Proposals for the New National Skills Development Strategy (NSDS) & SETA Landscape

Proposals for the New National Skills Development Strategy (NSDS) & SETA Landscape

2 Format of Presentation Status Quo Review of DHET Proposals Employer response Skills too important to leave to government

3 Status Quo Still operating within the parameters of the existing legislation governing skills development and the associated skills levy payment. Minister has re-stablished all SETA s for a period of two years as well as extended NSDS III for another two years until 2018 Proposed changes only envisaged to be implemented in 2018

4 Status Quo SAQA NQF Skills Development Oversee development & implementation of NQF Higher Education and Training (HETC) Provision for development by means of a levygrant scheme SETA SETA s to administer the levy-grant scheme funds Regulation of Standard Generating Bodies Accreditation of bodies responsible for monitoring & auditing achievements Further Education and Training (FETC) General Education and Training (GETC) wage bill R500 000 must pay 1% levy Grants must be applied for through mandatory and/or discretionary grant funding Develop and implement sector skills plans promote learnerships

5 Legislation governing Skills Development Department of Education Department of Labour Standards SAQA Quality National Skills Authority Skills Development Planning Unit NSB s SGB s ETQA s (per industry sector) Moderators 21 SETA s (per industry sector) Assessors DOL NSA Training Providers SARS Company Refunds/ Grants

6 SETA's 80% SETA Allocation to QCTO, 0.5% STATUS QUO SARS, 2% National Skills Fund 20% National Skills Fund, 18% Discretionary Grant, 49.5% SETA Admin, 10% Madatory Grant, 20%

7 Review of DHET Proposals On 10 November 2015 Minister of Higher Education & Training (Blade Nzimande) published proposals for changes to functions of SETA s and allocation of Skills Development Levy Funds. The above mentioned proposals came about as a result of the White Paper for Post-School Education and Training: Building an Expanded, Effective and Integrated Post-School System released in January 2014.

8 What is being proposed? The Minister s proposals fall into three broad categories; namely: Sector Education and Training Authorities; Skills Development Levy; and National Skills Development Strategy.

9 Review of DHET Proposals In terms of Sector Education and Training Authorities the key proposals include: SETAs should be located directly under the DHET as delivery units of the DHET SETAs should be renamed Sector Education and Training Advisory Boards (SETABs) SETABs will be required to help learning/training institutions to identify what is required by the workplace in order for SETABs to assist learners in finding workplace-based learning opportunities. SETABs should become permanent structures and no longer only exist for five-year term periods

10 Review of DHET Proposals In terms of Sector Education and Training Authorities the key proposals include: SETABs should become permanent structures and no longer only exist for five-year term periods Scope of SETABs will remain the same as per SETAs Twenty-one (21) SETABs remain, although individual mergers may be required, the reason for this is to avoid major disruption to service delivery and to avoid creating bigger sectoral bodies which will result in greater distance between the management of the institution and the companies served. Functions such as skills planning, funding and quality assurance should be centralized under the DHET to end the varying processes and contractual arrangements which exist between the SETAs.

11 Review of DHET Proposals In terms of Skills Development Levy, the key proposals include: The proposals will mean a shift in skills levy income from the SETAs to the National Skills Fund, and increased ministerial control The Mandatory Grant will become known as the Workplace Skills Plan Grant and SETABs will be responsible to quality assure and support the submission of accurate data. The Discretionary Grant will become known as the Sector Specific Grant and to ensure better coordination of the skill fund to support the National Development Plan, 80% of the Sector Specific Grant will be located in the National Skills Fund.

12 Review of DHET Proposals In terms of Skills Development Levy, the key proposals include: The National Skills Fund will allocate funds directly to the Quality Council for Trades and Occupations. The National Skills Fund manages that share of the levy funds historically known as the PIVOTAL grant. The National Skills Authority (NSA) should monitor the work of the SETABs and advise on the broad allocation of the NSF

13 SETA's 39.90% PROPOSED CHANGES 2018 Discretionary Grant, 9.9% SARS, 2% Workplace Skills Grant, 20% National Skills Priorities, 18% SETA Allocation to QCTO, 0.5% SETA Admin, 10% PIVOTAL Gra nt, 39.6% National Skills Fund 60.10%

14 Review of DHET Proposals In terms of the National Skills Development Strategy (NSDS) IV, the key proposals include: There is a disjointed approach between employers making use of specific job-descriptions vs. qualifications being issued by learning institutions. There is a need for common language to be used by all stakeholders which speaks to occupations. It is proposed that both job descriptions as well as qualifications should be mapped to occupations and the language to be used should be that of the Organising Framework for Occupations (OFO).

