Department 2018/19 Revised Strategic Plan & Annual Performance Plan; with Minister

Meeting report

Comments by Minister

Ms Naledi Pandor, Minster of Higher Education and Training, started by apologising for the Director General’s (DG’s) absence. She said that it was due to her having undertaken to be at Nelson Mandela University (NMU) at that time, and he had gone to attend in her stead. He would be joining the meeting later on. As the Committee would know, a new Vice-Chancellor had been appointed at NMU, and the Minister was due to speak at the inauguration. Due to the significance of her being one of the first female Vice-Chancellor in the country, it had been important for the Department attend.

She wanted to avoid a long discussion on policy because that would be addressed in the presentations. The annual performance plan (APP) was the basis upon which the Portfolio and Select Committees would monitor the work of the Department of Higher Education and Training (DHET) in the year ahead. She hoped that the manner in which they had structured the APP would provide a good basis for the Committee to hold the Department accountable. The APP contained both the programmes that the Department would embark on during the year but also provided measuring tools to be used for oversight work.

She expressed excitement that the 2018/19 APP gave greater life to the post-school education policy which had been one of the most significant developments in the sector to date. This was the greatest policy instrument that the Department could use in the coming year. However, in addition to this, the technical and vocational sector needed to be brought to life, as it presented the country with the greatest opportunity of providing people with appropriate skills that catered to the South African economy and addressed its unique socio-economic concerns. Technical and Vocational Education and Training (TVET) colleges need to offer more responsive programmes that were modern and innovative. She noted the importance of TVET colleges having the capacity to carry out their mandate, and said the skills profile of the South African population needs to be broadened.

She also added that the Sector Education and Training Authority (SETA) needed to play its full role in executing this strategy in the country. She was still in a process of learning about the sector, but there were exciting opportunities. She handed over to the DDG on Universities, Dr. Daine Parker to proceed with the APP presentation.

Annual Performance Plan: DHET

Universities

Dr Diane Parker, Deputy Director General: University Education, DHET, said that the Department continued to implement the White Paper on post-school education and training in priority areas identified in the National Development Plan (NDP), as well as in the medium-term strategic framework (MTSF). The APP was structured into three parts -- the strategic overview, the programmes, and the linkage of new plans with some of the other plans of the Department.

A key focus was the policy pronouncements the Department had made, as well as the new funding which had been given to the Department to support poor students being phased in over the next five years through the implementation of the bursary scheme. The APP reflected the additional funds allocated to strengthening the universities and TVET colleges. It also reflected the baseline adjustments that had been made for the 2018/19 year, which amounted to R67.2 billion in total. An additional allocation had been added mainly to support the rollout of bursary schemes. A portion had also been allocated to support and strengthen institutions.

Among the challenges that needed to be dealt with, was the elimination of certification backlogs. The Department had made great strides in dealing with this issue, and the State Information Technology Agency (SITA) reported that the backlog had largely been dealt with. However, cases still kept appearing, so the Department needed to monitor the situation. The Department had not yet met its target of constructing 12 new TVET colleges, and only three were at various levels of completion at that time. However, she assured the Committee that a plan had been formulated for rolling out the remaining colleges. Student accommodation was still a challenge, but the Department was working toward remedying that.

Dr Parker described the purpose of the university education programme as developing and coordinating the policy and regulatory frameworks for an effective and efficient university education system, by providing financial and other support to universities, the National Student Financial Aid Scheme (NSFAS) and national institutes for higher education. The core programmes run by chief directorates were:

• University planning and institutional funding;
• Institutional governance and management support;
• Higher education policy development and research; and
• Teaching and learning development.

The Department’s priorities over the 2018 MTEF would be to:

• Develop regulations for institutional types (universities, university colleges and higher education colleges) in terms of the Higher Education Amendment Act (2016);
• Provide support to strengthen and transform the public higher education system through the full implementation of the University Capacity Development Programme which was being rolled out in 2018;
• Develop systems to pilot the Central Applications Service and establish the service;
• Develop a fee regulatory framework and policy for student funding to ensure affordable higher education fees and effective funding of students to ensure sustainability in the higher education funding model;
• Pilot and finalise an expanded financial assistance and support model and present this to Cabinet; and
• Ensure public funds were effectively utilised for the purpose intended through monitoring, which was key to the mandate of the Department.

The Department would be devolving 14 annual oversight reports focusing on the implementation of various steering and funding mechanisms across the higher education sector:     

• The Higher Education AIDS (HEAIDS) programme
• Financial health of universities
• Foundation provision grant
• Implementation of the University Capacity Development Programme
• Research outputs
• Infrastructure and efficiency grant     
• New universities earmarked grant
• Ministerial enrolment targets      
• Institutional governance
• International Scholarships Programme       
• Private Higher Education Institution’s (PHEI’s) compliance with the regulations
• BRICS partnerships     
• Teaching and learning development capacity improvement programme
• Student leadership capacity development programme

Dr Parker said that over the five-year strategic plan period, several steering mechanisms had been developed. The focus in 2018/19 would be implementation and oversight. Ongoing monitoring and evaluation of the programmes that were in place would continue, and annual reports on the utilisation of the funds, identifying the successes and challenges, and identifying areas for improvement and/or intervention would be submitted.

Universities were required to submit annual reports by July each year in terms of the reporting regulations published under the Higher Education Act. The Department analysed these reports to check for compliance. The most important aspect was the financial health of the system against a set of indicators. The purpose of this was to identify institutions requiring support or intervention. The annual financial health report provided insight into the financing and sustainability of institutions and the sector. The annual report produced in the 2017/18 financial year had shown that 22 of the 26 universities had received unqualified audit opinions from their external auditors.

