Sector Education & Training Authorities: Wholesale & Retail and Agriculture: Strategic Plans 2010/11

Meeting report

Chairperson’s opening Remarks
The Chairperson noted that the Sector Education and Training Authorities (SETAs) would be briefing the Committee as part of a process of accountability of all SETAs.

Wholesale and Retail (W&R) SETA briefing
Mr Joel Dikgole, Chief Executive Officer, W&R SETA, said that the presentation was based on the Chairperson’s request that this SETA deal with specific issues. He outlined the general National Skills Development Strategies (NSDS), and the action plans, targets and budgets that the SETA had drawn in respect of each. In brief, he stated that the learnership project was a major project for the year 2010/11, which had recently been approved and would be publicised. This SETA would offer projects of a special nature and those that covered scarce skills.

Mr Dikgole tabled a slide dealing with skills for rural development and cooperatives. It aimed to target 1 000 learners and to enter into collaborations with various partners and community organisations. He also mentioned collaborations with Further Education and Training Colleges (FETs) and Higher Education and Training (HET) institutions, when dealing with the plans for workplace learning opportunities. In respect of Adult Basic Education and Training (ABET) he indicated that this was being refocused to Adult Education and Training, that it would involve recognition of prior learning and that the levels were being adjusted.

Mr Dikgole then presented a budget analysis for 2009/10. This set out the total revenue and expenditure, and compared this to the budget figures.

He presented a summary of strengths, weaknesses, opportunities and threats for the SETA (see attached presentation for details). He then proceeded to set out and explain the special projects in Limpopo / Mpumalanga and Eastern Cape, and listed the projects and collaborative efforts in the various provinces. He also listed the special projects that aimed to address the demand for youth development. Finally, he tabled pie charts of the spread and numbers of the training providers. .

Discussion
The Chairperson asked what the strategy was in respect of drop outs.

Mr Dikgole pointed out that the SETA had agreed with the board that it would make an informed decision on what caused the high drop out rate. However the reasons that caused the high drop out rate included that some learners were not ready for the programme, or that they had found the stipend to be too low and could not afford to continue to study. He also stated that he had agreed to present to the board a recruitment strategy and would prioritise this. He suggested that a pre-learnership was a way of preparing the learners for their studies, and that this had, for example, been used during the Thabo Mbeki programme, with successful results.

The Chairperson agreed that a student programme was needed. He asked whether the SETA had a model.

Mr Dikgole stated that the SETA had a strategy that learners would be guided through the programme, for example being funded through experienced mentorship, which was a new venture. Learners finishing this new venture would not go into business because of the mentorship.

The Chairperson said that the Committee was already aware, through other briefings, of the problem of drop-outs, and these had been highlighted by the National Student Financial Aid Scheme (NSFAS). He asked if it was possible to give the numbers by the end of this year.

Ms N Vukuza (COPE) stated that she was not happy that the phrase “surplus low uptake of discretionary grants” was clear, and asked what it meant.

Mr Dikgole replied that R50 million had been set aside for work place grants. However, the uptake on these had been low, and therefore the SETA had had to write off close to R40 million. He pointed out that low uptake of grants would also be attested to by other SETAs. The majority of the organisations were small, and could only accommodate between 1 and 50 learners, and therefore had no capacity to do more. The SETA had, however, appointed an independent skills facilitator to help. The reality was that there were 340 organisations, which had been participating for the past 10 years. If it was at all possible to get 11 000 organisations in the sector to take one learner each, then the programmes would be more successful.

Ms F Mushwana (ANC) asked whether the SETA knew how many people were unemployed, and if their statistics were estimated or accurately recorded. If there were no statistics, then she wished to know when these would be compiled.

Mr Dikgole replied by stating that the figures in relation to learnerships over the past 10 years showed that 60% were employed and 40% were unemployed. He stated that when the SETA rolled out learnerships for unemployment it would attempt to impose conditions, but this was a challenge because organisations wanted to take in learners but they did not want to actually employ them in the longer term. He pointed out that there were new projects and stakeholder participation was critical to the SETA’s activities.

Ms Mushwana was concerned that there did not appear to be an action plan.

