Report on Public Hearings with SETAs: finalisation

Meeting report

LABOUR PORTFOLIO COMMITTEE
23 September 2003
REPORT ON PUBLIC HEARINGS WITH SETAs: FINALISATION

Acting Chairman: Mr D Olifant (ANC)

Documents handed out:
Labour Portfolio Committee Report on public hearings with the SETAs held on 18 and 19 March 2003 (Appendix)

SUMMARY
The Report on the Public Hearing with SETAs was adopted.

MINUTES
The Committee met to adopt the report on SETAs. The last draft had not contained any thing that they had disagreed with except for grammatical issues; which the latest document had corrected.

Grammatical changes noted:
1.2 (c) omission of "h" in the word "This"
3.1 (a) omission of "on" after the word "embarked"

The report would change Setas to read as SETAs in uppercase form.

Discussion
Mr Mzondeki (ANC) requested that in addition to the recommendations, the SETAs could be invited to Parliament for feedback.

The Chairperson said that once Parliament adopted the report, it would act on it.

The report was adopted with the changes and additions to the recommendations.

The meeting was adjourned.

Appendix
Report of the Portfolio Committee on Labour on public hearings with the Setas held on 18 and 19 March 2003

The Portfolio Committee on Labour, having conducted the hearings and having noted the presentations and submissions made to it, reports as follows:

A.Terms of reference

The Committee resolved to conduct the hearings on 18 and 19 April 2003. The objectives of the hearings were to:

Monitor progress and establish problems in the implementation of the Skills Development Act (Act No 97 of 1998).
Determine the level of performance of SETAs since their inception.
Assess measurable outputs and indicators which show the development of SETAs.
Identify the challenges and constraints faced by SETAs.
Monitor the level of compliance with the PFMA.
Assist in formulating proposals which may assist in developing a way forward
Fulfil its mandate of overseeing the Department of Labour (DOL) and statutory bodies that fall within its portfolio.
Determine whether policy developments take place in accordance with the key objectives and aims as stated in the 15-point plan of the DOL.

The Committee agreed that a report would be compiled and tabled in Parliament after all the information had been collated and analysed.

B.Background

Eight SETAs and officials from the SETA Co-ordination unit of the DOL appeared before the Committee. Each SETA was represented by the Chief Executive Officer, Chairperson, representatives from the organised labour and business. The DOL was represented by the Senior Executive Manager: SETA Co-ordination, European Union Team Leader: SETA Co-ordination, and the Manager: SETA Co-ordination.

The following SETAs appeared before the Committee:

Diplomacy, Defence and Trade and Industry Sector Education and Training Authority (DIDTETA)
Energy Sector Education and Training Authority (ESETA)
Health and Welfare Sector Education and Training Authority (HWSETA)
Insurance Sector Education and Training Authority (INSETA)
Media Advertising Publishing Printing Packaging Sector Training Authority (MAPPP SETA)
Mining Qualifications Authority (MQA)
Transport Education and Training Authority (TETA)
Tourism and Hospitality Education and Training Authority (THETHA)

C.Introduction

The Committee received a broad overview on the functions of the SETAs. The briefing included major success of the establishment phase, and challenges faced with respect to the implementation of the National Skills Development Strategy.

It was mentioned that the SETAs had within the last three years spent a substantial amount of time and effort on:

establishing systems and structures;
building the capacity of all the role-players; and
adopting policies to institute proper governance practices.

The Committee was further informed that the Setas were starting to implement programmes and initiatives aligned to the long-term objectives of the National Skills Development Strategy.

The SETAs' presentations focussed more on progress made and challenges faced by the SETAs around the following:
Skills planning and Grant Disbursements
Quality assurance
Learnerships
Finances, and
Governance

D Input made on SETAs

Skills Planning and Grant Disbursement

One of the core functions of SETAs is to facilitate and monitor skills planning and reporting, as well as to disburse skills grants to qualifying companies in the sector.

Successes in respect of Skills Planning and Grant Disbursement

The DOL has approved the Sector Skills Plans of all the economic sector.
In each economic sector there has been a definite increase in the number of Workplace Skills Plans (WSPs) and Annual Training Reports (ATRs). This growth participation, however, means that more skills grants are being disbursed to qualifying companies by the SETAs.
The number of strategic projects identified and supported by the various SETAs through discretionary grants has increased considerably.
The requirement for companies to nominate and register Skills Development Facilitators (SDFs) with various SETAs has meant that there is a dedicated resource in the companies to facilitate the planning, reporting and consultation on skills development. SETAs have implemented training programmes for SDFs, and have thus built capacity in the sectors. Efforts to ensure representativity among SDFs are ongoing in the different sectors are ongoing in the different sectors.
SETAs are promoting a learning culture in companies. They are best placed and resourced to encourage the concept of the workplace as a place of learning. SETAs, however, are able to track the trends of skills development in their respective sectors, and measure the impact of the outcome of training in relation to productivity and performance of the overall sector.
SETAs have increased their effort and found various creative ways of involving and supporting the SMMEs. Meanwhile the DOL has established an SMME Forum to facilitate dialogue in respect of this challenge that is facing the SETAs.


