Policy Generic National Artisan Learner Grant Funding and Administration System

Policy Generic National Artisan Learner Grant Funding and Administration System 1. Introduction The training of artisans is a national priority. The national performance outcomes of Government, the Human Resource Development Strategy for South Africa, the National Skills Development Strategy, the Industrial Policy Action Plan (IPAP2), the New Growth Path and its related National Skills Accord for economic development, the National Development Plan, as well as almost all of the Strategic Infrastructure Projects (SIPs) announced by the President in his State of the Nation address in January 2012 all affirm the importance of this. A national artisan development programme including all components of artisan development, driven by all social partners in a coordinated and integrated manner, is therefore a critical need for the country. In recognition of this, the Minister of Higher Education and Training on 4 February 2013 declared 2013 as the Year of the Artisan. This policy is therefore released by the Minister as a key component of the Year of the Artisan. The Artisan and Technician Development Technical Task Team (ATD-TTT), the stakeholder representative body established by the Human Resource Development Council (HRDC 1 ) of South Africa has through its workplan identified the three primary blockages to a national artisan development programme. These three blockages were tabled before the Human Resource Development Council on 15 June 2012 and unanimously endorsed for removal by relevant implementing partners. These three blockages are the lack of: 1.1 Detailed, accurate, current data for: artisan trade prioritisation workplaces and placement scientific target setting monitoring & evaluation 1.2 A single guaranteed funding model for all artisan trades listed in the Government Gazette applicable to all sectors including a single artisan learner administration and grant disbursement system; and 1 The HRDC was established on 30 March 2010 by the Deputy President of South Africa to facilitate conditions that promote optimum participation of all stakeholders in the planning, stewardship, monitoring and evaluation of HRD activities in the country. 1 P a g e

1.3 An Artisan Recognition of Prior Learning (RPL) system that is focused on supporting persons who are working as support workers in the engineering field to become certificated artisans. The ATD-TTT has also developed a set of recommendations and related activities, time frames and primary coordinating implementation partners that need to lead processes to remove the above three blockages. This detail is captured in the ATD Forums Monitoring and Evaluation Report that is utilised at all ATD Forums as a monitoring tool. As a result of having reached this milestone, a decision has been reached by the HRDC to close the ATD-TTT as it has completed its work. However, the structure made up of government, employer and labour representatives will continue to exist as stakeholder forum to monitor, evaluate and report on the implementation of the blockage removal activities by the primary coordinating implementation partners. The structure will now operate under the acronym of HRDC ATD-MET. 2. Background and Process to Date for Removal of Blockage 1. 2 This policy has been developed to explain the annual process that will address the second of the above noted blockages to artisan development. However, the policy and the annual process will also assist in addressing the other two blockages to the national artisan development programme resulting from efficiencies achieved by a single national learner administration system. This can be leveraged to improve data collection and analysis as well as the implementation of a national artisan RPL system. It must also be noted that this policy results in an annual process that has been developed in response to a directive received from the Minister of Higher Education and Training on 30 January 2012 that the Department, in particular the National Artisan Moderation Body (NAMB), should coordinate a process of developing a national artisan learner grant and a single funding, disbursement and learner administration model for all artisan programmes across all sectors. This directive was issued as a result of a formal letter from the ATD-TTT that was submitted to the Minister on 31 October 2011 requesting that the Minister intervene with SETAs and the NSF to remove the second blockage by creating a single national, generic artisan learning funding and administration model. To implement the directive from the Minister and remove the second blockage to the national artisan development programme, the NAMB in collaboration with the ATD-TTT initiated a series of consultative discussions with the SETAs and the NSF that has resulted in this policy. 2 P a g e

3. Advantages and Benefits The following are the advantages and benefits that will be realised by implementing this standardised annual process for a single guaranteed funding and learner administration policy for all artisan trades listed in the Government Gazette 35625 applicable to all sectors. A systemic, logical, pragmatic approach to removing a primary blockage to the national artisan development programme; A programmatic multi-project approach to artisan development that is implemented on an ongoing annual basis that replaces the current single project approach used by SETAs and NSF for artisan development; Systemic, standardised and common approach to developing a system that can be automated and improved upon by leveraging ICT technology; A systemic and ongoing method of progressively determining the actual, real annual prevailing demand and capacity of national artisan development requirements as determined by the inputs of qualifying employers directly; A process that ensures all artisan development stakeholders in the country collaborate to drive a single national artisan development system to practically remove the current sector and/or employer based approach to national artisan development; A process that ensures that all artisan trade occupations as listed in the Government Gazette 35625 receive equal opportunities for development but subject to prevailing scarcity and economic demand. 4. The Annual 5-Step Process Step 1 Budgets Each SETA and the NSF establishes the total rand value budget for Artisan Development for the next financial year and submits to DHET for Consolidation to establish Total Available National Artisan Development (NAD)Budget Completed by 31 October each year This first step forms the basis for artisan learner funding. The question being asked is how much money is available, confirmed and committed, to artisan learner grants for artisan development for the next financial year that starts in April of every year. Each SETA and the NSF will be required to submit this information to DHET for consolidation into a single national budget, following the August submissions of draft strategic plans by all government departments and public entities. 3 P a g e

