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EPP SETA Research - Department of Labour
Employment Promotion Programme (Managed by DPRU and Funded by DfID) SETA Review Submitted by Singizi cc March 2007 1 TABLE OF CONTENTS TABLE OF CONTENTS ........................................................................................................ 2 TEAM MEMBERS ................................................................................................................. 5 LIST OF ACRONYMS........................................................................................................... 6 LIST OF APPENDICES......................................................................................................... 8 EXECUTIVE SUMMARY ..................................................................................................... 9 SECTION ONE: BACKGROUND, CONCEPTUAL FRAMEWORK AND METHODOLOGY ................................................................................................................ 30 1 2 INTRODUCTION AND BACKGROUND TO THE STUDY.................................................... 30 CONCEPTUAL FRAMEWORK......................................................................................... 30 2.1 Problem Formulation .......................................................................................... 31 2.2 Aim and Objectives of the Review ....................................................................... 31 2.3 Research Questions ............................................................................................. 32 2.4 Conceptual Framework for the Research: An Overview..................................... 32 2.5 Indicators............................................................................................................. 34 3 RESEARCH METHODOLOGY ......................................................................................... 34 3.1 Refining the Brief................................................................................................. 35 3.2 Component One: Reviewing the Policy and Legislative Objectives of Skills Development and the SETAs ........................................................................................... 35 3.3 Component Two: Governance and accountability .............................................. 36 3.4 Component Three: An Analysis of the Core SETA Functions ............................. 39 3.5 Component Four: Relevance of Outputs ............................................................. 42 3.6 Methodological Notes and Limitations................................................................ 47 SECTION TWO: THE SKILLS DEVELOPMENT STATUTORY AND POLICY FRAMEWORK ..................................................................................................................... 49 4 5 THE EVOLUTION OF THE SYSTEM ................................................................................ 49 OVERVIEW OF THE CURRENT STATUTORY FRAMEWORK ........................................... 52 5.1 The Skills Development Green Paper.................................................................. 52 5.2 Skills Development Act ........................................................................................ 53 5.3 Skills Development Levies Act and Related Regulations..................................... 55 5.4 Skills Development Amendment Act, 2003 .......................................................... 55 5.5 The National Strategy for Skills Development (NSDS) ....................................... 56 5.6 SAQA and the NQF ............................................................................................. 57 5.7 Public Finance Management Act ........................................................................ 58 5.8 Constitution ......................................................................................................... 59 6 EMERGING POLICY ISSUES .......................................................................................... 59 6.1 Conflicting Objectives and Approaches .............................................................. 59 6.2 SETA Governance ............................................................................................... 60 6.3 Sector Skills Planning.......................................................................................... 61 6.4 Learning Programmes......................................................................................... 61 6.5 Quality Assurance ............................................................................................... 62 6.6 Mandatory Grant Allocations.............................................................................. 63 6.7 Reporting and Accountability.............................................................................. 64 6.8 Incentive Environment......................................................................................... 64 SECTION THREE: GOVERNANCE AND ACCOUNTABILITY ................................. 65 7 GOVERNANCE .............................................................................................................. 65 7.1 Principles of Good Governance .......................................................................... 65 7.2 Systemic Governance of the Skills Development Landscape............................... 66 2 7.3 Corporate Governance ........................................................................................ 67 7.4 Composition of SETA Boards .............................................................................. 68 8 ACCOUNTABILITY ........................................................................................................ 70 8.1 Assessment of SETA Compliance with their Obligations .................................... 70 8.2 Review of SETA Constitutions ............................................................................. 76 8.3 Perceptions of Key SETA Agents on the Functioning and Efficacy of SETA Boards 78 8.4 Issues Relating to Accountability in Terms of Reporting .................................... 81 9 EMERGING ISSUES ....................................................................................................... 82 SECTION FOUR: REVIEW OF THE IMPLEMENTATION OF SETA CORE FUNCTIONS ......................................................................................................................... 85 10 PLANNING ................................................................................................................ 85 The Logic of the Skills Planning System.............................................................. 85 Review of The Implementation of Planning Processes........................................ 86 SETA analysis...................................................................................................... 94 Key System Weaknesses and Underpinning Planning......................................... 99 In Summary: Some Key Questions..................................................................... 100 11 REVIEW OF SETA ETQAS’ CONTRIBUTIONS TO THE QUALITY ASSURANCE OF PROVIDERS ........................................................................................................................ 102 11.1 Quality Assurance roles of SETA ETQAs.......................................................... 102 11.2 Themes and Issues Emerging ............................................................................ 116 12 THE MANAGEMENT AND PROMOTION OF LEARNERSHIPS...................................... 120 12.1 SETA Management of Learnerships .................................................................. 120 12.2 Issues Emerging in the Implementation of Learnerships .................................. 122 13 FINANCE ................................................................................................................ 132 13.1 Introduction ....................................................................................................... 132 13.2 The Policy Context ............................................................................................ 132 13.3 Skills Development expenditure trends prior to the implementatin of the Skills Development Act............................................................................................................ 134 13.4 Revenue Trends ................................................................................................. 137 13.5 Expenditure........................................................................................................ 138 13.6 Learnerships ...................................................................................................... 139 13.7 Employer Grants ............................................................................................... 142 13.8 Discretionary Grants......................................................................................... 143 13.9 Administration Expenditure............................................................................... 144 13.10 NSF ................................................................................................................ 145 13.11 The functioning of the Training Markets ....................................................... 147 13.12 Emerging Issues............................................................................................. 148 10.1 10.2 10.3 10.4 10.5 SECTION FIVE: EFFICACY AND RELEVANCE OF OUTPUTS.............................. 151 14 15 AN OVERVIEW OF NSDS TARGETS AND ACHIEVEMENT ...................................... 152 EFFECTIVENESS IN ADDRESSING SCARCE SKILLS ................................................. 160 15.2 Emerging Issues................................................................................................. 190 16 COMPANY PERCEPTIONS OF THE EFFECTIVENESS OF SKILLS DEVELOPMENT INITIATIVES........................................................................................................................ 193 Recruitment and Selection ............................................................................................. 193 Employment Equity........................................................................................................ 195 Productivity ................................................................................................................... 195 Overall Impact of Skills Development and SETA Contributions................................... 196 SECTION SIX: RECOMMENDATIONS ........................................................................ 201 17 17.1 17.2 HIGH LEVEL AND STRATEGIC RECOMMENDATIONS ............................................... 201 The Need for Prioritisation of Objectives.......................................................... 201 Clarifying the SETA Mandate............................................................................ 204 3 18 RECOMMENDATIONS RELATED TO IMPROVING THE EFFECTIVENESS OF THE CURRENT INSTITUTIONAL ARRANGEMENTS....................................................................... 206 18.1 18.2 18.3 19 Governance........................................................................................................ 206 Core functions ................................................................................................... 208 Monitoring SETAs ............................................................................................. 216 CONCLUSION.......................................................................................................... 