. The department has embarked on a massive distribution of

those guidelines.

With respect to the issue of finances, the department indicated that although there

was an improvement in the area of financial management by SETAs, there was

still more to be done. DOL had developed and published revised grant

regulations to address the issue of surpluses. There was a concern around the

issue of companies that develop plans that are not implemented. That resulted in

some SETAs having to hold monies against such plans indefinitely. The revised

grant regulations now does away with this problem.

The department was in the process of devising a programme that will culminate in

the improvement of corporate governance within the SETAs. The programme is

being developed in conjunction with the University of South Africa and funded by

the National Skills Fund.

With respect to the funding of learnership programmes on the Expanded Public

Works Programmes (EPWP), the Department of Public Works and the

Construction SETA had approached DOL for funding of EPWP learnerships.

These funds were allocated from the National Skills Fund (NSF). The Ministers

of Labour and Public Works had met to discuss issues which they should raise

with Treasury relating to the concerns raised by the private sector with respect to

levies and how to maximise EPWPs.

The Committee expressed its concern around the issue of an exit strategy, and the

after-care of learners who graduated from learnerships.

The briefing by PSETA was on the following:

* Mission

* Scope of coverage;

* Re-certification;

* ETQA;

* Skills planning; and

* Learnership implementation

The mission of PSETA commits it to co-ordinate and facilitate delivery

of appropriate learning programs to improve transverse skills in the

public service.

PSETA had done a lot in the major areas to up-skill employees in the

18.1 learnerships and to ensure that there were appropriate programmes

in place for those employees to be better skilled. The SETA had had a

problem with public service departments that were spending huge

monies of their training budget on allowing employees to attend private

sector short courses that were not credited with PSETA, as well as

spending on attendance to conferences. With respect to the latter, the

Director-General in the Department of Public Service and Administration

was tasked with a project of coming up with policy that will regulate the

attendance of conferences by public servants. PSETA alluded to the fact

that it was still experiencing a great difficulty in getting departments to

spend more of their 1% training budget especially in relation to 18.1

learnerships. The SETA had, however, developed clear guidelines to

assist departments in approaching 18.1 learnerships.

PSETA acknowledged that not much was done in the identification and

development of appropriate courses for junior management and officials

at lower levels. They also acknowledged that they were currently

focusing on the area. The SETA was doing lot of work in the skilling of

senior management and middle management in terms of their

competencies. However, while these have been a focus of work carried

out by PSETA and SAMDI, there was a concerted effort to pay attention

to junior management through the development of qualifications at NQF

4 and 5.

With respect to the concern that was raised by the Committee around the

mindset of public servants, PSETA in partnership with the South African

Management Development Institute (SAMDI) had developed a

comprehensive induction and orientation course that would assist both

new and existing employees in orientating them to the new ethos within

public service, as well as keeping with the principles of Batho Pele.

In relation to its status, PSETA expressed a view that the fact it had been

a unit within the Department of Public Service and Administration

(DPSA), had posed challenges on its accountability and resulted in it

being unable to perform as expected. The SETA was currently in the

process of registering as a public entity. The setting up of process would

be finalised by November 2005. However, the legal status would enable

it to receive appropriate funding to ensure that it meets the NSDS

requirement and overcome problems around accountability and

governance.

PSETA had received a certificate of establishment for 2005 – 2010 and

could apply to be established as a legal entity. It has submitted a

proposal to Treasury to get a dedicated grant to fund PSETA. There was

a need to ensure that each department utilized the allocated skills levy

appropriately and effectively.

With respect to the roll out of 18.2 learnerships, PSETA could only fund

4000 learners due to the funding received from the NSF. The first phase

of the project was rolled out in the Eastern Cape, Northern Cape,

Mpumalanga and North West provinces. Allocation of learners was

done as per the needs identified by the provinces. The qualification on

the 18.2 learnerships was currently rolled out will be completed by the

end of March 2006. PSETA was in the process of approaching the NSF

to fund the second phase which will include the other four provinces.

This will enable the PSETA to meet the GDS targets.

The South African Qualifications Authority together with PSETA do

quality assurance on training provided. Regular reports are done and it is

ensured that the training provided is valid and meets the needs.