Challenges facing Skills Planning and Grant Disbursement

The participation rate by companies within each sector with respect to grant disbursement is a major constraint that is faced by most Setas.
Unclaimed levies result to an accumulation of surpluses with the Setas.
Setas are faced with a challenge of increasing participation of the SMMEs in the Skills Development Strategy. Generally, SMMEs are of the view that the effort of claiming grants is not worth the return. Tis is one of the key challenges that require a legislative rethink.
The quality and accuracy of the second generation of Sector Skills Plans (SSPs) need to improve with more data available from WSP and ATR. As well as more time available to conduct research and consult with the industry.
The capacity of trade unions to participate in company skills planning and reporting need to improve. The DOL has specific programmes planned for this purpose.
Many levy-paying companies have not yet seen the relationship between training of employees, and greater productivity and profitability in their business. Some companies continue to view the skills levy as an additional tax on the business, and therefore reluctant to participate in the skills development strategy.

Quality Assurance

The quality assurance function of SETAs is governed by the South African Qualification Authority (SAQA) Act of 1995, and its related regulations. To fulfil their functions, Education and Training Quality Assurers (ETQAs) are required to have Quality Management Systems (QMSs) in place, with clear defined policies, procedures and review mechanisms.

Successess in respect of quality assurance

All SETAs have been accredited by SAQA to fulfil the ETQA functions.
Learning providers are being accredited by SETAs.
SETAs are funding the training of assessors and moderators. The latter are registered into the SETAs databases.
Systems and security mechanisms for Certification of Learners are being standardised across the ETQAs.
A culture of outcomes-based assessment, including the process for recognition of prior learning has been introduced in every sector.
SETAs are contributing to the development of Qualifications and Unit Standards within their respective sectors.
The promotion of quality is implemented by SETA ETQAs.

Challenges to facing quality assurance

Companies and training providers feel that the accreditation process is time consuming. SETAs are continuously investigating ways and means of simplifying the accreditation process without compromising the requirements and standards set by SAQA.
There is lack of capacity within the public-private provider fraternity on QMSs.
There is a need to build the capacity of training providers to develop outcome-based learning materials.
There is a lack of assessment guides and tools, and a limited number of qualified and experienced assessors and moderators.
The delays related to NQF registered qualifications and unit standards impact negatively on provider accreditation and assessment processes.

Learnerships and Skills Programmes

SETAs design, register, administer and promote learnerships and skills programmes in the various sectors.

Successes in respect of learnerships and skills programmes

Almost 406 learnerships have been registered among 25 SETAs, and over 25 000 learners have embarked learnerships.
All SETAs have spent a substantial amount of time and resources creating and promoting awareness about the new learnership system in their respective sectors.
The apprenticeship system is being successfully maintained and converted into the learnership system in the relevant sector. The DOL has facilitated the dissolution of Industry Training Boards (ITBs).

Challenges facing learnerships and Skills Programmes

An ongoing challenge facing the new skills strategy is to obtain and maintain buy-in from employers who would be the ones signing up learners. The DOL and SETAs are currently engaged in joint marketing efforts and incentive schemes, including grants and tax incentives for employers.
Building the capacity of training providers should be prioritised.
Access to learnerships by the youth and unemployed people has been identified as a national priority. In an effort to raise awareness about emerging opportunities, the DOL and SETAs will conduct a learnership campaign as well as a learnership week, which will be held from 16-21 June 2003.
Some of the funds that could support learnerships are under-utilised partly because of the slow up-take of learnerships.

Finances

Nature and flow of funds

SETAs derive their income in the form of levies paid in terms of the Skills Development Act and Skills Development Levies Act. These levies are based on the rand value of payrolls of employers in their respective sectors. Currently, the rate of levy is 1% of the gross payroll value.

Following is a table which illustrates the actual amounts involved, expressed in percentage totals:

The grants available to SETAs are distributed as follows:

Mandatory 60%
Discretionary 10%

Successes in respect of Finance

A number of SETAs have had success in getting money back to their stakeholders as envisaged by the Acts. Grant payments, both mandatory and discretionary, have increased steadily as SETAs built their own capacity. More employers have started to participate in the activities of their respective SETAs, and complied with the legislative requirements.

