Minister & Deputy Minister of Higher Education and Training on challenges affecting productivity, job creation and economic growth, & plans to address skills shortage

Economic Development

05 March 2012
Chairperson: Ms E Coleman (ANC, Eastern Cape)
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Meeting Summary

The Minister and Deputy Minister for Higher Education and Training as well as the Director-General for the Department of Higher Education and Training addressed the Committee, focusing on developments relating to addressing the issue of skills needed to drive economic development. The Minister's presentation looked at the challenges affecting productivity, job creation and economic growth, the priorities of government and the mandate of his Department, addressing the skills needs, the auditing of skills and infrastructure projects in the pipeline.

The Minister stated that there were a number of challenges affecting productivity, job creation and economic growth in the country. These included:
•Failure of businesses in many sectors of the economy to equip their workforce to adapt to change as the economy becomes more knowledge-based
•Systemic blockages such as the lack of synergy between the various post-school sub-systems
•Absence of coherent strategies within economic and industrial sectors, lack of systematic skills development to support and sustain growth and development
•Unemployed who lack basic numeracy and literacy skills
•Unemployed without entry-level skills or work experience

The 18-24 years age group was an important one because it was a crucial transition period for youngsters. A study found that 2.8 million youths between 18 and 24 years were not employed or in some sort of educational training. This was a huge number of people that were not contributing to the economy. The amount had increased since 2007. It was found that 500 000 people aged between and 18 and 24 only had primary school education, while 500 000 had secondary education below the Grade 10 level. These people would not even be able to attend Further Education and Training (FET) colleges. Almost a million youths had between Grade 10 and Grade 12 education, and almost 600 000 had Grade 12 education without exemption. The more qualified a person was, the more likely it was that they would get meaningful employment. The most affected were African and coloured youth.

The Committee wanted to know more about the work that was being done to align the skills development plan with the needs of the economy going forward and what efforts could be made to find people that were “skilled to skill” such as artisans in retirement. Members asked why there were so many fly-by-night Further Education and Training (FET) colleges, if it was possible to recruit people from other countries when government felt there was a lack of adequate skills, and if training opportunities could be enforced as part of tender agreements and terms for foreign investment. They noted that if learners at FET colleges did not receive learnerships or internships to get experience then their time would be wasted. The Committee was concerned that there were people with PhDs that could not get jobs and wondered if it had anything to do with the relevance of the degrees they studied. They were also concerned that the subjects that many learners studied at secondary level did not correlate with what they wanted to study at tertiary level. The Committee felt a need for more emphasis to be put on this matter along with the matter of bridging courses or preliminary courses to prepare learners for tertiary institutions. Members wanted to know how many of the nine provinces were performing well in terms of FET colleges, and why professional associations were being seen as “gatekeepers”

Members asked if students placed in a workplace received incentives or if the incentive was exposure. They noted that the Minister wanted every district to have an FET college and wondered if there would be enough lecturers for all the FET colleges. The Committee noted that it was every sectors duty to contribute to the country’s development, including the private sector. They emphasised the importance of tracking learners from creche right through to tertiary level

Meeting report

Opening Statement
The Chairperson welcomed the Minister for Higher Education and Training (DHET), Mr Blade Nzimande, the Deputy Minister, Prof Hlengiwe Mkhize, and the Director-General in the Department, Mr Gwebs Qonde. The discussion today was going to be focused on challenges affecting productivity, job creation and economic growth. This was generally about skills development. The Committee also wanted to know what the plans were for addressing the skills shortage and the progress made on the annual skills audit. The Committee had not had the opportunity to engage on these matters.

The Chairperson understood that the Minister was faced with many other challenges. The Committee needed to know what these were, as they related to issues of establishing more universities to address the problem of rural people flocking to urban areas to get necessary skills. These were everyday issues relating to the effectiveness of some of the institutions created in various provinces – they are not working the way they should. For example, Further Education and Training (FET) colleges were not working at optimal level.

The Minister thanked the Committee for the invitation; he appreciated it because the Economic Development Portfolio Committee was very important to the Ministry for Education. In fact, one of the Ministries he worked closely with was the Ministry of Economic Development because of the close relationship they both had in terms of their goals for skills development and economic development. He wanted to share with the Committee the mandate of the DHET so Members could reflect on it in the context of skills development.

