Report by Ministerial Task Team on the Performance of Sector Education and
Training Authorities (SETAs) 2013
A RESPONSE
Th...
As it stands, the mandate of the SETAs is far too broad. This prevents individual SETAs from
adequately serving their desi...
Recommendation 3
The National Skills Authority (NSA) should be dis-established as it duplicates the mandate of other
bodie...
Recommendation 6
The SETAs should receive a reduced allocation of 70% of levies monies from SARS, with an
increased alloca...
DCCI’s response
We support this recommendation, but with the proviso stated below. The public sector has grown
exponential...
medium-to long-term. Subject to the finalisation of a review, a moratorium needs to be put in
place regarding changes to t...
The Chamber opposes this recommendation. Reporting instruments must be simplified, especially
for small businesses that ar...
All correspondence to be addressed to: P.O. Box 1506, Durban, 4000, KwaZulu-Natal, South Africa.
Tel: 27 031 335 1000, Fax...
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Report by Ministerial Task Team on the Performance of Sector Education and Training Authorities (SETAs) 2013

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A RESPONSE


The Durban Chamber of Commerce and Industry appreciates the work undertaken by the Ministerial Task Team over a thirteen month period to assess the past performance of the SETAs and put forward a set of recommendations to improve the performance of the SETAs in future. Members of the Chamber have not been satisfied with the performance of SETAs, in general, while recognising that some have been a great deal more effective and efficient than others.

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Report by Ministerial Task Team on the Performance of Sector Education and Training Authorities (SETAs) 2013

