ATC150819: Report of the Portfolio Committee on Higher Education and Training on the strategy plan 2015/16 - 2019/20 and Annual Performance Plan 2015/16 of the National Skills Fund (NSF) and Education, Training and Development Practices Sector Education and Training Authority (ETDP SETA), Dated 12 August 2015

Higher Education, Science and Innovation

The following report replaces the Report of the Portfolio Committee on Higher Education and Training, which was published in the Announcements, Tablings and Committee Reports date 18 August 2015 on page 3128.
 

Report of the Portfolio Committee on Higher Education and Training on the strategy plan 2015/16  - 2019/20 and Annual Performance Plan 2015/16 of the National Skills Fund (NSF) and Education, Training and Development Practices Sector Education and Training Authority (ETDP SETA), Dated  12 August 2015
 

The Portfolio Committee on Higher Education and Training, having met with the NSF and ETDP SETA, reports as follows:

1. Introduction

The Portfolio Committee convened a meeting with the NSF and ETDP SETA on 29 May 2015 to consider their Strategic Plan 2015/16 – 2019/20 and Annual Performance Plan 2015/16. This report accounts for work done by the Portfolio Committee during assessment of their plans. The report further makes financial and non-financial recommendations for consideration by the Minister of Higher Education and Training.

2. Background

The National Skills Fund (NSF) was established in 1999 in terms of the Skills Development Act, No 97 of 1998. The primary objective of the NSF is to disburse funds collected through the Skills Development Levies Act, 1999 (Act No 9 of 1999) as amended, to support projects identified in the National Skills Development Strategy (NSDS) as national priorities or for such other projects related to the achievement of the purposes of the Act as the Director-General of the Department of Higher Education and Training (DHET) determines. The NSF focuses on national priorities and provides resources to unlock or catalyse national development potential. The NSF is funded in terms of section 8 (3)(a) of the Skills development Levies Act, which states that 20 per cent of the levies, interest and penalties collected in respect of a SETA to the National Skills Fund. In terms of governance, the Director-General is the accounting authority of the Fund as contemplated by section 49 (2) (b) of the PFMA.

The NSF was listed as a Schedule 3A public entity in terms of the Public Finance Management Act (PFMA) No 1 of 1999 on 12 October 2012, retrospectively from 1 April 2012. Prior to listing, the NSF operated as a sub-programme under the Skills Development Branch of the Department of Higher Education and Training.

The ETDP SETA was established in terms of the Skills Development Act No. 97 of 1998 (as amended) with the mandate to promote skills development for the education and training sector. The Minister of Higher Education and Training relicensed the SETAs for the five year period from 1 April 2011 to 31 March 2016, to operate within the skills development framework as articulated in the National Skills Development Strategy (NSDS) III framework and other policies and strategies. The SETAs are public entities that fall under Schedule 3A of the Public Finance Management Act (PFMA), No 1 of 1999 and they are funded through the 1 per cent levy income paid by employers to the South African Revenue Service (SARS).

3. Policy mandates

3.1 National Development Plan (NDP) Vision for 2030

The NDP sets out a vision for the country for the next 15 years through its Vision 2030. The NDP identifies skills development and education as a critical enabler for economic development. The Plan states that SETAs should play a more effective role in the production of skills that are required to meet the immediate needs of the employers. The Plan accepts that education, training and innovation are not a solution to common national problems but they are rather critical in building national capacity to solve problems. The Plan sets out the role for SETAs as facilitators of skills development in the following areas:

• Skills development for existing businesses;
• Unemployed people who wish to obtain employment in the sector and emphasis on internships; and
• Training should cover levels of the National Qualifications Framework (NQF) required by the sector.