217 4 TEAM MEMBERS Research design and analysis Carmel Marock: Project Leader and ETQA and Learnerships Candice Harrison-Train: Research coordinator and ETQA and Learnerships Prof Bobby Soobrayan: Core Team and Governance and Finance Jonothan Gunthorpe: Core Team and Planning Researchers and data analysts Brendan Barry (CT&H) Mahlengi Bhengu Gavin Surgey Renee Grawitzky Gloria Mamba Laura Mseme Diggy Mseme Joanne Millan Rosaria Mukonyora Kate Soal Specialised Input Gail Elliott Meg Pahad Mellissa King 5 LIST OF ACRONYMS ABET AG AGRISETA ANC ASGISA ATR BANKSETA BBBEE BEE BITB BUSA CBO CETA CFO CGS CHIETA CIS COSATU CT&H CTFL SETA DFiD DG DoA DoL DPLG DPRU EPP EPWP ESDA ESDLE ESETA ETDPSETA ETQA FASSET FET FIETA FOODBEVSETA GRAP HET HR HSRC HWSETA INDLELA INSETA ISETT SETA ISOE JIPSA LGSETA LRA MAPPPSETA MERSETA MMS MoU MQA Adult Basic Education and Training Auditor General Agricultural Sector Education and Training Authority African National Congress Accelerated Shared Growth Initiative for South Africa Annual Training Report Banking Sector Education and Training Authority Broad Based Black Economic Empowerment Black Economic Empowerment Building Industries Training Board Business Unity South Africa Community Based Organisation Construction Sector Education and Training Authority Chief Financial Officer Career Guidance Councillor Chemical Industries Education and Training Authority Chartered Institute of Secretaries Congress of South African Trade Unions Cheadle Thompson & Haysom Clothing, Textiles, Footwear and Leather Sector Education and Training Authority Department for International Development Director General Department of Agriculture Department of Labour Department of Provincial and Local Government Development Policy Research Unit Employment Promotion Programme Expanded Public Works Programme Employment and Skills Development Agency Employment and Skills Development Lead Employers Energy Education and Training Authority Education and Training Development Practices Sector Education and Training Authority Education and Training Quality Assurance Body Finance, Accounting Management Consulting and Other Financial Services Sector Education and Training Authority Further Education and Training Forestry Industries Education and Training Authority Food and Beverages Sector Education and Training Authority Generally Recognised Accounting Practice Higher Education and Training Human Resources Human Sciences Research Council Health and Welfare Sector Education and Training Authority Institute for the National Development of Learnerships Employment Skills and Labour Assessments Insurance Sector Education and Training Authority Information Systems, Electronics and Communications Technologies Sector Education and Training Authority Institute for Sectoral or Occupational Excellence Joint Initiative for Priority Skills Acquisition Local Government Sector Education and Training Authority Labour Relations Act Media, Advertising, Publishing, Printing, Packaging Sector Education and Training Authority Manufacturing, Engineering and Related Services Sector Education and Training Authority Mining and Minerals Sector Memorandum of Understanding Mining Qualifications Authority 6 NA NECC NEPI NGO NLRD NPI NQF NR NSA NSB NSDS NSF NSFAS NTB NTSI NUMSA NVC OFO PESTEL PFMA PITB PPP PRP PSA PSETA QA QALA QC RPL SAQA SARS SASSETA SDA SDF SDLA SERVICES SETA SETA SETO SLA SMME SSP TETA THETA UYF W&RSETA WSP Not applicable National Education Coordinating Committee National Education Policy Investigation Non Governmental Organisation National Learner Records Database National Productivity Institute National Qualifications Framework Not reported/No response National Skills Authority National Standard Body National Skills Development Strategy National Skills Fund National Student Financial Aid Scheme National Training Board National Training Strategy Initiative National Union of Metalworkers of South Africa New Venture Creation Organising Framework for Occupations Political, Economic, Social, Technological, Environmental and Legal Factors Public Finance Management Act Plastics Industry Training Board Public Private Partnership Participatory Research Project (COSATU) Public Service Act Public Services Education and Training Authority Quality Assurance Quality Assurance of Learner Achievements Quality Control Recognition of Prior Learning South African Qualifications Authority South African Revenue Service Safety and Security Sector Education and Training Authority Skills Development Act Skills Development Facilitator Skills Development Levies Act Services Sector Education and Training Authority Sector Education and Training Authority Sector Education and Training Organisation Service Level Agreement Small, Medium and Micro Enterprises Sector Skills Plan Transport Sector Education and Training Authority Tourism and Hospitality Sector Education and Training Authority Umsobomvu Youth Fund Wholesale and Retail Sector Education and Training Authority Workplace Skills Plan 7 LIST OF APPENDICES Attachment 1: Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G Appendix H Appendix I Appendix J Appendix K Appendix L Appendix M SETA by SETA analysis Report on Statutory Framework Pertaining to Skills Development Review of SETA Constitutions SETA Board Self-Completion Questionnaire SETA Chair Interview Schedule SETA CEO Interview Schedule Coded Qualitative Data from SETA CEOs and Chairs SETA ETQA Self-Completion Questionnaire Workplace Leaders Interview Schedule Coded Qualitative Data from Workplace Leaders HR Managers Self-Completion Questionnaire Summarised Review of Sector Skills Programmes Master List for Scarce Skills in South Africa SETA Targets and Achievements Against NSDS Objectives and Indicators 8 EXECUTIVE SUMMARY 1. INTRODUCTION AND BACKGROUND This is an executive summary for the research study that was completed by Singizi in March 2007. The study involved a review of the SETAs, and was commissioned by the Employment Promotion Programme (EPP) in September 2006. The study serves as an attempt to provide a comprehensive picture of the SETA environment so that stakeholders can collectively understand the different approaches that are being adopted by SETAs to carry out their mandate. It is hoped that the study will make a contribution to the development of a shared understanding of the critical success factors necessary to ensure the effective functioning of the SETAs within the context of the overarching skills system. In doing this, the study seeks to understand what the SETAs specific contributions are, and should be, and how these are supported or made more complex by other components of the system. This executive summary provides a brief synopsis of the methodology that was adopted to review the SETAs, and then contains the key findings and recommendations. The comprehensive findings are contained in the full report. 2. METHODOLOGY ADOPTED The research methodology adopted for this study has involved a series of multipronged activities divided into four components in line with the key research questions. As indicated, this study was conducted under the auspices of the EPP. This meant that the research team was reliant on SETAs to agree to willingly provide documents, learner data and time for interviews. In the main, there was very good co-operation from SETAs, although there were a few SETAs that were unable to provide all the data that was required, and one SETA CEO that was not available for an interview 1. The team also interacted with senior officials in key government departments before the research commenced in order to outline the purposes of the research and to adhere to appropriate protocols before accessing officials. These were distributed to: SARS Commissioner, Pravin Gordhan; DG Treasury, Lesetja Kganyago; DG Department of Labour, Vanguard Mkosana; and CEO SAQA, Sam Isaacs. These departments also all assisted with the project and the officials within these departments were extremely helpful in providing a nuanced understanding of the system as well as in the provision of documents where possible and the research team conducted a small number of interviews with key government officials within these departments. The different activities that the research team undertook in fulfilment of this brief included the following: 1 The details of this engagement with the SETAs are listed in the full report and the data provided by each SETA is attached in an annexure to the report. 9 Interviews • The research team conducted a series of interviews with a number of individuals who were, at different points, centrally involved in the development of South Africa’s skills development strategy. • In addition to this the team interviewed individuals from the AG’s office who are responsible for SETA audits. • As one of the primary research components of the study, the research team conducted face-to-face or telephonic (depending on the respondents’ preference) interviews with all of the SETA Board Chairs. • In addition to the above, the research team conducted face-to-face interviews with all of the SETA CEOs. • The research team conducted interviews with company CEOs/leadership Questionnaires • The research team developed a self-completion questionnaire which was distributed to board members; • The research team also distributed an ETQA manager self-completion questionnaire; • The research team obtained self-completion questionnaires from HR managers. Documentation • A review of some of the documents that have been written about the evolution of South Africa’s skills development strategy from the NTSI in 1994 to NSDS II in the present; • Documents (including relevant legislation) pertaining to the statutory framework relating to skills development and, specifically, the SETAs; • A number of documents that outline key governance issues in both the public sector and the private sector were reviewed as part of this component of the study. In particular, King II, as well as documents produced by government analysing governance issues pertaining to public entities, were consulted. • During the course of the research the team reviewed various reports compiled by the AG’s office on the SETAs. • All the constitutions of the 23 sector education and training authorities (SETAs); • The team also attempted to collect a series of documents and select pieces of data from the SETAs: Ultimately, the research team was able to achieve almost complete sets of data for the following: SSPs for the 2005-2009/10 period (a complete batch of the SSP Updates for 2006/7 was also obtained from SETAs and other sources); Annual Reports for the periods 2004-2005 and 2005-2006; Lists of registered learnerships; Learner data; and WSP templates. This data was then analysed and where immediate gaps could be seen, a follow-up process was undertaken with the relevant SETA. • In addition, the team also approached the NLRD division at SAQA for this learner data, so as to provide a point of data triangulation in this regard. • LFS data from the last 5 years was obtained in order to analyse whether there has been an increase in the numbers that have benefited from training programmes. • The team used a wide range of secondary sources referenced in the text of this report. These included previous studies supplied by the EPP, including: Sean Archer, The International Literature on Skills Training and the Scope for South African Application, Economics Department, UCT, 2006 and Reza Daniels, Skills Shortages in South Africa: A Literature Review, School of Economics, UCT, 2006. 10 Methodological Notes and Limitations With regards to the data provided by the SETAs a number of issues that need to be borne in mind in the reading of this report: • • • Where possible the team tried to extract a complete sets of data from all of the SETAs; However, difficulties were encountered in some cases with the internal validity and reliability of the data: While there was an attempt to verify this data with external data sources, the validity and reliability of data obtained from these other sources was also questionable. Despite the above, however, the research team took a position that a preliminary analysis of these pieces of data could at least provide a broad picture of the SETAs achievements. However, these problems point to the critical need to improve the data capture, management and reporting systems used by the SETAs and this issue is explored further in this report. 3. CONCEPTUAL FRAMEWORK This study has attempted to locate the mandate of the SETAs in terms of its genesis, and the policy and regulatory environment that frames the roles and responsibilities of the SETAs. It has then reviewed the institutional capacity of the SETAs in terms of its governance dimension, and the manner in which the SETAs undertake their core functions. Finally, it has considered the relevance of the outputs of the SETAs in terms of the objectives as set out in the skills development system. The methodologies adopted in this study and analyses applied to the findings were derived from a conceptual framework that is comprised of the following key elements: • SETAs form part of a broader system which necessitates an analysis of the SETAs within the context of the delivery chain so as to understand the following: (i) the extent that the systemic environment in which the SETAs are located support, or hinder, the ability of the SETA to effectively and efficiently perform their functions (ii) the way in which the scope of the SETAs has been interpreted in relation to the mandates of the other institutions that are critical to the overall success of the skills development strategy. • SETAs are seen as the central mechanism for mediating the relationship between training (supply side) and economic and social requirements (demand side). SETAs are central to interpreting the skills requirements in the context of economic demand, but they do not create demand. However, this study, as well as previous work commissioned by the EPP 2, highlights the complexity of the requirement for skills forecasting. Moreover, the study has suggested that there are real weaknesses in the planning system and that there are a number of concerns pertaining to the planning process including: The limits of employer-level data and, in particular, quantitative data, be recognised in modelling skills needs, 2 E.g. Sean Archer, The International Literature on Skills Training and the Scope for South African Application, Economics Department, UCT, 2006 11 The concern that employers reflect data in their WSPs that allow them to reflect achievement against plans in their ATRs, rather than reflecting real needs, as well as actual training conducted in the workplace; Linked to the previous point, the concern that bad source data tends to be escalated through the various levels of planning, with severe consequences for the credibility of planning and monitoring. This problem is aggravated by the absence of a credible comprehensive Management Information System (MIS) in the skills development sector; While there appears to be a growing acknowledgement that it is not possible to run skills systems that are so finely calibrated as to remain perfectly responsive to changing economic conditions, much of the skills development policies (especially in respect of planning) appears to be predicated on the assumption that such calibration is possible; The previous point is emphasised by the point made by Archer, quoting Rumberger, who contends that there are at least two types of quite different changes which contribute to alteration in the demand for skilled labour: “...