Total revenue in the sector had increased from R63.981 billion in 2015/16, to R69.145 billion in 2016/17, representing an 8.1% increase, while expenditure had increased from R59.476 billion in 2015/16 to R66.055 billion in 2016/17, representing a 11.1% increase. This would need to be monitored to avoid expenditure exceeding revenue. The report also showed that seven universities had incurred operating deficits on their total operating funds, and the Department would be looking into what the issues at these institutions were.

Significant state subsidies had been put into the system in 2016/17, raising the figure to 39.3% of university income coming from the DHET. Student debt had grown between 2014/15 and 2016/17 from approximately R6.1 billion to R8.3 billion, with net student debt rising from R2.6 billion to R3.3 billion in the same period. This was a worrying trend partly due to some students believing they should not need to pay fees as well as historic debt which had been placed on the poor and working class. One key issue was how those who could pay fees should be incentivised to pay their fees.

There had been massive investment into university infrastructure. The obstacle had been to see where funds were most needed and could be used most effectively. Since the beginning of the programme, R20.1 billion had been disbursed to universities for purposes of infrastructure development. In the next phase of the programme, another R8.5 billion would be invested over the next three years. This would not include money allocated for new university projects, which totalled R3.8 billion, with a further R3.145 billion earmarked for the next three years. This amount of funding would require appropriate monitoring, and to try and deal with this the Department had implemented a new macro infrastructure framework (MIF), which tracked all infrastructure development across the system. By using the capacity created through developing the new universities, the Department would also introduce an Infrastructure Development Support Unit to assist in monitoring.

Dr Parker referred to the challenge of student housing that the system faced, and said the Student Housing Infrastructure programme which formed part of the Infrastructure and Efficiency Grant (IEG) programme was being implemented to try to address this problem. The Department had a plan in place to utilize its funds to implement the programme and develop around 200 000 beds for universities and 100 000 for TVET colleges over the next 10 years.

An annual cohort report was produced to track the throughput of students across the university system utilising audited student enrolment and success data. The throughput rate for students studying through the distance mode of study remained a challenge. This would first have to be overcome before the distance mode of study could be used for expansion. Analysis showed the importance of effective financing, academic and psycho-social support for first generation university students in achieving success.

Contrary to the belief that NSFAS students were not doing well, the data showed that in 2017, 37.3% of students across general cohort dropped out, while among students who received DHET funding, only 25.9% dropped out. For students on Thuthuka funding, which provides wrap around support primarily for accounting students, the throughput rate was 81.2%. These figures showed the value of tracking students and providing comprehensive support.

The annual Research Output Report measured research output against research output policies, and showed an increase in research output over time. There was also a significant improvement in the production of books in 2016. This was directly related to the change in policy, which had increased the number of unit allocations for book publications. The Department now wanted to focus on improving the output quality of publications. It had established a collaborative project in conjunction with the Centre for Research on Evaluation, Science and Technology (CREST) at Stellenbosch University to enable improved capacity for managing research outputs and ensuring quality.

Dr Parker said that the staffing of South Africa’s universities framework provided a comprehensive programme for transforming and developing university staff from recruitment to retirement; focused on teaching, researching and leading, and reporting annually on progress, development and challenges. This programme also nurtured and supported new academics, equipping them and improving leadership and management skills. The New Generation of Academics programme had produced 208 new academics, and it was hoped that this number would increase as the programme was implemented more effectively. The Future Leaders Initiative (FLI) had also identified 54 emerging leaders who were studying towards a Doctorate in Business Administration in Higher Education Management and Leadership through a programme offered by Bath University (UK) and the Nelson Mandela University in Port Elizabeth. The Department was working on a number of funding opportunities with various partners to implement its programmes further.

The University Capacity Development Programme, which would be fully implemented this year, would serve as a contribution, but partners were needed to sustain the initiative. The programme would consist of three components -- student development/success, programme development and staff development. This also provided support for institutions to explore the content they taught and other knowledge systems, in line with the call for decolonised education. The overall investment into this initiative over the next three years would amount to approximately R2.9 billion. She emphasised the importance of developing the establishment of a Centre for Africa Language Teaching at the University of Johannesburg.

She went on to refer to the Teaching and Learning Development Capacity Improvement Programme (TLDCIP) which the Department had embarked on with the European Union. This initiative fell under the University Capacity Development Programme (UCDP) because it seeks to develop teachers for all parts of the university teaching system. The programme covers several aspects, such as teaching special needs students, primary mathematics and literacy teachers and training TVET teachers.

The Department continued monitoring the compliance of Private Higher Education Institutions (PHEIs) with the regulations published in terms of the Higher Education Act, ensuring institutions were operating legally in the system and only offering accredited programmes. PHEIs contributed by providing programmes in niche areas such as design, information technology (IT) and business. At the Higher Certificate level, the sector had grown from close to 120 000 student enrolments at over 100 institutions in 2013, to 167 408 student enrolments at 122 institutions in 2016. To date there were 292 PHEI campuses across the country, with the greatest number in Gauteng and the Western Cape. However, the greatest challenge remained illegal colleges which the Department was work to overcome in partnership with the South African Police Service (SAPS). In terms of qualifications, the Higher Certificate remained the most popular, and this was a gap in the public university sector that the private colleges filled. Private institutions offered very few postgraduate level programmes, so they did not meet the criteria for being considered full range universities. The majority of studies were in business, commerce and management studies, which catered specifically for the private sector.

TVET Colleges

Ms Gerda Magnus, Chief Director: Vocational and Continuing Education, DHET said the purpose of the TVET programme involved planning, developing, implementing, monitoring, maintaining and evaluating national policy, programme assessment practices and systems for technical and vocational education and training.

The baseline for TVET funding had been increased to R5.3 billion for 2018/19.These funds would be used for TVET subsidies, of which R1.4 billion would go towards teaching and learning. A further R1.3 billion would be allocated to infrastructure maintenance. Approximately R2.5 billion would be used to cover tuition fees of up to R509 000, and up to R2 billion would go towards the travel and accommodation of students.