Mr Dikgole said that the action plan, following on what he had said earlier, was to try to involve more stakeholders and the SETA was prepared to fund this.

Ms Mushwana raised queries on the income, interest and surplus, asking whether the SETA was actually doing business, and what it was doing to assist.

Mr Dikgole said that the SETA was not in the “business” of accruing interest on the funds that it had. However, when there were write offs, the surplus funds would be banked with reputable institutions, who did pay interest on the funds held.

Ms Daphne Matloa, Chief Financial Officer, W&R SETA, pointed out that unemployed learners were given additional amounts. She added to the question on interest by noting that interest was paid by the banks, and the other interest involved the South African Revenue Services (SARS).

The Chairperson asked how much was spent on retailers.

Ms Matloa replied that it was about R55 million.

The Chairperson pointed out that the strategy of rolling out programmes was a weak area.

Dr Henny Zwarts, Chief Operations Officer, W&R SETA stated that the SETA had embarked on a project of taking 3 500 people, and placing them in small companies, with full sponsorship.

Mr Z Makhubele (ANC) stated that although the drop out rate had been noted, he had not heard what the success rate was.

Mr Makhubele stated that there had been nothing in the presentation elaborating on the Recognition of Prior Learning (RPL). There seemed to be a problem countrywide about implementing RPL.

Mr Dikgole agreed that over the past 10 years W&R SETA had not made major progress with the RPL. It had, however, developed a tool kit which organisations would use. There was an upcoming conference in Johannesburg during which the RPL issue would be revisited. He also stated that RPL required funding as it was expensive.

Mr Makhubele asked for the cost per learner, and how this figure was arrived at.
Mr Dikgole responded that that money made available for learnerships, especially for the unemployed, was informed by management, and took into account the delivery and a stipend.

Mr Makhubele was concerned about the quality of the pre-learnership programmes. He questioned who determined the programmes and asked why this SETA could not encourage others to undertake these programmes.

Mr Dikgole said that there were pre-learnerships in many organisations. These had proved successful elsewhere. Where people had been prepared, there were better results.

Mr Makhubele asked how many cooperatives were involved, and specifically whether there were any at present. He also asked about the challenges that were faced by these co-operatives and how they would be assisted.

Mr Dikgole replied that the SETA had done some research three years ago to determine how many co-operatives were in the sector, which showed that there were not many co-operatives within the seven retailers.

Mr Makhubele asked what the absorption rate was, and whether those who were not absorbed would be given some capital funding to take their skills further. He also wanted to hear the impact of the programmes.

Mr Dikgole replied that when organisations signed for learnerships with SETA, a condition was placed requiring them to employ 90% of the successful learners. He stated that there was a 50% drop out rate, so effectively they were employing 90% of the 50% who remained. Companies had asked this condition to be reviewed.

Mr W James (ANC) asked how the SETA measured the impact of its programmes.

Mr Dikgole replied that the SETA would analyse whether learners were competent at the end of the programme. The impact was judged on whether the learners, having gone through the programme, were advancing in the company and being promoted. He stated that the desired impact of training was that learners should benefit. The SETA would also assess how many organisations were rolling out new businesses.

Mr Makhubele asked what the pass rate was, out of the 50% who remained to complete the course.

Mr Dikgole replied that around 90% would succeed.

Dr Zwarts reiterated that the drop out rate was a continuous challenge. He stated that the SETA had just begun a pilot project where it had managed to increase the success rate from the former 55%, up to 87%.

The Chairperson asked the Members to take note of strategic issues. He asked how many learners were being added to the ranks of the unemployed at the end of the year. He stated that there were serious problems around the drop out rate and there was a need for further analysis around that. He also indicated that this SETA did not appear to have a strategy for development, and that this appeared to be incidental, rather than addressed as a driver.

Mr G Radebe (ANC) asked how the SETA identified the FETs with whom it would collaborate.

Mr Dikgole replied that they had been working with FETs for the past 10 years. He stated that previously only FETs that would come forward and rolled out a programme were used. He pointed out that this had changed since all FETs were going to be used. He also pointed out that a research report would be available soon.

