Department of Higher Education and Training Performance and Expenditure of Sector Education and Training Authorities (SETAs) Standing Committee on Appropriations 18 November 2016

Presentation Outline Introduction Overall Non-Financial Performance of the SETAs Detailed discussion on the Funding Framework for SETAs and 2017 MTEF priorities Risks, opportunities and challenges in the SETA System Ensuring value for money, efficiency and effectiveness in SETA operations Discussion of the role that SETAs can play in the funding challenge faced by the Higher Education Sector

Introduction Sector Education and Training Authorities (SETAs) are required to develop a Sector Skills Plan as mandated by the Skills Development Act of 1998, as amended SETAs are expected to facilitate the delivery of sector-specific skills interventions that help to achieve the goals of the National Skills Development Strategy (NSDS) III This includes among other things the development of learning programmes and monitoring education and skills provision in their various sectors

Introduction Sector Education and Training Authorities (SETAs) are required to develop a Sector Skills Plan as mandated by the Skills Development Act of 1998, as amended SETAs are expected to facilitate the delivery of sector-specific skills interventions that help to achieve the goals of the National Skills Development Strategy (NSDS) III This includes among other things the development of learning programmes and monitoring education and skills provision in their various sectors

Introduction The Department of Higher Education and Training (DHET) has the responsibility to oversee and monitor the work of SETAs in achieving their predetermined objectives. The performance information below captures the objectives and indicators in terms of the approved annual performance plan and service level agreement SETAs must submit specific plans and reports annually to the Minister and Department and these are Sector Skills Plans, Strategic Plans, Annual Performance Plans, Service Level Agreements

Overall Non-Financial Performance of the SETAS

DHET NSDS 3 1 2 3 4 5 6 7 8 Institutional mechanism skills planning Access to occupationally directed programme Promoting the growth of TVET Adult language and numeracy skills to enable additional training Better use of work place-based skills development Supporting cooperatives, SMMEs, NGOs, etc for rural development Public sector capacity for improved service delivery Building career and vocational guidance 8 7 6 5 4 3 2 1 DHET Priority Skills NSDS 3 8 Goals

DHET NSDS 3 1 2 3 4 5 6 7 NSDS III linked Programmes Artisan Development Learnerships Work Integrated Learning/Internships Bursaries Skills Development Programmes Small Business Building career and vocational guidance 7 6 5 4 3 2 1 DHET Priority Skills NSDS 3 8 Goals

Workplace Based Learning Challenges

Workplace Based Learning Challenges

Not in Employment, Education and Training (NEET) The number of South African NEETs increased from about 2 million in 1996 to close to 3.2 million in 2011 NEET rates were 25.1% in 1996, 34.0% in 2001, and 32.2% in 2014 The Department has directed SETAs to increase workplace based learning opportunities in various learning programmes PIVOTAL: Professional, Vocational, Technical and Academic Learning Programmes that result in qualification or part qualification on the National Qualifications Framework

Workplace Based Learning Interventions

Workplace Based Learning Interventions

Workplace Based Learning Interventions

Bursaries

Funding Framework for SETAs and 2017 MTEF Priorities

Skills Development Levies Act SDL is a levy mechanism which seeks to encourage learning and skills development in South Africa and is determined by an employer's salary bill An employer is obliged to register for SDL purposes unless there are reasonable grounds for believing that the total liveable amount paid / payable by the employer to all its employees during the following 12 month period will NOT exceed R500 000. This compulsory levy scheme was introduced with effect from 1 April 2000

Skills Development Levies Act Public service employer in the national or provincial sphere of Government is exempt, these employers must budget for an amount equal to the levies payable for training and education of their employees i.e. all employers with an annual payroll of R500 000 or more to pay a skills levy equal to 1% of their annual payroll

Skills Development Levies Act and SETA Grant Regulations GRANT BREAKDOWN R100 Skills Development Levy (100%) R20 R80 SETAs (80%) NSF (20%) R10 R49.50 R20 R18 Discretionary (49.5%) Mandatory (20%) Admin (10.0%) NSF Mandate (18%) R9.90 R39.60 R0.50 R2 Pivotal (80%) Other* (20%) QCTO (0.5%) SARS (2%) Collection costs *Implement SSPs Priorities Learner focused Support mechanisms

Total Skills Levy per Year SETA Grant Regulations Total Skills Levy per Year

Skills Levy (SETA and NSF) 2011-2020 SETA Grant Regulations Skills Levy (SETA and NSF) 2011-2020 SETA Grant Regulations

