Skill Development Strategy: update by Department

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Employment and Labour

22 May 2001
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Meeting Summary

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Meeting report

22 May 2001

Chairperson: Mr Manie

Documents handed out

Presentation by the Department of Labour
National Skills Development Strategy booklet
Human Resource Development Strategy booklet

The Department has reviewed the role of traditional placement in Labour Centres. In terms of the new approach they identify opportunities for social development initiatives. They offer the co-ordinator of the project funds to train local people in that project. Thus the approach is to find the work and then to train people in the opportunities (as opposed to training people before they have a job).

The total number of employers that are paying the National Skills Development levy is only 50,9% according to the SARS database. The large firms are paying. The non-paying firms are the smaller firms. The Department indicated that they will try to address this issue in the year ahead.

Ms Adrienne Bird (Chief Director: Employment and Skills Development Services in the Department of Labour) made the presentation.

Summary of Presentation
The purpose of the Skills Development Act includes to:
- increase the quality of life of workers,
- promote self-employment, and
- to ensure quality of education and training

The objectives of the National Skills Development Strategy are:
- to develop a culture of high quality life-long learning
- fostering skills development in the formal economy for productivity and employment growth
- stimulating and supporting skills development in small businesses
- promoting skills development for employability and sustainable livelihoods through social development initiatives
- assisting new entrants into employment

There are various agencies to assist the achievement of these objectives. These include the:
- NSA (National Skills Authority)
- SDPU (Skills Development and Planning Unit)
- Labour Centres

The income of the NSF (National Skills Fund) for the year 2001/2 is R 860 million. This money is available for disbursement through grants. This funding can be accessed through the provinces, SETAs, DTI program, or through the head office of the Department of Labour which manages some funds directly.

In terms of the National Skills Development levy/grant, the SETA can give grants to the firms. Firms can claim 15% of what they paid in levies if they submit a plan of what they intend to do and who will be a beneficiary. If they report on the implementation of their plan, they can get an additional 50% back. Thus a total of 65% in levies can be returned to the firm.

Between April 2000 and March 2001 the total amount collected by SARS in terms of the National Skills Development levy is R 1 250 003 750,64. Eighty percent of this went to the SETAs in February. The total number of employers on SARS database that are paying is only 50,9%. The large firms are paying. The non-paying firms are the smaller firms. The Department of Labour will try to address this in the year ahead.

As formal sector jobs are not available, the Department has had a review of the role of traditional placement by Labour Centres. The system of telephoning people to look for vacancies for people they have trained is not very fruitful. Therefore they are re-orienting the labour centre.

In terms of this re-positioning, the Department identifies opportunities for social development initiatives. They want to identify projects which others have initiated and offer funds to the project coordinator to train local people in that project work. The approach is to find the work opportunities and then to train people for that type of work . This is better than training and then trying to find placement (because in that way people often cannot find work).

A number of learnerships have also been identified by SETAs. These are like the old apprenticeships. They train people for the performance of certain occupations. It does not only encompass blue collar trades.

In terms of human resource development, the Department hopes to improve communication across government.

Mr Clelland (DP) asked if the Department had examined why the percentage of companies paying the skills levy was so low and what was the Department doing about it.

Ms Bird replied that the level of grant payment is low. The Department is focused on this problem. The Department is seeking partnerships with the business community so that they can encourage their constituents to pay.

Mr Clelland asked for a comment about the skills and capacity of the Labour Centre staff to train people.

Ms Bird replied that either the SETAs or the Education Quality Assurers accredit the trainers.

Mr Rasmeni (ANC) asked if the skills development programme was supporting the objectives of black economic empowerment.

Ms Bird replied that it was. Strategic documents have been adopted. One is a cluster of initiatives which targets strategic sectors to strengthen these sectors. Also, the Social Development cluster’s ministers have put together a second document which focuses on economic relief. Black economic empowerment is integrated into both these strategies. The Department encourages the SETAs to support these.

Mr Rasmeni also commented that the Department should not only train people for vacancies which are already available because too few vacancies may occur. They must train people for the purpose of empowerment and ownership of business. This will assist in addressing unemployment. Why a demand-led strategy?

Ms Bird replied that they are not saying that the demand must come from the private sector. The public sector is also very important. The demand can also be read off future projections and plans (not only what is needed now). If an entrepreneur sees an opportunity for example then that is also ''demand''. ''Demand'' does not only refer to vacancies in the Sunday Times.

She noted that a study was done showing that when training is provided as a poverty relief measure then approximately 5% of the people who attend the training will find a job. This means that in the region of 95% are unsuccessful. The result is that a lot of money is wasted on teaching people skills that they are not using. There must be a good chance that the trainee can apply the skills that they learn. The Department is working with the Department of Trade and Industry (DTI) on providing credit and market advice to entrepreneurs. They do want to create successful entrepreneurship.

Mr Rasmeni also asked about the Department's relationship with other department's in terms of the learnership schemes.

Ms Bird replied that they have collaboration with the Education Department. They are also working with DTI in the business area.

Mr Manie (ANC) asked how the rate of allocation of grants can be strengthened and how it is measured.

Ms Bird replied that behind the grant is a workplace plan and implementation report. The Department has to run national campaigns to show the urgency. She said that she ''takes the point''.

On the demand-led training strategy, Mr Manie said that he agrees that an element of need and demand must be established. At the same time however one must look at the supply side too, one must be proactive or there will not be skills.

Ms Bird replied that there is a question regarding when it is better to train and when it is better to provide education. Education is cheaper than a targeted training program (with training for example equipment must be used). There should be training where there is a reasonable sense that the person can get a job.

Mr Durand (NNP) asked what tangible contribution has been made by unions (in respect of Skills Development). He also asked if cognisance is taken of mother tongue education and if there is training for retrenched people.

Ms Bird replied that with the levy/grant system studies show that employers pass the cost on to employees. Therefore the levy is a joint contribution between the employers and the employees. Secondly she replied that the mother tongue issue has primarily been taken up by the Education Department. On training the retrenched she replied that the Department has identified the need and they must put resilient programs in place. They are working with DTI on this.

Mr Maphalala (ANC) asked what programs there were to train the unemployed. The mechanisms to train them seems to be limited. He also asked how committee members could access the SETAs to monitor development and training (and to confirm the information they receive in Parliament).

Ms Bird replied that the Department is planning a quarterly report which will contain detailed information such as how much is collected by SETAs. They will provide copies of this. Regarding resources to the unemployed Ms Bird told the committee what National Treasury always tells the Department of Labour. They must first prove that they can spend the money that has already been allocated to them and they must spend it well before they ask for more money.

Mr Manie requested that the Department send the committee two examples of SETAs. One example of a SETA that is working well and another of one that is experiencing difficulties. They could use this to do determine which areas should be worked on and where changes should be made.



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