3.2 Medium-Term Strategic Framework (MTSF) 2014 – 2019

The 2014-2019 MTSF which is a five year strategic plan of government, and it forms the first five-year implementation phase of the NDP. Therefore, this requires that the work of all national and provincial departments, municipalities and public entities should be aligned with the NDP vision and goals. The aim of the Framework is to ensure policy coherence, alignment and coordination across government plans as well as alignment with the budgeting process. The Framework states that there should be an improved interface between SETAs, workplaces and education and training institutions (Technical and Vocational Education and Training Colleges, universities and adult education and training institutions). The interface is to support greater opportunities for work-based training and experience, with 140 000 work-based learning opportunities planned for 2019. The Framework further targets increased partnerships between SETAs and employers for placement.

 

3.2 National Skills Development Strategy (NSDS III)

The NSDS III acts as the overarching strategic guide for skills development and provides direction to sector skills planning and implementation in the SETAs, and the framework for the skills development levy resource utilisation by the SETAs and the National Skills Fund. The strategy also sets out linkages with, and responsibilities of, other education and training stakeholders. It responds to pressing challenges that impact on the ability of the economy to expand and provide increased employment opportunities.  Key driving force of the strategy is to improve the effectiveness and efficiency of the skills development systems and effective response to the needs of the labour market and social equity.

The NSDS III has eight goals for implementation by the SETAs which are:

• Establishing a credible institutional mechanism for skills planning;
• Increasing access to occupationally-directed programmes;
• Promoting the growth of a public FET college system that is responsive to sector, local, regional and national skills needs and priorities;
• Addressing the low-level of youth and adult language and numeracy skills to enable additional training;
• Encouraging better use of workplace-based skills development;
• Encouraging and supporting cooperatives, small enterprises, worker-initiated, non-governmental organisations (NGOs) and community training initiatives;
• Increasing public sector capacity for improved service delivery and supporting the building of a developmental state; and
• Building career and vocational guidance.

3.4 White Paper on Post-School Education and Training

The White Paper articulates a vision for an integrated system of post-school education and training, with all institutions playing their role as parts of a coherent but differentiated system. The White Paper seeks to set out strategies to expand the current provision of education and training in South Africa, to improve its quality, to integrate the various strands of the post-school system. There are interventions set in the White Paper for implementation by different sector of the Post-School Education and Training. Flowing from the White Paper, the Department plans to develop a National Plan for Higher Education which will be an implementation plan with measurable targets for each sub-system of the sector. The main policy objectives are:

• a post-school system that can assist in building a fair, equitable, non-racial, non-sexist and democratic South Africa;
• a single, coordinated post-school education and training system, expanded access, improved quality and increased diversity of provision; and
• a post-school education and training that is responsive to the needs of individual citizens, employers in both the public and private sectors, as well as broader societal and development objectives.

Given this important role of delivering services to the people, it is of critical importance for SETAs and the NSF to be well capacitated and efficient to deliver on their mandates.

3.5 Human Resource Development Strategy for South Africa (HRD-SA) 2010 – 2030

The HRD Strategy for South Africa (2010 – 2030) is a call to action. Its primary purpose is to mobilise multi-stakeholder participation, and to encourage individuals and organisations to take on the challenge of improving the human resource stock of the nation. The National HRD Strategy has eight commitments designed to address the priorities of the South African Government:

• Overcoming the shortages in the supply of people, with priority skills required for the successful implementation of current strategies to achieve accelerated economic growth.
• Increasing the number of appropriately skilled people to meet the demands of current and emerging economic and social development priorities.
• Ensuring improved universal access to quality basic education and schooling (up to Grade 12) that is purposefully focused on: (a) achieving a dramatic improvement in the education outcomes for the poor; (b) equipping learners with optimal capacity for good citizens; and (c) the pursuit of post-school vocational education and training for employment.
• Implementing skills development programmes that are purposefully aimed at equipping recipients/citizens with requisite skills to overcome related scourges of poverty and unemployment.
• Ensuring that young people have access to education and training that enhances opportunities and increases their chances of success in further vocational training and sustainable employment.
•  Improving the technological and innovation capability and outcomes within the public and private sectors, to enhance South Africa’s competitiveness in the global economy and to enable the country to meet its human development priorities.
• Ensuring that the public sector has the capability to meet the strategic priorities of the South African Developmental State.
• Establishing effective and efficient planning capabilities in the relevant departments and entities for the successful implementation of the HRDSSA.