(a) changes in the composition of jobs in the economy, and (b) changes in the skill requirements of individual occupations”. Successful forecasting would have to take explicit account of trends in both of these components. There is no evidence in the literature on skills projections that these have been tackled in a realistic model. • Institutions take time to mature and to reach sustainable effectiveness. The ten-year review comments that though economic policy processes have been sound, one of the key limitations in the implementation of economic policy has been the cost of institution-building. It observes that “Institutions, such as some of the small business agencies, the National Empowerment Fund, the National Development Agency, the Umsobomvu Youth Fund, some of the SETAs, and many local government level economic agencies, have taken a great deal of time to become effective”. Some key lessons are that the cost of institution-building should not be underestimated, and that, where possible, new tasks should be incorporated into the work of existing successful agencies. This perspective underlies the approach adopted in this study, which highlights the need to reinforce institutions that have been established (rather than adopting a ‘crash and burn’ approach, and to focus on developing an understanding as to where the blockages are in the implementation of activities). Thus, the study has focused on whether the SETAs have developed increased capacity over time and in which activities, and to distinguish these from those activities that SETAs appear to still not be able to be carry out effectively (Ten-year Review, Page 79a). Thus, the recommendations take into account the strength and capacity that the institution has in relation to its proposed scope and considers the viability of each of the functions allocated to the SETA. • The results-based methodology, which specifies outputs, is an approach that has won widespread support across the world. Many donor agencies have adopted this approach to improve the credibility of planning, accountability, and monitoring and evaluation. However, the growing body of literature on the shortcomings of New Public Management (which results-based planning is derived from) claim that the application of the methodology has produced varying results in different contexts. In a Case Study of the Tourism 12 Learnership Project developed for Business Trust 3 it was observed that the application of the results-based methodology in the Tourism Learnership Project may have run into significant problems. The dynamic and evolving nature of the context, institutional weaknesses, the fact that key institutional mechanisms required for implementation of the new training frameworks (such as registration of qualifications and accreditation of providers) were not in place and the weaknesses in the provider market, all combined to create a context that was unpredictable. This level of unpredictability made it difficult to determine numerical outputs - in terms of the learner numbers to be trained with any accuracy. It was suggested that the emphasis on achieving the specified numerical targets resulted in an implementation culture that was preoccupied with achieving the numbers – at the expense of quality, sustainability and relevance. Based on this, the case study highlighted that a key lesson arising from this situation is that numerically specified outputs need to be more comprehensive, focusing on a few key dimensions of the desired outputs, if they are to be effective. Furthermore, a level of flexibility is necessary regarding adherence to the specified outputs, especially in environments that are less predictable. The learning suggested by this case study is that while results-based planning is useful, its power is considerably enhanced and risks minimised if it includes target indicators on important outputs (including quality indicators) and if it is applied in a manner that is sensitive to the implementation and learner context. 4. RECOMMENDATIONS A number of recommendations have been formulated, based on the findings of this study. We have distinguished between high level recommendations that relate to strategic issues with system-wide implications and recommendations that relate to improving the effectiveness of the current institutional arrangements and can therefore be implemented in the short to medium term. 4.1 HIGH LEVEL AND STRATEGIC RECOMMENDATIONS This section highlights those recommendations that are related to systemic changes, and which will need to be explored for the medium to long term. 4.1.1 The Need for Prioritisation of Objectives Critically, this study flagged 4 the issue of the competing expectations with which stakeholders entered, and continued to engage with, the skills development policy debate. Crudely, this could be represented by (i) an urgent need expressed by the labour movement for individual access to employment and promotion opportunities by ensuring that skills development supports redress and equity; (ii) the imperative highlighted by employers for skills development to support increased levels of productivity; and (iii) the importance, advocated by educationalists, for the development of generic competencies that support recognition of prior learning, portability of qualifications and continual learning. While, these objectives are not mutually exclusive, the effort to accommodate them all has produced a very long list of objectives assigned to the system through the Skills Development Act: 3 Learning Series: Reskilling the Tourism and Hospitality Sector:A Case Study of the Tourism Learnership Project, Compiled by Carmel Marock for the Business Trust, September 2006 4 Particularly Section Two: the Skills Development Statutory and Policy Framework 13 • • • • • • • To develop the skills of the South African workforceto improve the quality of life of workers, their prospects of work and labour mobility; to improve productivity in the workplace and the competitiveness of employers; to promote self-employment; and to improve the delivery of social services; To increase the levels of investment in education and training in the labour market and to improve the return on that investment; To encourage employersto use the workplace as an active learning environment; to provide employees with the opportunity to acquire new skills; to provide opportunities for new entrants to the labour market to gain work experience; and to employ persons who find it difficult to be employed; to encourage workers to participate in learnerships and other training programs; to improve the employment prospects of persons previously disadvantaged by unfair discrimination and to redress those disadvantages through training and education; To ensure the quality of education and training in and for the workplace; To assistwork seekers to find work; retrenched workers to re-enter the labour market; and employers to find qualified employees. The existence of such an extensive list of objectives and their relationship to each other, have resulted in a number of unintended outcomes in the process of implementation. In particular, two unintended outcomes appear to be extremely significant and are discussed below. The first significant unintended outcome arises from the large scope and number of objectives. In policy terms, the long list of objectives represents a huge, and arguably, unrealistically complex mandate (in scope and technical difficulty) for an emerging system that is struggling to be institutionalised. These challenges are rendered even more serious when one accounts for the level of capacity available in a developing country such as South Africa. It should be noted here that the experience of highly industrialised countries with regard to similar models of skills development but, which some may argue, with somewhat smaller scope, suggests that implementation was anything but easy and demanded highly developed levels of capacity. The second significant unintended outcome relates to the fact that all the objectives are given equal priority in the National Skills Development Strategy and our analysis suggests 5 that, in specific instances, in the course of implementing the Skills Development Strategy, some of these objectives operate as competing objectives. The following two examples, drawn from the analysis presented earlier, illustrates this point: • 5 There is an emerging tension between implementing the targets identified through the SSP versus those targets contained in the SLA, which have been mediated by the priorities outlined in the NSDS. This tension emerges in the analysis of the scarce skills training, where it can be seen that many of the Primarily from the evidence presented in Sections Three, Four and Five 14 SETAs are not adequately addressing scarce skills through providing training at the level in which there is an identified scarce skills, instead SETAs have placed emphasis on ensuring that large numbers of individuals access programmes in accordance with the requirements of the NSDS. This translates into increased access for individuals for programmes on levels 1 and 2 on the NQF. This directly links to costing, as for SETAs to reach their numerical targets, it is almost impossible resource-wise to plan for programmes of a longer duration than a year - a requirement if learners are to move from lower levels on the NQF to higher levels, which represent the levels in which there is an identified scarcity of skills. This uncomfortable prioritisation process links to the multiple objectives, but also to the manner in which these objectives are translated into a myriad of indicators that further emphasise the different priorities of stakeholders. NSDS Objective 1’s indicators emphasise the need for skills development to support increased productivity and competitiveness of employers, and the role of skills development in terms of promoting quality of life and labour mobility. The continued tension pertaining to this point emerges in JIPSA discussions, where role players articulate an urgent need for SETAs to support programmes that are consistent with ASGISA priorities. Many of the SETAs indicate that it is difficult for them to respond to these requirements, because of commitments that have been agreed upon which speak to the NSDS and are contained in the Service Level Agreements. • Another example drawing from the research is the imperative placed on ETQAs to ensure the quality of training in the workplace, whilst at the same time focusing on policy requirements to increase the number of SMME providers. ETQAs indicate that they are unable to fully meet their quality assurance requirements because of the growing number and geographic spread of providers, and the related need for high levels of provider support, given the number of emerging providers. Both of these examples highlight the manner in which different stakeholder expectations have been integrated into the NSDS, and the way in which this impacts on the ability of SETAs to navigate these different needs and successfully achieve the identified objectives. While all the objectives are clearly compelling in the context of South Africa’s transformation project and are not objectively mutually exclusive, in the context of actual conditions some of the objectives tend to operate in conflict to each other. The effect of this phenomenon is quite significant, as the efficacy of the system to deliver on key objectives becomes severely constrained. In the context where objectives tend to operate in conflict and where there are no clear policies that discriminate between these objectives in terms of their importance, any system would tend to favour those objectives that performance reviews and incentives tend to favour. It is therefore extremely important for the system to distinguish between what are considered to be the primary objectives of the skills development system and what may be regarding as secondary objectives. In this way, all the monitoring and financing policies need to align in pursuit of these objectives. The explicit challenge to the system would then be to develop a cogent strategy that is focused how the primary objective will be met, and how the secondary objectives can be met in manner that both realises their policy imperative and supports the achievement of the primary objective. This suggests the need to develop indicators against the secondary objectives, which result in accurate signalling and credible monitoring of implementation in a manner 15 that does not reduce the efficacy