SETA Grant Regulations SETA Skills Levy 2011-2012: Breakdown in line with SETA Grant Regulations SETA Grant Regulations

SETA Expenditure Performance vs Budget   2013/14 2014/15 2015/16 Budget Actual R'000 Administration 1 446 241 1 319 169 2 486 210 1 890 431 1 741 738 1 604 697 Mandatory 2 462 757 2 216 553 2 900 910 2 008 951 3 223 131 2 260 788 Discretionery 6 095 323 4 073 079 7 179 752 5 250 879 7 977 249 7 226 752 10 004 321 7 608 801 12 566 872 9 150 261 12 942 118 11 092 237

SETA Expenditure Performance vs Budget

SETA System Priorities NSDS III directs SETAs to develop Sector Skills Plans (SSPs) in each and every economic sector The Department has developed the Sector Skills Plan Framework that guides SETAs on the content and structure of the Sector Skills Plan In the Sector Skills Plans, SETAs are required to present the profile of the sector, indicate skills demand and supply signals, outline mechanisms to respond to the demand signals by setting out key skills priorities for the specific financial year Priorities are presented by SETAs in the PIVOTAL programmes list which is submitted to the Department as an annexure to the SSP annually

SETA Priorities These priorities are informed by stakeholders in the sector as well as by national priorities and SETAs are required to indicate an intervention in relation to these priorities Key areas of priority in the SETA PIVOTAL lists include: a focus on artisan development occupations as well as on entry-level and intermediary skills Establishment of SETA Offices in TVET Colleges Identification of other critical partnerships eg. research etc

Risks, opportunities and challenges in the SETA System

Risks Lack of uniformity in the SETA operation, different SETAs use different systems, processes and procedures making it difficult for external stakeholders to comprehend the system Managing twenty (21) different systems, coordination, monitoring and evaluation remains a challenge. There is a need to streamline the system, hence, the new SETA landscape makes various propositions in this regard, including, but not limited to shared service systems Improving linkages with the PSET system - there is a need to improve and solidify working relations of key PSET stakeholders such as HEIs, TVET colleges, CETCs, SETAs and Employers

Opportunities Integration of skills development into the post-school education and training system: Golden opportunity to be embraced - White Paper propagates the integration Labour market actors + Quality Councils + education and training providers need to speak with one voice = SETAs to facilitate as intermediaries Bridge the divide between the responsiveness and access/ quality of the provision of Education and Training Complementarity between levy grant system and voted funds

Opportunities Support the National Development Plan (NDP), New Growth Path (NGP), Industrial Policy Action Plan (IPAP), Operation Phakisa, etc Better serve the National Priorities of Government by prioritising Occupations in High Demand eg. the country needs more artisans

Challenges Uneven capacity and resources among SETAs with varying performance levels, some SETAs are doing well hence continuous work to strengthen SETA capacity Poor SETA governance in some SETAs Role of government in SETA boards is limited Poor planning (resulting in surpluses and deficits) Shift from a quantitative to a qualitative focus Lack of research capability (hindering sector skills planning) Ineffective performance management, monitoring and evaluation

Challenges Negative public perceptions about SETAs Difficulties in addressing cross sectorial skills development needs Slow economic growth, impacting on workplaces Some employers not opening up workplaces to the level of our expectations Exemption of government departments from paying the levy Some government departments spending of training money

Ensuring Value For Money SETA Grant Regulations, implemented in 2013 with the focus on PIVOTAL programmes i.e. bursaries, artisan development, learnerships etc Service Level Agreements between SETAs and the Department, monitored on a quarterly basis All SETAs are audited by the Auditor-General, with directives issued from time to time to address AG related findings Growing number of SETAs receiving clean audits in 2013/14 was FIVE, in 2014/15 was SIX and in 2015/16 is TEN SETA Review Panel appointed - a team of experts outside the Department conducts reviews and triangulates with the DHET findings

SETAs role in the funding challenge faced by the Higher Education Sector Grant Regulations introduced in 2013, directed SETAs to spend 80% of 49.05% towards PIVOTAL programmes which includes, amongst others, bursaries etc; In the financial year 2013/14 after Grant Regulations were introduced SETAs assisted 19 551 learners in universities and colleges (in line with the targets – bursary/workplace based learning) , this number increased in 2015/16 to 26 100; SETAs are directed to assist with workplace based learning opportunities for the learners from universities and colleges, linking them with industries, some to complete their qualifications or for workplace experience to address the skills in demand.

Thank You

Questions