The R1.4 billion additional funding increased the baseline funding for colleges from R7.4 billion to R8.8 billion. Colleges were currently under-funded at a rate of 54%, which would now be undercut to 69% in 2018 and thereafter to 73% in 2019 and 76% in 2020. Funding should ideally be at 80%, and that level should be reached by 2021. There would be no increase in enrolments for the next four to five years but this would allow the full funding of programmes to proper norms and standards.

Challenges included the maintenance of existing infrastructure. It was critical to ensure that infrastructure was brought up to date. As part of the R1.3 billion the colleges would conditionally receive R9.1 million each in advance to be spent on bulk services, statutory compliances, sanitation building repairs and student accommodation repairs. The allocation for next two years would be based on an assessment of existing infrastructure and by end of year, funds would be allocated according to the priority of needs.

There were three targets for infrastructure in the APP -- the functionality of new buildings being built, the rollout plan of nine new colleges and two refurbished ones, and finally a report to the Committee on infrastructure maintenance. Each college must develop a plan for the maintenance they wished to undertake, while prioritising the life cycle of the infrastructure. Once plans had been approved, urgent maintenance could start. The remaining funding would be used over the next two years to assess all infrastructure at colleges, and create a national infrastructure database. The Department would spend approximately R1.3 billion on new campus development.

Ms Magnus said that many APP targets were reports, but these allowed the Committee to monitor the work of the Department. A new IT system had been installed but there were still challenges due to communication issues and human error. Work would go into reporting systems and policy directives to ensure that the system worked well.

A new reporting model was needed for performance data that could account for pockets of data. There was a need to imbed a system of monitoring of councils that the Department would like to develop this year. 28 college council’s terms were expiring in 2018, and there would thus be an extensive process put into place to select a new council. The work of the councils who were stepping down needed to be evaluated and a report on college governance produced.

The issue of low throughput rates remained a big problem. This year the focus would be on teaching and learning plans, student support plans, both academic and non-academic, for which the Department had requested reports from colleges. The Department would also undertake work on the devolvement of lecturers to provide a platform from which to develop and upgrade their skills. The Department would be launching its pre-vocational programmes for those who struggled with mathematics, engineering and science. This would be implemented at nine colleges, with more expansion to come. It was planning to compile a proposal to provide 100% of grants to colleges in the coming year. It would produce oversight reports to present to the Committee on:

• Academic performance of students;
• Student support services and teaching and learning support;
• Throughput rate for TVET college students;
• Stakeholder engagement -- SA Institute for Vocational and Continuing Education and Training (SAIVCET)

Ms Magnus said the challenges they faced included the outdated examinations system, which was unable to provide reliable and comprehensive reports. A new IT system was being developed and would be tested for implementation in 2019. The Department continued to the monitor the certification backlog as well. It struggled with exam irregularities, including leakages, distribution and marking. It would be improving the conduct and monitoring of examinations to avoid any irregularities and improve their quality. The following reports would be produced to present to the Committee:

• The conduct of public TVET college examination centres during national examinations and assessments;
• Eradication of certification backlog;
• Functioning of the IT examination services system.

Skills Development

Mr Zukile Mvalo, Deputy Director General: Skills Development, DHET, said that the purpose of the programme on skills development was to promote and monitor the national skills development strategy developed in terms of the Skills Development Act 97 of 1998. It also sought to create a policy and regulatory framework for an effective skills development system.

In 2018, the APP would focus on the implementation of the National Skills Development Plan (NSDP). The Sector Education and Training Authority’s (SETA’s) grant regulations, which came into effect on 1 April 2013, directed that SETAs must spent 80% of their 49.5% levy on professional, vocational, technical and academic learning (PIVOTAL) programmes. SETAs had been investing more in learnerships and bursaries.

The Department had a good working relationship with NSFAS, and in 2016 approximately R81 million was distributed through NSFAS, which increased to more than R230 million in 2017. Studies had shown that out of those who participated in learnerships, seven out of 10 were easily absorbed into a given industry. The Department therefore always encouraged the SETAs to spend more on programmes. There had been improvements in SETAs’ audits. More than 148 000 workplace-based learning opportunities had been recorded in 2016 through SETAs. In the last three years of the Medium Term Strategic Framework (MTSF), the national artisan production numbers had also steadily increased from 16 114 in 2015 to 21 188 in 2016. Many artisans had been absorbed into the engineering industry, which formed an important part of South Africa’s development strategy and economic growth prospects. A study in 2016 on artisans employed or self-employed through the Swiss-South African Cooperation Initiative (SSACI) found that 79% of artisans found employment on completion of their apprenticeship programmes, while 6% of this 79% were self-employed.

Mr Mvalo said that targets for skills and development were to:

• Produce a report on the implementation of the revised SETA landscape, developed and approved by the Director-General, by 31 March 2019;
• Produce quarterly oversight reports on the implementation of the National Skills Development Strategy by SETAs;
• Produce a report on the implementation of good governance standards by SETAs by 31 March 2019;
• Reduce the average lead time from qualifying trade test applications received until the trade test was conducted, to 80 days -- in 2016 the lead time was on average 160 days, and it currently stood at 100 days;
• Develop a national artisan development information management system, which the Department hoped to have operational by 2020.

Performance indicators for 2018 were to have the number of work-based learning opportunities at 135 000, to see the trade test pass rate increase to 61%, and the number of artisan learners employed or self-employed raised to 75%. The percentage of SETAs the Department wanted to see meeting good governance standards was 65%. It was also aiming to see the number of new artisans increase to 22 188 and the number of new artisan learners registered to 28 750.