Challenges facing Finance

Due to teething problems that were initially experienced, there had been problems in aspects such as the receipt of levies and flow of monies back to the stakeholders.
One of the constraints that affect all the SETAs is the time taken to get grants back to the employers. The implementation grants (amounting to 45% of the total levy) can only be paid once the year in question has passed.

Governance

Successes in respect of governance

A number of SETAs have succeeded in establishing best practice governing structures that comply with the PFMA of 1999.
The DOL has established a Board/Council and stakeholder capacity building programmes which are available to all the SETAs.
Many stakeholders have taken up the opportunity to become involved in the decision-making processes of the SETAs.
In cases where irregularities and mismanagement have occurred, the latter were dealt with in terms of the law by the governing bodies and the DOL.

(5.2) Challenges facing Governance

Continuous improvement of good governance structures and systems will remain a challenge facing the SETAs.
Some cases have occurred where working relations between the Board/Council and the operational staff of SETAs have not been properly and clearly defined in terms of duties and responsibilities assigned to both parties. This has led to tension between the Board/Council members and the CEOs/management staff in many SETAs. The King 2 report on corporate governance could guide SETAs in this regard.

ISSUES RAISED

SETA Performance

The Committee sought clarity on whether there were tangible signs of improvement and structures in place to enhance progress. The DOL mentioned that SETAs were not uniform in their levels of performance, and some vary from good to poor.

A Memorandum of Understanding (MOU) has been concluded, which will be used as an interim measure in the absence of a legislative provision to allow for the DOL to sign a Service Level Agreement with all the SETAs. The MOU, however, outlines departmental obligations such as the monthly transfer of skills development levies to SETAs. It also puts an obligation on SETAs to spend money in implementing their individual business plans and delivery of agreed skills development targets. The DOL also indicated that it was satisfied with the operations of the majority of SETAs. Intervention was made in areas of non-performance. In isolated cases, fraud had come to light and that lead to the negative publicity about SETAs. Quarterly monitoring and reporting systems had been agreed upon in order to assess the individual performance of each SETA. A Quarterly National Skills Development Forum has been established whereby the NSA will liaise with SETAs regarding the quarterly report.

Other concerns raised by the Committee to the DOL and SETAs included the following:

The salary levels of the CEOs and staff of the SETAs, board members allowances, use of consultants and SETA reports.
Learnerships and skills training seem to be carried to the bright students only.
The level of co-ordination between SETAs and the government.
The interaction between the SETAs.
The degree of progress in the alignment of SETAs with local government and other government institutions.
The relations between the DOL and the Department of Education.
The interaction of SETAs with the clothing and textile industry.
The involvement of trade unions in the job creation process.
Translation of manuals into the various official languages.
The approach of SETAs to the disabled and persons living with HIV/Aids.
Progress of skills development and training programmes in the taxi industry.
Whether there were rules governing the roll-over funds.
The lack of employment for matriculants and graduates.
The availability of comprehensive databases from government.

Responses, comments and suggestions to some of the concerns raised were as follows:

On the issue of salary scale, it was mentioned that benchmarking salaries would be difficult. The feeling was that this aspect would evolve into a more equitable system. The Committee expressed its concern over the issue of salary scales and called for guidelines to be drafted.

The Committee was also advised that there were guidelines which were carefully adhered to with respect to the roll-over funds.

The DOL reiterated that an attitude of co-operation between SETAs and government had prevailed. The stakeholder interest had been served by appointing members to SETA boards, who were selected from organisations such as FEDUSA, COSATU,etc.

The Committee suggested that attention be given to establishing accurate databases throughout government.

Awareness and advocacy

The Committee wanted to know whether there was progress in reaching out to the rural communities. It was mentioned that SETAs are given opportunity to meet the general public, including showcasing themselves during the Annual National Skills Development Conference. Road shows had also been conducted. SETAs had adopted various strategies in meeting their stakeholders. The Committee suggested that public awareness on SETAs, especially in rural communities, should be enhanced.

The Committee wanted to know whether there were any steps taken regarding cross sector training. It was suggested that further consideration be given to group training in order to fast track the process.

On the issue of the training of SMMEs, it was recommended that SETAs must ensure that SMMEs are trained in relevant areas where training is needed.

The accessibility of SETAs was raised as a concern by the Committee. It was suggested that SETA offices be located close to labour centres.

With respect to clarity sought on skills development and training of the rural communities, it was indicated that interactive training had been successful, especially in the tourism industry. Rural communities had participated in the conservation and tourism projects. Adequate attention had been given to informal traders, especially those in the craft sector.

CONCLUSION

The Committee will meet with the DOL to consider the issues raised during hearings.