Sector Education and Training Authorities (SETA): progress reports

Meeting report

LABOUR PORTFOLIO COMMITTEE
18 March 2003
SECTOR EDUCATION AND TRAINING AUTHORITIES (SETA): PROGRESS REPORTS

Chairperson: Mr M Manie (ANC)

Documents handed out:
Overview of SETAS by Mining Qualifications Authority (MQA)
Presentation by Diplomacy, Intelligence, Defence, Trade Education and Training Authority Presentation by Insurance Education and Training Authority (INSETA)
Presentation by Energy Sector, Education and Training Authority (ESETA)
Presentation by Health and Welfare Sector Education and Training Authority (HWSETA)
Presentation by SETA Co-ordination - Ministry of Labour

SUMMARY
Four SETAs presented progress reports of their activities since their inception three years ago. Information was provided on their Skills Plans, discretionary grants, quality assurance, learner registration, learnerships, finance and corporate governance. The challenges and constraints the sectors were facing were identified. All presenters gave evidence to effect that they had  strictly enforced the requirements of the Public Finance Management Act. 

Committee members were very concerned that an impact was being made. They also asked if there was carry-over into the SMME sector and rural areas. They called for measurable outputs and concrete indicators to show the development of SETAs since inception.

MINUTES
Opening Remarks by Chairperson
Mr S Manie called for the delegates to focus on factual achievements and specific problems experienced by all the SETAs.  He encouraged the meeting to come forward with concrete recommendations and not deal with matters in broad brush strokes.   He laid down the four areas of concern:
- Commitment
- Accountability
- Effectiveness of the legislation
- The Department's duty to maintain an overview of the sector for report back to parliament.
He mentioned the benefits of public participation in the affairs of  SETAs, and called for open and frank discussion.

Briefing by SETA Co-ordination Unit - Ministry of Labour
Mr  S Morotoba (Executive Manager) tendered the Director General's apologies for not being able to attend the meeting.  He expressed satisfaction by the Ministry on the performances of the majority of SETAs despite teething problems. He admitted that SETA performance has been uneven across the sectors and they have intervened in areas of non-performance and in dealing with isolated incidences of fraud. (See document for full presentation).

Overview on SETAs
Dr M Mthweco, CEO of the Mining Qualifications Authority, in his overview of SETAs mandated by the eight SETAs, noted that the inception of SETAs had taken place three years ago on 20 March 2000. The size of the 25 SETAs depended on the numbers of employers and employees contributing to the Skills Development Levy. SETAs  were not uniform in their levels of performance which varied from good to poor.  However he viewed SETAs as part of a revolutionary process in the training and development sectors.

He outlined SETA functions and the successes and challenges related to skills plans, grant disbursement, quality assurance, learnership and skills programmes. He then looked at the finances of SETAs and the issues around the flow of funds. This was followed by a study of its corporate governance and the challenges of implementing the King 2 Report. (see document for detail).

Insurance Education and Training Authority (INSETA)
Mr N Volschenk, CEO of INSETA, spoke on the background of INSETA and the insurance sector. On the subject of corporate governance he stressed the need to conform to the requirements of the Public Finance Management Act for an integrity-based approach. He cited 23 instances of good governance carried out by INSETA. The staff composition of INSETA was outlined. He then looked at the successes and challenges facing INSETA. (See INSETA document)

Diplomacy, Intelligence, Defence, Trade Education and Training Authority (DIDTETA)
Mr P Manda, CEO DIDTETA, outlined the composition of  DIDTETA and mentioned that its financing was mainly from government. This was unlike the other SETAs whose income derived from levies on private sector employers. As a result it did not have the benefits of funding for discretionary projects. He looked at the DIDTETA Sector Skills Plan. He then tracked the progress of DIDTETA in the light of the National Skills Development Strategy (NSDS). It was noted that difficulties had been experienced with the protocol and bureaucracy in government departments and the lack of direct contact with the Defence Force's service providers until this had been resolved. He pointed out that the Presidential Strategic Leadership Development Programme (PSLDP) run by SAMDI ( South African Management Development Institute), had been partly sponsored by the European Union to make the course affordable. These donors had now withdrawn their support leaving DIDTETA with a difficult financial burden so the initiative might have to be cancelled. (See document)