with which primary objectives are achieved. At the same time, it should be ensured that secondary objectives are addressed in a meaningful way; without severe perversions or gaming (expedient pursuit of targets that are deemed to carry maximum public relations value). For example, for equity to be meaningfully achieved, it is critical that previously disadvantaged individuals’ access programmes that enable them to pursue learning and career opportunities. Perversions or gaming in this example would manifest by implementing mass programmes at lower levels that do not enable learners to access opportunities. The result of these programmes will simply be to reduce the envelope of resources available to address skills requirements in the sector. But the perversion would be that such a SETA would be assessed to be “highly effective”, confirming the woeful inadequacy of the indicator applied. To reiterate the analysis presented earlier this report; assuming that the primary objective of the system is ‘quality skills provision for growth’, then it can be clearly seen that if we do not meet the objective of quality provision, there is little point in celebrating the achievement of the accreditation of large numbers of SMME providers that cannot offer quality education and training. In a more complex example, as stated previously, the indicators that focus on equity and those that emphasise growth are currently manifesting in a competing set of actions. However, if ‘quality skills provision for growth’ is the primary objective, then it is critical that the efforts undertaken consider what the growth needs of the sector are. This should be done in a manner that supports equity, both because of the political (and moral) imperative for redress, but also because if the South African labour market is not transformed in a more equitable manner, then this will, in turn, impact negatively on growth in the longer term. Thus, the equity targets should be located in a strategy that moves individuals from lower levels on the NQF, to levels and programmes that are consistent with areas in which there are opportunities – or, phrased differently, to programmes that address scarce skill needs. This will have resource implications, and therefore requires a focus on addressing equity in a manner that supports growth so as to assist the decision making process that is required for relevant policy decisions. In summary, this analysis highlights the need to identify the primary objective, and to then ensure that - in the manner in which both the primary and secondary objectives are implemented - the secondary objective does not diminish the efficacy of the implementation of the primary objective. 4.1.2 Clarifying the SETA Mandate This study has conducted an assessment of the SETAs’ collective success in fulfilling the objectives of the Skills Development Act. However, the review of the outputs achieved by SETAs against the objectives set out in the National Skills Development Strategy highlights that scope of functions undertaken by the SETAs has increased in significant ways since their inception; and they appear now to have taken responsibility for the achievement of all the objectives outlined in the Skills Development Act (SDA), including those that were previously assigned to other institutions. Some examples of these additional responsibilities include the following: training career guidance counsellors; recruiting learners directly into learnerships, as well as ensuring that learners are placed in the workplace; and promoting SMME creation. 16 The last-mentioned example, related to SMME promotion, provides a clear illustration of scope “creepage”. The SDA states that the intention of the Skills Development Strategy is to promote self-employment, but does not articulate a specific role for the SETAs for this component of the strategy. However, in practice, SETAs are held accountable for small business development in respect of a range of targets. And while some of these targets are consistent with their statutory scope, others are clearly not. For example, in terms of the SDA SETAs are required to ensure that small businesses access the grant, and that small businesses are able to participate in, and benefit from, the skills development strategy. However, SETAs are currently also directly supporting the establishment of small businesses as a placement strategy and, as indicated previously, a large part of the quality assurance work is focused on creating SMME providers. This additional responsibility respresents a significant increase in scope, and concomitantly requires a substantial additional demand in institutional capacity. Two important concerns arise in response to the above: (i) some of the additional responsibilities that the SETAs have picked up form part of the mandate of other institutions within the Department of Labour – such as the employment services, Umsobomvu Youth Fund - and those institutions that are located elsewhere in government such as DTI. It is important and more preferable that these institutions be held to account for these activities, rather than simply extending the scope of the SETAs; and (ii) that there is a need to consider the scope of each SETA within the boundaries of viability. It may be too ambitious, for example, to require that the SETAs play all the responsibilities that currently accrue to them in practice. It may be preferable to focus on increasing the strength of the SETAs to undertake a limited set of key responsibilities and with greater efficacy, than increasing their scope or even developing unrealistic expectations for the manner in which the activities can be carried out within the limits of existing capacity. Fukuyama 6 provides a useful model for analysing this question further: In his analysis of different states and their respective strengths and scopes, Fukuyama highlights the importance of distinguishing between strength and scope. A key problem that recurs in certain discourses on the state is to conflate notions of strength with that of increased scope and, in that way, contributing to state failures on account that scope has been delineated far too widely to be feasible. Fukuyama contends that a key public policy objective of state building is to ensure that strength is increased, even if this necessitates a reduction in scope. 6 Fukuyama, Francis: State Building: Governance and World Order in the Twenty-First Century, 2005 17 This argument can be graphically illustrated by the following graph: Fukuyama’s Strength and Scope Model Increasing Strength Quadrant I Quadrant IV Quadrant II Quadrant III Increasing Scope In terms of this model, the ideal location would be within quadrants I or II – that is, to have a high level of strength with a scope that is somewhere between what is . Fukuyama describes the continuum along the X axis thus: “…stretches from necessary and important to merely desirable to optional, and in certain cases where there is an increase in scope (with diminished strength) to counter-productive or even destructive.” In applying this analytical framework to institutions or systems, it would imply that an increase in scope, without strength, would eventually give rise to a situation where the institution reaches a point where the increase in scope is counterproductive; that is, where “lots of things are done badly”. Fukuyama’s model was adapted for this study and applied to an assessment of the functions of the SETAs in terms of the where on the continuum the responsibility is currently located and where we believe it should feasibly be located given current capacity if the function is to be performed optimally. This assessment is provided in the following section which outlines the teams recommendations for improving the effectiveness of the institutions within the current institutional arrangements. It is clear from the study that the SETAs collectively bear a mandate that is very high in scope, but without the commensurate capacity to undertake the various functions arising from this scope. In terms of Fukuyama’s model, they therefore fall within Quadrant III of Figure 1, above; representing the least desirable situation to be in. The negative consequences identified by Fukuyama and described above are therefore likely to arise with strong probability. Some of the most intractable problems being experienced across SETAs, as described in the full report, are not doubt linked, to some degree, to this phenomenon. We believe that the question of scope is one of the most important issues that the skills development system is currently faced with. There needs to be a careful consideration of what elements of the scope is essential in the current period and which the system will be able to cope with given current capacity and the stage of institutionalisation of the system. 18 4.2 RECOMMENDATIONS RELATED TO IMPROVING THE EFFECTIVENESS OF THE CURRENT INSTITUTIONAL ARRANGEMENTS This section focuses on those recommendations that can be implemented within the existing framework and therefore have immediate application. 4.2.1 Governance As indicated in the main body of the report, the institutional arrangements that have been established to operationalise South Africa’s skills development policies are indeed very complex. The system of governance, and the related legislation and policy that are designed to promote accountability and effectiveness, are predicated on a high level of devolution. This approach is intended to simplify decision-making and, in so doing, enhance effectiveness. But devolution inevitably increases the risk of financial mismanagement and the system seeks to mitigate these risks through various institutional mechanisms. The pre-eminent institutional mechanism, in this regard, is the system of internal audit and policies and procedures for Supply Chain Management and risk management. The research findings show, on the one hand, when we compare the Audit outcomes of SETAs with those of National Departments and Public Entities, the SETAs compare very well to National Departments and Public Entities with regard to audit outcomes. Indeed, there was a greater proportion of SETAs that achieved clean reports in both years compared to the other categories. These findings may run counter to general perceptions, as most people are more likely to expect SETAs are much worse in a comparison of this nature. On the other hand, this study has highlighted the concern that a significant number of SETAs have not been able to implement some of the crucial institutional mechanisms. Particularly worrying is the fact that a number of SETAs have not been able to establish a credible internal audit capability and that there are a number of SETAs that are consistently failing in their governance functions. The report noted that the Skills Development Amendment Act creates the space for the Minister of Labour, as the executive authority, to act decisively where required. This is an issue that requires greater attention and will be addressed in the recommendations. Finally, this study acknowledges the complexity of the compliance requirements and this report makes a number of recommendations, which are intended to strengthen the institutional governance arrangements of the SETAs. . Improving Accountability To assist in addressing these challenges, it is extremely important for an explicit stance to be taken in relation to under-performing and culpable SETAs. This review highlights where there are consistent concerns relating the performance of certain SETAs and highlights those SETAs with which there have been consistent concerns raised in the report of the Auditor General. In these cases it is recommended that there is a need for a credible forensic audit that reports to the executing authority (unfettered by management and the board) to be undertaken to investigate the extent of the lapse in financial management and whether any culpability exists. This action will also serve to emphatically clear any misconceived perceptions of financial impropriety. If culpability is uncovered in the process, it would be important that the provisions of the law are invoked to protect the integrity of the SETA governance system.This is seen as critical to signal a seriousness, so as to ensure effectiveness and accountability within the system. It is also extremely important to take such 19 action to uphold the obligation to ensure proper stewardship of public finances, and to ensure effectiveness of the skills development system. This is seen as particularly important, as our review does suggest that there may be situation prevailing whereby the serious shortcomings that are confined to a limited number of SETAs are shaping public opinion of all SETAs. Apart from this being unfair, it tends to compromise the integrity of the skills development system. Further, the Department of Labour is best placed to play a much-needed role in standardising various aspect related to systems and the constitutions of SETAs. This will go a long way in improving the effectiveness of the systems of accountability and stewardship. Improving Institutional Governance This review has highlighted the importance of tripartism, and interviewees have consistently raised the issue of the SETA boards