DEPARTMENT OF HIGHER EDUCATION AND TRAINING BRIEFING ON PROGRESS ON THE MIGRATION OF ADULT EDUCATION AND TRAINING (AET) AND TECHNICAL AND VOCATIONAL EDUCATION AND TRAINING (TVET)SECTORS Joint Meeting of the Select Committee on Education and Recreation, Portfolio Committee on Higher Education and Training and Portfolio Committee on Basic Education NSDS & SETAs BEYOND 2016 WITHIN THE CONTEXT OF AN INTEGRATED, DIFFERENTIATED POST SCHOOL EDUCATION AND TRAINING SYSTEM 04 June 2015 draft discussion doc nsds setalandscape - DHET

What is the problem we are trying to fix? Practical issue: SETA’s current registration comes to an end in March 2016, as too does that of the National Skills Development Strategy III (which sets the broad framework for levy income disbursement). It is time to re-establish and/or re-structure Effectiveness issues: In 2013-2014 the targets set for SETAs were not met – Target bursaries 17 658 Achieved 19 551 Target learnerships 86 211 Not Achieved 75 503 Target internships 12 072 Not Achieved 8 017 Target FET placement 22 765 Not Achieved 11 963 Efficiency issues: R2,6 billion not committed or allocated at the end of 2013/4 financial year, hence transferred to NSF Employers and unions complain about these issues! 1 draft discussion doc nsds setalandscape - DHET

What is the problem we are aiming to resolve? Integrative problems: The skills development system, underpinned by the levy-grant system, was developed in the 1990s by the Department of Labour. The Department of Labour was, at that time, driven by a different set of imperatives (responsiveness to labour market needs) to that of the Department of Education (access to quality teaching and learning for all) and as a result the policies of the two departments were not aligned. And although the Department of Higher Education and Training was established in 2009, it has taken time to resolve historical differences based on these separate traditions. The ‘White Paper for Post-School Education and Training: Building an Expanded, Effective and Integrated Post-School System’ (hereafter WP) published by the Minister of Higher Education and Training in early 2014 seeks to bridge this divide and provide a ‘both access/quality and responsiveness’ model for the post-school education and training system 2 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET What is the opportunity we are aiming to embrace? From 2009 individual changes have been made to bridge the gap between institutional learning and workplace learning but task incomplete. In 2014 Minister Nzimande published ‘White Paper for Post-School Education and Training: Building an Expanded, Effective and Integrated Post-School System’ (hereafter WP) which argues for a INTEGRATED system. It states that: The roles of the SETAs and the NSF will be simplified and clarified, and their capacity built in line with their core functions. SETAs will focus on developing the skills of those in existing enterprises and the development of a skills pipeline to such workplaces. Their focus will be narrowed to engaging with stakeholders in the workplace, establishing their needs, and ensuring that providers have the capacity to deliver against these.” (WP, emphasis added, p. xvi) 3 draft discussion doc nsds setalandscape - DHET

NSDS IV: To steer planning & resources NATIONAL SKILLS DEVELOPMENT STRATEGY IV (2016 – 2021) Educated, skilled & capable workforce for inclusive growth   At a first level of detail - Output targets: Targets for managers (e.g. focus on the public sector and SMMEs e.g. y% of public servants have required professional designations); Targets for professionals (e.g. as percentage of 1000 population); Targets for associate professionals; Targets for service and clerical workers; Targets for the trades (e.g. 30 000 artisans per year by 2030); Targets for plant and machine operators; Targets for trained elementary workers.   At a second level of detail, targets for individual priority occupations under each heading (cf. national scarce skills list) As a third order set of targets, general measures to improve the access & throughput of learners entering and succeeding in relevant qualifications linked to occupations in demand e.g. lecturer development, equipment, infrastructure, work placement etc. And as a fourth level, a strategy for each priority occupation is outlined, in relation to identified Centres of Specialisation 4 draft discussion doc nsds setalandscape - DHET

