ATC100317: Report Budget Vote 16: Higher Education and Training
Report of the Portfolio Committee on Higher Education and Training on Budget Vote 16: Higher Education and Training, dated 17 March 2010
The Portfolio Committee on Higher Education and Training, having considered the budget of the Department of Higher Education and Training, Vote 16: Higher Education and Training, reports as follows:
1.1 The Portfolio Committee on Higher Education and Training considered the budget of the Department of Higher Education and Training on 10 March 2010. The purpose of the meeting was primarily to outline the department’s budget for the 2010/11 financial year and its strategic plan for 2010 - 2015.
1.2 The Department of Higher Education and Training officials who appeared before the Committee included: Director-General (DG), Ms M Metcalfe; Deputy Director-Generals (DDGs), Ms K Menon (Acting) and Mr F Patel; (Acting) Chief Financial Officer (CFO), Mr T Tredoux, and Director, Mr Z Hlongwane.
1.3 This was the first time that the newly established Department of Higher Education and Training tabled its budget and strategic plan before the committee as a separate entity. The previous budget which was considered in June 2009 was processed as a single vote of the former Department of Education (DoE) pending the transfer of legal functions from the Departments of Education in July 2009 and Labour in November 2009.
1.4 This report gives a brief summary of the presentations made by the Department to the Committee, focusing mainly on the 2010 Medium Term Expenditure Framework (MTEF) allocations and an overview of allocation across programmes.
1.5 The Committee had sight of the Department’s current strategic plan for the first time during the day of the briefing. As a result, it was difficult for it to engage as thoroughly as it would have wished on the details of the Department’s plans. To allow it to fulfill its oversight more effectively, the Committee resolved that it would engage further with the Department’s plans during the next quarter of 2010.
1.6 The Committee recognises that, although it has new legislative power to amend the budget, the ability to do so is currently hampered by lack of capacity. Accordingly, this legislation will be phased in in due course as capacity is developed.
1.7 In considering the budget, the Committee noted the enormous task the department faces in respect of catering for the needs of the 2.7 million young people who are unemployed and other relevant challenges of the post school education system.
2. The aim of the Department and background to the distribution of the Budget Vote 16
2.1 The aim of the newly established department is to develop and support a quality post-school education and training sector, promote access to higher and vocational education, and enhance skills development training opportunities.
2.2 The DG, Ms M Metcalfe, who led the presentations, provided the background to the distribution of the budget. The MTEF budget of the DHET consists of funds based on the split of functions of the former Department of Education as well as the transfer of functions from the Department of Labour. The splitting of funds from the Department of Education was done on agreed framework in line with the allocation of functions as well as the distribution of the staff compliment. The shifting of the funds from the Department of Labour was done by the National Treasury based on the functions allocated to the Department. When the splitting of functions is complete, adjustments may be necessary in the Adjustments Estimates Bill.
3. 2010 Medium Term Expenditure Framework (MTEF) Allocations
3.1 Mr T Tredoux: Acting Chief Financial Officer presented the financial analysis of the department: The department received a total budget of R32.145 billion from the Treasury for the 2010/11 financial year. This budget includes an amount of R8.4 billion for direct charges against the National Revenue Fund for the Sector Education and Training Authorities (SETAs) and the National Skills Fund (NSF), The breakdown of the voted funds is as follows:
Total voted funds (in R’000)
32 144 926
Less : Direct charges (Sector Education and Training Authorities funding and National Skills Fund)
8 424 228
Balance of voted funds
23 720 698
National Skills Fund (NSF)
(Contributed by Exchequer)
17 516 740
1 986 740
FET Conditional Grant
Other (such as SETA)
3 772 661
Compensation of Employees
Balance available for operational / projects costs
The total amount of R23.7 billion is the actual voted funds excluding direct charges.
3.2 Over the METF, the department receives new allocations to its baseline of R3.8 billion in 2010/11; R4.3 billion in 2011/12 and 4.97 billion in 2012/13. These new allocations are mainly for the following policy priorities:
· Higher education subsidies for the years 2011/12 (R300 million) and 2012/13 (R700 million)
· The National Student Financial Aid Scheme to provide additional financial assistance to the economically disadvantaged in higher education institutions in 2012/13 (R57.6 million)
· Funding for the newly established department (R20 million, R30 million and R40 million)
· Compensation of employees adjustment (R1.1 million, R1.3 million and R1.4 million)
· Further Education and Training: amounts shifted from the provinces’ equitable share (R3.37 billion, R3.54 billion and R3.72 billion)
· Addition to the new further education and training colleges conditional grant (R400 million, R430 million and R450 million)
3.3 The department received further adjustments to its baseline over the MTEF of R8.59 billion in 2010/11; R8.34 billion in 2011/12 and R9.8 billion in 2012/13, as follows:
· Skills function shift from the Department of Labour (R166 million, R184.9 million and R190.8 million)
· Skills function shift: compensation of employees adjustment from the Department of Labour ((R2.2 million, R2.6 million and R2.8 million)
· Function shift: Direct charges to the SETAs and NSF (R8.4 billion, R9.1 billion and R9.6 billion.