 

Since SETAs and the NSF are public entities responsible for skills development, they should ascribe to the goals of the HRD Strategy which are: to urgently and substantively reduce the scourge of poverty and unemployment in South Africa; to promote justice and social cohesion through improved equity in the provision and outcomes of education and skills development programmes, and to substantively improve national economic growth and development through improved competitiveness of the South African economy.

4. Overview and assessment of the Strategic Plan 2015/16 – 2019/20 and Annual Performance Plan 2015/16 of the NSF and ETDP SETA

4.1 National Skills Fund

4.1.1 Vision and mission

The vision of the NSF is funding to skill the nation. The mission is to provide for national skills development towards a capable workforce for an inclusive growth path.

4.1.2 Mandate

The mandate of the Fund has been developed into two broad strategic goals, namely:

a) Strategic Goal 1: To fund national skills development priorities

The money of the Fund may be used for the primary objectives as defined by the prescripts of the Skills Development Act, namely:

• To fund projects identified in the National Skills Development Strategy (NSDS) as national priorities (section 28(1); and
• To fund projects related to the achievement of the purposes of the Skills Development Act as the Director-General determines (section 28(1).

 

The goal 1 is operationalised in two strategic objectives:

i) Strategic Objective 1: Efficient and effective programme / project preparation

The purpose of this strategic objective is to be effective and efficient in funds needs analysis, scoping and projects selection (both proactive and reactive). The first part of the NSF’s skills development funding process involves the following broad sub-processes:

• Develop and approve NSF Strategic Framework and Criteria for the allocation of funds;
• Develop and issue Requests for Proposals (RFP) based on NSF’s Strategic Framework  and Criteria for the allocation of funds;
• Receive and evaluate proposals, both solicited and unsolicited proposals; and
• Sign Project Contract.

Targets for the 2015/16 is to commit 100 per cent of the reserve funds to the skills development and to commit R2.12 billion future income towards skills development.

ii) Strategic Objective 2: Efficient and effective programme / project management

The purpose of this strategic objective is to be effective and efficient in project management, which consists of project start up, implementation support, disbursements, monitoring, evaluation and closure. The second part of the NSF’s skills development funding process involves the following sub-processes:

• Project start-up;
• Implementation support, monitoring and disbursement during project execution;
• Project evaluation, and
• Project close-out.

The Fund’s targets for the 2015/16 is to fund 70 000 leaners for training, of which 30 000 will be funded on the Government priorities and 40 000 learners will be funded on the Director-general’s priorities. The entity plans to disburse 90 per cent of grant income received as well as fund 80 per cent of the infrastructure earmarked for funding. 

b) Strategic Goal 2: to ensure business excellence within the National Skills Fund

The purpose of this strategic goal is to drive the NSF towards increased excellence in skills development funding by enhancing the administrative and operational excellence of the Fund. There is one strategic objective under this goal namely, excellence in resource management. The aim of the objective is to address strategic resource management aspects for the NSF, which is critical in achieving excellence in resource management. Resource management includes a number of areas: research and analysis, HR Management, financial management, ICT management, Information / knowledge management, Infrastructure / facilities management and shared logistical services management.

For the 2015/16 financial year, the NSF plans to have excellence in Human Resource Management by filling 90 percent of key funded positions and 60 percent of the total funded positions. The entity also strives for excellence in Information and Communication Technology (ICT) Management such that 70 percent of ICT needs will be implemented. 

