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

2. 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

3. 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

4. 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

5. 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

6. Overall Non-Financial Performance of the SETAS

7. 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

8. 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

9. Workplace Based Learning Challenges

10. Workplace Based Learning Challenges

11. 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

12. Workplace Based Learning Interventions

13. Workplace Based Learning Interventions

14. Workplace Based Learning Interventions

15. Bursaries

16. Funding Framework for SETAs and 2017 MTEF Priorities

17. 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 R This compulsory levy scheme was introduced with effect from 1 April 2000

18. 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 R or more to pay a skills levy equal to 1% of their annual payroll

19. 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

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

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

22. SETA Grant Regulations
SETA Skills Levy : Breakdown in line with SETA Grant Regulations
SETA Grant Regulations

23. SETA Expenditure Performance vs Budget
2013/14
2014/15
2015/16
Budget
Actual
R'000
Administration
Mandatory
Discretionery

24. SETA Expenditure Performance vs Budget

25. 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

26. 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

27. Risks, opportunities and challenges in the SETA System

28. 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

29. 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

30. 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

31. 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

32. 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

33. 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

34. 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 learners in universities and colleges (in line with the targets – bursary/workplace based learning) , this number increased in 2015/16 to ;
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.

35. Thank You

36. Questions