Community Education and Training (CET) Centres

Dr Bheki Mahlobo, Acting Deputy Director-General: Community Education & Training, DHET, said the purpose of the CET programme was planning, developing, implementing, monitoring, maintaining and evaluating national policy, programme assessment practices and systems for community education and training. The Department drew its mandate from both the constitution and the National Development Plan (NDP), which required that up to one million students be accommodated in the CET system by 2030. The NDP required that adult education be implemented both in the work place and in programmes offered in public institutions. It was therefore important to see how many people were being lifted from illiteracy through the SETAs. The CET programme had been termed a ‘second chance’ programme as it hoped to allow those who had been historically unable to gain access to education to do so. It also helped to accommodate those that the schooling system no longer could, and recognised that some adults desired practical skills and not necessarily literacy.

The CET system faced the following challenges:

• System inefficiency and underperformance;
• Infrastructure limitations and the impact on time-on-task and the quality of training. The Department was considering utilizing unused buildings;
• Slow pace of programme diversification to realise the innovation in terms of the White Paper;
• System under-funding, which meant that institutions would have to look beyond just the Department for financial support;
• Lecturer supply, demand and utilization -- currently 30% of lecturers were unqualified;
• Capacity of governance structures and management;
• Slow pace of student certification, which was inherited.

The targets of the programme for 2018 were to:

• Produce a report on the CET centre implementation of governance policies (Q4) covering monitoring implementation and compliance with relevant policies and legislation;
• Produce a monitoring and evaluation report (Q1) on system efficiency and performance;
• Increase access by increasing the headcount enrolment target to 320 000 and a certification rate of 40%;
• Produce reports on the implementation of teaching and learning plan (Q2 & Q4) focusing on the extent to which teaching and learning interventions had been implemented by CET centres to improve system performance;
• Produce a report on the implementation of the strategy for partnership (Q4). This sector cannot achieve its mandate if CET centres do not enter into partnership for infrastructure utilization, programme diversification and lecturer training and development;
• Report on infrastructure maintenance (Q4) -- the extent to which the infrastructure that is owned by centres is maintained;
• Based on the approved Ministerial framework, draft norms and standards for funding CET centres would be developed (Q4) to ensure equitable allocation of funding;
• Run capacity-building workshops for councils, management and student leadership (Q3);
• Develop robust financial management systems at CET centres (Q4) which would allow institutions to generate alternative income streams and not rely solely on the Department;
• Jointly, with SITA and provincial education department (PED) examination system administrators, eliminate the General Education and Training Certificate (GETC) backlog (Q2);
• Develop a national framework for the development of constitutions for CET centre student representative councils (SRCs) to strengthen that mechanism.

The achievements of the programme thus far included fully establishing management structures and councils, and a fully developed policy and legislative environment nationally to ensure a common legal and policy code for the system.

Planning, Policy and Strategy

Dr Hersheela Narsee, ‎Director: Research Coordination, Monitoring and Evaluation, DHET, said that the purpose of the Planning, Policy and Strategy programme was provide strategic direction in the development, implementation and monitoring of Departmental policies and the human resource development strategy for South Africa. The key areas of focus for the programme were the following:

• Implement National Policy for Integrated Career Development System -- across all spheres of government;
• Finalise Open Learning Policy Framework for Post-School Education and Training Post-School Education and Training (PSET);
• Improve implementation of the National Qualifications Framework (NQF) by taking forward the findings of the NQF evaluation; 
• Improve the responsiveness of the PSET system to the needs of the economy and society by advocacy and dissemination of a list of occupations in high demand to inform enrolment planning, bursary allocations, career advice;
• Provide management information reports in support of planning;
• Report on skills supply and demand;
• Report on PSET statistics and macro PSET indicator trends;
• Monitor and report on the implementation of various policies -- the Articulation policy, the Strategic Disability Policy Framework and the Policy Framework for the Realisation of Social Inclusion.

The Department would be engaging with the international community through the following:

Southern African Development Community (SADC) -- Co-hosting with the Department of Science and Technology and the Department of Basic Education the annual Joint Meeting of SADC Ministers responsible for Education and Training and Science, Technology and Innovation, and reporting on progress on the implementation of the Regional Indicative Strategic Development Plan.

Brazil, Russia, India, China and South Africa (BRICS) -- Hosting the BRICS senior officials and Ministers of Education meeting and BRICS Network University Conference in July 2018.

G20 -- Participate in the Education Working Group meetings and the Education Ministerial meeting. The Working Group would be deliberating on the current and future skills needed by the labour market within the global arena. This was a new initiative by the G20 and fitteds well with the DHET’s own research agenda.

Bilateral engagements -- The Department would pursue relations with priority countries through Ministry to Ministry meetings. 

Ms Narsee said that the Department would be presenting only a single piece of legislation for the year, namely the National Qualifications Framework Amendment Bill, 2016 (NQF Amendment Bill). There were also 46 legal cases at that time, ranging from applications to review proceedings. Some of the cases had become dormant. However, litigation reports were updated monthly to monitor the activity of each litigation matter.

Administration

Mr Theuns Tredoux, Chief Financial Officer, DHET, said the targets set by the Department for 2018 were the following:

• Filling 90% of approved positions;
• Resolving all disciplinary cases within 90 days;
• Reducing the average number of days to fill an advertised position to 180 days;
• Paying creditors within 30 days of receipt of valid invoices;
• Achieving an unqualified audit;
• Improving network connectivity uptime.

The following priorities were linked to these targets:

• Approve and implement the organisational structure;
• Finalise the post provisioning norms and post distribution model for TVET college and CET centre staff;
• South African National Research Network (SANReN) connectivity at TVET colleges and the Department;
• Facilitate the construction of a new head office and the acquisition of regional office accommodation;
• Implement an in-house employee verification and vetting system
• Implement policies and systems to instil an ethical culture and conduct in the Department;
• Implement a system to improve efficiency and overall performance in the Department through the assistance of electronic systems.