Step 2 Work- Places SETAs issue a call for artisan learner grant applications from QUALIFYING EMPLOYERS for funding of new artisan learners for registration from April the following year for ALL trades as listed in the Gazette. SETAs submit a summary of applications received to DHET for consolidation onto a single national database of approved artisan learner workplaces for use in planning spatially based capacity building initiatives. Completed by 30 November each year This second step will improve the accuracy of data related to the national workplace capacity for artisan learners and give an annual update of artisan learner demand from all sectors of the economy. SETAs will be requested to perform this function as they have existing systems in place to implement the process although a common across-sector/seta application process will need to be developed to allow for subsequent consolidation. In addition, national workplace approval criteria need to be utilised and not the existing separate sector based criteria. These national criteria have been developed on existing sector based criteria that have been amalgamated and improved upon where possible. A major advantage of this process is that once established, these national criteria can be published by the DHET to create awareness among all employers in South Africa of what is necessary to qualify to take in artisan learners, irrespective of what sector(s) the employer operates within or which SETA the employer is registered with. Once each SETA has collected and vetted the applications based on national criteria, these applications will be summarised and submitted to the DHET for consolidation. This will result in the first ever national database of approved artisan learner workplaces aligned to the national list of artisan trades. National government will thus have valuable data that will allow for evidence based spatial planning for future artisan development workplace capacity development. This is especially important for the work that is in progress within the DHET to develop a national skills plan for strategic infrastructure projects (SIPs). Step 3 New Learner Grant The new artisan learner grant for 2014 2015 will be R 46 450 per new artisan learner per annum with SETAs and NSF allocating a commitment of R139 350 per each new artisan learner they can fund. The commitment must be approved by relevant Accounting Authority. The new learner grant must be increased annually by an escalation percentage determined the DHET in collaboration with SETAs and NSF to ensure a long term sustainable, guaranteed funding regime. Completed by 31 January every year A fixed, predetermined annual new learner grant must form part of the funding model. Employers will not commit to taking on learners and cannot plan ahead if they do not know what the grant per learner will be. The fixed annual learner grant will mean that the actual 4 P a g e

number of new learners supported with grants each year will fluctuate each year subject to available budgets allocated by SETAs and NSF. This approach has implications for national artisan development planning as current national plans are to progressively increase the number of new learners entering artisan learning programmes by at least 1 000 extra learners per year. If annual budgets decrease in total, a national intervention will be needed to ensure that growing targets are achieved. To date SETA and NSF co-funding models have been utilized. However, co-funding models are bureaucratically cumbersome and learners cannot be exclusively identified as a SETA learner or an NSF learner. Such an exclusive funding approach model that may be directly managed by the NSF allows for much simpler and direct control and it will negate any additional administration and/or project management costs that SETAs may have to manage and report on NSF learners. In addition, it allows for the NSF to fund employers either through SETAs or directly should they wish to do so in order to achieve specific national, strategic developmental goals that are determined by the Minister of Higher Education and Training. Step 4 Allocations SETAs determine allocations of grants to qualifying employers based on SETA Board criteria and advise employers. NSF determine allocations to qualifying employers based of NSF criteria either through SETAs or direct with employers and advise SETAs and/or employers. Completed by 28 February every year Bases on applications for artisan learner grants received from qualifying employers, criteria established by each SETA Board and the total annual budget determined by the SETA Board, the SETAs commit and allocate a specific number of new artisan grants at a maximum amount of R 139 350 per learner. SETAs submit a detailed provisional report to the DHET of final new artisan learner allocations inclusive of relevant artisan occupations and employer details. This will allow for a consolidated list so as to determine the total number of planned new artisan learners to be funded by SETAs, and in which artisan trades. The DHET will review the submission from SETAs and may request a SETA or SETAs to review allocations to employers or specific artisan trades in order to meet national objectives. Once the DHET has endorsed the SETA allocations, each SETA will proceed to notify employers of their allocations and request employers to initiate processes to claim or forfeit grants as per rules described in Step 5 below. The NSF, once the SETA allocations have been completed, will proceed to allocate a specific number of new artisan grants at an identical maximum amount of R 139 350 per learner to qualifying employers that applied to the SETAs but that received less than the total number of grants applied for. This can be viewed as a top up approach by the NSF. 5 P a g e