The issue of exit opportunities for learners had been raised with DOL

and DPSA. The SETA is looking at ensuring that when unemployed

youth are brought into learnerships, the question of vacancy

requirements, as well as scarce skills requirements are considered.

PSETA is in a process of putting up a clear policy on how to deal with

the retention and recruitment of these learners into permanent

appointments after training. The issue of skills shortage is dealt with as

part of the Skills Database Project which is massively undertaken in the

public service as part of the Governance and Administration Cluster. A

commitment had been made to the President, as part of the national

strategy, the project will be up and running by January 2006. PSETA is

also looking at long term strategy to deal with training of professionals in

the public service. The recruitment of foreign professionals is a short

term strategy.

The public service is perceived as having made progress in the

implementation of employment equity, especially at senior management

level. The two areas which are identified as lagging behind were females

in management positions and employment of people with disabilities in

the public service. Government and in particular the DPSA had an active

recruitment campaign to increase the number of people with disabilities

in the public sector, and PSETA was committed to ensuring that at least

4% of all learners were people with disabilities.

The question of infrastructure development for public servants is a

programme that was dealt with through the GNA. PSETA

acknowledged that there was a backlog in this area.

The Committee expressed its view on the importance of linking skills

development processes in order to improve performance in the public

service. PSETA was looking at ensuring that skills development was in

line with the performance management systems within the public service.

Regarding the issue of collaboration amongst SETAs, PSETA has an

agreement with the ISETT SETA to implement an NQF level 4

learnership on systems development. There were also learnership

agreements with the Health and Welfare SETA around auxiliary nursing

healthcare, and the ETDP around Facilitators and Assessors.

The DOL emphasised on the importance of SETAs to work together, as

well as the different spheres of government. The NSDS II does

emphasise on this work collaboration. The issue around the physical

presence of SETA in provinces could be addressed by this collaboration.

The PSETA had targeted to meet the 10 000 target set by the Growth and

Development Summit (GDS). PSETA was concerned that learnerships

were not used to do practical experience.

The PSETA board had identified the issue of exit opportunities for

learners as a priority and would like to ensure that people were linked to

vacancies.

The Committee noted the problem of scarce skills in the country.

However, PSETA alluded to the fact that the recruitment of foreign

professionals was used as a short- term strategy, there was a need to put a

long- term strategy to deal with professionals in the public service.

The Committee expressed concern at the public service lagging behind in

the implementation of employment equity. The lack of women managers

and the employment of people with disabilities were identified as areas

where less progress was made. It was suggested that provisions should

be made to ensure that training in SETAs include people with

disabilities.

The issue of work collaboration is spelt clearly in the 2005-2010 NSDS.

The issue of each SETA having an office in each city was seen as costly.

Fostering inter-SETA relations could be a solution to the matter. It was

also proposed that DOL provincial offices should look at whether the

Sector Skills Plans (SSP) were linked to the Integrated Development

Plans (IDP).

FASSET is responsible for ensuring that appropriate learnerships are

available in the financial sector. The SETA has 22 registered

learnerships. In terms of cross-sectoral learnerships, 21 Memorandum of

Understanding (MOU) were signed with other 21 SETAs. The SETA

exceeded its target of 3, 000 learner in learnerships for the first five

years. These were learners that were previously employed and

unemployed. 100% of learners who completed their learnerships were

formally employed or furthering their studies. A great deal of work was

done in terms of driving the concept of signing previously disadvantaged

individuals into FASSET learnerships.

The SETA had been involved in a number of social development

projects. The purpose of these projects was to meet the high skills needs

within the sector. However, all these were in line with the NSDS equity

targets in terms of beneficiaries, i.e 85% Black, 54% women and 4%

Disabled. Each project is measured on an ongoing basis and measured

against the agreed objectives and deliverables. Examples of these social

projects included Science and Maths school project, Guarantee Trust

Holdings (GTH) work readiness programme, Thuthuka and CIMA

Tirisano learnership project. The level of training offered by these

projects ranged from Grade 12, where support was provided to learners

in subjects such as Higher Grade Mathematics, English and Accounting,

as well support to graduate and post graduate level students.