4.1.3 NSF Fund Allocation Framework

a) Human Resource Development Priorities

Within the framework of the Human Resource Development Strategy of South Africa (HRDSSA) II, the NSF Fund Allocation Framework will prioritise: strengthening and support of the expansion of TVET Colleges access; the production of intermediate skills (in particular artisans) and professionals; the production of academics and stronger industry-university partnership in research development; strengthening foundation learning; and address worker education.

b) Ministerial priorities in consultation with the National Skills Authority (NSA)

The successful delivery of the NSDS relies on the role played by social partners in the delivery of skills. The NSF will fund and participate in: skills development legislation research and review, including integration thereof into education and training and national priorities of government; constituency capacity building and NSA capacity building programmes;

The Fund will also participate in national dialogue and advocacy; skills marketing and communication, inclusive of annual skills conference and exhibitions; Provincial Skills Development Forums (PSDF); and promotion of good practice in skills development.

c) National priorities aligned to the key strategies of government

The NSF will fund national priorities areas from various strategies of government which include: New Economic Growth Path (NGP); Industrial Policy Action Plan (IPAP); skills to support rural development; skills for education and health; skills to support justice and crime prevention; skills to support cooperatives and small enterprises; public sector capacity building; skills for green economy; and artisan development. In delivering on these priorities, the Fund has partnerships with the Department of Public Works, Trade and Industry, Correctional Services, Small Business Development and Public Enterprises and, with its state owned entities, Transnet, Denel and Eskom. The partnerships with state owned entities have increased the production of artisans. 

 

d) Priorities identified by the Director-General supporting the Skills Development Act

The Fund Allocation Framework will support skills required for the achievement of priorities identified by the DG in support of the Skills Development Act, which include: worker education; skills system capacity building, Training Lay-off Scheme; academia, research and development; and bursaries.

e) Priorities to address skills infrastructure

The Fund Allocation Framework will support priorities to address key skills infrastructure gaps, which include: public delivery infrastructure; Community Education Centres (CEC) infrastructure; skills development institutes infrastructure; and State-owned Enterprises (SoEs) infrastructure.

 

 

4.1.4 Overview of the budget

Table 1: Overview of the 2015/16 Budget and MTEF
Income	2014/15	2015/16	2016/17	2017/18	2018/19
R thousands
Revenue from non-exchange transaction	2 687 353	2 937 293	3 227 223	3 420 856	3 626 108
Revenue from exchange transactions	393 226	302 258	238 580	194 006	40 000
Total Revenue	3 080 579	3 239 551	3 465 803	3 614 862	3 666 108
Expenses
Skills Development Grant Disbursements (Goal1)	3 441 728	4 866 431	3 057 778	3 241 244	3 435 719
Administrative expenses (Goal 2)	268 532	256 290	225 582	231 271	245 147
Total expenses	3 710 260	5 122 721	3 283 360	3 472 515	3 680 866
Surplus/Deficit	-629 681	-1 883 170	182 443	142 347	-14 758

 

The total revenue for 2015/16 is R3.2 billion; total expenses will amount to R5.2 billion; skills development grant disbursement will be R4.8 billion; administrative expenses will be R256 million and the surplus (deficit) for the year will be R1.8 billion. The entity will use its reserves to offset the funding deficit for 2015/16 financial year. The closing balance of the surplus (deficit) for 2015/16 is R5.9 billion. The reserves have been contractually committed to students’ bursaries and future infrastructure development for the post-school education and training.

The total revenue is currently growing at an average of 10 per cent per year. Provision for a 6 per cent growth in revenue was made in the budget going forward. Skills development grants are expected to peak above annual revenue as NSF will start to utilise its accumulated reserves towards skills development over and above the current revenue. This is due to the NSF high level commitments towards skills development. The NSF’s total administrative costs is at 4.9 per cent of its total revenue (R256 million), making the Fund administratively a cost efficient organisation in comparison with other levy organisations.