Mr Radebe pointed out that the SETA’s alignment with rural development targets was low, but that this should be a major focus area. He asked about the marketing of the rural project, and asked why the SETA was using radio as the only means to market this programme. He suggested that it should also use chiefs or councillors in the areas to market this programme.

Mr Dikgole said that radio was not the only communication medium. However, in the past the SETA had placed advertisements with major newspapers, but it was shown that these did not reach those communities. He pointed out that the SETA used a radio station in Johannesburg which reached about 60 communities. It was also looking to explore other options.

Mr Radebe asked how the SETA identified work-based learning and how the learners were distributed because he was concerned that it would not reach the destitute.

Ms N Gina (ANC) stated that she was worried about the time the SETA took to react, and to come up with remedies and strategies, which she believed had been too long. There seemed to be major problems with the low uptake and asked what the SETA had done to manage this. She also asked whether there was anything being done for the disabled.

Mr Dikgole replied that the SETA had a project with the Thabo Mbeki Development Trust for the disabled. He mentioned that there was also a project with Shoprite Checkers, who had employed deaf people. He, however, admitted that it had been very difficult to push these numbers for the disabled, but that within the next twelve months the Thabo Mbeki Development Trust would be rolling out nationally.

Ms W Nelson (ANC) expressed her concern that unemployment and poverty levels were particularly high in some provinces. She thus asked where the 3 000 learners were situated. She asked what was being done in the small provinces where there was extreme poverty.

Ms Mushwana asked why Mpumalanga and Limpopo province were grouped together since this was where poverty was rife.

Mr Dikgole pointed out that there was a high concentration of retailers in KwaZulu Natal and Gauteng provinces, and these were where the levy paying organisations were established. The reason for grouping the smaller provinces together was that there were not many levy paying organisations in those provinces. He stated that the Board had agreed to establish a presence in every province, and this would be seen by the end of March 2011. At the time that the SETA was still growing, it had tended to group provinces together, but there would be further rollouts in more provinces. He said that the amount mentioned for rural allocations did not mean that the SETA did not want to have large numbers, but said that it was just a pilot programme to iron out initial problems.

The Chairperson asked for comment from the Chairperson of the Board of the W&R SETA on the lack of strategic management. He was not satisfied with some of the answers.

Mr Ivan Molefe, Chairperson of the Board, W&R SETA assured Members that the roll out of initiatives to Mpumalanga and Limpopo was an ongoing issue. He reiterated that most provinces had been grouped together but they were now being separated. He also added that the W&R SETA board took rural development seriously, and stated that this issue would be on the agenda at every meeting to ensure that the SETA would deal with development in rural areas.

Mr Dikgole presented a SWOT (Strengths, weaknesses, opportunities, threats) analysis, pointing out that the SETA’s major strength lay in sound governance, while its weaknesses were around disbursement of funds. Opportunities would be rural outreach and participation.

Mr Radebe pointed out that it was “disgusting” that the W&R SETA did not recognise the projects established by the President, which amounted to undermining the authority of the President, and urged that this SETA must attend to this as a matter of the utmost urgency.

Mr James asked what percentage of the budget the SETA spent on management.

Mr Dikgole replied that the SETA was allowed to spend 10% on administration.

Mr James asked how many entrepreneurs had entered the economy, and how many had entered the economy as a result of the SETA funding. He asked what the SETA’s detailed plans were.

Mr Dikgole pointed out that some of the issues that Members had asked about would be reflected in the Annual Report. He responded that there had been 117 new enterprises that the SETA had funded.

Ms Vukuza asked what gains the SETA had made in the past year. She asked what the projections and targets were, compared to those of the previous year. She also highlighted the issue of low uptakes and stated that she would want this issue to be flagged so that the SETA would focus on these issues in the future.

Ms Mushwana noted that Gauteng and Western Cape provinces had been the focus for this SETA. However, these provinces did not need the money as much as the other provinces.

Ms Mushwana asked for the contact details of the W&R SETA delegates, so that Members could get in touch with them.

Ms Nelson asked whether there were any initiatives in the previous years.

