1. NATIONAL SKILLS FUND (NSF) PRESENTATION TO LABOUR PORTFOLIO COMMITTEE 29 MARCH 2006

2. 2 PRESENTATION OUTLINE  PRIMARY OBJECTIVES OF NSF  LEGISLATION & CORPORATE GOVERNANCE  MAIN TASKS  EXPENDITURE TRENDS  ACHIEVEMENTS  NEW FUNDING WINDOWS  PRIORITIES/CHALLENGES

3. 3 PRIMARY OBJECTIVES Skill Development Act stipulates that: Funds in the NSF may be used only to fund:  Projects identified in the National Skills Development Strategy (NSDS) as National Priorities or  Other projects related to the achievement of the purpose of the Skills Development Act as the DG determines

4. 4 LEGISLATION & GOVERNANCE  NSF was established in terms of Skills Development Act, 1998  Main source of income for NSF is 20% of skills levies collected  Minister of Labour decides on allocations from NSF on advise from National Skills Authority (NSA).  Director-General:Labour is the accounting officer of the NSF

5. 5 GOVERNANCE STRUCTURE NSAMinister of Labour DG: Labour DDG: ESDS M: Admin and Systems SEM: NSF EM: SSPEM: SP

6. 6 MAIN TASKS  Devise and recommend policy for NSF  Contribute to the design and corporate management of the NSDS  Establish systems and procedures for grants disbursement in accordance with approved policy  Design and implement systems/processes to monitor use of NSF funds  Liaison with NSA in design and development of NSF funding windows and criteria  Project management

7. 7 EXPENDITURE TRENDS YEARINCOME ‘000 EXPENDITURE ‘000 SURPLUS ‘000 2000/1314,186177,412136,775 2001/2589,343262,550326,793 2002/3802,844530,118272,726 2003/4930,712707,196223,516 2004/51,085,2751,177,224(91,949) 2005/6 as at 23 March 2006 942,142596,000346,142

8. 8 NSDS I FOCUS

9. 9 NSDS I ACHIEVEMENTS  Social Development Projects: R722 m spent from 2000-2004 for training of 421,710 unemployed persons (99% black, 57% female 2% people with disabilities).  Strategic Projects: 89% of R1,1 billion has been disbursed over three- and a half year period (Learner profile- 95% black, 55% women and 0,05% people with disabilities). Deliverables include:  47 189 learners benefited from ABET & other NQF level 1 programmes  44 201 people received additional skills from structured learning programmes  29 200 SMME’s received skills training/mentoring  9 332 will receive learnership qualifications  Learnerships (unemployed): A total of R602 million has been allocated, to facilitate 21,482 learners to obtain learnership qualifications

10. 10 NSDS I ACHIEVEMENTS… continue  Bursaries: 2001-2005 NSFAS (Under graduate)Total amount – R243,6 million Bursaries awarded – 26,789 (Include students with disabilities of 1593 – R43,7 million NRF (Post graduate)Total amount – R87,8 million Bursaries awarded – 2,878 (Include students with disabilities of 102 – R3,8 million)

11. 11 NSF 2005 -2010

12. 12 NSDS 2005-2010 & NSF NSDS LEVERS 20% LEVIES SETA GRANTS NSF FUNDING WINDOWS 80% LEVIES SETAS NSF

13. 13 5 YEAR FUNDING FRAMEWORK R Billion NSDS SETAs NSF

14. 14 NSF FUNDING WINDOWS NoNo NSF Funding WindowPercentage budget 5 years NSDS Indicators/MandatesBudget 5 years ‘000 NSF targets 1Social Development Initiatives (Incl EPWP) 37%Indicator 3.1(unemployed trained)1,988,000568,253 unemployed people 2Adult Basic Education & Training (ABET) 12%Indicator 3.3 (ABET)609,000100,000 unemployed people 3Critical Skills Support25%Indicators 1.2 & 4.1(Information guideline & delivery of learning programmes) 1,289,00037,038 unemployed people 4Provisioning Support4%Indicators 2.4 & 5.3 (national standard in skills development & quality improvement) 176,000 5Industry Support Programme5%Indicator 2.6 & Job Summit Agreement (training for employment/re-employment & social plan) 266,000 6Informal Sector Support5%Indicators 3.2 (non-levying enterprises, NGO’s, CBO’s, Co- ops);4.3 (new ventures) & 5.2(provider institutions 265,0001600 organizations, 2100 young people trained & mentored 5 institutions 7Constituency Capacity Building & Advocacy 3%Indicator 5.4 (stakeholder capacity& commitment) 178,000 8Special Projects4%NSDS Principles223,000 9Discretionary projects & Innovation 5%SDA263,000 Total5,204,000

15. 15 NSF WINDOW 1 1.Social Development Initiatives (incl EPWP) PurposeSupport Indicator 3.1 Target Beneficiaries Unemployed/Under-employed people; Communities Who can apply Government Departments; Private sector; NGO’s/CBOs; FETCs Core CriteriaNeed Basis; Alignment with provincial and local economic-and development strategies; ‘Placement’;

16. 16 NSF WINDOW 2 2.Adult Basic Education & Training PurposeSupport Indicator 3.3 Target Beneficiar ies Unemployed Who can apply DOE; Public/Private Providers; NGO’s Core Criteria Institutional capacity of provider; Sub- contracting; Quality assurance; Reach into rural areas

