National Skills Authority and National Skills: Fund briefings

Meeting report

LABOUR PORTFOLIO COMMITTEE
6 September 2005
NATIONAL SKILLS AUTHORITY AND NATIONAL SKILLS: FUND BRIEFINGS

Chairperson:

National Skills Fund briefing
National Skills Authority briefing
Skills Development Act
Department of Labour website contains extensive information on Skills Development

SUMMARY
The National Skills Fund reported that their main tasks were to generate policy frameworks for distributing funds, to create funding windows, and to manage the funded projects. Over the past four years since its launch, the Fund had contributed to the National Skills Development Strategy (NSDS) and to government’s overall social and economic strategies and policies. There were nine new funding windows for the Fund for the next five years. Some of its priorities were to ensure a smooth transition between NSDS I and NSDS II. It also had to strengthen monitoring and quality control systems for all funded projects, and review and strengthen its management capacity to ensure effective functioning.

The National Skills Authority said that it had set targets to be achieved nationally and these were split among the Sector Education Training Authorities (SETAs). The allocations differed based on the size of each SETA. The targets had never been properly researched, but all the SETAs had exceeded their targets by large percentages. However, some of the SETAs had performance problems in governance and the management of their funds.

The National Skills Authority outlined its objectives in developing these targets. Many of the SETAs had complied with the requirements they had to meet and rested, while others exceeded their targets and continued with the ‘skills revolution’. It noted the capacity problems experienced by some of the SETA boards and it was embarking on capacity-building exercises.

Members asked what procedures and criteria the Fund used to determine which training centres to fund, how it marketed itself in the rural areas to ensure people knew about the availability of bursaries. They also asked if the Fund had any implementation blockages that delayed the disbursements of funds.

MINUTES

National Skills Fund (NSF) briefing
Mr J Du Preez, NSF Chief Director, said that the NSF had been established in terms of the Skills Development Act of 1998. It operated in line with the National Skills Development Strategy (NSDS). The main source of income for the NSF was the 20% of skills levies collected and an annual allocation from the fiscus. The main task of the NSF was to generate policy frameworks in which the funds would be distributed, create funding windows as well as managing the projects that the money funded. There was much liaising with the NSA. The NSF did not work in isolation. Over the past four years, not only had the NSF contributed to the NSDS, but it had also contributed to government’s overall social and economic strategies and policies.

The NSF had made a number of achievements in the 2004/5 financial year. In its social development projects, R109.4 million had been spent on the training of 53 990 unemployed persons, with further commitments for another R88.8 million for training still in progress as at 31 March 2005. About R600 million had been allocated to learnerships for the unemployed to facilitate 23 000 learners obtaining learnership qualifications. The NSF had disbursed R26.8 million to cover 693 postgraduate bursaries and another R46 million to cover 6 195 undergraduate bursaries.

Mr Du Preez noted that the President had announced earlier in the year that over the next five years, the income from the skills levy would be about R21.9 billion, with R16.8 going to the SETAs and R5.1 billion going to the NSF. There were nine new funding windows for the NSF for the next five years. They were aimed at social development initiatives; adult basic education and training; critical skills support; provisioning support; an industry support programme; informal sector support; constituency capacity building and advocacy; special projects and discretionary projects and innovation. The NSF Strategic Projects Model was not a funding window but an implementation model. The target groups were national and provincial government departments.

Some of the challenges and priorities of the NSF were to ensure a smooth transition between NSDS I and NSDS II. They had to develop detailed procedures and criteria for new NSF funding windows in line with the approved core criteria. The NSF had to strengthen monitoring and quality control systems for all funded projects, and review and strengthen the management capacity of the NSF to ensure the effective functioning of the NSF.

Discussion
The Chairperson asked what procedures and criteria the NSF used to determine which training centres to fund. She also wanted to know how much money the NSF had allocated to each of its nine funding windows.