failing to realise a coherent identity, but rather operating as a bargaining council. It is suggested that to support the effective functioning of the boards, it will be of immense value if the government presence can be greatly strengthened (in seniority of representation and, in some cases that they have higher numbers currently allowed for in the constitutions). One of the most significant challenges in the present governance policy provisions is the fact that the complex and serious nature of board members’ responsibilities do not reconcile well with the part-time nature of their tenure and casual nature of practice. This phenomenon does not apply, in the same way, to boards in the private sector where responsibilities tend to accrue to executive directors (board members) who happen to be full-time. We recommend that this matter receive urgent attention, as the status quo is certainly untenable in the long-term. Linked to this, there is a need to carefully formulate, and then implement, criteria for board membership. These formulations need to give due regard to the kinds of attributes that are required to ensure optimal effectiveness of the board in discharging its critical role in the skills development system. Further, there is a need to consider more carefully the induction and training of board members, which needs to be urgently addressed. However, the option of crash courses have proven to have very little value in addressing the challenges discussed in this report. It is perhaps best to start by formulating a detailed capacity development strategy before embarking on any training. It is extremely important that the formulation of such a strategy be driven by people who have no link to training provision in this area, in order to avoid possible perversions or suspicion of perversions. Improving Corporate Functions In view of the importance of this capability, a senior official of the National Treasury interviewed for this review proffered a suggestion the option of establishing internal audit capability that can be shared by a few SETAs. This will allow for economies of scale, and assist in solving the recruitment problems in this area of scarce skill. This is an idea that may be worth pursuing. It is also suggested that the concept of a company secretary, who is a very high-level and skilled person, be appointed to service the board, though expert advice on compliance to corporate governance provisions should be considered in the case of SETAs. However, such a person is not the same as someone who simply services the logistical and minute-taking requirements of the board. It likely that the recruitment of suitably qualified persons (for example, CIS) will not be easy, in this 20 case the option of a shared facility between a few SETAs may be viable as an alternative. It may be advisable for the Department of Labour to play a proactive and explicitly developmental role in promoting capacity for good governance in SETAs through appointing a person who could resource the corporate governance capacity development needs of SETAs. 4.2.2 Core functions As indicated, Fukuyama’s model was adapted for this study and applied to an assessment of the functions of the SETAs in terms of the where on the continuum the responsibility is currently located and where we believe it should feasibly be located given current capacity if the function is to be performed optimally. This assessment was conducted for each of the major responsibilities allocated to the SETAs and was aimed at identifying the most feasible scope for a particular responsibility based on the limits to their capacity (even with interventions to improve capacity). Note that this section therefore does not even include those functions that the SETAs are performing that do not fall within their scope as identified in the SDA. Fukuyama’s Strength and Scope Model applied in the assessment of SETAs’ capacity to undertake their current mandates and options for redefining the scope of mandates to improve feasibility Responsibility Develop a sector skills plan within the framework of the national skills development strategy; Establish and promote Learnerships: Identify the need for a learnership; develop and register learnerships; Identify workplaces for practical work experience; support the development of learning materials; improve the facilitation of learning; assist in the conclusion of learnership agreements & register learnership agreements. Minimalist Scope related to responsibility Signal broad trends emerging from a national analysis of broad economic trends Identifying and registering learnerships with the DoL, registering learnership agreements and encouraging employers to host learnerships Activist (high) scope related to responsibility Review of current Capacity Feasible option based on current capacity Detailed forecasting which allows for a modeling exercise which translates knowledge of skills needs and a functioning training system This is an area that (in the main as there are a few good examples) there appears to be very limited strength and capacity: SETAs do not have sufficient data pertaining to current skills in the sector. Nor is there data as to training taking place. There appears to be minimal capacity to model different scenarios and instead, there are lists of occupations which in many cases do not appear to be a credible representation of scarce skills. SETAs should focus on the development of SSPs that focuses on broad labour market signalling of skills requirements rather than on detailed planning. The SSPs should have an increased focus on strategic plans to support training in scarce and critical skill occupations. Identifying and registering Learnerships with the DoL: registering learnership agreements AND developing national curricula with associated learning materials & assessment instruments, manage LS and recruit learners & ensuring that there are sufficient number of workplaces The SETAs are unevenly managing the Learnerships (including selection of learners). They have shown an increased capacity to identify and register learnerships, there are increased activities to support the development of curricula. However, the learnerships are not, in the main, either addressing scarce skills, or enabling learners to access scarce skill programmes. There has also not been a consistent application of assessment and moderation practices. This suggests that while the policy objective may lean towards detailed modelling processes (albeit not manpower planning), it is more realistic to consider the possibility of SETAs focusing on providing signals, which suggest occupational trends that are emerging as important (defined by growth and scarcity) in the context of broad economic trends and improved data about existing skills and training. The SETAs should focus on the identification of the need for Learnerships (as part of SSP process), should advocate for workplaces and should ensure that LS are registered with DoL. There should be a central process to ensure that these LS are part of an articulated learning pathway located within a clear curriculum framework (and aligned with apprenticeships where relevant) This is consistent with the NQF policy recommendations for curricula to be integrated with qualification development. 21 Responsibility Collect and disburse the skills development levies in its sector; approving workplace skills plans; and allocating grants in the prescribed manner to employers, education and training providers and workers. Minimalist Scope related to responsibility Administer the processing of WSPs and allocate mandatory grants. Allocate discretionary grants in terms of national criteria. Activist (high) scope related to responsibility Review WSPs against the priorities identified in the SSPs, and allocate monies in terms of these priorities. Utilise the monies in the DG grant to steer additional training in priority areas that support access and progression to employer workers. Further, with the DG and the NSF allocations, support increased access of unemployed into the labour market as well as further learning opportunities. Review of current Capacity Feasible option based on current capacity SETAs have shown increased capacity to administer the grants successfully, and there has been a significant improvement in the number of enterprises that receive their grant back. SETAs should continue to be required to pay the mandatory grant on the basis of the submission of a consolidated WSP/ATR report. However, the SETAs in the main have not shown the capacity to review and approve WSPs against sectoral priorities, and there is a reported tendency for workplaces to plan for training that they can easily provide so as to avoid penalties when reporting. Thus there is a limited picture of needs or training provided by the WSPs or ATRs. Further, weaknesses in the SSP process make it unlikely that the SETAs will be able to check or steer the skills system against priorities, even if they had the capacity to undertake these reviews. To support this it is proposed that a consolidated template is developed which encourages workplaces to provide a comprehensive picture about existing skills in the workforce, new entrants and the nature and costs of training taking place in the workplace. This would be consistent with the EE reports and could support future planning. It would also assist to determine whether the objective in the NSDS pertaining to increased training and investment is being realised. In the longer term the capacity of the SETAs to use the mandatory grant to steer the system could be reviewed. With regards to the DG Grant and the NSF Grant allocations, ways to reduce the transactional costs should be sought, and the need to ensure that these programmes are consistent with the SSP priorities is critical – including the possibility of programmes that run for an extended period. In addition, SETAs do not appear to have developed the capacity to efficiently facilitate the allocation of DG and NSF monies. This seems particularly the case as the models for disbursement that have been selected appear to have exceptionally high transactional costs, such as the selection of learners in some cases, the need to administer each individual learner agreement, as well as the large number of service providers. Again, the absence of a credible SSP makes steering of training complex. 22 Responsibility Minimalist Scope related to responsibility Activist (high) scope related to responsibility Review of current Capacity Feasible option based on current capacity Fulfil the functions of an ETQA Accredit providers against basic administrative requirements and ensure that learner enrolments and results are captured Ensure that there are front-end and back-end quality assurance processes which facilitate: effective standard generating, and support providers with: curriculum development (including assessment instruments), quality institutional and workplace learning, as well as credibly moderated assessment. This research study has discussed the challenges that SETA ETQAs face in terms of maintaining consistent quality in performing their functions in the face of an everincreasing pool of providers and workplaces spread across the country. It is noted that resource constraints are made even more severe in the context of providing significant levels of support to small and emerging providers. SETAs should focus on workplaces as this is clearly within their remit – that is can the workplace support the learning in terms of equipment and supervision. The role that SETAs should play in the quality assurance of the provider institutional components and the monitoring of providers should be considered within the context of the changes being proposed within the NQF policy review process. Further, the report highlights the difficulties that the SETAs have in monitoring providers in terms of throughput and pass rates of learners. Further, the reliance on frontend quality assurance (programme evaluation per provider) as well as the fact that in the main providers have their own internal assessment instruments (rather than an external assessment) and processes create a great strain on the SETA. Monitoring education and training in the sector To provide learner data for learners that have participated in SETA supported programmes in terms of agreed upon fields and a detailed financial analysis in terms of activities that have taken place against agreed upon objectives A comprehensive reporting arrangements that ensures increased accountability in terms of clear effectiveness and efficiency indicators that demonstrates how the achievement of the primary and secondary objectives are being supported. Across the system there appears to be very limited capacity to capture and verify data (although these are some exceptions to this). The data sets are incomplete and do not allow for an analysis of achievements against the objectives. SETAs should be required to capture and report on data in terms of: number of learners broken down into race, gender and disability. This information should be recorded against programme name, type, level and costs as well as funding sources. SETAs should also report on other programme activities against objectives. Further, while the report highlights that SETAs in the main have performed well in terms of their audited statements there is still a lack of capacity to report expenditure against programmes and activities. To facilitate this there is a need for clear definitions & a template that is used across SETAs. These reports should be made available on a SETA by SETA basis to ensure that there is public accountability. 