15 Review of DHET Proposals In terms of the National Skills Development Strategy (NSDS) IV, the key proposals include: It is proposed that NSDS IV speak to four levels of output targets, i.e. 1. the first being major occupational bands of the OFO, 2. the second level providing detailed occupational priorities informed by the National Scarce Skills set (itself informed by sectoral targets). 3. The third being targets set to have the learner entering the skills development system and progressing through to completion and lastly, 4. the fourth level being the implementation of strategy for each priority occupation.

Proposed SETA Implications & BUSA Solutions SETAs to SETABs costly and SETAS become less relevant; dilution of stakeholder involvement, loss of sector ownership Propose strengthening SETA model in sectors where it works Well performing SETAs should be retained, other arrangements to be developed for non performing SETAs Requires sector by sector review undertaken by government & stakeholders. Where SETAs are retained, their functions should be more focused. 16

17 Proposed SETA Implications & BUSA Solutions SETA functions should be- To produce labour market information to identify priority skills Act as bridge between employers and training providers to articulate skills demands and training needs and also promote workplaces for learning To support the development of occupational standards and design of qualifications in line with QCTO requirements SETAs should continue to have a role in the authorization of SDL grants but lose other functions such as quality assurance. SETA boards to include more senior employer representatives

18 Proposed Skills Levy Implications & BUSA Solutions Employer concerns about the operation of the SDL fall into 3 categories: The use of levy funds The control and management of significant sums of money Complexity and bureaucracy associated with the disbursement of grants

19 The use of levy funds Skills Development Levies Act, 1999 SDL is a levy imposed to encourage learning and development in South Africa and is determined by an employer s salary bill. The funds are to be used to develop and improve skills of employees

20 The use of levy funds Principle purpose of levy should be retained Proposals allow for possible source of revenue at the disposal of the Minister to contribute to costs of postschool education and training Past has shown that DHET required SETAs to support government priorities before such as supplementary funding for National Student Financial Aid Scheme; Fees Must Fall Campaign

21 The control and management of significant sums of money It is Proposed that a SKILLS FUNDING AGENCY be established. Should be Government and Stakeholder managed Create an efficient payment system Ensure that payments are intra vires, authorized Regular published accounts Data to assess impact

Complexity and bureaucracy associated with the disbursement of grants It is proposed that: For companies who have submitted skills plans and received grants for last 5 years be exempt from a portion of the levy equivalent to mandatory grant No SETA management of funds Separate exercises required to make assessments of skills needs and eligibility of grants for training SETAs to collaborate to develop common systems 22

23 Issues around operation of SDL Large unallocated balances in some SETA accounts unacceptable, funds should be deployed to deal with priority needs DHET proposes that skills grants will be paid to companies where courses are linked to NQF; could mean that in-house courses will not be eligible for SDL support. PROPOSED THAT: Support for original purpose of the levy is endorsed Further consideration is given to ways the employer can discuss and agree its stance on levy issues

24 Too important for government alone Changing world: Developed countries lose 216 million workers by 2050: Sub-Saharan Africa gains 328 million in labour force Organisation of work is changing Demographic challenge Impact of technology and innovation Imperative to drive economic growth, competitiveness and productivity Medium to long-term prospects for SA are positive

25 Employer roles Number of roles that employers can play in skills development Direct provision of quality training Training providers and participants in training market Determination of demand and skills needs Design of training programmes, especially standards-based and competence-based programmes Management of public-sector provision: Policy Institutional Management Technical support and access to facilities for work experience and teacher/instructor training

26 SETA Grant Regulations Judgement On 7 August 2015 the Labour Court handed down judgement in the application brought by BUSA to review and set aside certain aspects of the SETA Grant Regulations made by the Minister of Higher Education in December 2012. New regulations reduced the mandatory skills grant payable to employers from 50% to 20%. The regulations also included a sweeping mechanism which required SETAs to pay over all unspent funds to the National Skills Fund. This meant that these funds could be spent on national skills initiatives that were not related to workplace training

27 SETA Grant Regulations Judgement In its judgement the Labour Court declared both regulations to be invalid, and it set them aside with effect from 31 March 2016. The appellants did not comply with the extended deadline on filing an appeal. In our view, it is clear from Rule 5(17) that in the circumstances, the appellants are deemed to have withdrawn the appeal, as contemplated in Rule 5(17). BUSA directed a letter to the Registrar of the LAC on 20 January 2016, setting out the background as above, and seeking directions in the matter

28 SETA Grant Regulations Judgement BUSA s hands are tied until the expiry of the suspension period, 31 March 2016. However, once that period of suspension has expired, BUSA and its members are fully entitled to enforce the court order. The appellants may in the meanwhile attempt to reinstate the appeal, or it may attempt to make new regulations. Any application to reinstate the appeal will have to be dealt with on its merits. Unhelpfully, the Registrar of the LAC will not provide clarity on that score. Despite this, BUSA is fully entitled to proceed as if there will be no appeal.

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