17. 17 NSF WINDOW 3 3. Critical Skills Support PurposeSupport Indicator 1.2 Identification of Scarce Skills Support Indicator 4.1 Accredited programmes Target Beneficiarie s Students; Unemployed; Learners/graduates Who can apply National institutions dealing with bursary admin; SETAs; ESDLEs Core Criteria Focus on national priorities/scarce skills; Institutional capacity; Exit strategy; Financial need and academic performance (bursaries)

18. 18 NSF WINDOW 4 4. Provisioning Support PurposeSupport Indicator 2.4 -National standard of good practice in skills development Support Indicator 5.3 -Improvements in quality of services Target Beneficiarie s Employers (public and private); Employees (2.4) SAQA; ETQAs (5.3) Who can apply SAQA; ETQAs (5.3) Core Criteria National significance; Accessibility SAQA advise on ETQA applications

19. 19 NSF WINDOW 5 5. Industry Support Programme PurposeWorkplace skills development support: Support Indicator 2.6.- Linked to DTI Incentive Programme for new investments and expansion initiatives Social Plan Technical Support Facility (SPTSF): Support Job Summit Agreement Target Beneficiarie s Newly employed workers and applicable employers Firms to be affected by major job losses Core Criteria Applications – within 6 months of DTI approval Reasonable certainty that the firm can be turned around; Cost of intervention should not exceed potential value to be derived (SPTSF)

20. 20 NSF WINDOW 6 6.Informal Sector Support PurposeSupport Indicators 3.2; 4.3 & 5.2 Target Beneficiar ies Non-levy paying enterprises;NGOs;CBOs; Community based Co-ops; Youth Provider institutions (5.2) Who can apply Non-levy paying enterprises; NGO’s; CBO’s; Community –based co-operatives Core Criteria Financial viability, Potential for growth and value adding in community

21. 21 NSF WINDOW 7 7. Constituency Capacity building & Advocacy PurposeSupport Indicator 5.4 Target Beneficiar ies NSA Constituencies Relevant Government Departments as represented on NSA Who can apply Target Beneficiaries Core Criteria NSA approved workplan PFMA compliance

22. 22 NSF WINDOW 8 8.Special Projects PurposeSupport Principles of the NSDS as well facilitative measures to the NSDS 8.1 Promotion of NSDS/Marketing 8.2 Research 8.3 Supplementary support towards people with disabilities Target Beneficiarie s NSA Constituencies/general public (8.1) NSA, DoL, SETAs (8.2) People with disabilities (8.3) Core Criteria Approved workplan (including budget)- 8.1 Approved research agenda (8.2) NSF or SETA approved projects (8.3)

23. 23 NSF WINDOW 9 9.Discretionary Projects & Innovation Notes To support the SDA Gives expression to provisions of SDA for DG discretion

24. 24 NSF Strategic Projects  It is not a funding window but an implementation model  Focused on supporting provincial growth & development strategies or other national priorities  Budget of R 1 billion over 5 years drawn from selected funding windows  Allocations to be made to provincial governments, with Premiers' offices the expected custodians of projects

25. 25 ACHIEVEMENTS NSDS II..31/12/05  Social Development Initiatives: R131,7 m spent facilitating training of 80,000 unemployed persons (99,7% black, 58,6% women & 3% people with disabilities);  Learnerships: Committed R181 m to benefit 7,330 unemployed learners on various learnerships. In addition to this a total of R88 m was committed for learnerships (2300) that are implemented through ESDLEs. A RFP was issued to SETAs in November 2005 to submit projects for learnerships, internships and apprenticeships. 23 applications were received by the closing date of 19 January 2006, and are being evaluated;

26. 26 ACHIEVEMENTS NSDS II..31/12/05  Bursaries (scarce skills): R26 million was allocated to NRF for 2005 academic year-funding 621 post-graduate bursaries. R49 million was allocated to NSFAS for 6,320 under-graduate bursaries  Industry Support Programme: By 31 December 2005, the programme facilitated 3,926 new job opportunities since inception. Of these workers, 94% are blacks, with 70% being black women.

27. 27 ACHIEVEMENTS NSDS II..31/12/05  Social Plan Technical Support Facility: R17 million was allocated to NPI for 2005/06 financial year. R10,4 m was spent by 31/12/05 which inter alia contribute to the prevention of job losses (62 future forums and 34 turnaround strategies established)  ABET: RFP was issued in November 2005 to allocate R105m for training of approximately 18,000 unemployed learners. 146 proposals were received by the closing date in January 2006, and the evaluation process are being finalized.

28. 28 NoNSF Funding WindowBudget distribution 2006/07,000 1Social Development Initiatives (Incl EPWP)571,567 2Adult Basic Education & Training (ABET)236,098 3Critical Skills Support768,090 4Provisioning Support38,800 5Industry Support Programme76,343 6Informal Sector Support53,315 7Constituency Capacity Building & Advocacy37,000 8Special Projects50,000 9Discretionary projects & Innovation49,500 Total1,880,713 2006/07 Budget Distribution

29. 29 2006/07 Budget Distribution

30. 30 PRIORITIES/CHALLENGES  Ensure smooth transition between NSDS I and NSDS II  Review/develop course fee model under the Social Development Funding Window (including learner allowances, NQF alignment, etc);  Strengthen monitoring & quality control systems for all funded projects

31. 31 PRIORITIES/CHALLENGES… continued  Review /strengthen management capacity of the NSF (including provincial/labour centrelevel) to ensure the effective and efficient functioning of the NSF;  Increasing demands placed on NSF (financial and human resources) based on an increasing awareness about the work of the Fund