  1. 1. Report by Ministerial Task Team on the Performance of Sector Education and Training Authorities (SETAs) 2013 A RESPONSE The Durban Chamber of Commerce and Industry appreciates the work undertaken by the Ministerial Task Team over a thirteen month period to assess the past performance of the SETAs and put forward a set of recommendations to improve the performance of the SETAs in future. Members of the Chamber have not been satisfied with the performance of SETAs, in general, while recognising that some have been a great deal more effective and efficient than others. The specific comments given on each of the seventeen recommendations reflect the collective views of member companies within the Chamber’s membership of 2 806. These members include multi-national corporations, micro, small and medium business, NGOs, consultants and member- based business associations, and cut across all sectors represented by the 21 SETAs presently in operation. Recommendation 1 The SETAs need a tighter focus, which must be reflected in their vision, mission, governance structure and strategy. This focus should be on skills development (planning; enabling provision; allocation of grants and quality assurance) in established businesses and workplaces relating to sector priorities and the transformation charters for the various sectors. DCCI’s response pg. 1
  2. 2. As it stands, the mandate of the SETAs is far too broad. This prevents individual SETAs from adequately serving their designated sector/s. The SETAs’ mandate has been extended to include people in rural areas and the unemployed. While we cannot ignore the merits of up-skilling these vulnerable groups, for which the National Skills Fund is able to provide, the SETAs’ priorities must be to address the particular skills needs of their relevant sector/s. We cannot stress enough that the SETAs are sector-based service institutions, and are not intended to be extensions of the Department of Higher Education (DHET) and/or a vehicle for furthering the government’s broader agenda. It is also felt that the influence on SETAs of the DHET is too great, leading to a focus on qualifications which are not always directly appropriate for the workplace. Businesses often struggle to find programmes which are credit-bearing and, at the same time, address their needs and those of the employees who have specific tasks to perform. The type of training which takes place in an organisation must be determined within the organisation, rather than being directed by the DHET, so that the individual needs of the business will determine the type of training required by its employees. The role of the SETA is to support its levy-paying employers in this regard. Recommendation 2 The NSF must continue to be responsible for funding broader national priorities that are not covered by the SETAs. Where appropriate the NSF should allocate funds to other government departments and agencies (NYDA; DPW; etc.) that have a mandate to deliver in terms of these principles and therefore have the capacity to integrate skills development into broader programmes. The NSF levy allocation should be increased from 20% to 30%. The structure and location of the NSF should be revised in order to ensure that it has sufficient capacity and appropriate accountability to perform its revised mandate. DCCI’s response The Chamber agrees that the responsibility for attending to the funding to meet broader national priorities relating to skills development, particularly among unemployed and young people, lies with the NSF. However, an increase in the NSF levy allocation is not considered appropriate as the NSF already fails to disburse the levies it collects successfully. Merely increasing the levy allocation to the NSF will not improve its operation; the issue lies in the NSF’s inability to disburse funds according to acceptable priorities and within appropriate controls of the expenditure of public funds. pg. 2
  3. 3. Recommendation 3 The National Skills Authority (NSA) should be dis-established as it duplicates the mandate of other bodies. DCCI’s response The DCCI strongly opposes this recommendation and believes that the NSA should be established as an independent body of experts who assess priorities and needs and direct the NSF in the disbursement of its funds. Recommendation 4 Change the function and amount of the mandatory grant. This would ensure that workplaces have the systems to submit accurate and comprehensive information relating to all training that is taking place in the workplace, current levels of skills, experience and qualifications of employees in the workplace, as well as skills priorities for the short- as well as medium-term. DCCI’s response The mechanisms for reporting already discourage businesses from documenting the skills development in which they engage. Thus, these mechanisms should be deliberately simplified so as to encourage a closer spirit of co-operation between SETAs and levy-payers. The reduction of the mandatory grant, from the original 50%, to 20% is deplored and will further discourage businesses from participating in the institutional process. Recommendation 5 Strengthen steering through tighter use of an increased discretionary grant. It should be targeted at substantive training for employed people in different sectors as well as unemployed people entering those sectors in-line with agreed upon sector priorities. DCCI’s response The discretionary grant should be utilised solely for the needs of the specific sector as determined in the sector skills plan. pg. 3
  4. 4. Recommendation 6 The SETAs should receive a reduced allocation of 70% of levies monies from SARS, with an increased allocation of 30% to the NSF. The SETAs should disburse the monies received directly to employers. DCCI’s response Opposition to the increase in a percentage of the levy income being paid to the NSF has already been recorded. On the question of the disbursement of monies directly to employers, the Chamber gives its support. It is acknowledged that various intermediaries, such as project managers of learnership projects have been ‘unjustly enriched’, and in such situations it would be better for the monies to be paid directly to employers. The time at which the payment is made is critical, however. Payment after the conclusion of the training and the achievement of qualification on the part of the learner, places enormous strain on a small business. It is suggested, therefore, that attention be given to a payment regimen in which a portion of the money is paid at an earlier stage. Where a number of small employers are involved in similar training initiatives, the SETA would need to play a more co-ordinating role, especially in the identification of suitable training providers. Recommendation 7 Maintain the current amount of the levy. DCCI’s response This recommendation is supported. Employers acknowledge that the shortage of skills is a national challenge, so they have a responsibility to pay the levy. Objections have lain less in the quantum of the levy payable than in the oft-inappropriate use of the revenue generated and the reality that huge sums have had less-than-satisfactory success in addressing the national and workplace needs. Recommendation 8 The public sector should be brought in-line with the private sector for comprehensive skills development purposes. Every public sector employer in the provincial, national and local levels of government must be compelled to budget and pay a skills development levy in a manner pre- determined by a national policy directive for the public sector. pg. 4