Mr Du Preez replied that when the Skills Development Act was amended in 2003, it removed any link the Department of Labour had to training providers. The way that these providers were funded was not by way of a direct fund or commitment to them as the Department of Education had, but through the creation of an environment where the communities or companies could choose providers that suited their needs. He said that he did have the breakdowns for the various windows and could provide the Committee with them.

Ms N Ngcengwane (ANC) asked how the NSF marketed itself in the rural areas to ensure that those people knew about the availability of bursaries. What was the NSF doing about its challenges? She asked if they had any implementation blockages that delayed the disbursements of funds.

Mr Du Preez said that the NSF used implementation agencies to help them. The flow of the money was linked to the performance of the projects. The NSF disbursed money quarterly. A second disbursement for a project was dependent on the performance of the project in the first quarter. This could contribute to some blockages in that some money was held back until certain levels of performance were met. The NSF had identified the lack of awareness about the availability of bursaries as one of its challenges. There was a proposal to begin a pilot programme to deal with this issue.

Mr S Rasmeni (ANC) asked if the NSF could show results by providing clear examples from communities and provinces. Mr Du Preez replied that this information was contained in a report they were about to release. To locate these people, programmes for their registration were also being implemented.

National Skills Authority (NSA) briefing
Mr Z Nkomo, NSA Education Secretary, said that the NSA was first established in 1999 in terms of chapter 2 of the Skills Development Act of 1988, was reconstituted on 27 September 2002 and was to be reconstituted again in October 2005.

The NSA set targets to be achieved nationally and they were split amongst the SETAs. The numbers differed based on the size of each SETA, with some getting more than others. The targets were never properly researched but all the SETAs exceeded their targets by large percentages even though some of the SETAs had performance problems in governance and the management of their funds. The NSA had five objectives in developing these targets. They would develop a culture of high quality lifelong learning; foster skills development in the formal economy for productivity and employment growth; stimulate and support skills development in small businesses; promote skills development for employability and sustainable livelihoods through social development initiatives, and provide assistance for new entrants into employment.

To develop a culture of high quality lifelong learning, the NSA’s target was to ensure that 70% of all workers had at least a level one qualification on the National Qualifications Framework (NQF). This target had been achieved. However, the figures were aggregated and did not show performance per sector or province. The NSA wanted at least 15% of workers to have embarked on a structured learning programme. About 50% had completed their programmes satisfactorily and successfully exceeded this number.

In fostering skills development in the formal economy for productivity and employment growth, they wanted 75% of enterprises with more than 150 workers to receive skills development grants and the contributions towards productivity and employer/employee benefits measured. The first part of this goal had been achieved but parts two and three had not been measured. The target for all government departments to assess and report on budgeted skills expenditure for skills development relevant to public service, sector and departmental priorities had not been achieved. The fact that government departments did not pay levies may have been a contributing factor. However, there had been a positive response towards education and training displayed by departments in general through compliance with SETAs to an extent.

The goal to stimulate and support skills development in small businesses called for at least 20% of new and existing registered businesses to be supported in skills development initiatives and the impact of such support measured. This target was exceeded in the 2003/4 financial year, and by March 2005, the figure was at 79%.

To promote skills development for employability and sustainable livelihoods through social development initiatives, the NSA wanted 100% of the NSF apportionment to social development spent on viable development projects. The level was currently at 92%. The issue that had to be dealt with here was the difference in performance among the provinces, with some exceeding their targets, and others doing poorly.

Mr Nkomo said that the NSA set the target of getting at least 80 000 people under the age of 30 entered into learnerships in providing assistance for new entrants into employment. This target had been exceeded but the NSA was still verifying which learnerships per sector and NQF level, as well as the type of learnership achieved, through National Learners Records Database (NLRD).

The NSA still faced many challenges. Many of the SETAs complied with the requirements they had to meet and rested, while others exceeded their targets and continued with the skills revolution. The NSA noted the capacity problems experienced by some of the SETA boards and was embarking on a capacity building exercise. The main issue in this regard was if the current scorecard was the right tool to measure the SETAs’ performance.

Due to time constraints, the Committee was unable to ask questions about this presentation.

The meeting was adjourned.