Finance

Mr Tredoux said PSET was the largest growing budget within Government, increasing by 9.2% over the 2018 MTEF. The Department’s baseline adjustments over the 2018 MTEF amount to R12.364 billion in 2018/19, R25.334 billion in 2019/20 and R29.548 billion in 2020/21. These additional funds were mainly for the roll-out of fee-free higher education for qualifying poor and vulnerable students, as well as increased subsidies for universities and TVET colleges. However, another significant change was the increased funding allocated to universities and TVET colleges by the Department.

The increased baseline was a positive outcome of the Department’s bids for additional funding since its establishment, such as for the support of students, increases to the baseline subsidies of universities and TVET colleges, as well as the funding of examination services. The increased baseline was primarily for the funding of poor students. This had resulted in a substantive increase in NSFAS funding of R34.5 billion over the 2018 MTEF period. NSFAS was also receiving an additional R105 million over the MTEF period, aimed at supporting and improving its administration to enable the effective management of the increased funding.

He said the increased subsidies for universities was a strong push towards improved baseline funding of institutions and a substantive drive towards the sector’s funding at 16% of the gross domestic product (GDP).

Institutional subsidies to the TVET sector had more than doubled and the sector had been allocated an infrastructure grant of more than R4.4 billion over the MTEF. This was the first time that TVET colleges would receive funds specifically geared towards infrastructure capacity development. Funding for the HEAIDS programme had been scattered across various departments, but had been centralised at the Department of Higher Education and Training, resulting in a funding shift from the Department of Health totalling R27.7 million for the 2018 MTEF. The Department had also received a baseline adjustment for examination services that would result in a considerable impact on the services provided by this section.

Like many other departments, the DHET had had to experience some baseline reductions which would be in the form of cuts in the administration budget. He assured the Committee, however, that the Department was able to accommodate this. Therefore, the Department’s public entities had been reduced to the amount of R20.455 million over the MTEF period. However, he stressed that the Council of Higher Education (CHE) and NSFAS would not experience baseline reductions due to the need for proper monitoring and management, given the large influx of funds into the Department.

He provided Committee Members with a table overview of the budget trends from 2017/18 to 2020/21. Within this period, the amount allocated to the Department would increase from R68.9 billion in 2017/18 to R118.6 billion in 2020/21. There was significant growth in the year-on-year budget going into 2018/19 and 2019/20, at 21.64% and 20% respectively, with a reduced percentage change in 2020/21 at 9.94%. However, despite this smaller percentage change, it still far exceeded the expected inflation rate of 5%. As a percentage of GDP, the allocation to the Department would increase to 2.04% of GDP, making up 6.11% of consolidated government expenditure in 2020, an increase of just under 2% from 2017/18. As a percentage of total education expenditure, the Department’s share increased from 22.23% to 28.73% in this period. Programme 3: University Education, would continue to dominate the budget, representing 81% of expenditure in 2018, because all university and NSFAS expenditure was funded from this entity.

Regarding expenditure within the Department, he said that administration as well as programmes, policy and planning would increase at a constant rate year-on-year in that period. However, spending on universities would see a large increase in the medium term due to subsidy payments to NSFAS. There was an increased allocation to TVET colleges, where compensation of employees made up a large portion of spending.

Expenditure on goods and services by the Department would nearly double in the medium term due to spending on the new examination services.

For 2018, compensation of employees amounted to R8.957bn, or 95.3 % of Departmental operations, as follows:

• Departmental: R1 036.370 million
• TVET colleges: R5 711.631 million
• CET colleges: R2 013.817 million
• Examiners and moderators: R195.146 million

There was a relatively small increase in the operational budget of R8 billion for 2018/19 when compared to the previous year. Though the operational budget increased to R649 million during 2019/20 and  R664 million during 2020/21, this would be due to the increased allocations for examination services and had no effect on other operational costs.

Strategic Risk

Mr Tredoux said it was the responsibility of all branch heads to ensure that all the identified risks within their respective areas were continuously managed. He highlighted six factors that contributed to risk within the Department. These were capacity constraints within the Department, because of the current structure that was not approved and the lack of funding for the unfunded posts. No voted funding was available for some of the core functions, putting high reliance on the National Skills Fund for the funding of operational costs and the filling of positions. The non-availability of proper financial management systems in the TVET colleges had been reflected in the audit outcomes. There was aged IT infrastructure and poor service by SITA on the procurement of IT services, which needed to be replaced urgently. The Department also experienced inadequate interfacing and integration of internal processes / systems. Physical infrastructure remained inadequate.

Before handing over to the next presenter, the Chairperson welcomed Mr Gwebinkundla Qonde, Director General: Department of Higher Education, who had joined the meeting during the previous presentation.

Audit Committee

Prof D van der Nest, Chairperson: Audit Committee, said the Auditor General (AG) had placed reliance on the Audit Committee as an independent advisory body to the Department. The Department had received an unqualified audit opinion and was working towards a clean audit report. One key issue in the past had been material adjustments which needed to be made, but in the prior financial year there had been no adjustments, and he praised the CFO of the Department and his team for this. A good working relationship existed between the Audit Committee, management and the Auditor-General

An area of focus was the need for better performance information from TVET and CET colleges, which was required in order to reach the goal of a clean audit. The Audit Committee would continue to monitor sound financial management and governance in the Department with a focus on compliance with legislation and regulation. It would continue to follow up on previous Auditor-General findings. Special attention would be paid to human resource (HR) matters. The prevention of irregular expenditure would persist, and action would be taken where necessary. The hard-line approach that the Director General had taken towards these matters had assisted in a reduction of irregular cases.