Briefing on Developments Relating to Addressing the Necessary Skills Needed to Drive Economic Development
Challenges affecting Productivity, Job Creation and Economic Growth
The Minister stated that there were a number of challenges affecting productivity, job creation and economic growth in the country. These included:
Failure of businesses in many sectors of the economy to equip their workforce to adapt to change as the economy becomes more knowledge-based
Systemic blockages such as the lack of synergy between the various post-school sub-systems
Absence of coherent strategies within economic and industrial sectors, lack of systematic skills development to support and sustain growth and development
Unemployed who lack basic numeracy and literacy skills
Unemployed without entry-level skills or work experience
Urban bias of economic development has resulted in an urban bias in skills development initiatives with skills for rural development being neglected
Over-emphasis on NQF level 1-3 learnerships, with insufficient progression towards skills required for growth sectors in a knowledge economy
Businesses had not been taking on learnerships
Artisanal training has been on a decline
Continuing skills shortages in the artisanal, technical and professional fields that are fundamental to the development and growth of our economy
Inadequate skills levels and poor work readiness of young people leaving formal secondary and tertiary education and entering the labour market

According to the 2007 Community Survey: Not employed, not in education, not severely disabled (18-24 year olds) – the study found that there were 6.7 million 18-24 year olds in the South African population. The 18-24 years age group was an important one because it was a crucial transition period for youngsters. The study found that 2.8 million youths between 18 and 24 years were not employed or in some sort of educational training. This was a huge number of people that were not contributing to the economy. The amount had increased since 2007. It was found that 500 000 people aged between and 18 and 24 only had primary school education, while 500 000 had secondary education below the Grade 10 level. These people would not even be able to attend Further Education and Training (FET) colleges. Almost a million youths had between Grade 10 and Grade 12 education, and almost 600 000 had Grade 12 education without exemption. The more qualified a person was, the more likely it was that they would get meaningful employment. The most affected were African and coloured youth.

Priorities of Government and the Mandate of DHET
The Minister stated that Education and Training was one of the five key priorities of government.
Cabinet had adopted “A Skilled and Capable Workforce to Support an Inclusive Growth Path” as an apex priority outcome for this government. This was critical for an inclusive economy, labour absorption, rural development and a more diversified and knowledge intensive economy. On the demand side, the government wanted to ensure that the skills needed to drive the country’s economic growth and social development was delivered at an increasing rate, and that the availability of quality skills would enhance both investment and service delivery. On the supply side, the government must serve a growing number of young people and adults, provide different entry points into the learning system with quality learning, and create easy pathways across different learning sites.

Addressing the Skills Needs to Drive Economic Development in South Africa
The third phase of the National Skills Development Strategy III (NSDS3) was launched in January 2011 to steer investment in education and training, and skills development in order to achieve the vision of a skilled and capable workforce to support an inclusive economic growth path and social development. The NSDS3 aimed to improve access to quality learning programmes, and build strong relationships between stakeholders and social partners.
A National Artisan Moderation Body (NAMB) was established to lead implementation of the artisan programme in November 2010. The target was to produce 10 000 artisans annually in critical areas. Current indications showed that the target would be surpassed. 30 000 new learners would be registered by 2011/12 to pursue artisan trades. In addition to this, the National Skills Fund (NSF) had increased bursary support for other critical skills and post graduate studies to over R500 million in 2012. Round tables with businesses and labour organisations were being held to facilitate collaboration between social partners in the implementation of the artisan development programme. Advent of the National Skills Accord in July 2011 had enabled partnerships between government, business, labour and community structures in skills delivery. Employers had undertaken to train beyond their needs.

Work undertaken through the NSF had gone over and above bursary funding for critical skills. 6900 National Rural Youth Service Corps (NARYSEC) recruits were being trained from the rural wards of the country for effective participation in the rollout of the rural infrastructural programme. The NSF was involved in the training of 30 000 unemployed young people on the countrywide rollout of the Extended Public Works Programme (EPWP) by the Public Works Department.

Vocational and Continual Education and Training was expanding and ensuring that the FET college system was responsive to sector, local, regional and national skills needs and priorities. NSFAS support to students through the Scarce Skills and Disability Fund, Rural Student Programmes, and Post Graduate Funding had enabled postgraduate students that required funding to complete their honours, masters and doctoral degrees. The University Teaching Development Grant aimed to improve the qualifications of academics, improve the teaching capabilities of lecturers and provide student support to improve academic performance.