  5. 5. DCCI’s response We support this recommendation, but with the proviso stated below. The public sector has grown exponentially in recent years, so there is no reason why it should be exempt from compliance, especially considering that service delivery suffers from a shortage of skills in government departments at all levels. The Chamber recommends that government departments/ institutions pay just the 70% of the levy payable to the appropriate SETAs. It is considered inappropriate that the government should contribute to its own National Skills Fund. Recommendation 9 There needs to be a national central mechanism/body through which skills demands in the short, medium and long term are analysed. DCCI’s response The Chamber believes that this is the role that should be played by the National Skills Authority, provided that it is constituted as proposed in the response to recommendation 3 above. While the need for statistics of a superior quality is clear, the bureaucratic burden of the SETAs should not be increased. Organisations such as StatsSA and universities should be engaged to support the NSA in this role. Recommendation 10 Supply needs to be conceptualised and analysed. The DHET, working with the SETAs, would map- out supply against demand and establish where there is insufficient capacity to deliver this supply and determine strategies to address this. DCCI’s response It is nearly impossible to accurately predict the supply and demand of skills. The best effort would be to highlight trends in skills supply and demand. This should be an NSA responsibility, in collaboration with individual SETAs in any analysis of specific sectors. Recommendation 11 Once the mandate of the SETAs is finalised, there should be a review of the implications of this for the SETAs. Such a review must seek to streamline and reduce the number of SETAs over the pg. 5
  6. 6. medium-to long-term. Subject to the finalisation of a review, a moratorium needs to be put in place regarding changes to the SETA landscape as it currently stands. DCCI’s response The Chamber does not support the further consolidation of SETAs; ‘bigger’ is not always ‘better’. Some of the larger SETAs (Services SETA and the WRSETA) are much more inefficient than their smaller counterparts. The consolidation of the SETAs will reduce their capability to service their sectors sufficiently. Recommendation 12 There needs to be a diverse mix of programmes that meet long-, medium-, and short-term priorities. There is a need to focus on occupational programmes that develop the academic skills required in the medium to long term. Short courses which are not accredited should be allowed (and offered by both public and private providers), but funded by employers. DCCI’s response The Chamber believes that in many instances technical skills are the main priority in the workplace. Life and coping skills should not be neglected, however, while provision should be made for people with technical skills to augment these by further education in academic spheres. In general, the skills requirements of businesses are determined by the individual needs of each business and skills requirements are not standardised across businesses, even those in the same sector. The Chamber believes that the advantages of the Recognition of Prior Learning have not been explored satisfactorily and urges much more attention from SETAs to increase the opportunities for experienced, but unqualified, workers to improve their positions. Recommendation 13 The nature of the instruments used for reporting, as well as the number of, the relationship between, and the timing of the instruments, need to be revised in order to ensure that they differentiate between the long-, medium-, and short-term, that they are logically sequenced, and that duplication is removed. DCCI’s response pg. 6
  7. 7. The Chamber opposes this recommendation. Reporting instruments must be simplified, especially for small businesses that are less capable of planning their training far in advance. Recommendation 14 For SETAs to accomplish their directives, it is necessary that staff, and in particular board members, improve and build their skills. New standardised training and induction programmes should be created and attendance should be mandatory for all SETA board members. DCCI’s response The Chamber wholly supports the up-skilling of SETA staff and board members. The individual skills needs of their staff should be assessed preparatory to the undertaking of a professional job analysis and the development of detailed job specifications and objectives. With regard to the skills of board members, it is recommended, that in addition to effective orientation and training, board members should be selected on the basis of their possessing appropriate skills and experience to conduct their duties. Board members must also be issued clear job objectives and specifications. If necessary, the extra funding required for this exercise should be found in the NSF so as not to reduce the amount that SETAs are able to disburse to employers. Recommendation 15 There is a need to assess the intentions of a new, single SETA constitution against the structure mandated to avoid conflict and contradiction. DCCI’s response The Chamber stresses that the ‘one size fits all’ approach is not appropriate. Conflict and contradiction are not always negative, and they may in fact lead to a more balanced view. The constitution of a SETA must allow for the needs of the whole sector/s and this might imply differences from other SETAs in respect of structural arrangements. Recommendation 16 DHET in conjunction with National Treasury should have a much closer monitoring of SETA’s procurement practices. pg. 7
  8. 8. All correspondence to be addressed to: P.O. Box 1506, Durban, 4000, KwaZulu-Natal, South Africa. Tel: 27 031 335 1000, Fax: 27 031 332 1288 Chamber House, 190 Stalwart Simelane Street, Durban, 4001 e-mail:chamber@durbanchamber.co.za Website:www.durbanchamber.co.za DCCI’s response The Chamber supports this recommendation insofar as the monitoring of SETAs by the National Treasury is concerned. The rigours of the PFMA are challenging and, unfortunately result in supply chain and procurement blockages. In depth training of responsible officials would mitigate an undesirable situation where SETAs spend more time ensuring that they are complying, than they do in service delivery. Recommendation 17 There remains a need to streamline the current multi-layered stakeholders in the SETA landscape. Such an intervention may result in streamlined SETA accountability mechanisms and development of clear oversight responsibilities. DCCI’s response The Chamber believes that further streamlining is unnecessary and, indeed, may prejudice the interests of some sectors in those SETAs which serve different types of businesses. Additional Comment in Conclusion The SETAs are often characterised by a lack of sound financial management. Many businesses have commented that the payment track record of the SETAs is spectacularly poor as stakeholders and service providers often have to wait months for payment to be made. The Chamber suggests the introduction of a maximum period for payment of between 30 to 60 days. Should the SETA not make the payment within this period, the stakeholder or service provider should be entitled to some type of recourse. A.J. LAYMAN Chief Executive Officer 16 September 2013 pg. 8

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