23 4.2.2.1 Planning This section provides core recommendations pertaining to the revision of indicators within the NSDS in order for them to be more meaningful for the purpose of planning and consistent with the Skills Development Act (SDA). In addition, recommendations related to enhancing the SSP process and how planning can be supported by improved data from workplaces, are also offered. National Skills Development Strategy This recommendation relates to the high level strategic recommendation which focuses on the imperative to determine primary objectives and secondary objectives, with clear quality indicators that support the achievement of these objectives. This suggests that the key recommendation in the short-term is that there is a need to fine-tune the existing NSDS whilst not losing sight of the extensive stakeholder process that was run to develop the NSDS. This would focus on developing indicators which the SETAs could be reasonable evaluated against, and establishing the indicates (some the same and some different) which other institutions will be evaluated against in terms of the a achievement of the NSDS. While this process takes places, it essential that the negotiation of NSDS sector targets with SETAs which form part of the SLA process accounts adequately for the sector requirements as outlined in the SSPs pertaining to each SETA. This implies a significant departure from the current practice, which findings in this report suggest amounts to a rather mechanical distribution of the aggregate national figure among SETAs which does not always take into account the sectoral priorities and the resources that will be required to support provision against these priorities. Sector Skills Plans The limitations of SSPs have been extensively documented in other studies and emerge with corresponding emphasis from this study. In view of this and given the serious capacity shortcomings of the SETAs with regard to data capture and management and economic modelling, it is recommended that it is clearly most prudent to adopt a minimalist approach to sector skills planning. Such a minimalist approach might be comprised of the following elements: (I) The institutionalisation of a clear and standard definition of “scarce skills” across all SETAs; (II) Formalising support by the DoL’s planning division to all SETAs in the application of broad forecasting methodologies. This should be aimed at exploiting economies of scale and account for the overlaps across SETA sectors. This will also assist to provide a framework that will contribute to planning for scarce skill categories that cut across different sectors; which is a challenge in the current planning frameworks. (III) SETAs should then be required to focus their efforts on the important task of SETA-wide consultations that focus on skill shortages in their respective sectors. SETAs should also use data collected in their sector (based on recommendations below). Based on this improved data and consultative processes, the SETAs should be required to develop broad forecasts of skills requirements and then craft 5 year strategies for supporting skills development in support of sector growth. Within these strategies, 3 year plans, projects and budgets should be developed. It is not anticipated that 24 sectors will be able to provide numbers against occupations that are anything more than indicative, or even illustrative of potential scale of need. Thus the focus will be on what can be achieved (targets) to address these scarce skills in a manner that takes into account the secondary objectives that are to be realised. Improving Enterprise Information One aspect of improving data available for SSPs, relates to the imperative to address the paucity of data relating to training taking place at the workplace which has been consistently raised in this study. Both the findings from the review of the plans and the levy/grant sections highlight the perverse incentives that have come into play with regards to reporting training output against plans. The section on finance also highlights the point that there is little evidence that the SETAs (in the main) have the capacity to steer the system using the mandatory grant. For this reason, it is suggested that the emphasis of the WSPs and ATRs change, and employers should simply report on one template: the profile of their current workforce and the training (including the costs associated with this training) that they have undertaken during the previous year. Based on this submission, the Mandatory Grant should then be paid, which would minimise the tendency to only submit plans for what employers think they are expected to provide for the allocation of Mandatory Grants, and reports that are reduced to training against those plans rather than on providing a full picture of training that has taken place. This recommendation is seen as critical in enabling SETAs and the system to develop a picture as to what training has taken place in their sector and to allow for an analysis as to whether there is an increase in training both in numbers that benefit as well as levels of investment. In pursuance of these revisions to reporting requirements, the reporting template should ideally include data that focuses on: composition of the workforce against the Organising Framework of Occupations (OFO); the recruitment and loss of employees against OFOs; the increase or decrease in enterprise positions against OFOs; and training conducted against OFOs and NQF levels, including training expenditure. 4.2.2.2 Learnerships There are a number of issues that have been raised pertaining to the design and implementation of learnerships. While the study has raised a number concerns about the quality of provision, this was not the focus of this study, instead, the emphasis is on the manner in which SETAs can more effectively manage these functions. A number of issues arise as important in this regard: • • The relationship between the SSP process and the qualification generation and learnership development processes should be made explicit. This would assist to reduce the inefficiencies caused by the large number of qualifications that have been developed, and learnerships that have been registered which are not used at all in the system. It would also assist to ensure that those areas in which need is identified forms the focus of these activities, and that this is done in a manner that supports alignment between qualifications and positive labour market outcomes The acknowledgement of the dynamic nature of the labour market and the inherent challenges related to planning, makes it imperative for the system to support quality programmes that focus on selecting for, and developing ‘human capital characteristics of economically active individuals’ such as attitude and values, educational qualifications, certificated skills, work experience, language proficiency. Such an approach, is likely to enhance labour market outcomes 25 • • • associated with training, regardless of occupation, sector and specified job vacancies. This underscores the importance of being more explicit about the learning assumptions associated with each qualification. Critically, we strongly believe that SETAs should not be selecting learners; rather they should apply their experience in providing greater guidance about selection matters. Improved selection is seen as crucial in terms of the large inefficiencies that are created both by national recruitment processes as well as by learners changing learnerships half way through a learnership, which contributes to low throughput rates; That there is a need to ensure that there is alignment of trade qualifications with learnership qualifications, where relevant, and the SETAs (and the DoL) need to ensure that it is clearly communicated that both of these routes will be accommodated within the system. This will require that the Department of Labour consistently reinforces this important policy provision; and, That the learnerships must be seen as one among a range of learning interventions that are possible and provided for in the SSP plan. The specific role of the SETA with regards to these different interventions needs to be critically evaluation so as to establish whether the high transaction costs are being justified by the outcomes attained. For example, given the evidence that the majority of programmes addressing scarce skills are supported through bursaries for courses offered in Higher Education Institutions, it is important to assess impacts on Government policy and financing of the NSFAS. However, this option has not been explored, and the specific capacity of the SETAs or the NSFAS to support learning at higher education needs to be reviewed to understand the complementary roles that these two structures could play. It is apparent from the study, that the role of SETAs in supporting learning in higher education is not grounded in an explicit policy that is aligned with the broader framework of public funding of higher education (including state subsidies and NSFAS). 4.2.2.3 Quality Assurance The quality assurance of provision is an issue attention in current policy debates. The study has have arisen linked to the large number of ETQAs, assurance that have been adopted across ETQAs, the accreditation system that has been adopted. that has received considerable highlighted the complexities that the varied approaches to quality and the onerous requirements of Many in the course of this study have expressed doubt about whether SETA ETQAs should remain a SETA responsibility, on grounds that the resources required for accreditation and related processes may be “crowding out” what is perceived as “core business” of SETAs. There is incontrovertible evidence that SETAs are not succeeding in performing their ETQA functions credibly. This is a serious threat to the skills development system, which is predicated on the assumption that the functions assigned to the ETQAs are effectively carried out. It is unwise and untenable to continue as if this vital cog of the skills development system is functioning effectively. This matter warrants urgent and purposeful action. The two key recommendations that are made in this report pertaining to quality assurance are therefore: • It is essential that the systemic issues relating to quality assurance are understood and resolved; failing which, the likelihood of the problems simply transferring to another institution would be very strong. This includes a considered analysis as to which quality requirements are possible within the existing capacity of skills development institutions – for example, whether it is 26 • possible to quality assure large numbers of internal assessments or if there is a need to establish effective external assessment mechanism minimally at the point of qualification. This study also recommends that in determining which quality assurance functions the SETA should retain there is a need to consider the broader activities of the SETA so as to establish which quality assurance activities compliment these and which are extraneous to the core functions of the SETA. An example of this is that of the quality assurance of workplace provision which seems integral to the role of a SETA, and may not be as effectively addressed by a structure that is removed from the sector. 