In terms of skills development, 14 244 learners had registered in artisan learning programmes. Through the NSF, 6708 undergraduate bursaries were awarded to support studies in critical skills. 1331 post graduate bursaries were also awarded. The trade test pass rate increased from 41% in 2010 to 57% in 2011.
8 898 FET graduates and students from Universities of Technology have been placed in workplaces for experiential training. 4 191 Students were placed in workplaces for workplace exposure whilst studying.

Auditing of Skills
The Sector Skills Plan (SSP) development must be developed within the framework of the National Skills Development Strategy III, the government’s New Growth Path, the Industrial Policy Action Plan II, the Human Resource Development Strategy and government’s priorities. It had to be updated annually to reflect new developments and was centred on employment creation and supporting economic sectors by significantly stepping up the production of relevant and scarce skills.

Currently there were no institutional mechanisms that provided credible information and analysis with regard to the supply and demand for skills in the country. The NSDS3 identified the critical role that SETAs had to play in gathering statistics and other relevant information on labour market skills and training provision. Transformation and re-focusing of SETAs to bring the development of Sector Skills Plans (SSP’s) at the centre of their activities is underway.

DHET was working in partnership with HSRC and University of Witwatersrand Policy Planning Unit to bring about integrated skills planning for the whole country. Two inter-linked projects, financed through the National Skills Fund are underway, under the coordination of the DHET.

Infrastructure Projects
Infrastructure for FET college multipurpose campuses, student accommodation and ICT connectivity was on the way, as well as the construction of new universities in Mpumalanga and Northern Cape. The government’s focus was also on the refurbishment of student housing in historically disadvantaged universities, and building new student residences. The government had noted
inadequate technical skills due to low outputs from universities, improper gate-keeping by professional associations, lack of opportunities for work experience could impact on PICC’s Strategic Integrated Projects. There was a Develop Skills Plans for 17 National SIPs and all major Government infrastructure projects as well as technical skills required for execution, operations and maintenance.

Engineers, technicians, technologists and artisans form the backbone of skilled workers for the economy. There was no use developing high level engineers and technologists if there was no production of intermediate level technicians and artisans to support them through Vocational Education and Training opportunities. There was a high and urgent demand for artisans and technicians that could be sourced outside of universities. The number of graduates registering as candidates and ultimately becoming professionally registered is low by comparison with those graduating. Registration or the capping in the registration of professional Engineers was hampering the supply of engineers. Engineering graduates were not provided with the opportunity within a company or in industry to complete the three year required work experience to enable registration and work opportunities were often provided but not relevant for registration. DHET was engaging with the Engineering Council of South Africa (ECSA) in a process where an agreement with industry was reached to provide a compulsory and a structured workplace exposure of three years to engineering graduates after graduation.

Green Paper
The Green Paper sought to expose the challenges facing the post school system and sets out broad policy for, expanding post school provision to improve access, strengthening the institutions to improve quality, and setting out a vision and pathways for achieving a coherent post school system with
articulation, collaboration, and coordination between the different components, as well as alignment between the various institutional types and between education and training institutions and the labour market

The Green Paper had been launched and released for public comment. Following public consultation, the work on the White Paper will commence.

Discussion
Ms S van der Merwe (ANC) said she had just read an article called “The Week that Changed Our World” by a conservative newspaper that said that “the overlay of the President’s State of the Nation Address with the budget was going to change our world”. The Minister was correct that unless this was underpinned by an education plan and skills development plan, the country was going to be found wanting. She wanted to know more about the work that was being done to align the skills development plan with the needs of the economy going forward. The Minister spoke a little about “data on skills”. She wondered if he could talk to data on trends in terms of skills needed going forward to 2030 and beyond. The government had an international programme on the up-skilling of South African graduates to superior skills through cooperation with other governments and firms abroad. Were these skills being pursued?

The Minister replied that he signed an agreement with the President based on skills areas that he had to prioritise. It was agreed that the country was short of skills in engineering, health sciences, artisans and finance. The government did not have much choice at the moment; it had to import some skills. The trick was to attach South African trainees to them. This related to the Member’s question of up-skilling South African graduates. One of the key things the government was focused on was strengthening industry-university partnerships. There were a number of companies that DHET was talking to at the moment.