Discussion

The Chairperson of NCOP Select Committee thanked the Department for the presentations on each of its six programmes, as well as the financial breakdown and risk assessment. The Committee would hold the Department accountable, based on the targets they had presented. The targets would also be measured for alignment with the strategic plan, the MTEF, the legal framework, the NDPS and potentially the SONA.

Mr C Kekana (ANC) recognised the gradual increase in the budget for TVET colleges, but asked for clarity of the scale between the increases in expenditure on TVET colleges when compared to that of universities. He reminded the Committee that the goal was to have 60% of the sector trained at TVET colleges and 40% at universities. He asked if the increases shown in the presentations were in line with increasing employability and catering to what a developing country needed to progress economically. He noted the extent to which a country like Japan had utilised vocational training to grow rather than simply having graduates with theoretical knowledge. Were the allocations proportionately based on the desired outcomes for the country? On the point of decolonization, he inquired whether engineering students were simply being taught how to repair imported products and machines, or how to design and make their own as well. He argued that this self-empowerment was a vital step towards decolonisation and helping South Africa compete on a more equal footing with the rest of the world.

He referred to a visit he had made to campuses in Kwazulu-Natal and seen the success of industrialising initiatives like Operation Phakisa, where the ocean industry was flourishing while also empowering South Africans. However, in places like Limpopo, TVET colleges trained people in the hospitality sector. He felt this was a lost opportunity, by not training people in technical fields or with practical skills. He questioned whether the focus in rural areas should be on hospitality. He asked if there were plans to push for programmes that were more industry-orientated in the sector. Lastly, he pointed out that there were many empty public works buildings in townships, and argued that these should be used as training facilities rather than having them deteriorate. He asked if this had been considered by the Department.

Mr A van der Westhuizen (DA) expressed disappointment with the presentations by the Department. Considering the influx of resources it now had at its disposal, d he would have like to see them do more. He had seen no indication within the APP that could deal with the serious threat young South African people were facing. 63% of pupils left school without certificates, and it was the Department’s responsibility to assist them in becoming productive members of the workforce. The Minister had on a prior occasion said the national senior certificate could not be made available to adults due to a lack of funds. He found it unacceptable to allow most early school dropouts to remain on the streets. He stressed that the world of work was changing. The subjects which were supposed to be taught at institutions such as TVET colleges would become the building blocks of what South Africa needed in future. However, the plans presented placed little to no emphasis on how the sector would prepare students to enter scarce skill areas that required technical expertise. He referred to phone repairs as a primary example of a technical and vibrant industry that young South Africans should be equipped to enter, but public institutions simply did not offer the necessary training. Those who could afford to were thus forced to go to private institutions, which were not accessible to a large section of the country’s poor population.

He criticised the Department for not putting forward tangible plans to take the lead on e-learning or to explore options of blended learning. This would be particularly useful to students who did not have access to student accommodation, and would allow them to better study from home. He urged the Department to think deeply about the needs of the country. He noted Mr Kekana’s point on using abandoned buildings for training purposes. He went further in asking why used facilities could not be used in the evenings as well. With the right model in place, schools would be willing to make their properties available for after-hours activities, rather than the Department wanting its own infrastructure built. He expressed concern over the sustainability of the current funding model and the fact that artisanship had not yet reached the same levels as it had in the 1980s.

He was also worried about the light treatment that bogus private institutions had received in the form of a warning letter. The Department needed to take a more hard a line approach. He highlighted the HR issues within the Department by referring to a case at Boland college, where the Department had failed to replace a retired principal for several months, even after the school had written to them. He asked the Department to prioritise norms and standards for staff provisions at colleges, which would offer staff a career at TVET colleges with job security. He pleaded that the Department move from promises to action.

Ms J Kilian (ANC) commended the Department on presenting a thorough APP. The introductory phase gave a good oversight of the sector, while also noting the challenges. The Department should be criticised for issues that the Committee had flagged in the past but had not been adequately dealt with, but the Department had in many ways made significant progress. One major obstacle had been the dysfunctional state of the TVET colleges and community training centres that the Department had inherited. She also noted that perceptions around universities as opposed to TVET colleges had not changed. Young people still chose a university over technical or vocational training. She stressed the need to change perceptions around TVET colleges. South Africa needed to give people the right scarce skills to participate in the market. The dropout rate of primary and secondary sector pupils indicated the need for greater attention to be given to lure people back into long-term and continuous learning and training.

She said that it was important to have a private education system in the country, and congratulated the Department on reducing the number of bogus qualifications on the market to only two. The Department had to keep monitoring situations of that nature. She expressed positivity about the funds coming to NSFAS, which could change the lives of so many poor families. She commented that the Department was a monitoring and enabling entity with limited ministerial ability to intervene because of internal school governing councils. However, she was concerned about the inability to measure performance properly due to the lack of information management systems. Without performance measurements, it was impossible to measure outcomes. She was concerned about the lack of progress and urgency in putting those systems in place.

Regarding the CFO’s comments on SITA, she said that it would not work if everyone kept pointing fingers at SITA when the Department needed to accept responsibility. Iff SITA really was not working, they should be reported to the President or brought before the Committee. SITA had experienced significant damage to its brand and reputation in its struggle with corruption. However, there was a new leadership at the helm and they were eager to assist, and the Department needed to use the talents at its disposal. She urged the Department to note the outcomes in their plans which were difficult to measure, and to see how the problem could be overcome.

Mr D Stock (ANC, Northern Cape), joined Ms Kilian in thanking the Department for a comprehensive presentation and plan, but stressed that the Department needed to be held accountable. In a previous presentation to the Select Committee, the Department had indicated that enrolment statistics had not been ready to be released due to institutions not meeting deadlines. He requested that those statistics be made available at the meeting through the secretariat, or as a summary from an official of the Department or the Minister.