Energy Sector, Education and Training Authority (ESETA)
Mr N Nkosi, CEO of  ESETA, gave a progress report for the period 1/3/01 to 28/2/03. He identified the industry stakeholders as: Organised Labour, Employers, Departments of Minerals and Energy and Public Enterprises. He dealt with the ESETA Sector Skills Plan (SSP) which had at the NSDS objectives as a basis. He drew attention to the fact that skills development in certain large organisations such as ESKOM had begun long before the introduction of SETAs and that this fact may distort statistics on the achievements of  ESETA..
(See ESCETA Business Plan 2002/3)

Health and Welfare Sector Education and Training Authority (HWSETA)
Dr R Govender, CEO of HWSETA, looked at his sector's achievements against the NSDS targets and went through their key result areas. He provided information on skills planning, discretionary grants, quality assurance, learner registration, learnerships, finance and corporate governance. He then identified the constraints the sector was facing. (See HWSETA document).

Discussion
The Chair suggested that written answers to committee questions be provided within a week.

Mr M Ramodike supported Mr Manie's decision to submit responses in writing and invited non-contributory government departments to submit reports as well. He expressed his concern that only 600 of the possible 9000 companies registered by SARS had participated in the scheme in relation to INSETA. He said that the labour movement was unhappy with the shedding of about 2500 jobs in the INSETA sector.

Mr G Oliphant (ANC) made the following comments:
- he admired the passion and commitment displayed by INSETA.
- he suggested that portfolio committee members visit certain SETAs
- he asked that the particulars of DIDTETA's problem with its budget should be given.
- he asked if HWSETA was able to cope despite the limitations it had referred to
- he asked if it had been an advantage or disadvantage for ESETA to work with Eskom which had much experience in the field of skills development before the advent of SETAs.

The Mining Qualifications Authority was asked about the success of its campaign to engage companies. Was VAT being paid on levies distributed by SARS?

Mr N Middleton  (IFP) asked if there were any problems concerning the payment of levies by the SANDF.

In response the CEO of INSETA said that a solution to the job casualties in the insurance industry needed further research. The latest base figures for the number of available jobs was 105 000 of which 9 500 had been shed. Of those only 3 500 paid levies. The matter of job shedding was beyond INSETA's control.  He believed that there was a bigger stakeholder group and confirmed that the figures were a bit of a thumb suck.  He said that a research report would soon be available and this would provide statistics that would be more reliable.  He referred to the appointment of inspectors by his sector and further projects in this regard in Kwazulu Natal

Mr R Govender (ESETA) replied that besides the obvious advantages, the presence of Eskom tended to throw the statistics out. He confirmed that there had been solid participation by government and local government. Positive initiative had come from the Department of Minerals and Energy. The appointment of a Finance Officer had gone a long way to bring about good management of  ESETA's funds.  As regards the failures in the various  SETAs mentioned by Mr Middleton, he said that  HWSETA had a strong board with vision and teamwork and a staff that was well capacitated.  The role of the board had been clearly formulated.  He confirmed that there had been clarity and accountability and that healthy stakeholder partnerships had been established.  He said that the support from the Labour Department was strong

Mr P Manda (DIDTETA) reported that because his SETA had to survive on government grants with no levy contributions as was the case with the other SETAs, survival depended on budget allocations.  The main contributor to his SETA was the Ministry of Defence.  Other smaller contributions were received  from other departments amounting to R500 000. He confirmed that the total income had increased to R7 million.

Mr Manie commented that he was keen to receive ideas as to the best way of evaluating the work done on the NSDS.  He wanted to know what SETAs were doing to address the possibility of fraud and whether SETAs were showing tangible signs of improvement.  He asked what new structures had been put in place since last year and what improvements had been introduced to enhance progress. Had he training and jobs creation process improved since the inception of SETAs?  He wondered if there were any statistics to support improvements claims or other means to measure such progress. He mentioned that written responses could be submitted within a week.  He added that urgent consideration should be given to group training so as to fast-track the process.