Mr X Mabasa (ANC) asked what efforts could be made to find people that were “skilled to skill”. Some of them could have resigned. The Minister had to put emphasis on bringing them into the government fold and trained. He wanted to know if it was possible to recruit people from other countries in instances where government felt it did not have adequate skills.

The Minister answered that there were colleges that were already employing retired artisans for training learners in FET colleges. The government wanted to expand this into engineering. He thought that every FET should have a SETA office to assist students once they have graduated.

Mr Z Ntuli (ANC) asked why there were still so many fly-by-night institutions in the country. He agreed that there were people that graduated from FET colleges that were knowledgeable but not skilled. If they did not receive internships then it would seem like their time was being wasted. He suggested that training opportunities could be included as part of tender agreements.

The Minister replied that he was very passionate about the idea that training opportunities should be included in tender agreements. Ideally, no one that wins a tender from government should be allowed not to sign a training agreement with government. People said that it would scare away investors, but how many people would run away from a R5 billion tender deal? He wanted the Committee to be champions of this idea.

Mr Qonde replied that “fly-by-night” institutions were operated by what he referred to as “thieves” who were motivated by making huge amounts of money by offering sub-standard programmes that were not accredited. They knew that if they went through the normal processes, their programmes would be evaluated. They chose to open up and register students. After they received money, they closed. The DHET was dealing with the matter and looking at having good measures with organisations of law enforcement.

Ms D Tsotetsi stated that before 1994 there were many teachers that were teaching subjects that were not relevant to the growth of the economy. There were students with PhD’s that could not get jobs. She asked if this had anything to do with the subjects they did or the relevance of their degree.

The Minister explained that it was due to both the relevance of the degrees and “attitude”. There was a particular attitude that if you came from certain universities you were not up to scratch. This was not true for every graduate. However, there were issues of relevance and the over-supply of certain degrees. At the moment, the DHET was looking at the matter of “re-tooling” of graduates. He did not believe that anyone with a degree could not be re-tooled in to particular areas of scarce skills. A person with a sociology degree may not be able to be turned into a civil engineer, but this person could be trained in project management, which was a skill that the country did not have. There was a plan to absorb a number of graduates. Government, especially, had a responsibility to do this and help expose graduates through learnerships. 

The Chairperson congratulated the Minister on the National Skills Accord; she knew how important it was for the country. She wanted to know how many out of the nine provinces were performing well in terms of their FET colleges. Government used to have learnerships. She wondered how these were faring and how many beneficiaries were being absorbed into jobs.

Mr Qonde answered that the number of FETs that were performing well varied from province to province. In each province there were FET colleges that were doing well, and then others that were performing quite badly. On average, there were two or three FET colleges per province that performed badly. The DHET identified that there were mainly problems at management and administration level in terms of FET colleges. The DHET has developed programmes that are focused on assisting these institutions with management planning, operational planning as well as development and monitoring of programmes.

The Minister added that he had visited all fifty FET colleges. He could say without fear of contradiction, what the strengths and weaknesses of each college was. This was part of the effort to uplift all the colleges so they met the minimum standards. There were success stories for some of the FET colleges, but the DHET was looking at uplifting the rest in terms of management performance and programmes.

The Chairperson noted that the Minister had to leave the meeting earlier, but follow-up questions would be directed at the DG and the Deputy Minister. She stated that the Minister would be called back to brief the Committee on the NSDS3 and the National Skills Accord. She agreed that all infrastructure projects had to have a skills development plan – not only a plan but a “costed” plan. The Committee would familiarise itself with the Green Paper and make an input on it.

Ms van der Merwe addressed the matter of “professional associations”. She noted that they were seen as gatekeepers in a way, which caused some difficulty in getting experiential workplace positioning. She said that Germany had “guilds” where they control in a sense everyone that came into the profession such as plumbers, waiters etc. Young Germans entering into a profession must have three years experience as an apprentice before they are recognised in their field. South Africa probably would not be able to replicate this entirely; however, this was an important aspect of experiential learning where the profession itself takes charge of the mentorship of a young person, which ensures quality of the learning experience that people get. She wondered if this sort of things could be used to train artisans.

Mr Qonde agreed that sometimes the role the professional associations played was more of a gate-keeping role. They were quite distant form the programmes and teaching that was taking place in the country. The Minister met with these professional associations and there was some work that was being done with them to see how professional associations can have an institutionalised relationship with universities so that what was being taught was what they need as well to allow more learners to become registered professionals. The Ministry and DHET were working on the matter. There were quite a number of companies that have come on board. More students had been getting workplace exposure.