Mr M Khawula (IFP, KZN) echoed Mr Stock’s request for statistics and in addition requested the Department’s targets for enrolments for the following year. The Select Committee had always been concerned about the under-funding of TVET colleges, and it had resolved to withdraw its vote if the issue persisted into 2018. He recognised the amount allocated to infrastructure development, but insisted that the Department should consider increasing the amount. The previous year, the Select Committee had received complaints from TVET colleges about the neglect they had experienced. He argued that this backlog of neglect would have to be dealt with as well and that more would have to be done to overcome the effects of years of under-funding in that area.

At this stage, some Members of the Select Committee had to leave to attend another meeting.

A Member of the Select Committee added that the APP addressed the imbalances of the past and showed progress, although the Committee had to remain critical. She expressed her confidence that the increased monitoring and evaluation that universities would be embarking on would ensure that the Department received value for money. She requested clarity on what criteria were being used to determine which programmes needed to be monitored, and noted that NSFAS was one of the key programmes to be monitored. She was satisfied that the Department recognised the challenges it faced with data systems. The consequences of a lack of data affected budget allocations and this would prevent money from being wasted on students that did not exist. She also noted Mr Kekana’s points on infrastructure, and said that according to the White Paper, CET colleges were required to offer programmes which improved community cohesion, social capital and were responsive to the geographical needs of the people. Beyond being a second chance programme, there were a range of programmes that linked to what Mr Van der Westhuizen had mentioned, where young people were taught technical skills like cellphone repair. The country did not need people with just theory, but needed practical skills that would allow people to become employers and entrepreneurs. The Department needed a plan for a community education training college that embodied a model that considered the criticisms raised. She compared this new model to night schools, which responded to the needs of society and allowed members of society to become productive.

The NCOP Committee Chairperson commented on the value of the Select and Portfolio Committees meeting regularly. She raised the problem of student accommodation and said this had been an issue for a long time. The Select Committee had put together a task team to do a feasibility study at certain universities, and to a lesser extent at TVET colleges. Not enough attention was given to TVET colleges, though there had been a significant increase in funding allocated to this area. She expressed concern that enrolment at the colleges had been stagnant and would remain that way for the next few years. There were plans to build more colleges, but she asked how these would be populated if enrolment was not sufficient. She also mentioned the certification backlog which continued to be an issue, and she echoed the sentiments of Ms Kilian that to point fingers was not helpful. She stressed that this backlog seriously impeded the employability of young people who finished their qualifications. She commented that community colleges lacked infrastructure, as explained in the presentations, and recommended that abandoned spaces be identified in the various provinces and used to assist the colleges. Finally, she asked the Department who was responsible for administering the community colleges’ funding and what the Department had done to ensure that this individual was equipped with the capacity to administer those funds.

The Chairperson noted that the Chairperson of the Selected Committee was departing to join another meeting at that time.

She thanked the Department for responding to the Committee’s BRRR report which had been adopted in the previous year and where the Committee had made far-reaching recommendations. She thanked the CFO of the Department for indicating of the role of Parliament in highlighting what the Department needed to pay attention to, while also engaging other departments. She asked the CFO to clarify why there had been a drop in the lease payments in the economic classifications section. The lack of capacity in Programme 1 had been raised, and she asked the Minister to expand on the Department’s plans to pursue automation as well as expand on the new staff members who have been allocated to handle that aspect.. She asked if it would be useful to have a Director for that as well.

The Chairperson asked the Minister why the budget did not include more consideration for career development, given that she had been involved in that with other Departments. She recommended that the career development unit report to Parliament. The Committee had noted the issue of baselines mentioned by the CFO, and more needed to be done. Did the Department have sufficient programmes in place to change the skewed distribution of access to postgraduate studies and institutions which produced research. The bulk of research produced came from just five universities, as opposed to the 18 which were in the country. This stemmed directly from the country’s apartheid legacy. The Chairperson therefore proposed that another report be compiled on transformation at institutions, to determine whether the money injected had been used effectively towards that end. Lastly, she said that there was a lot of duplication between the targets set by the SETAs and the Department, and said that this may warrant further investigation into how these entities could be brought together.

Minister’s response

Minister Pandor said that as a country, South Africa had to remain alert to the fact that it operated in a constrained financial environment, with limited revenue to achieve its goals. A good APP in her view should allow the Department to advance while also being realistic in its objectives, given what was available. One could not plan according to one’s imagination. As Mr Kekana and other Members had observed, a large portion of resources had been devoted to universities as opposed to TVET colleges. However, that was standard for any post-school system in the world because universities offer high level cost programmes, such as medical courses which could never be offered at the TVET level. However, government needed to find ways of getting more funds into TVET colleges, as this had been a priority for the Department.

She viewed the changes in the budget as a significant correction, in line with the strengthening of TVET colleges. This change needed to be acknowledged, as universities would see a 28.1% increase from 2018-2021, while TVET colleges would see a 186% increase in that same period. From this financial year, 90% of resources would go to universities, and 10% to TVET colleges, which was double from 5% in the previous year. She also warned that a sudden push of resources away from universities and towards TVET colleges would harm the ability of these institutions to function. Universities would no longer be able to execute their mandate while TVET colleges would lack the appropriate administrative structures to effectively deal with such an influx of funds.

The Minister addressed the question of decolonisation in the curriculum. She stressed that the concept needed to be defined in more concrete terms for it to be applied properly, as opposed to popular revolutionary rhetoric. She would want to see the Department and other stakeholders working to give content to the concept. She agreed that it may relate to the training of engineers or medical practitioners in locally relevant ways – for example, non-communicable diseases were more relevant to the South African context, given their high numbers in country. Decolonisation in that sense was about relevance to the context in which graduates functioned. However, graduates also needed to be relevant in an international setting so as not to limit job prospects. Therefore training should incorporate both the local and global contexts. The presence of Africa and the south in the academic sphere required far more attention than had been given in the past. She agreed with Mr Kekana that a lot of the training that young people received was more aligned to the needs of the global north. She also noted the success of Operation Phakisa, and the stronger focus on mining and technical skills in provinces like Limpopo, so that specialisation could take hold. However, she disagreed with Mr Kekana over the issue of training people in tourism, expressing concern that not enough was being done to train people in tourism in provinces like Limpopo, where specialists such as game rangers were most needed.  