 

 

4.2 Education, Training and Development Practices (ETDP) SETA

4.2.1 Vision, mission and values

The vision of the ETDP SETA is to promote the development and improvement of the skills profile of the sector’s workforce in order to benefit employers, workers and employees in the sector. In support of its vision, the ETDP SETA has its mission the promotion, facilitation and development of education, training and development. The ETDP SETA upholds these values: transparency; fairness; courteousness and caring; honouring deadlines; promotion of quality among all stakeholders; co-operative governance; continuous improvement; and sustainable environment.

4.2.2 Strategic Outcome Oriented Goals

The ETDP SETA skills planning and implementation is guided by the Medium Term Strategic Framework Term (MTSF) 2014 - 2019 Outcome 6.1 Quality basic education and Outcome 6.5 Skilled and capable workforce to support an inclusive growth path. In responding to these outcomes, the ETDP SETA has set six strategic goals, namely:

Strategic Outcome Oriented Goal 1: Expanded research to inform sector skills planning and employability for economic growth. The goal statement is to conduct empirical research to inform labour market forecasting and scenario planning in the post-school education and training system.

Strategic Outcome Oriented Goal 2: Adequately capacitated educators and lecturers for effective teaching and learning in schools, TVET Colleges and higher education institutions. The goal statement is to build capacity for teachers and managers in schools; researchers and lecturers in HEIs; and lecturers and managers in TVET Colleges to drive transformation and improve teaching and learning.

Strategic Outcome Oriented Goal 3: A skilled public service personnel to improve service delivery in the institutions / organisations targeted. The goal statement is to enhance the skills and competencies of public service personnel with special focus on practitioners, administrators and support staff.

Strategic Outcome Oriented Goal 4: Increased number of students who successfully enter the post-school education and training system. The goal statement is to ensure access to and articulation of learning pathways within the schools, TVET Colleges, HEIs and workplace placements to allow for seamless career path that leads to successful completion of programmes in the ETD sector.

Strategic Outcome Oriented Goal 5: Enhance capacity in constituent employers for skills development. The goal statement is to build human and institutional capacity within the non-schooling ETD sector constituencies.

Strategic Outcome Oriented Goal 6: A highly effective, professional, efficient organisation and management administration informed by good corporate governance practices. The goal statement is to improve organisational performance through effective and efficient governance leadership, management and administration.

 

 

4.2.3 Programmes

a) Programme 1: Development of a credible ETD sector skills plan

The purpose of this programme is to gather accurate information on the supply of and the demand for skills in order to address the skills gaps in the sector. The SETA will develop a five year sector skills plan (SSP) (2015/16 – 2019/20) for submission to the Department of Higher Education and Training. The target responds to the NSDS III goal of establishing a credible institutional mechanism for skills planning to inform the skills demands and supply. The SETA has appointed six research chairs at six institutions of higher learning. The budget of this programme for 2015/16 is R9.7 million.

 

 

b) Programme 2: Quality teaching and learning in schools, TVET Colleges and HEIs

The purpose of this programme is to improve the quality of teaching and learning in schools, TVET Colleges and HEIs and contribute to a transformed higher education environment. For 2015/16, the entity will train 300 first time Foundation Phase teachers and 140 continuing Foundation Phase teachers, enrolled either in a Diploma qualification or in a Bachelor of Education (B.Ed) degree. Other targets for 2015/16 include; training of 500 primary and secondary teachers in ICT, 650 primary and secondary teachers in End User Computing Learnership, 250 teachers in Braille and sign language. 300 TVET College lecturers will be enrolled in certain programmes which are relevant for their skills development and 25 Higher Education Institutions will receive financial support for academic development. It is noted that the programme addresses the NDP and MTSF goal of ensuring that South Africans have access to education and training of the highest quality by 2030. The budget of this programme for 2015/16 is R77.9 million.

c) Programme 3: Improving public service delivery in the ETD sector

The purpose of this programme is to capacitate those involved in public service administration functions that have a direct bearing and / or impact on education and training with the necessary skills to perform their duties. The entity will place 1 250 school administrators in schools to assist with library administration and 300 district officials will be enrolled in relevant learning programmes. The budget of this programme for 2015/16 is R62.9 million.