4.2.2.4 Finance This report highlights the challenges in the SETA environment, and the strides that will need to be taken to enhance the institutional capacities of the SETAs; it has also illustrated the areas in which there has been progress made. In view of the existing SETA landscape, the teams recommendations pertaining to finance are predicated on the view that the system is unlikely to have the capacity to absorb any sudden increases in financial flows above those presently projected. Any sudden increase may disrupt the current positive trend in stabilising the SETAs and in building the capabilities required to effectively meet the objectives of increasing the investment in training and quality of outcomes. Role of the Mandatory Grant Expenditure rates have improved considerably over the years since the establishment of the SETAs. This growth has been driven by improvements in the rate of employer grant disbursement, but only after the requirement for SETAs to appraise WSPs for compliance to sector priorities was removed. This action was necessary to remove the blockages and delays that were retarding the smooth flow of employer grants. However, its removal has fundamentally altered a key assumption in the levy-grant system, which is to use levy payments and claiming as a mechanism for steering workplace training and for ensuring that it corresponds to sector priorities. This matter needs to be carefully considered, but its reinstitution can only be effected following a clear demonstration that the system has sufficient capacity to undertake these tasks without compromising the efficient flow of funding. It is important to ensure that no further impediments or increases in transaction costs are brought to bear on successful workplace training that is currently underway. Discretionary and NSF Grants There is a need to ensure that DG can support training priorities emerging from the SSPs and that these support a range of programmes. This includes the possibility that the programmes run over more than one year enabling individuals to realise either an Employable Skills Unit or an occupational qualification required by the sector. Monitoring expenditure and investment in training There is very clear evidence that the extent of public investment in training has increased considerably as a direct consequence of the ear-marked tax introduced through the SDLA. It is however much less clear whether investment in training by employers has increased as was intended in the policy. A paucity of information in this regard makes this kind of assessment very difficult. Employers are not obliged to report on training investment undertaken outside of those funded through employer grants. This is a matter that requires attention in the policy analysis and development 27 processes, and possibilities to address this absence of data are highlighted in the recommendation pertaining to improving the mechanism for enterprise information outlined in the planning recommendations as well as in the section below. Linked to the above, the report highlights the absence of detailed financial information provided in any consistent manner by the SETAs. It is recommended that the requirement for financial information to be captured in a manner that allows for comprehensive financial analyses, thus establishing a credible basis for improving the effectiveness of financing policies in the training sector be introduced. 4.3 Monitoring SETAs This review underlines that need for credible monitoring mechanisms to be institutionalised, based on a set of credible and comprehensive indicators that are grounded in a rigorous clarification of the primary and secondary objectives for skills development. This is consistent with the conceptual approach outlined in this chapter, which highlights the need to take into account the imperative to balance a focus on outputs, with a clear focus on the objectives of the system. This study highlights the concern that the SETAs are currently required to report against each indicator in terms of output targets that it has set. This results in data that is difficult, or even impossible to reconcile. So, for example, the number of unemployed learners undertaking programmes in scarce skill areas are difficult to analyse (with the exception of a few of the SETAs), as the number of unemployed learners is reported under NSDS targets, but the learner enrolment and achievement data does not provide a profile of the learner. The same issue emerges in terms of race, gender and disability. Further, in many cases the outputs reported on bear little resemblance to the indicator, and even less to the objective; making it difficult to determine whether the information being reported is contributing to the objectives of the SDA. Information from providers is randomly provided and the completeness of learner information raises very serious concerns about the integrity of the system, including the important aspects of accreditation and certification.To complicate matters further, the numbers submitted and captured on the NLRD do not reflect the training that is taking place in the economic sector, but rather focus on training that is within a particular ETQAs primary focus. This reporting frame makes it more difficult to establish what training is taking place within the purview of a particular SETA’s sector. This study has also highlighted that there is a chronic paucity of data from the workplace with regard to training not funded through SETA grants, making it impossible to monitor whether the overall skills development strategy is impacting on the type of training that is taking place in the workplace and the scale of investment that is being made by employers and whether this is indeed increasing. Finally, the paucity of financial data in the SETAs and the Skills Development System is a matter of very serious concern that warrants urgent attention. The present systems are incompletely populated and accessing comprehensive information for substantive review has not been possible in this study. The risks associated with the present situation are extremely high and demands urgent remediation. A response to the above issues, including some of the recommendations raised in the recommendations pertaining to the improvement of the functions of the SETA, includes some of the following: • A focus on a set of ‘dash board indicators’ that focuses on: effectiveness (the measure of the correlation between outputs and training objectives) and 28 • • • • • 5. internal Efficiency (as a measure of the relationship between the inputs (measured in money terms) and the outputs) with a strong emphasis on achieving External Efficiency (relevance), that is the extent of the match between the outputs and objectives of the training system, on the one hand, and the economic & social requirements, on the other hand. The introduction of a standardised single template which allows SETAs to report on learners against all the relevant fields (this requires learner data in terms of race, gender and disability against programme name, type, level and cost as well as an indication of where the funding from the programme is from; As recommended above, the amendment of the WSP and ATR to allow for a single template in which workplaces will provide information about existing skills in the sector, new entrants as well as all training supported at the different levels on the NQF. This data should be analysed so as to allow for a comprehensive picture of training taking place in workplaces in the sector; The inclusion of an additional field in the NLRD for data on the economic sector the learner is from, which will assist to make it possible to verify data received from SETAs (this will then include information on programmes based on the workplace reporting template, specifically programmes funded through the SETA as well as programmes that may be supported through other mechanisms such as the NSF; As recommended previously, the requirement that the SETAs provide a detailed financial breakdown which allows for an analysis of costs and expenditures against programme activities; and, Over and above the AG process, there is a need for a due diligence process to be undertaken with regards to the performance reviews of SETAs. This would (i) establish whether the steps that the SETA indicates that they followed as part of the skills planning process were in fact undertaken, and (ii) whether the learner records can be verified. There is also a need to establish whether the scarce skills identified in these SSPs resonate with other forecasting processes in the relevant sector (it is noted that the DoL is attempting to explore this aspect in the research it has commissioned with the HSRC). CONCLUSION Significant progress has been achieved by SETAs and the Skills Development system. But important challenges have emerged from this review with regard to: the level of development of SETAs; the numerous challenges that persist in respect of implementation, effectiveness and efficiency; the shortcomings in the functioning of the training market; the underdeveloped capacity and functioning of the monitoring and evaluations systems; the lack of effective management information systems; the effectiveness of quality assurance mechanisms in the system all combine to suggest that the SETAs and the Skills Development system are still at a critical stage of institutionalisation. The findings of this review suggest that the SETAs are on a positive trajectory. Future success will be contingent on a recognition that institution building is a complex and demanding process that requires purposeful and sustained investment. This suggests that changes in the SETA landscape require careful consideration with an emphasis on instituting changes that build on the current system and that continue to propel the system forward. These changes need to be implemented in a manner that recognises the system issues that have been highlighted by this report as well as the possibilities for improving institutions in the short to medium term 29 SECTION ONE: BACKGROUND, CONCEPTUAL FRAMEWORK AND METHODOLOGY 1 INTRODUCTION AND BACKGROUND TO THE STUDY This study is an attempt to provide a comprehensive picture of the SETA environment so that stakeholders can collectively understand the different approaches that are being adopted by SETAs to carry out their mandate. This report is written within the context of intense debates as to whether SETAs are in fact assisting or hindering skills development, which have been raging in the media, and in the policy arena, over the past few years. It is hoped that this study will make a contribution to the development of a shared understanding of the critical success factors necessary to ensure the effective functioning of the SETAs within the context of the overarching skills system. In doing this, the study seeks to understand what the SETAs specific contributions are, and should be, and how these are supported or made more complex by other components of the system. The Employment Promotion Programme (EPP) commissioned this study in September 2006. The EPP contracted Singizi cc to undertake a research study on the imperatives for skills development in South Africa, with a specific focus on the roles and responsibilities and contributions of the Sector Education and Training Authorities (SETAs) thereto. As indicated, this research - while focusing on SETAs considers the different roles of the SETA within the context of the skills development delivery chain and locates all its recommendations within the context of the overall system. 2 CONCEPTUAL FRAMEWORK South Africa’s national goals for the first decade of the twenty-first century are ambitious but achievable. They include reducing unemployment and poverty by half, achieving an adequate supply of the skills required by the economy, ensuring that all South Africans are able to exercise their democratic rights, ensuring that government is compassionate and accessible, massively reducing the incidence of emerging and re-emerging diseases, significantly reducing the number of serious and priority crimes, and positioning South Africa strategically as an effective force in global relations. To achieve these goals Government has already developed an economic strategy named the Accelerated and Shared Growth Initiative for South Africa (ASGISA). This strategy aims to set the foundation for the achievement of goals described above by attaining 6% annual economic growth. A macro social strategy is set to be launched by Government in the near future to parallel this economic strategy. Collectively these goals will require two major players working in tandem. On the one hand, South Africa’s success depends on its raising the efficacy of governance and service delivery institutions and on the capacity of the state to deliver on the strategies and programmes that have been formulated to roll out the developmental state. On the other hand, national success depends critically on the growth of a 30 diverse and participatory private sector that is able to carve niches in the global economy and to reduce poverty and improve standards of living through growth. Critical to all of the above is the human capacity of the country and the education and skills base in place to support growth. As part of the State’s institutional capacity, Government put in place sector education and training authorities (SETAs) to kickstart a democracy-era skills revolution. They occupy a pivotal role in the skills economics of the nation. As the key conduit for funding, they collectively coordinate the investment of just under R5 billion per annum in skills development across public and private sector organisations. This role includes driving workplace and sector skills planning, learnership and skills programme design and registration and quality assurance. Their role in addressing the current skills imperative, highlighted by ASGISA is clearly critical. 