Major social and economic groups affected by the problem Students lose because there is no systemic way in which to secure workplace- based learning opportunities once they complete their institutional studies, with the result that they find it difficult to bridge into employment – a problem most severe for those at TVET colleges. They must navigate 21 different SETA systems; Colleges and universities lose because of the complexity of the system – for those seeking grants to support their students, they must engage with 21 different funding sources (SETAs),each with their own funding procedures and timeframes (see Annexure which details these procedural differences). Employers Frequently complain that they have to train students ‘again’ when they enter their workplaces; and because grants available for ‘learnerships and internships’ are seldom aligned to formal, public sector qualifications. Employers also complain about the administrative difficulties of securing grants, with many declaring it to be a ‘tax’ which they must pay as they are unable to navigate the systems (see list of up to 38 compliance documents that a company must submit for grant applications in Annexure – and these are not even the same for all SETAs); Workers find it difficult to re-enter the learning system Unemployed lose because they must apply to 21 different institutions for opportunities, each with different timeframes and criteria. 5 draft discussion doc nsds setalandscape - DHET

System-level problems Aligning the labour market and E&T cannot be done through a sectoral lens (as many occupations are cross-sectoral e.g. electricians work in 17 economic sectors and training them sectorally makes little sense from the provider perspective) Each SETA has its own systems and procedures making it very hard for anyone outside of each sector (students, public providers, professional bodies and others) to interface with the system; The SETA systems are very complicated, there are a range of ways in which these processes can be aligned and simplified but this requires a national system; SETAs have very uneven capacity – a handful are excellent, the majority are weak and one or two are dysfunctional. Attempts to remedy the situation through the appointment of Administrators has been very uneven; The cost of managing 21 different systems is excessive – streamlining will be more cost effective; There is a remaining schism between the public provider system (colleges and universities) and the SETA system (with their link to employers and their ability to provide incentives to them). 6 draft discussion doc nsds setalandscape - DHET

System effectiveness and efficiency: The efficiency problems are at SETA level. Government has not prescribed standard rules and procedures for all to follow. SETAs have therefore each interpreted the range of compliance rules of government in their own ways. Some SETA Boards also contribute to the problem as they have, on too many occasions, become interested parties when it comes to the disbursement of funds – steering funds to preferred service providers. They have also too often confused the roles of ‘board’ with that of executive authority – which further slows the disbursement of funds. 7 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET Underlying issues: SETA systems are not uniform: All SETAs have developed their own application and disbursement procedures, and they differ on issues such as: Who may apply; What is funded; The length of the process – although all are long Timing and methods of advertising application opportunities Application forms differ and other processing procedures Corporate information required – this too is very extensive Payment of tranches Monitoring and verification reporting requirements Problem? These differences make it very difficult for public and private providers and those who relate to many or all SETAs, such as the professional bodies. The White Paper says ‘The roles of the SETAs and the NSF will be simplified and clarified’ 8 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET Current challenges Some SETAs with strategic importance have low income due to low wages of those in the sector e.g. AgriSETA so difficult to support rural development strategies Currently it is difficult for labour market actors to influence the responsiveness of public colleges and universities as there is no systemic way for them to do so. Funding is an important lever to do this but there is presently no link between voted funds and levy funds – overlaps and gaps persist. But the core purposes of these funding sources are complementary: voted funds for institutional learning and levy funds for incentives to employers for workplace learning. The challenge is to get these two to work together for responsiveness 9 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET However … There is no desire to disrupt the system unduly Employers and workers must continue to be central and incentives for their participation must not only continue, they must be strengthened State strategies to strengthen and grow the economy must inform skill prioritisation, so funding of skills development for these strategies must be prioritised (meaning it must be possible to secure funding for these programmes beyond that collected in the sector only). The role of the National Skills Funds needs to be strengthened for this purpose. 10 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET Solution: Do three things at the same time Address practical, efficiency and effectiveness challenges in the current SETA system by streamlining the 21 SETA systems; Align the SETA system and the public education and training institutional system so that The needs of the labour market can be conveyed to the public education and training providers in a systemic way and these institutions can be more responsive, and The levy funds can be used to help learners from the public education and training system to gain access to workplace-based learning opportunities and progress to employment in needed areas thereafter The system itself is not unduly disrupted so that current good practice can continue. 11 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET Process followed White Paper imperatives (integrated PSET system): SETAs and NSDS not a stand-alone system but integral to broader PSET system. Policy advice carefully studied: The Ministerial Task Team on SETA performance (MTT); Skills System Review Technical Task Team (SSR TTT); Implication: Significant challenges need significant changes! Lessons learnt from innovation, experience and research e.g.: National Career Advice Portal (NCAP) University Branch planning ~ Ministerial Statement Artisan programme ~ cross-sectoral qualification Skills for and through SIPs ~ occupational teams, HSRC research (Theme 4 – Sectoral Systems of Innovation) … 12 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET Three Basic Concepts Learning pathways (from school to work) SETAs as public sector ‘intermediaries’ between the world of work and institutions of learning (universities and colleges) – gathering the needs of the labour market and presenting them to the provider system “Occupation” as bridge between ‘job description’ and ‘qualification’ 13 draft discussion doc nsds setalandscape - DHET

