State of Higher Education Mergers; Financial Challenges at Tertiary Institutions & Funding Mechanisms for Further Education &Tra

EDUCATION PORTFOLIO COMMITTEE
20 February 2007
STATE OF HIGHER EDUCATION MERGERS; FINANCIAL CHALLENGES AT TERTIARY INSTITUTIONS AND FUNDING MECHANISMS FOR FURTHER EDUCATION AND TRAINING COLLEGES: DEPARTMENT BRIEFING

Chairperson: Prof S M Mayatula (ANC)

Documents handed out:
FET Colleges Finances and Financial Aid Scheme presentation
Allocation of FET Recap Funds and Bursary Funds
Update on the Restructured Higher Education Landscape presentation

Audio Recording of the meeting

SUMMARY
A three-member delegation from the Department of Education briefed the Committee on the current status of higher education mergers and how the Department was dealing with the financial challenges at tertiary institutions and funding mechanisms for further education and training colleges. Reports received at the end of January 2007 from colleges on their re-capitalisation spending showed that actual spending by college per province of amount allocated ranged from 30.2% in the North West province to 68.8% in the Eastern Cape. Uncommitted funds per province as a percentage of amounts allocated ranged from 3.4% in the North West province to 25.1% in Mpumalanga. Good progress had been made towards realising the strategic objectives of the merger process, which included the provision of quality education and enhancing good practice in educational management. Notwithstanding difficulties and challenges, the Department felt that much had been achieved that was excellent and worthy of celebration. Committee Members expressed concern over the disparity in admissions opportunities and academic outcomes for disadvantaged children, the need for support for disadvantaged students, equity within institutions, opportunities for staff development, and resolution of disputes between students and university authorities.

MINUTES

Introduction
Dr Duncan Hindle, Director-General, Department of Education (DoE), introduced Dr Molapo Qhobela, who had previously been Acting Deputy Director-General, as the new Deputy Director-General of Higher Education, and asked that Ms Penny Vinjevold, Deputy Director-General: Further Education and Training, give the Further Education and Training (FET) Colleges Finances and Financial Aid Scheme presentation first, before Dr Qhobela’s Update on the Restructured Higher Education Landscape presentation. This was because Ms Vinjevold and he had an appointment in the National Council of Provinces where the implementation of the National Curriculum Statement was to be debated at 10h00. The Chairperson agreed.

FET Colleges Finances and Financial Aid Scheme Presentation
Ms Penny Vinjevold, Deputy Director-General: Further Education and Training, DoE, said, in an overview of college finances, that audited statements showed strong growth in income over recent years and that the growth in income from a variety of resources rose from R409 million in 2000/2001 to R736 million in 2003/2004. The reasons for re-capitalising FET colleges were that they had offered outdated programmes that had not met the needs of the economy and the need to plan new programmes and provide infrastructure and equipment to support the new programmes).

Key principles of re-capitalisation were that the process would be driven by programmes to meet the needs of society and the economy, research and information, and redress strategies. A R50 million planning grant had been allocated for 2005/2006. R500 million had been allocated for re-capitalisation in 2006/2007. R600 million was allocated for that purpose in 2007/2008, increasing to R800 million in 2008/2009.

At provincial level a weighted formula based on youth population, contribution of province to Gross Domestic Product (GDP) and student enrolment in colleges was used as a principle for allocation of funding; at college level allocation was based on the existence of programmes for which there was evidence of need and which were part of the Growth and Development Plan of the province.  With regard to budget items for funding, all allocations in relation to programmes offered new infrastructure and development of existing infrastructure, equipment and Information and Communication Technology (ICT), development of professional staff in relation to programmes offered, administrative systems, and curriculum development.

When allocations were considered by line item, the highest allocations were for infrastructure (R1.156 million) and equipment (R0.379 million) out of a total of R1.860 million. With regard to implementation in 2006, funds were transferred, curricula were prepared, lecturers were trained, tenders and specifications for infrastructure and equipment were issued, examiners were appointed and students recruited.  The re-capitalisation process was monitored and a state of readiness instrument was developed, with liaison between the provincial departments of education, the national department and the Treasury, and an independent ministerial task team.

Colleges had been required to submit reports on their re-capitalisation spending as at the end of January 2007 actual spending by college per province of amount allocated ranged from 30.2% in the North West province to 68.8% in the Eastern Cape. Uncommitted funds per province as a percentage of amounts allocated ranged from 3.4% in the North West province to 25.1% in Mupumalanga.

The mode of operation of the National Student Financial Aid Scheme (NSFAS), a loan and bursary scheme established by the Government in 1996 to facilitate access to education for students with potential but without sufficient financial means and in which colleges played a major role in the administration of the scheme, was also explained.