The Education Upliftment Project (EUPEC), supported by the NSF, had

assisted in fast tracking transformation and driving participation in the

skills development initiative in the sector. The project also provides

support for the School of Accounting at the University of Fort Hare in

the Eastern Cape. The NSF supports the Thuthuka project in the Eastern

Cape. The SAICA had also assisted in the implementation and

delivering of those projects. However, the DOL has allocated R75m to

extend the project to Limpopo and Kwazulu-Natal.

Almost 2000 Workplace Skills plans were received and over 1000

workplaces were accredited. 36% of SMMEs participated in claiming

grants and attended interventions. Over R147 m was spent on training.

Challenges

Proactive communication to all stakeholders remains a high focus area at

FASSET. Part of that include Continuous Professional Education (CPE)

training sessions. This plays a vital role in ensuring high levels of

awareness, support and participation for all initiatives. However, the

issue of the regional representation of the SETA remains a concern to the

Committee.

Transformation and diversity remains a challenge in the financial sector.

FASSET’s efforts in addressing inequalities were stifled by insufficient

numbers of previously disadvantaged individual matriculants with higher

grade Mathematics coming to the system. Even where black

matriculants have received relatively high symbols, training institutions

claimed that learners did not have expected level of knowledge of

Mathematics and Accounting. In addition, poor proficiency in English

language, lack of computer knowledge and facilities, as well as

inadequate career guidance continued to inhibit access into the sector.

The Committee wanted to know the relationship between the FASSET

and the Department of Education, especially in relation to the demand of

Maths and Science. The high numeracy required by the sector also

serves as a barrier to entry, although Matriculation results have improved

in recent years.

FASSET is committed towards changing the profile of the sector,

especially in relation to issues such as the number of qualified Black

Chartered Accountants. The marketing strategy of the SETA in schools

and universities runs in conjunction with professional bodies in the

sector, as well as the Association for the Advancement of Black

Accountants (ABASO). The latter is quite active in rural areas.

ABET training is offered to all employees who are currently within the

sector. Such training is funded by FASSET in a form of a grant.

The impact of the R500 000 remuneration ceiling levy exemption on

SME participation and assistance pose a challenge.

The Committee was concerned at the Department of Finance and the

South African Revenue Services (SARS) which were not paying levies,

although they were one of the large sectors that were benefiting from

FASSET.

The SETA has almost 107, 588 employers on its database. 60% of

member companies are levy-paying and 40% non-levy paying. The SETA

had registered 54 learnerships with the South African Qualifications

Authority (SAQA). The GDS targets were exceeded by

300%. In addition, targets of registered learners was exceeded in line

with the Service Level Agreements (SLAs), as well as disability targets on

learnerships.

The highlights of SSETA activities during the previous financial year

included the following:

* Over 600 Skills Development Facilitators (SDFs) were trained.

* The development and registration of the small business

qualification for SMMEs.

* The roll-out of an employee assistance programme in response to

a a holistic view to skills development.

* The formation of an inter-sectoral Disability Forum.

* Accreditation of 1089 service providers and ISO accreditation of

SSETA as an organisation.

* The successful implementation of the NSF funded domestic

worker skills development project.

Opportunities facing Services SETA in implementing NSDS

2005-2010 were noted as follows:

* A more targeted approach to skills development with focus on

scarce and critical skills.

* Collaboration and strategic partnerships at national, provincial

and international levels, including NEPAD secretariat.

Deleted: ¶

* A more focused support to large and medium firms in the sector

towards skills development.

* Linking learnerships and placement within broader EPWP

framework through partnership agreements linked to demand side

of strategies.

Challenges facing SSETA in implementing NSDS 2005-2010 were noted

as follows:

Inclusion of employment equity criteria for large and medium firms

in the sector for 10% mandatory grant component, as well as

improved board

profile regarding employment equity.

Learnership funding specifically with drop income due to tax

amendments.

Fast tracking certification partners for all industries.

Disability target and profile in the sector.

Providing skills development support and initiatives to approximately

100 000 non-levy paying employers in the sector.



The SETA has 54 registered learnerships. CHIETA was mentioned

amongst one of the SETAs which were announced as an excellent

performing SETAs by the Minister. The SETA had done very well

particularly in terms of its management of funds.

1 867 people in the 18.2 category entered learnerships in the chemical

industries sector. A further 1 878 workers were registered in the 18.1

learnerships. Out of the 1 466 GDS target that was set for the SETA, 3

812 people were trained. That exceeded the target by 115%.