SETAs as public sector ‘intermediaries’ SETAs as intermediaries? They must stand between the labour market and the public provider education and training system to facilitate communication and collaboration. Labour Market SETA Colleges Universities 14 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET Purpose White Paper – Driver MTT/ HRDC TT/ OECD – Research Looked at practices NCP/ Ministerial / Statement and (university)/ OCC Team/ SIPs/ Artisan What should SETA do (functions) and be (structure) post 2016 End March 2016 (End of term of SETAs) All is not well – effectiveness and efficiency 15 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET Roles of SETAs (WP) The primary roles of SETAs post-2016 will be: Determine the skill needs of employers by occupation using the OFO in their sector, report to Occupational Teams under DHET for cross-sectoral consolidation and analysis. (DHET will consolidate across sectors, generate national scarce skill list and inform providers); Support the development of institutions to meet these needs (from qualification design to qualification delivery); Secure workplace-based learning opportunities for learners; Support institutional and workplace-based learning of the current workforce; 16 draft discussion doc nsds setalandscape - DHET

Annual planning and resourcing cycle: February E&T inst & SETABs campaign Firms apply April Grants committed July E&T inst & firms informed August E&T inst plans submitted November Plans approved E&T inst determine areas of ‘specialisations’ Partnership agreements struck Where partnerships struck, SETABs can fund support measures too draft discussion doc nsds setalandscape - DHET

Special role of government departments Proposed that government departments have special role in relation to planning; Departments with a role in relation to a sector have representatives on boards; They are responsible for ensuring that national strategies are integrated into sectoral briefs; Responsible Departmental Heads must sign-off sectoral plans to ensure that they embrace national strategies in the sector. Government must use DHET templates for their own plans so that these can be consolidated; Govt. training funds used for quality-assured training 18 draft discussion doc nsds setalandscape - DHET

Implications for employers and workers Workplaces will still submit Workplace Skills Plans indicating their needs (in occupational terms, as is the case currently); These will be captured on a central system Grants will be paid to employers to provide workplace learning – but where grant claims are in excess of funds available, there will be a prioritisation process informed by sectoral briefs which embody state strategic projects Information about grant applications and approvals will be made available to public institutions for planning purposes Grants to strengthen the capacity and relevance of public provision will be aligned to national priorities Centres of Specialisation will be encouraged as there are not enough funds to build the capacity of all to do everything – firms seeking graduates with these skills will link to Centres (not local only) 19 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET Implications flowing from these roles (continued) SETAs will be working more closely with public institutions and it is highly desirable that their planning and resourcing cycles and systems are aligned, hence it is proposed they become ‘Special Delivery Units’ of DHET in terms of Section 7B of Public Service Act (1994, proclamation 103 of 1994). These will be established by govt. gazette issued by Minister HET (can mean a smooth transition given it is proposed that their scope remains unchanged); Special Delivery Units will continue to have stakeholder Boards, but these will become advisory bodies, no longer Accounting Authorities. Propose name change: SETA to Sector Education and Training Advisory Bodies (SETABs) to reflect role change.; 20 draft discussion doc nsds setalandscape - DHET

