Skills System Review Technical Task Team HRDC Summit March 2014

AIM of Task Team 2 To review the current skills development system and to determine whether the sector based approach to skills development is the best model for delivering skills in the country

3 1.Terms of reference 2.Research  International: 5 countries – UK, Brazil, Netherlands, Singapore, Germany  Desk research – many previous reports  Local: SETAs, QCTO, NSA, regional structures, NSF, DHET Skills Branch 3.Workshops 4.Stakeholder Engagement  Large businesses, organised business and SETAs  Small businesses and organised small business  Organised Labour  NEDLAC Community constituency – women, co-operatives, people with disabilities, youth  The DHET Skills Branch Management  HRD Council and individual members 1.Terms of reference 2.Research  International: 5 countries – UK, Brazil, Netherlands, Singapore, Germany  Desk research – many previous reports  Local: SETAs, QCTO, NSA, regional structures, NSF, DHET Skills Branch 3.Workshops 4.Stakeholder Engagement  Large businesses, organised business and SETAs  Small businesses and organised small business  Organised Labour  NEDLAC Community constituency – women, co-operatives, people with disabilities, youth  The DHET Skills Branch Management  HRD Council and individual members Methodology /Process

Focus Areas 4 1.Background and purpose 2.Problem statement 3.Skills system environment 4.Overview of international literature 5.Vision and Mission 1.Background and purpose 2.Problem statement 3.Skills system environment 4.Overview of international literature 5.Vision and Mission 6.Fundamentals 7.Key outcomes 8.Existing Skills System 9.Models 10.Recommendations on building a new skills system 11.Proposed road map for implementation 6.Fundamentals 7.Key outcomes 8.Existing Skills System 9.Models 10.Recommendations on building a new skills system 11.Proposed road map for implementation Linked to structure of the Report

Skills system focus:  The Department of Higher Education and Training and the Skills Branch  National Skills Fund  National Skills Authority  Quality Council for Trades and Occupations  Functions located in 21 SETAs Key lessons from the current system analysis:  Fundamentals are complex  Difficulties in responding to needs  Silos 5

Problem statement 16 key areas  Impact on the economy  Skills needs  Low and unmet expectations  Poor linkages  Funding & management of funds  Addressing current and future needs  Qualifications vs competence  A confusing QA system  Accessibility  Complexity of public sector skills framework  Governance  Bureaucratic inefficiencies  Effectiveness and efficiency questioned  Structural issues  Challenges in the management of the skills system  No single or simple solution to the problems 6 There is a general sentiment that SETAs are not assisting in addressing the skills shortages that are holding back economic growth and which act as a barrier to inward investment and job creation. Quote: DHET Guidelines on Implementation of Seta regulations

Key Learnings 7  Wide agreement on problem statement, vision, key fundamentals and outcomes  Sector silos a major constraint on the system There is a need to:  Design and build a long term sustainable system  Put increased effort into making the fundamentals work  Have wide consultation  Have an implementation plan that does not disrupt delivery.

International findings 5 differing state/market models UKA worst-case ‘statist’ model. Supply-side led and imposed by the state. Little employer involvement. NetherlandsA best-case ‘social compact’ model. Strong employer input with ‘college–sector skills council– industry’ linkages and governance SingaporeA best-case development state model: state interventionist and successful in directly linking education and training to industrial policy needs over 5 decades BrazilA good employer-dominated system – the 1940s ‘S- system’ is still operating, led by employers and effectively meets training needs USAA successful voluntary model : Workforce Investment Boards broker voluntary partnerships between colleges, employers and the local or regional state. Community colleges providing employers with customised training 8

Vision 9 An effective skills system will need:  Ramping up  Strong partnerships and buy in from all sized business  Skills part of wider agreement on economy  Link skills system, education system and workplace  Meeting current and future needs  Balance employer and development needs  Addressing real skills needs  Contributing to growth, productivity and employment An effective skills system will need:  Ramping up  Strong partnerships and buy in from all sized business  Skills part of wider agreement on economy  Link skills system, education system and workplace  Meeting current and future needs  Balance employer and development needs  Addressing real skills needs  Contributing to growth, productivity and employment An inclusive and integrated skills system that is responsive to the needs of the economy and society now and in the future.

Fundamentals  Identification of sector skills needs  Strategic skills planning  Learning interventions: development and implementation  An inclusive system  Provider profile  Policy alignment  Monitoring & Evaluation  Quality Assurance  Governance and leadership  An effective & credible funding model  Human capacity  Brokering partnerships and collaboration  Effective back office functions and shared services 10

MODELS - 6 organising principles Logical consolidation Multi-Sectoral (as current) Clusters based on natural fit within broad sectors and shared skills focus Clustering - broad economic sectors Mapping of main value chains in the economy. e.g. food, energy; minerals Value chain clustering Focus on coordination with employers at a regional, city-region and local level Regional and local presence Stakeholder bodies agree on how to best implement skills development voluntarily A voluntary system Based on broad occupational groupings e.g. Artisans and engineering, Accounting and finance, managerial and administrative etc. Occupationally based system 11

No single organizing principle No single organizing principle will work for South Africa An inflexible system that does not allow for elements of each one will also not work Inflexibility due to the way governance has been structured with boards in each of 21 sectors. Agreeing national priorities is difficult The recommendation: remove the sector-based accounting authorities, establish a single governance structure for the entire skills system, retain many of the sector structures, but not all, and different structures will be provided for. 12

Provincial Structures Needs assessment Skills interventions implementation Monitoring reporting and evaluation Provincial Structures Needs assessment Skills interventions implementation Monitoring reporting and evaluation Sector Bodies Serve the needs of particular sectors Skills research Skills development implementation Sector Bodies Serve the needs of particular sectors Skills research Skills development implementation Stakeholders Employers from large to SMME’s NGOs / Co-ops National Skills Council Planning, Management of funds Shared services Standard setting and QA of provisioning Monitoring and evaluation Local Structures Liaison with local municipalities and stakeholders Develop projects Managing funds allocated Monitoring and reporting Local Structures Liaison with local municipalities and stakeholders Develop projects Managing funds allocated Monitoring and reporting Learners

Proposed interventions towards a new system 14 ProcessResponsibility White Paper Minister of Higher Education and Training MTT report into SETA functioning and performance DHET Skills Branch supported by a Task Team LMIP and building an Institutional Mechanism for Skills Planning DHET Planning Branch and HSRC SETA clusteringDHET Skills Branch SETA Turn Around Strategy – strengthening capacity of DHET to drive the skills agenda DHET Repositioning of the NSFDHET Business Case for the new skills systemDHET

Conclusions  Principles & framework for decision making. An “integrated skills system” debate, not a “landscape” review  Skills System recommendations Hybrid model with National skills council, provincial and local structures with blend of sector, supply chain, occupational  Managing change Strategic decision for change – the status quo is not going to address current or future challenges  Human Resources Develop the skills of those employed in the system 15 Follow the #hrdcsummit