As part of the contribution towards national objectives of growth,

employment and poverty alleviation, 4 040 unemployed learners

completed ABET Level 4 skills programmes aligned to the chemical

operations NQF level 1 learnership. 2 033 learners employed by

SMMEs participated in ABET skills programmes. 163 HIV/Aids

workplace co-ordinators were trained and supported. Customised

business development initiatives were implemented for 20 SMMEs for

sustainability.

CHIETA acknowledged that although 43 disabled people benefited from

their training, this is the area which not much was done. One of the

reason could be attributed to nature of the sector. However, the SETA

had encouraged the training of the disabled on skills such as IT,

switchboard, etc. The SETA also acknowledged that more needed to be

done to attracting youth to the sector.

In terms of marketing itself, CHIETA road and radio shows were

conducted. Staff were also deployed throughout the country, including

the rural areas where they visit schools and educate school children about

the sector. The SETA did acknowledge that there was a need to engage

in a vociferous manner in advertisements so as to market itself.

Recognition of prior learning is seen by CHIETA as important,

especially to people who although they did exceptionally well in

technical work, but could not progress to higher positions.

CHIETA had performed exceptionally well under the NSDS 1. However,

for it the new strategy, NSDS II would require it to rethink the way in

which products and services could be delivered. It also necessitates a

greater accountability of funds expended, quality of training provision,

involvement of marginalised communities, information gathering,

interpretation and dissemination, and directed social development

approach. The strategy also calls for stakeholder involvement at all level

The function of the SETA is to promote, facilitate and incentivise skills

development in the food and beverage manufacturing sector. The SETA

had successfully helped in the establishment of a sector Employment and

Skills Development Lead Employer (ESDLE) and the FOODBEV

learnership agency. The highlights of the SETA included the following:

The NSDS targets were exceeded by 54%.

The SETA had unqualified reports every year until closing of the

NSDS 1.

A positive audit report was received by SAQA and re-accreditation

as an ETQA body.

The low lights were listed as follows:

The delay in the re-certification hindered forward planning.

Funding of learnerships was restricted due to limited funding.

Difficulty in reaching the more rural areas.

Difficulty in achieving NSDS targets for the disabled.

Uncertainty over spill-over effects of merger of primary and

secondary agriculture SETAs.

Delay in announcing the NSF funding window.

Closing off of the hugely successful NSF funded Hlumani project.

Funding required for many NSDS targets and momentum created

around learnerships was noted as a challenge.

The Committee noted the weakness in the linkage between provinces and

rural areas as a concern. However, the possibility of the presence of each

SETA in all the provinces would be costly. This matter could be

addressed by the collaboration between the SETAs. A proposal made

was that provincial labour centres could be used to servicing the SETAs.

4.6 Manufacturing and Engineering SETA

Fifty percent of the income on levies come from big companies. A lot of

improvements were done since the appointment of a new Chief

Executive Officer. Part of the improvements included the following:

Enormous increase in learner intake due to announcement of enticing

discretionary grants.

Huge intake of unemployed learners.

Increase in payment of discretionary grants.

Huge successful SMME initiative resulting in sponsored training for

11 000 employees in small and medium companies.

Successful ABET project with ABET learners also from SMME

companies.

With respect to the SETA contribution to growth, employment and

poverty alleviation, 4 581 unemployed learners were registered. Out of

the latter, 3 477 were black, 1 017 female and 71 people with disabilities.

620 unemployed learners had completed learnerships. Out of the 6 669

apprentices registered, 3 608 were black, 302 female and 69 disabled.

All 4 498 apprentices that were registered and qualified were absorbed in

the industry.

Challenges of the NSDS 11 were listed as follows:

Aligning the strategy to uniqueness and diversity of the

manufacturing sector.

Low target for non-levy paying companies versus levy exemption of

small companies.

Delays in the announcement of NSF funding window.

(1) Work collaboration among the SETAs should be enhanced.

(2) The DOL should do more research on the profile of service

providers.

(3) The DOL should look into the issue of SETA boards and their

contribution.

(4) The DOL should monitor the functions of the Standard

Generating Bodies and their representation.