Implications flowing from these roles (continued) SETAB term of office: permanent, no longer 5 year; SETAB’s scope of coverage – unchanged (except where need/performance requires intervention) SETAB’s boards – composition largely unchanged, except stronger role of sectoral departments to support national strategies (must confirm SSPs) Administration budgets: A review will be required of Board and CEO remuneration, given change of roles ; Board and CEO’s term of office will be five years A shared services function will be established in DHET to enhance efficiency and to reduce costs flowing from duplication 21 draft discussion doc nsds setalandscape - DHET

SETAB role regarding grant allocations SETABs will manage the following grant funding (as shall be specified in the SETAB Establishment Govt. Gazette); Administration budget – although a portion of this will support the shared services unit; ‘Mandatory’ grant (to become known as Workplace Skills Planning Grant) (20%); Sectoral component of Discretionary Grant (currently 20%) to become known as Sector Specific Grant to be used for sector-specific initiatives; Projects funded from the National Skills Fund (applications from SETABs, supported by Boards, will need to be managed). 22 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET National functions HRD Council will, alongside the public, comment on proposed NSDS IV developed by DHET; National Skills Authority (NSA) – to monitor and evaluate SETAB functioning (WP: Xvii/68) with alignment to SETA Branch functions; NSA also to develop establishment and running of a dedicated training facility for the training of those officials and others in the performance of required functions (cf. SAIVCET focus on qualification/curriculum delivery); NSA to report directly to the Minister 23 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET System advantages: Massive simplification and streamlining of processes: ONE procedure for applications (not 21 parallel systems) ONE template (not 21 different templates) ONE set of prescriptions (not 21 different ones) ONE set of timeframes (not 21 different cycles) ONE set of grant levels (not 21 different sets of grants for the same programmes, although some sectoral factors) Alignment with broader PSET system: Workplace and institutional learning considered together Role of levy and fiscus clarified (not double-dipping, overlapping, gaps) Fiscus serves occupational priorities not only levy Clearer, simpler system for beneficiaries …. 24 draft discussion doc nsds setalandscape - DHET

Strengthening capacity Capacity of the Department and the other role players should be strengthened for maximum utilisation of the resources and impact and these are: Internal DHET SETABs clustering for optimum management and coordination One DHET SETAB cluster manager at senior manager level National Skills Fund Shared Services Unit to be adequately capacitated SETABs Employers Workers Provinces 25 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET Diagrammatic impression of integrated system draft discussion doc nsds setalandscape - DHET 26

draft discussion doc nsds setalandscape - DHET Way Forward – final implementation April 2017/8 From date of policy finalisation – work to make legislative changes to Skills Development Act; April 2016 – SETAs re-established and NSDS III extended until March 2017 or March 2018; Build shared services model and streamline functioning of grant payments (commencing around SIPs currently); Build financing model (including alignment with University and College Branch) Build functionality of Skills Branch with SETAB Cluster Managers Build Skills Planning Unit and its interface with Skills Branch Build systems in the National Skills Fund to manage PIVOTAL grant payments in efficient & effective manner. Above timeframes only possible with Phakisa-style focus. Alignment with WP Implementation Process. 27 draft discussion doc nsds setalandscape - DHET

draft discussion doc nsds setalandscape - DHET THANK YOU draft discussion doc nsds setalandscape - DHET