This approach allows the NSF to allocate grants either directly to qualifying employers or through SETAs but subject to specific NSF criteria and controls respectively. This approach allows National Government to determine what is the most effective and sustainable approach to build capacity for artisan development in the country. This may for example include an increasing allocation from NSF to qualifying employers that are State Owned Companies (e.g. Eskom) and Government Departments (e.g National Defense Force) that will allow the State to directly develop artisans in proportion to the changing needs of the country. Such competent artisans will then have the option to consider careers within the private sector or become entrepreneur artisans. This approach will benefit especially small companies that need artisans but cannot afford to train them or do not comply with the criteria to become qualifying employers. The NSF will proceed to notify SETAs or employers of their allocations and where relevant request employers to initiate processes to claim or forfeit grants as per rules described in Step 5 below. Step 5 Disbursements Each SETA and/or NSF manages, pays and reports on the disbursement of the R 139 350 grant per learner based on the tranche disbursement framework described below. Each payment subject to compliance to framework. A four-tranche process will be used for disbursing payments. This will minimise risk and allow for a measure of fairness. It will also assist in incentivising employers. Each tranche will be 25% of the total new artisan learner grant or R 34 837.50 per disbursement. The disbursement framework for each of the four tranches will be: Tranche 1: R 34 837.50 x Total Number of New Artisan Learners Grants Allocated. Disbursed within seven (7) days after receipt and verification of: Formal certified letter of commitment from the CEO/Head or formal designate of the employer to contract the total allocated number of new artisan learners within the current financial year; and A detailed implementation plan to register the total allocated number of new artisan learners within the current financial year; and Formal certified letter of acknowledgement from the CEO/Head or formal designate of the employer that any shortfall in registration against the total allocated number of new artisan learners within the current financial year will result in a similar reduction of allocations in the next financial year; and An affidavit from CEO/Head or designate of employer that he/she acknowledges that the employer he/she represents will be liable for prosecution should the artisan learner grants be utilised by the employer, as proven in a court of Law, for any purpose other than supporting an artisan learner and that the employer will not qualify for new grants for the ensuing five years. 6 P a g e

Written agreement in place between the SETA and the Employer that is a contractual obligation that allows a SETA to commit funds in advance for artisan related PIVOTAL programmes as is required in the SETA Grant Regulations. Tranche 2: R 34 837:50 per new artisan learner Disbursed within seven (7) days after receipt of: Certified original copy of Learning Programme Agreement accompanied by relevant supporting documentation as determined by the SETA or NSF. An on-site verification report by a SETA or NSF representative confirming that the new artisan learners are in the process of being trained on site in the relevant trade as is indicated by the Learning Programme Agreement. Tranche 3: R 34 837:50 per new artisan learner Disbursed within seven (7) days after receipt of: Report from Employer confirming that the new artisan learner has reached the halfway point of the training programme. The halfway point for each trade listed in the Government Gazette will be determined and described by the National Artisan Moderation Body in consultation with ATD Stakeholder Forums. An on-site verification report by a SETA or NSF representative confirming that there is on site evidence such as training records, logbook, electronic records and other appropriate evidence that the new artisan learner has reached the halfway point of the training programme. An affidavit from the new artisan learner that he/she has received all the relevant training as is described by the on-site evidence. Tranche 4: R 34 837:50 per new artisan learner Disbursed within seven (7) days after receipt of: A recommendation for certification from NAMB for the new artisan learner as is contemplated in Section 26A(2)(g) of the Skills Development Act. 5. Exceptions / Exemptions from Generic Artisan Funding and Learner Admin Policy During the various discussions held with all relevant stakeholders to reach this level of agreement on the Generic National Artisan Learner Grant Funding and Administration System, numerous exceptions and/or exemptions from this funding model have been identified. These exceptions and exemptions will be funded in special projects and separate SETA discretionary or NSF grants that are approved and implemented separate from the standard R 139 350 new artisan learner grant as described in this policy. The exceptions / exemptions include but are not limited to: Grants for persons undergoing Recognition of Prior Learning to become artisans Grants for learners coming from rural areas Grants for persons with disabilities Grants for accommodation for artisan learners 7 P a g e

Grants for infrastructure for artisan development Grants to increase employer or provider capacity for artisan development Grants for some occupations listed in Gazette 35625 as trades that have significantly different cost structures, either substantially more or substantially less than the average total cost of R 300 000 per trade that this specific model is built on. These include but may not be limited to chefs, goldsmiths, diamond and gemstone setters, butchers, bakers. These exceptions will be discussed with relevant SETAs and sectors and may result in a difference grant regime or an entirely separate funding mechanism for such trades. 6. Implementation, Monitoring and Evaluation Implementation will be from 1 April 2013 which means that that SETAS and the NSF must start immediately to implement planning and budgeting processes to meet the deadline for each of the five step processes during the 2013 2014 financial year. Although this means that the fixed grant of R 139 350 per artisan learner will only be enforced by this policy from 1 April 2014, SETAs and the NSF may wish to already adjust their artisan learner grant to this level during the 2013 2014 financial year should they have the necessary funds to do so. The Director-General has included the Generic National Artisan Learner Grant Funding and Administration System in the Service Level Agreements for all relevant SETAs. The Auditor General will also be made aware of the policy and be requested to include implementation of the policy as an item in their annual compliance and performance audit processes with all relevant SETAs and the NSF. The Policy will be also be promoted as a critical element of making 2013 the Year of the Artisan. This will give impetus to the policy being implemented on a proactive basis as a precursor to amending the current primary legislative framework for Artisan Development, namely Chapter 6A of the Skills Development Act during the 2014 Parliamentary process to ensure that the all SETAs and the NSF become nationally compliant by law to the single guaranteed funding model for all artisan trades applicable to all sectors including single, simple artisan learner administration and grant disbursement system. 8 P a g e