3.4 Although the department is newly established, it expects baseline efficiency savings of R1.25 million in 2011/12 and R1.56 million in 2012/13, on items such as travel and subsistence, advertising costs, venues and facilities, and inventories.
4. Overview of allocation across departmental programmes
The department is organised into five budget programmes, namely, Administration, Human Resource Development, University Education, Vocational Education and Training, and Skills Development. A total amount of R 23.7 million was allocated to the 5 programmes.
Programme 1: Administration
The Administration programme provides the overall management and administration of the department. A total amount of R100.6 million has been allocated to the programme and it increases at an annual average rate of 4% to R115.7 million in 2012/13. The increase over the medium term is due mainly to inflation related adjustments and additional allocations for required computer services to the department. The department will remain in the Sol Plaatjie office building of the former Department of Education while the Department of Basic Education will occupy the new building. There are only 13 chief directorates responsible for five programmes which pose a challenge for the department in terms of implementing its strategic plan.
Programme 2: Human Resources Development, Planning and Monitoring Coordination
This programme provides strategic direction in the development, implementation and monitoring of departmental policies and the coordinatation of activities regarding the Human Resource Development Strategy of South Africa (HRD-SA). A total budget of R26 million has been allocated to the programme which increases at an annual rate of 5% over the MTEF period from R27.8 million in 2009/10 to R31.9 million in 2012/13. The Minister for Higher Education and Training will administer the HRD-SA while the Deputy-President will head it. An HRD Council will be launched in the next two months which will ensure that decisions of the HRD Council are executed and provide report back to the HRD structures. The Higher Education and Training Laws Amendment Bill will seek to amend technical issues to include the new Minister of Higher Education and Training and other relevant matters in the Bill. The Bill will be tabled in Parliament at the end of the fourth term.
Programme 3: University Education
This programme develops and coordinates policy and regulatory frameworks for an effective and efficient university education system. A total budget of R19.5 billion has been allocated to this programme and it increases substantially at an annual average rate of 10.7% to R23.2 billion in 2012/13. The increase is mainly due to increased block grants for universities and an increase in the funding of student loans through NSFAS. The programme dominates expenditure, receiving 82.4 percent of the total Higher Education and Training budget. It includes subsidies to Universities, National Institutes for Higher Education (NIHE), Council on Higher Education (CHE), National Students Financial Aid Scheme (NSFAS) and South African Qualifications Authority (SAQA). Transfer payments to universities are the programme’s largest expenditure item.
The department is currently reviewing the policy framework for improving teaching and learning so as to produce quality graduates. Discussion will be held with institutions for higher education and relevant stakeholders to explore the viability of a university in Mpumalanga and the Northern Cape and by the end of March 2011, a report will be submitted to the Minister for his approval. The Higher Education Management Information System (HEMIS) will be strengthened to provide data of students entering and leaving the higher education landscape. The Minister will be reviewing the shortfall of accommodation in universities and more than 20% of funds allocated to universities are dedicated to infrastructure development.
Programme 4: Vocational and Continuing Education and Training
This programme plans, develops, evaluates, monitors, and maintains national policy programmes and systems for vocational and continuing education and training. The programme receives R3.9 billion for 2010/11, which comprises 16.4% of the total Higher Education and Training budget. The biggest portion of the budget for the programme (R3.7 billion) is dedicated to conditional grants for Further Education and Training (FET) colleges. This is mainly to support the development of college capacity in order to achieve transparency, enhanced performance, accountability and efficiency. The Khari Gude Mass Literacy Campaign will remain in the Department of Basic Education while the post school education system remains the function of the DHET. The department is currently visiting all provinces to explain the process of transition of the college function from provinces to the national department.
Programme 5: Skills Development
This programme promotes and monitors the national skills development strategy. A total budget of R168.3 million has been allocated to the programme with an annual average increase of 9% to R193.6 million in 2012/13. The Skills Development Act No. 97 of 1998 will be amended to provide for the establishment of the Quality Council for Trades and Occupations (QCTO) which will be fully operational by 31 March 2011. The department will support and manage the functioning of Sector Education and Training Authorities (SETAs) in implementing the National Skills Development Strategy II (NSDS II) and will coordinate the SETA re-establishment process to ensure that by 30 August 2010, the new SETA landscape can be gazetted. SETA underperformance will be strongly dealt with in this financial year. The draft NSDS III will be completed by the end of March 2010.
5. The following formed part of the discussions
The department was requested to explain the timeframe for the allocation of funds to various programmes as outlined in the presentation.
The department was informed that the committee has powers to amend its budget vote through the Money Bills Amendment Procedure and Related Matters Act No 9 of 2009.