d) Programme 4: Access and progression into high level skills and support for work experiential learning

The purpose of this programme is to provide Career Development Services (CDS), increase access to occupationally directed programmes and to provide youth with workplace learning and experience for employability. For 2015/16, the entity will renew 400 bursaries and award 300 bursaries to learners for full qualifications. 2000 learners will be offered an opportunity to improve their matric results and 300 unemployed youth will receive qualifications through Recognition of Prior Learning (RPL). The entity will place 800 graduates and undergraduates in workplace experience programmes, print and distribute 25 000 career guidance booklets to learners, place 313 community development officers (CDO) at institutions of learning or workplaces and enrol 900 learners in learnership programmes. The budget of this programme for 2015/16 is R147 million.

 

 

e) Programme 5: Supporting ETD constituencies for skills development

The purpose of this programme is to build human and institutional capacity within the ETD sector constituencies. For 2015/16, the entity will support three Trade Unions and 10 Political Parties in skills development programmes. 50 Non-Levy Paying enterprises and 18 Youth Cooperatives, two private training providers, two independent schools associations will also be supported in skills development programmes. Various others will also be supported inclusive of HEIs, research organisations, Teacher Union Institutes, SETAs and Professional Bodies. The budget of this programme for 2015/16 is R20 million.

f) Programme 6: Enhancing organisational management and administration for quality service delivery

The purpose of this programme is to enhance organisational management and administration to ensure that the ETDP SETA fulfils its skills development mandate. For 2015/16, the entity will review its organisational structure on a quarterly basis in order to ensure that critical posts are filled timeously to enhance capacity of business units. Seven candidates will be placed on talent management programme to strengthen staff retention and all those in the programme will be reviewed quarterly. Staff Performance Management Development System (PMDS) will be reviewed quarterly to ensure that performance appraisal of all staff is achieved.

The entity will ensure that all compliant mandatory grants are paid quarterly and all discretionary grants are paid within 30 days of receipt. Contract management process workflow will be enabled so that performance information can be captured and reported electronically.

All governance structures will be in place and all board and sub-committees function optimally and supported through skills development. The entity hopes to have no litigation against it and, it also wants to act upon all illegal activities within the organisation and to have a clean audit in respect of legal unit.  All contracts for 2015/16 performance programmes will be legally vetted and ready for use.

The website will be updated regularly and all publications will be available on time (4 up-skill magazine, 2 brochures and 10 annual reports: 1 national and 9 provincial). There will be at least one accredited provider per province to deliver SETA qualification and increase the number of occupational qualifications approved by the Quality Council for Trades and Occupations (QCTO). The entity will ensure that all suppliers in the data base are vetted. The budget of this programme for 2015/16 is R141 million.

 

 

 

4.2.4 Overview of the budget

Table 2: Overview of the 2015/16 and MTEF Budget

Programme	Budget				Nominal Rand change	Real Rand change	Nominal % change	Real % change
R million	2014/15	2015/16	2016/17	2017/18	2014/15-2015/16		2014/15-2015/16
Administration	123 744.0	141 316.0	156 740.0	164 244.0	17 572.0	11 099.5	14.20%	8.97%
QCTO	936.0	1 334.0	1 868.0	2 394.0	398.0	336.9	42.52%	35.99%
FET Infrastructure	0.0	0.0	0.0	0.0	0.0	0.0
Mandatory Grants	59 581.0	64 410.0	66 987.0	69 672.0	4 829.0	1 878.9	8.10%	3.15%
Discretionary Grants	287 885.0	308 999.0	341 322.0	493 449.0	21 114.0	6 961.4	7.33%	2.42%
TOTAL	472 146.0	516 059.0	566 917.0	729 759.0	43 913.0	20 276.7	9.30%	4.29%

 