Mr Makhubele asked whether there was a clear plan by the SETA on how it wanted to implement the RPL. He also asked whether it was able to offer incentives. He also requested a clear analysis on co-operatives and what could be done to boost their involvement. He also asked for further details about the reduction in the drop out rate and how this related to the success rate.

Mr Dikgole noted the concerns about initiatives and stated that the SETA would respond more positively the next time it reported to the Committee.

Ms Lana Westhuizen, Regional Manager, W& R SETA stated that the migration of the SETAs from the Department of Labour to the Department of Education took time, but promised that the delegates would be fully prepared to answer all questions at the next meeting.

The Chairperson stated that the issue was not so much whether the SETA was fully prepared but whether it was making maximum use of what it had. He indicated that he would like to see the SETA return to the Committee and highlighted the issues, arising from questions asked, that he would like the delegation to address.

Agri-SETA briefing
Mr Jerry Madiba, Chief Executive Officer, Agri-SETA, defined the management and role of this SETA, and set out in particular the mandate given to its Governing Board. The SETA was driven by sector needs rather than score cards. He indicated the process leading to the drawing of the strategic plans, and set out some of the key targets (see attached presentation for details). He also gave a SWOT (strengths, weaknesses, opportunities and threats) analysis, noting the opportunities for involvement in land reform, mentorships and the ability to work with the provinces. The slow response of the National Skills Fund and the excessive bureaucracy were named as threats.

Mr Madiba set out the key financial indicators for the 2009/10 financial year, noting that levy income had grown by 13%, that mandatory payments grew by 20% but that administrative expenditure had only grown by 5%.

Discussion
The Chairperson interjected to raise a matter raised in a previous meeting, around three Bills, reminding the SETA that it had been asked whether it required a technical participatory process in the transition from the Department of Labour to the Department of Higher Education. A legal opinion had been requested.

Adv Anthea Gordon, Parliamentary Legal Advisor, agreed that this was a pertinent issue, involving the extent to which public participation would be needed in the process. She noted that Section 59(1)(a) of the South African Constitution mandated the Committee to facilitate public involvement, and if it did not do so, then the Committee’s decision could be challenged through the Constitutional Court. She explained what “facilitation of public conduct” would mean.

Mr James agreed, and pointed out that the Higher Education Bill was problematic, and substantive representation would be required on this.

Ms Gordon stated that the Committee should be advertising for public comment.

Ms Mushwana cited an instance of a farm purchased in a particular municipality, which had produced nothing since the purchase. She said that Agri SETA should make sure that farms purchased to boost Black Economic Empowerment (BEE) were not lying idle.

Mr K Dikobo (AZAPO) pointed out that he was impressed by the level of disbursements noted in the presentation. However, he said that one challenge was the movement of learners from one SETA to another, and wondered if learners were not seeing this as some kind of employment. He asked whether there was any database to ensure that this would not happen.

Mr Dikobo also raised the issue of Adult Basic Education and Training (ABET) Levels 3 and 4, and asked how far the SETAs had gone in moving away from the “semi-academic” ABET.

Mr Johann Engelbrecht, Manager of Operations, Agri-SETA, stated that he fully agreed with what was said about ABET. Most ABET learners exited at levels 1 and 2, even before they had studied numeracy. He stated that an agricultural vocation access programme had been established, to pull people through the system. He also indicated that most of the ABET learners were adults in their advancing years.

Mr Makhubele asked what the cost to the industry was, and the response rate. He also stated that there was no mention made of co-operatives.

Mr Madiba replied that money had been set aside to support co-operatives. He also stated that if people brought to the attention of the SETA the fact that they needed help, then the SETA would help.

Mr Makhubele asked how much interaction there was with farmers, how this might take place, and how they assisted people with both knowledge and experience in farming.

The Chairperson asked whether the bureaucratic process affirmed or curtailed access.

Mr Jack Van Dyk, Vice Chairperson, Agri-SETA stated that he was not qualified to answer that question. However, he thought that the levy system was not suited for rural development. He indicated that it might be preferable to try to partner with another better-qualified SETA, and, in answer to the Chairperson’s further question as to who that might be, indicated that Agri-SETA may wish to partner with the Local Government SETA.

The meeting was adjourned.