Discussion
The Chairperson thanked Ms Vinjevold and invited Committee Members to comment and ask questions.

Mr A H Gaum (ANC) commended the NSFAS loan and bursary scheme. He further asked about the criteria for allocations.

Mr R S Ntuli (ANC) could not understand the disparity between Mpumalanga and the Free State, given that Mpumulanga had a higher population density and historically had never had any higher education institutions. One would have expected the need there to be at least the same, if not higher. He asked what means testing involved and to be given a simple explanation that he could provide to children. He further asked about the DoE’s approach to advocacy for higher education institutions, as in the course of his constituency work, he had noted high levels of ignorance about higher education.

Mr A M Mpontshane (IFP) was concerned that in institutions with satellite colleges only the main campus would benefit, and asked what measures the DoE was taking to ensure that satellite colleges also benefited from investment and improvements.

The Chairperson asked about the availability of hostel accommodation for students whose homes were far away.

Ms Vinjevold replied that administration of the loans and bursaries was handled by NSFAS, in which the DoE had full confidence. There would be only a small additional administrative cost to NSFAS for administering the 20 000 bursaries. The handling of the bursaries by NSFAS would ensure consistency on a national basis and avoid the problems that would arise if every college separately had to administer bursaries for its students. The means test asked each student about his or her household income and evidence thereof. There was also a category for academic performance. Students who qualified for bursaries and whose homes were far from campus would be given financial support to live in hostel accommodation or other cost effective local accommodation.

Mpumalanga had, with the same population, received less than the Free State, because the DoE had needed to consider infrastructure. Mpumalanga had recently received considerable educational investment from the private sector. Some areas of the Free State had had a much greater need for investment. With the implementation of the bursary scheme, one could expect an equalisation in overall allocations.

Ms Vinjevold hoped that Committee Members would debate the issue of more sites, since many sites that had been proposed were not viable. It was necessary to balance access and quality. A plethora of sites was incompatible with quality: it was better to move students to existing well-established sites. Provinces were being advised to close unviable sites and avoid establishing new sites that would not be viable, and concentrate resources on those sites that were strongly viable, with the exception of places such as Manenberg and Khayelitsha where there was a very large number of potential students and new sites were justified. There was no intention to increase the number of colleges, only of sites where appropriate. With regard to the North West province, the DoE asked the province to inform the Department where sites were required. Orbit College, North West Province, was an excellent example of a well-functioning college. It had an outstanding management team and had spent 98% of its allocated funds.

The DoE was taking great care to address criticism from municipalities and the private sector with regard to skills shortages and to ensure, by providing all necessary resources such as textbooks and well-qualified teachers, that students fulfilled expectations. Banks had expressed satisfaction with the DoE’s finance and accounting programme and had awarded generous bursaries. The situation was likewise with the construction industry. 

With regard to advocacy, the DoE had not used radio or television, but had publicised 12 of the best colleges in The Sowetan. There had also been local advocacy, for example, the College of Cape Town.  The DoE would consider, within the next two weeks, ways of better informing the public about the role of colleges.

The DoE had allocated R10 000 to each lecturer to choose their own path of career development, and recognised that their needs in terms of professional development differed from those of teachers. Lecturers had to demonstrate how their R10 000 would be spent. The FET Act, enacted in 2006, gave colleges much more flexibility to appoint the staff they needed. At Belhar, the construction industry had provided lecturers in the field of construction for two weeks at a time. This had not been possible before the promulgation of the Act. 
 
Update on the Restructured Higher Education Landscape
Dr Molapo Qhobela, the Deputy Director-General: Higher Education, DoE, reviewed the progress of the restructuring of higher education. In November 2002 the Cabinet had approved proposals for restructuring. In December of that year the Minister had informed councils of institutions concerned and invited comments. Mergers and incorporations were formally gazetted In November 2003 and effected in 2004 and 2005, with support given to designated institutions. The DoE had reported on the subject to the Education Portfolio Committee in May and September 2006. The University of KwaZulu-Natal, North West University, Tshwane University of Technology, and the University of South Africa were restructured in 2004; the Nelson Mandela Metropolitan University, Cape Peninsula University of Technology, the University of Limpopo, the University of Johannesburg, and the Walter Sisulu University for Science and Technology, Eastern Cape in 2005, and the National Institute for Higher Education in Mpumalanga and the Northern Cape was established in 2006.

Campuses of the former Vista University were incorporated into the University of Pretoria, the University of the Free State, the University of Johannesburg, the Nelson Mandela Metropolitan University and the Central University of Technology. The University of Fort Hare incorporated the East London Campus of Rhodes University. The University of the Western Cape incorporated the Dentistry faculty of the University of Stellenbosch.