The total budget for 2015/16 is R516 million; R141 million is for administration costs, R64 million is for mandatory grants, R308 million is for discretionary grants and R1.3 million is transferred to the Quality Council for Trades and Occupations (QCTO). The budget shows an increase in the outer years of the MTEF period. The allocation for consultants has increased from R4.6 million in 2014/15 to R10 million in 2015/16. This represents an increase of R5.4 million. Of the R10 million allocation for consultants, R6 million is to cater for the six appointed Research Chairs placed at the institutions of higher learning (University of Witwatersrand, University of Pretoria, University of KwaZulu-Natal, North-West University, Nelson Mandela Metropolitan University and Cape Peninsula University of Technology). The consultants’ budget allocation decreases to R4.6 million in 2016/17 and R4.4 million in 2017/18.  

The allocation for travel and subsistence increased from R8.4 million in 2014/15 to R14 million in 2015/16, an increase of R5.6 million. This increase is meant to cater for the entity’s travel to different provinces in facilitating skills development projects and monitoring and evaluation.

The entity alluded that its income is not sufficient owing to non-compliance of government departments with a Cabinet Directive memorandum imposing payment of levies to SETAs that have line function departments. On the 23 November 2012, Cabinet took a decision that provides for 30 per cent of the 1 per cent of the departments’ training budget to be allocated to the SETAs. Three Provinces (Gauteng, Mpumalanga and Limpopo) are currently paying 10 per cent instead of the 30 per cent required. The SETA reported that R200 million can be injected into its income if all government departments can honour the 30 per cent skills levies payment.

The Department reported that there were some challenges with regard to the legalities of the regulations issued by the Department of Public Service and Administration (DPSA) on the payment of 30 per cent of the 1 per cent of the training budget to SETAs. The National Treasury issued letters to government departments putting a moratorium on payments of levies. A legal team has been established to look at the regulations.

5. Observations

5.1 National Skills Fund

• The Committee was concerned with the monitoring and evaluation of the NSF funded projects given the huge commitment of funds in these projects. It was further noted that the NSF should have a tracking mechanism to monitor learner’s progression and absorption into the labour market.
• It was noted with concern that the NSF did not provide a list of all its funded projects in the Strategic Plan 2015/16 – 2019/20 and APP 2015/16 documents. Furthermore, the type of skills; selection criteria; National Qualifications Framework (NQF) levels of programmes; and geographical spread of the learners that will be trained in 2015/16 and outer years is not articulated in the documents.
• It was noted that the level of student indebtedness in higher education is a serious concern which contributes to student drop-out and financial exclusions and, this affects students mainly from the poor families. The NSF was requested to allocate part of its surplus funds to alleviate the challenge of student indebtedness.
• The NSF was commended for its low administration costs (4.9 per cent of the total revenue), and improved governance over the last two years. The Committee advised the NSF to target a clean audit for the current financial year.

5.2 ETDP SETA

• The ETDP SETA was commended for its good governance (unqualified audit for 14 years) and the Strategic Plan 2015/16 – 2019/20 and APP 2015/16 documents which have clear targets and performance indicators. However, it was noted that the targets in the APP 2015/16 were not adequate given the huge demand for training and skills development in the education and training sector. The Committee also noted that the strategic plan will have to be reviewed in anticipation of the new NSDS IV.
• The Committee was concerned with the increase in consultancy fees (R4.6 million in 2014/15 to R10 million in 2015/16) and an increase in subsistence and travel (S&T) (R8.4 million in 2014/15 to R14 million in 2015/16) since the fiscal policy places emphasis on allocation of funds for core service delivery programmes.
• The ETDP SETA was commended for being the only SETA with Regional Offices (ROs) in all the nine provinces and, the Committee urged the ETDP SETA to expand its offices to districts.
• The Committee commended ETDP SETA for its programme aimed at the development of the unemployed youth to acquire workplace skills through its 36 months internship programme and the Work Integrated Learning (WIL) programme for TVET College and HEIs graduates.
• Given the huge demand for training and skills development in the education and training development sector, the ETDP SETA was advised to have a strengthened partnership with the Department of Basic Education for the training of teachers to limit duplication and to have a strong impact and outcomes of its programmes.
• It was noted that the Research Chairs programme of the ETDP SETA should also be extended to historically disadvantaged institutions so that they can benefit from it.
• The Committee noted a concern raised by the ETDP SETA on the licensing that is coming to an end in March 2016 and the uncertainty it creates on the future of the existence of the SETA and on its organisational stability. The SETA hoped and wished that the Minister would give the directive as soon as possible. The Department reported that a draft framework on the new SETA landscape has been finalised and consulted on within the Department. The Minister will present it to Cabinet and thereafter consult with other social partners and engage with SETAs forum.   