The Deputy Minister added that the Committee had to realise that the country was a learning curve. The Ministry and the DHET has looked at best practice cases from other countries such as Germany. However, the government had to acquire the necessary competencies for those policies to work. In principle, the government was working very hard to deal with these matters. There was a commitment to help the professional associations to do things differently and improve the pass rates.

Mr Ntuli noted that there were times when the subjects that learners studied did not correlate with the degree they wanted to study. He understood that learners could do preliminary courses or bridging courses in order to qualify for these degrees. He asked if this still happened.

Mr Qonde explained that the matter of subject choice and combination related to the matter of guidance. The critical stage for guidance was in Grade 9. Learners had to make up their minds by Grade 10 where there career would lie. This had to be informed by what their combination of subjects would be. The challenge was that children went through the system without really making up their minds about what they want to do. This was why there were so many problems when learners registered at tertiary institutions.
The Deputy Minister added that the DHET was working hard to modernise the concept of career guidance. She wanted to encourage learners to look at career options in the same field as what they wanted to study. DHET was in the process of assisting the Department of Basic Education (DBE) to reach out to students and help them apply to tertiary institutions on time and strategically. This was also done through the SABC and community radio stations.
 
Mr Qonde stated that there were foundation phase programmes being offered to learners to address the matter of bridging the gap between secondary and tertiary school education. It helped to minimise the high failure rate at entrance level.

The Deputy Minister added that tertiary institutions seemed to go backward and forward with foundation courses. This needed to be monitored. Learners, especially those in rural areas, needed these courses.

Ms Tsotetsi asked if students placed in a workplace received incentives or if the incentive was exposure. She noted that the Minister wanted every district to have an FET college. She wondered if there would be enough lecturers for all the FET colleges. 

Mr Qonde replied that there was a lot work being conducted with FET colleges to train current lecturers as well as new ones.

He stated that one of the incentives for students in workplace exposure programmes was that their employability opportunities were higher than for those who do not get exposure. 

Mr Mabasa noted that it was every sectors duty to contribute to the country’s development, including the private sector. He wondered if it was possible to ask firms that wanted to invest in the country to train graduates as well.

The Deputy Minister replied that she was not sure about this suggestion as it could be seen as a barrier to those bringing investment into the country. However, this strategy could definitely be used for tenders.

The Chairperson asked how the Ministry and DHET envisaged the perfect graduate to be. How would this be communicated to the learners?

Mr Qonde answered that what the DHET wanted to do first was to ensure a high quality of programmes offered in educational institutions irrespective of which courses they are. Programmes that were offered had to be accredited by the Council for Higher Education (CHE) through the Higher Education Quality Council (HEQC), which interrogated and evaluated all programmes offered in institutions. The critical component of this was the quality of teaching and learning in these very institutions. This was a challenge for the country. One of the measures being employed was to assist institutions with these challenges. In the end, the DHET wanted to see students with knowledge required by the economy and the developmental needs of the country. The DHET also wanted to see the employability of the learners increase as well as the graduation rate in the whole education system. The perfect graduate was a student that was able to add value to the economy and pay allegiance to the country by dedicating himself/herself to assisting with the developmental needs of the country.

Mr Mabasa noted that the product of what the country wanted would stem from the seeds it planted. He stated that perhaps the government was not doing enough to track learners from crèche.

Mr Qonde replied that the DHET had considered tracking learners but there was no data set for it in the country. This would talk to tracking student right from crèche to see their potential and capabilities as well as their interests. The Minister was looking at this at the moment. There were various sub-projects that would address this matter, which would also look at the skills needed in the country and how it was being addressed.

The Deputy Minister responded that it would be useful if information on learners was sector-specific so it could be more helpful for future employers.

The Chairperson concluded that a more informed society was needed for the country. It was also important that the government emphasised the importance of reading, which would help to inform the youth. The Committee understood that tracking children was difficult. Nothing tangible was happening in this regard, but the government had to see how it could do more. The planning and implementation of educational projects was important, but the DHET also had to communicate these projects to the rest of the government. She thanked the Minister, the Deputy Minister and the DHET for honouring the Committee’s invitation – Members appreciated the turnout and wished them all of the best.

The meeting was adjourned.


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