On the matter of empty buildings, the Minister said that the Department was in conversation with the Department of Public Works to use both abandoned and publicly-owned buildings for training purposes.

Addressing Mr van der Westhuizen, she said that the APP was meant to show what the Department was working on at that time, and not what was taking place in the entire sector. There were initiatives in place that catered to the unique skills he had mentioned, as well as other training projects. The Department could at another point in time appear before the Committee again to report on what was taking place in the entire sector, and how the Department was offering support to institutions. She pointed out that the Department was attempting to ensure the teaching capacity of lecturers through programmes like the University Capacity Development Programme (UCDP( and a similar programme which would be implemented at the TVET level.

She acknowledged that E-learning was something the Department was looking to explore, but she also pointed out the challenges that institutions like UNISA had faced that the Department should learn from when implementing these systems. A more detailed plan would be made available later this year on the use of technology in teaching and learning.

With regard to community colleges, the Minister said the Department did not want to replicate the Senior Certificate, but provide opportunities for people to gain practical skills which resulted in a modern community centre which may even lead to a new qualification being developed. She agreed with Mr Van der Westhuizen’s point that warning letters to bogus colleges seemed soft handed, but she argued that the Department’s approach had succeeded in closing down those institutions by making knowledge about them public, and had informed parents not to send their children to these institutions. She acknowledged that the Department was not yet where it wanted to be on artisans, but recognisable progress had been made. She assured the Committee that there would be even greater progress with the colleges of specialisation programme, where nine key skill areas would be focused on, with selected colleges and partnerships with the relevant professional associations in those fields to ensure immediate absorption into the industry as apprentices.

She noted the need to resolve the issue of post provisioning norms and standards, as well as the over-centralisation of power within the Department which had diminished the responsibilities of the provinces . Given the appropriate monitoring, the Department should wean itself of some of the power. She agreed with Ms Kilian that the Department should be more responsive to the needs of the economy, helped by the National Skills Development Plan (NSDP) and the work of the Human Resources Development Council.

She stressed that the NSFAS allocation had been a welcome change and a huge step forward which should be commended, but she did not want to over-bureaucratise the Department which would result in institutions suffering. SETA’s new leadership did provide an opportunity for a better working relationship than what had existed in the past, but she expressed reservations about the model because it did not provide enough flexibility.

She asked the Department to provide Members with copies of the statistics on post-school education as requested by Mr Stock. She disagreed with the comments made by Mr Khawula, and said that an increase of 186% in funding to TVET colleges over the period stated was sufficient. She agreed that IT systems had been the key stumbling block around the allocation of funds for NSFAS, but this required greater integration and inter-institutional communication. She confirmed that the Department continued to strive to give effect to the White Paper.

Addressing the questions by the Chairperson of the Select Committee, the Minister noted the importance of TVET colleges in dealing with the skills deficit in the country, and funds had been allocated to grow the infrastructure of institutions. She corrected a point made by the DDG for TVET colleges earlier in the meeting, saying that there would be an increase in TVET enrolments because more institutions were being built, and over 4 500 students would enter the system. On the administrative capacity of colleges, the Department had worked to put the necessary structures in place. She confirmed that funding was done from the Departmental level, but though the mandate had shifted to the national level from the provincial, the funding had not followed. She encouraged Parliament to look into what the funding that had been allocated at the provincial level was now being used for.

The Minister advised Members against conducting their own private site visits for assessment, as issues of nepotism might arise. The Department should fulfill this role, while Parliament provided oversight. She also warned against having people in posts who were not utilized maximally.

She addressed the notion of differentiation between those institutions which were research oriented versus teaching intensive staff. She said this was normal for the sector, but work should still be done to prevent a perception that those universities unable to engage in research were historically black institutions. This would require a diversification of the postgraduate profile at those institutions with the aim of producing more “knowledge workers.” She mentioned the committee on transformation established by her predecessor, Mr Blade Nzimande, which had produced an initial report that the Department could present to the Committee in future.

Response from DHET officials

The Chairperson said that the Committee disagreed with the wording of “second chance” programmes when referring to CET colleges due to fear of potential discrimination that could result from it. She advised that the term “life-long learning” be used instead.

Mr Tredoux said that he was unsure to which property payments decline the question had referred. The amount for property payments increased every year, according to the data. He proposed that once clarity had been provided, the Department would respond afterwards in writing.

The Chairperson commented that the figures being referenced were under Programme 1, economic classification, in the APP. However, she allowed Mr Tredoux to look into the matter and respond to the Committee later on.

Mr Mvalo said that in the NSDP, the Department had looked at shared services with SETA, but this would be possible only after a thorough study had been conducted. The Department would be working closely with the relevant SETAs in areas where duplication had been identified.

Dr Mahlobo said that the CET branch was working on the corporate service branch to draft a proposal on the terms of service at CETs, after which the proposal would be presented to the Minister for approval. He said that budgets and funding for goods and services for the colleges were administered by the Department, but for centres themselves, 37 TVET colleges had been contracted to administer funding on behalf of the CETs. However, by the beginning of April 2019, the branch hoped to have financial management control systems in place, allowing all funding to be transferred to the CET colleges.

Conclusion

The Minister thanked the Committee for their comments and recommendations.

The Chairperson said that the Committee would bring in external bodies to assist with analysis of the report that the National Assembly would compile.

The meeting was adjourned.