6. Summary

The NSF is entrusted with the responsibility of funding skills development projects of national priority particularly for the post-school education and training sector. For the next five years, the NSF has committed R5.9 billion of its funds to skills development and other infrastructure development projects. However, the Fund still needs to address some of its key strategic risks such as; effective and efficient integrated ICT system; stakeholder relationship management; organisational structure; and performance management and evaluation to respond to national skills priorities. The Committee was concerned that the breakdown of the funded projects and learners was not provided in the NSF’s Strategic Plan 2015/16 and Annual Performance Plan 2015/16 documents which made it difficult to exercise sufficient oversight.

The ETDP SETA is entrusted with the responsibility of supporting the efforts of government to achieve economic growth through skills development in the education and development practices sector. The ETDP SETA is also responsible for the training and development of teachers in the basic education sector that has approximately 425 090 teachers and 25 741 schools. With a small budget of half a billion per annum, it is very difficult for the ETDP SETA to cover even a quarter of the total number of teachers for its skills development programmes. The ETDP SETA has good governance in place and, its performance indicators and targets are well defined. However, its targets are based on its available resources which are not sufficient.

7. Recommendations

The Committee recommends that the Minister of Higher Education and Training considers the following:

7.1 National Skills Fund

• NSF should strengthen and exercise its oversight and monitoring function over all its funded projects for 2015/16 and outer years given the huge amount of funds committed to these projects, and further develop a tracking mechanism to monitor learner’s progression and absorption into the labour market;
• The NSF should provide a list of all its funded projects in the Strategic Plan 2015/16 – 2019/20 and APP 2015/16 documents. Furthermore, they should provide a list of the type of skills; selection criteria; National Qualifications Framework (NQF) levels of programmes; and geographical spread of the learners that will be trained in 2015/16 and outer years;
• Given the high level of student indebtedness in higher education, the entity should allocate part of its surplus funds to the National Student Financial Aid Scheme (NSFAS) to alleviate the challenge of student indebtedness; and
• The key strategic risks identified by the entity should be urgently addressed to ensure that it responds to skills of national priorities and other priorities of government;

7.2 ETDP SETA

• ETDP SETA should collaborate with other government training agencies to have a meaningful impact in addressing the challenge of skills shortage and youth unemployment;
• ETDP SETA should have a strengthened partnership with the Department of Basic Education (DBE) for the training of teachers to limit duplication and to have a strong impact and outcomes in its programmes;
• The annual targets of ETDP SETA should be revised given the huge demand for training and skills development in the country;
• The strategic plan of ETDP SETA and its key delivery targets will have to be reviewed so that they can be aligned with the new National  Skills Development Strategy (NSDS IV) goals and objectives; and
• The entity should minimise spending in consultancy fees and subsistence and travel so that there can be more funding available for key delivery programmes.

7.3 DHET

• The Department should prioritise the engagement with SETAs on the draft framework for the new SETA landscape; and
• The Department should make a follow-up with regard to the moratorium on the payment of skills levies by government departments as per the Cabinet resolution to improve the discretionary grants of SETAs.

 

Report to be considered