Mr S Mshudulu (ANC) had a list of comments and questions:
-The health sector seemed to be a problem because there was no tangible evidence that the workplace had been improved. Had training needs been identified and the problems addressed?  He asked for clear evidence that steps had been  taken to alleviate problems
- It appeared as though learnerships and skills training was only being carried to the bright students. 
- He asked what HWSETA had done about penetrating the not-so-bright students.
- He believed that improvements in the capacity to carry skills training to rural communities would need to be a priority and asked about the kind of amenities that had been provided to create access points for rural communities.
- He suggested that labour offices should be used to accomplish wider and more extensive penetration into rural areas.
- He said that attention would need to be given to the ways and means of  establishing accurate databases through government.

Ms H Malebana (ANC) asked Mr Govender to give reasons for the extraordinary turnover in senior staff.  She said that it was strange that no mention had been made about corruption in the sector.  She also wanted to know whether the SETAs had shown progress in reaching out to the rural communities and whether there was any factual evidence of that.

An ANC committee member enquired as to when the many problems in the SETA environment could be translated into solutions.  He said that national priorities should be delineated and the abolition of poverty should be vigorously pursued. He asked about:
- The level of co-ordination between SETAs and government.
- The introduction of forums to exchange information.
- The relations between the Labour and Education Departments.
- The processes for reaching out to rural communities.
-.The problem of informal traders with regard to the many bureaucratic barriers.
- The interaction of SETAs with the clothing and textile Industry.
- The kind of assistance given to veterans of the previous conflict and steps taken to recruit them into jobs.

Mr G Oliphant (ANC) mentioned that skills development within SMMEs was a key challenge.  He asked whether the challenge had evolved into firm proposals.  He reiterated the need to get the trade unions involved in the job creation process.  He asked for more details about the  campaign to take the SETA message to the rural communities.  He commented that young people were not happy with the employment situation.

Mr Manie asked about the time span before grants were actually paid.  He urged SETAs to grasp their responsibilities for job creation and skills development.  He said that clear strategic guidelines should be laid down in pursuit of  the goals of job creation and skills development within the 25 sectors of the economy.

Mr Govender on behalf of  HWSETA responded to the questions on corruption, saying that there had been full compliance with the Public Finance Management Act (PFMA). A Finance Officer had been appointed to keep a close eye on possible fraudulent practices.

Mr Volchenk on behalf of  INSETA replied to the questions as follows:
- A check list comprising 15 pages had been implemented and the outcome notified to the Audit and Finance Committee .
- Induction lectures on the PFMA had taken place.
- All staff have had a copy of  the policy on procedures.
- He queried whether the system of payment of grants was the best system.
- He believed that mandatory grants were of less importance than discretionary grants that had been implemented across the whole sector.
- Discretionary grants seemed to be the way forward.
- He said that there had been an upliftment in Mathematics training.

 Dr Mthwecu on behalf of the MQA replied to the questions as follows:
- More discretion should be used in regard to SMME grants over learnerships.
- Unclaimed funds had been a problem.
- There had been good co-ordination with the Labour Department.
- A formulated message to the youth was imperative.
- Prevention of fraud had been a priority and MQA had liaised well with the Auditor General.

Mr S Mshudulu commenced the next round of questions as follows:
- How the interests of the disabled had impacted on the SETAs?
- What had been the response to the AIDS problem?
- What efforts had been made to translate manuals into the various language?
- What strides had been made in regard to employment by women as a disadvantaged group?
- What steps had been taken with regard to cross sector training? 
 
Dr Mthwecu responded by adding:
- That the inter-governmental support for MQA was good.
- That the biggest problem was to set priorities for the allocation of grants.
-T hat the MQA had devoted R10 million to foster co-ordination between the government, SETAs and other stakeholders.

Mr Manie concluded the meeting by saying that SETAs would have to be mindful of the fact that they were accountable to the people. Progress should be monitored by means of concrete indicators and numbers distinguishing between the status quo before the advent of SETAs and developments thereafter.