A concern was raised regarding the department’s capacity in relation to the implementation of its strategic plans. It was enquired as to whether the department would be able to deliver its mandate given its current capacity.
The department was requested to give reasons for not having occupied the new building as yet.
The department was requested to outline the timeframes for the proposed legislation to ensure advanced planning by the committee can plan in advance.
It was enquired as to whether the department had measures in place to ensure quality education in higher education.
The committee was concerned that the department had not reported on any progress regarding the R439 million meant to boost infrastructure capacity for previously disadvantaged universities. It was noted that there is a huge demand for residential accommodation in these universities and that the department should prioritise this issue.
The department was requested to explain whether it had mechanisms in place to regulate continuous under-spending by NSFAS and give details of the official release date of the NSFAS Review Report.
It was enquired as to whether there was a systematic way in which universities account to the department.
A concern was raised regarding the spreading of illegal private colleges. It was questioned as to whether there were effective mechanisms in place to monitor and regulate illegal providers.
The department was requested to provide estimates of the throughput and drop-out rate for this academic year.
It was questioned as to whether it was a strategic decision of the department to focus on processes rather implementation.
It was enquired as to whether the department had responded to the memorandum submitted by the South African Students Congress (SASCO).
A concern was raised regarding the capacity of administration personnel in FET colleges. It was noted that some of the FET colleges were dysfunctional and the department should prioritise this matter urgently.
It was noted that funding for FET colleges was low and that this would impact on the department’s plans to increase access and promote the success of the FET sector.
The departmental budget will be distributed after the 1st April 2010 to its various programmes and entities.
- It was noted that, it would not be easy for the department to deliver the strategic plan with only 13 directorates responsible for five complex programmes.
- The department welcomed the powers of the committee to amend its budgets and is willing to share common agreement during the process.
- The examination function will until further notice be maintained as a single function located in the Department of Basic Education’s new office building.
- The Skills Development Act No 97 of 1998, National Qualifications Framework Act and the Higher Education Laws Amendment Bill will be tabled in Parliament during the fourth Parliamentary term for consideration by the committee.
- The focus of the Council for Higher Education (CHE) is on the improvement of teaching and learning to ensure that the challenge of graduate under-preparedness is properly addressed to respond to the needs of the labour market and society in general. More funds allocated to institutions are directed at improving the quality of lecturers.
- Higher education institutions are required to submit their financial status in the middle of the academic year and, thus assisting the department to monitor institutions that are not utilising funds appropriately.
- The department needs to plan appropriately and it is inevitable to look systematically at required action.
- The department monitors the shift of funds between categories of NSFAS to ensure speedy take-up on funds allocated to the various unutilised categories. Funds in some categories are transferred to other needy programmes to avoid any under-spending.
- The department is unable to access information to estimate the throughput and drop-out rate for this academic year since its data is always two years in arrears.
- The NSFAS Review Report will be official released on the 16 March 2010 for public comment.
- The department has a helpline to assist the public with enquiries relating to the status of private colleges.
- The process of establishing universities in Mpumalanga and the Northern Cape is being considered by the department. The department will forward a report to the committee on the issue once it is available.
- The department has good working relations with the South African Union of Students (SAUS) and the SRC. There is a branch within the department that liaises constantly with the SRC. The NSFAS review report will provide details pertaining to the students demand for free higher education.
- The department aims to work closely with the FET Councils to strengthen the capacity of FET colleges.
It was the first time that the newly established Department of Higher Education and Training presented the Budget Vote 16 to the committee. It is clear that the department is faced with an ultimatum task of transforming the post school education system as well as responding to the needs of the 2.7 million youth who are neither employed or being training. The committee remained extremely concerned with the capacity of the department in relation to the delivery of its mandate. The committee would recommend that the department make an impact in the skills development sector including the SETAs within a period of two years. The committee requested that the planning of the department should be linked with the needs of society. The strategic plan of the department did not provide necessary information on the timeframe on output of activities and according to the committee this is a shortfall in its performance.
The committee recommended that the department consider the following:
- That there is a need to develop a clear implementation plan to improve graduation rates in higher education institutions and FET colleges.
- The department should submit a plan and progress report on the establishment process of the universities in Mpumalanga and the Northern Cape. While the Committee is of the view that the establishment of these universities should be prioritised, it acknowledges the need to follow due process and be informed by thorough analysis and research.
- The Higher Education Management Information System (HEMIS) should be upgraded to provide up-to-date data on the number and profile of dropouts and graduation rates.
- Surplus funds in the National Skills Fund should be utilised to maximize skills intervention including the extensive expansion of FET colleges.
- Career guidance opportunities should be developed to assist young people with clear career paths in the coming financial year.
- The alignment process of SETAs should be finalised within the 2010/11 financial year.
The Committee recommends that Budget Vote 16: Higher Education and Training be passed.
“Report to be considered”
Signed on behalf of the committee
Mr M Fransman, MP
Chairperson: PC on Higher Education and Training
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