In order to support institutions through the merger process and monitor progress, the DoE had established a Merger Unit within the Department. The Government had allocated R3 billion for the restructuring process, to be disbursed over the period 2003-2008. Financial support covered three distinct areas: re-capitalisation of under-capitalised institutions, reimbursement of expenditure directly related to mergers and meeting costs associated with any human resource restructuring that might have been deemed essential to fulfil the operational requirements of the new entity. Strict criteria had been developed in consultation with the National Treasury to inform allocation of resources to institutions.

Investment in infrastructure at merged institutions included R30 million for deferred maintenance at the University of Fort Hare and R47 million for improving teaching and learning facilities, as well as deferred maintenance for student residences at the North West University.

All merged institutions had substantive Councils and Vice-Chancellors. Walter Sisulu University and the University of Limpopo had still to appoint substantive managements as their Vice-Chancellors had only recently been appointed. Appointment of substantive management had aroused debate as to whether positions should be advertised externally or internally with regard to the imperatives for transformation, especially equity in race and gender, fairness and the requirements of the Labour Relations Act.

Every merged institution had a Students’ Representative Council (SRC). A prolonged phase of interim structures had resulted from initial conflict between SRCs of constituent member institutions. In the light of this the DoE had helped institutions develop student governance models appropriate to multi-campus institutions and there was often an institutional SRC and campus-based SRCs.

The merger process had accommodated continuity in academic programmes for “pipeline” students.  The University of KwaZulu-Natal, Tshwane University of Technology, Nelson Mandela Metropolitan University and the University of Johannesburg were the most advanced multi-campus institutions in reviewing and possibly consolidating faculties across delivery sites. The DoE and the Higher Education Quality Committee of the Council on Higher Education (CHE) continued to provide support to institutions in developing new academic, organisational and programme structures and the Minister had developed a unitary qualifications policy, the Higher Education Qualification Framework.

The New Institutional Landscape for Higher Education comprised 21 higher education institutions: 11 Universities, six Technikons, four Comprehensive Universities and two National Institutes for Higher Education.  These National Institutes were defined as “special purpose vehicles”. Restructuring and consolidation would further the aims of transforming and reconstruction of higher education. Good progress had been made towards realising the strategic objectives of the process: new institutional identities, resolving the divisions of the past, focussing on the provision of quality education, and enhancing good practice in educational management.

Discussion
The Chairperson thanked Dr Qhobela, asked about FET colleges, fees in schools, and about the DoE’s thoughts on fees, and invited Committee Members, who had much experience in their constituencies of the problems under discussion, to comment and ask questions.

Ms M J J Matsomela (ANC) asked, with reference to the Council, Synod and Administration, and to unions and management, at the North West University, how the DoE sought to ensure equity within institutions, and what progress had been made towards achieving equity of opportunity. It was important to consider staff development, alignment of academic programmes, and quality assurance.

Mr R S Ntuli (ANC) said that the average black child found difficulty in reaching high admissions criteria and asked how students from disadvantaged backgrounds could be supported in “a tangible way”. Currently, lack of such support resulted in an extremely high failure rate in black children as compared to white children.

Mr B G Mosala  (ANC) said that it was important to avoid disputes between university authorities and students, especially black students, and asked about the challenges that the Merger unit was facing, and if the Unit could assist in resolving disputes between university authorities and students. Moreover, he asked if the Unit could help him to answer the concerns of students who approached him directly in his role as a Member of Parliament.

Mr R P Z Van den Heever (ANC) expressed appreciation of the DoE’s allocation to Nelson Mandela Metropolitan University in view of the deficiencies of previously disadvantaged institutions.

Mr Mpontshane said, with reference to the University of KwaZulu-Natal, that merged institutions had to develop new identities.

Dr Qhobela said that the Minister was, in her response to the Budget Speech, going to refer to the concept of “substantive higher education centres”. He spoke of a “need for synergy” with regard to FET; the structure of National Vocational Certificates was designed so that young people could progress into higher education. The merger process was ongoing. He spoke of “the cost-drivers of higher education” with regard to subsidies and fees. It was a challenge to ensure that, if fees were to be reduced, that other financial inputs, such as state subsidies, income from donations and research contracts, should also increase. With regard to Quality Assurance, the DoE sought to have a compact between itself and every institution. It was important to ensure that academic integration was in line with national objectives. The DoE was reviewing the equity profile of new students, and the University of KwaZulu-Natal was an example of an institution in which the number of disadvantaged students and the quality of academic staff had increased, and illustrated excellence that should be celebrated.
 
The Chairperson thanked the DoE delegation. The meeting was adjourned.