2.1 PROBLEM FORMULATION South Africa has instituted a sophisticated system for skills development in the country. However, there is widespread concern about the efficacy of the institutions and mechanisms that make up this system in meeting the skills requirements for improved enterprise performance and economic growth. Following a review of the factors that shape South Africa’s economic performance in the process leading up to the formulation of ASGISA, the supply of adequate skills was identified as one of the binding constraints to accelerated economic growth. The skills supply problems are manifested in two broad categories: 1) The absence or inadequate numbers of people in the labour market with appropriate skills in certain occupational categories, and, 2) Sub-optimal productivity of people who are currently active in specific areas of enterprise in the formal and informal economies. The former category mitigates the capacity of economic expansion into certain strategic areas, and reduces the country’s competitiveness for attracting foreign direct investment. The latter category reduces the country’s economic competitiveness in global markets, and thus impacts negatively on the balance of trade. Both categories combine to mitigate overall economic performance. In considering the contribution of skills development to economic performance and growth strategies, it is important to recognise that a number of other variables either have an independent impact or serve as intervening variables in mediating the impact of skills development. Consequently, skills development is a necessary condition for improving economic performance, but is not a sufficient condition. This review, therefore, focuses on skills development, while recognising that its impact is mediated by a number of other significant variables. While the scope of this review does not allow for any detailed assessment of these variables, their potential impact will be acknowledged and accounted for in the methodology and analysis. 2.2 AIM AND OBJECTIVES OF THE REVIEW As specified, the aim of the review has been to conduct a rigorous assessment of the efficacy of the skills development system in South Africa for the purpose of identifying ways in which this system can be improved to ensure greater efficacy in meeting the skills requirements attendant to the current economic growth imperatives (as defined in ASGISA). 31 The aim of the review has been to conduct a rigorous assessment of the efficacy of the skills development system in South Africa for the purpose of identifying ways in which this system can be improved to ensure greater efficacy in meeting the skills requirements attendant to the current economic growth imperatives (as defined in ASGISA). Within this, the specific objectives of the review are as follows: • Review the institutional and policy context of the SETAs; • Provide a rapid appraisal of the role of the SETAs in providing skills in the economy (mediating supply side interventions with demand); • Develop a credible picture of the salient features of each of the SETAs; • Describe and analyse positive examples of where SETAs are effectively and efficiently supporting skills development in their sectors, as well as examples where they are acting as obstacles to effective and efficient skills development. 2.3 RESEARCH QUESTIONS In terms of the above, the key research questions that this study aims to address include the following: • • • • • What economic supply-side roles were the SETAs established to fulfil and how was it anticipated that they would interact with demand? What functions are the SETAs performing in fulfilment of these roles and how effectively are they playing these roles? What outcomes are being achieved through these interventions, and how are these outcomes perceived? In what ways could the SETA system be improved in order to better support ASGISA success? Finally, in future what ‘dashboard indicators’ could be useful in evaluating the impact of the SETAs on skills supply in sectors? 2.4 CONCEPTUAL FRAMEWORK FOR THE RESEARCH: AN OVERVIEW The institutional framework for skills development is comprised of a number of institutions; each of which perform a function or set of functions that collectively constitute the skills development system. Some of the other skills development institutions that are directly linked to the Department of Labour include: I. The National Skills Fund (NSF), which is managed by the Department and guided by advice from the National Skills Authority (NSA). The primary objective of the NSF is the funding of relevant projects identified in the NSDS as national priorities or other projects related to the achievement of the purpose of the Skills Development Act as determined by the Director-General of the Department. The Department’s Provincial Offices, labour centres, SETAs as well as other disbursing agencies are allocated funding from the NSF; II. Institute for the National Development of Learnerships, Employment Skills and Labour Assessment (INDLELA) is responsible for five areas which are; training of trainers in technical skills, training of trainers (pedagogics), training of advisors, training for employment services and coordination of small, medium and micro enterprise activities within the learnership and skills programme context; 32 III. National Productivity Institute (NPI), is an institute of excellence that strives to develop the productive capacity of South Africans through consultation, education and implementation with the support of government, organised business and organised labour; IV. Umsobomvu Youth Fund (UYF) has a mandate to facilitate and promote the creation of jobs and skills transfer among young South Africans. This mandate is delivered through investments in effective youth development and entrepreneurship programmes. Over and above these institutions there are also a range of other institutions, such as DTI, which has extensive SMME capacity building responsibilities. This confirms that SETAs account for only one (albeit a very important one) of the institutions that collectively constitute the skills development system. This raises a number of important issues for the study, in particular: 1) the skills development system operates through a number of contingent (inter-dependent) functions; each or clusters of which resort within the mandate of specific institutions, and 2) consequently, a review of the efficacy of SETAs in respect of their impact on meeting the skills requirements of the economy, needs to account for the role and contribution of other competent institutions in the pursuit of this project. Thus, this research - while focusing on SETAs - considers the different functions of the SETA within the context of the skills development delivery chain and locates all its recommendations within the context of the overall system. The delivery process (supply chain) for training is made up of a number of steps, in which a range of variables comes into play. The chain moves from the objective of economic growth to, inter alia: • • • • • • • • • • • The development of skills development goals; The policy, institutional and financial framework; Credible Sector Skills Plans and Workplace Skills Plans; Appropriate standards and qualifications; Relevant Career Guidance; Quality programme design; Quality and relevant programme delivery; Individual competencies and individual worker productivity; Innovation and competitiveness; Enterprise productivity, Innovation and competitiveness; leading to economic growth. While the delivery chain outlines is a highly simplified representation of the skills development process, it attempts to outline what are considered to be the essential elements of training. The chain also represents a line of causality, in which each moment of the chain results from the preceding moment and, in turn, brings about the subsequent moment. We hasten to acknowledge that, in reality, the training delivery process is not characterised by such a simple and linear causality. We therefore only employ this device for illustrative purposes. Further, each of the steps in this chain themselves contain a large number of complex transactions for which different institutions are responsible, and the ability of the SETAs to operate efficiently and effectively is militated against where there are high transaction burdens. The utility of the review’s findings will be contingent on the extent to which this complexity has been adequately addressed in the analysis. We therefore believe that a number of distinct analytical focal areas and indicators need to be employed for the purpose of this review. 33 2.5 INDICATORS Thus, within the systems approach adopted by the team, it is necessary to clarify the broad role of the SETA within the delivery chain outlined in order to determine the indicators that can be used to review the performance of SETAs within the overarching skills development system. The SETA is understood to be a central mechanism for mediating the relationship between training (supply side) and economic and social requirements (demand side) with the SETA playing a key role in the sequence of events outlined in the supply side of the illustration below: Supply Side Inputs Training Output Demand side Training objectives Economic & social requirements Figure 1: Skills Development Supply-Demand Source: Adapted from World Bank (2004) Skills Development in Sub-Saharan Africa Flowing from the above, the following indicators, which have typically been used to evaluate training programmes, have strong applicability to the review of SETAs being undertaken. • • • External Efficiency (relevance) – extent of the match between the outputs and objectives of the training system, on the one hand, and the economic & social requirements, on the other hand. Effectiveness – measure of the correlation between outputs and training objectives Internal Efficiency – measure of the relationship between the inputs (measured in money terms) and the outputs These indicators, effectiveness and efficiency, collectively constitute the measures for which SETAs bear strongest accountability, on account that they exert significant stewardship and control over the variables at play in these processes. Although it is observed that a number of intervening variables, in addition to training, come into play in determining external efficiency, thus reducing the extent of accountability that resorts solely with the training system or SETAs. These indicators will be interwoven throughout this report and will form the focus of the discussion and recommendations in the conclusion of this report. 3 RESEARCH METHODOLOGY The research methodology adopted for this study has involved a series of multipronged activities divided into four components in line with the key research questions outlined in 2.3 above. This section of the report outlines in detail the research activities undertaken for the SETA review per component. As indicated, this study was conducted under the auspices of the EPP. This meant that the research team was reliant on SETAs to agree to willingly provide documents, learner data and time for interviews. In the main, there was very good co-operation 34 from SETAs, although there were a few SETAs that were unable to provide all the data that was required, and one SETA CEO that was not available for an interview 7. The team also engaged with national departments that directly relate to the SETAenvironment. In all cases, the team was granted access to the departments and, where possible, individuals provided the team with data 8. 3.1 REFINING THE BRIEF On initiation of the study, the research team met with the Director of the DPRU in order to conduct an initial clarification of the terms of the brief. Thereafter, the research team developed a matrix of objectives and a draft scope of work and then called together members of the EPP (from COSATU, Business and the Presidency), as well as a number of economists who have been centrally involved in skills development in South Africa. On the 5th of October 2006, the research team facilitated a workshop with invitees, and presented an initial outline of the key research questions, the research methodology and data collection specifications. The workshop was attended by: • • • • • Haroon Bhorat, DPRU Alan Hirsh, Presidency Henk Langenhoven, SAFCEC Neva Makgetla, Presidency Singizi research team members, including Carmel Marock, Bobby Soobrayan, Jonothan Gunthorpe, Candice Harrison-Train, Brendan Barry, Renee Grawitzky, Gloria Mamba and Gavin Surgey. The workshop explored the parameters of the study in terms of the expectations of stakeholders and role-players, and discussed those factors that were perceived to be impeding or promoting the implementation of skills development initiatives in South Africa. In doing this, the workshop also reviewed the proposed methodology and the key ‘dashboard indicators’ that were should be used in an analysis of the impact of the SETAs on skills supply in sectors. 3.2 COMPONENT ONE: REVIEWING THE POLICY AND LEGISLATIVE OBJECTIVES OF SKILLS DEVELOPMENT AND THE SETAS This component of the research study reviewed the genesis of the skills development strategy and the envisaged role for SETAs and the manner in which this was translated into policy and legislation. It also explores the revisions that have been made to the legislation in the light of the learning acquired through the implementation of the Skills Development Act (SDA). The emphasis of this component was to understand ‘what role were the SETAs established to fulfil?’ 3.2.1 Desktop Review of the Genesis of the Skills Development Strategy The research team conducted a review of some of the documents that have been written about the evolution of South Africa’s skills development strategy from the NTSI in 1994 to NSDS II in the present. This review aimed to track the development 7 The details of this engagement with the SETAs are listed in this report and the data provided by each SETA is attached in an annexure to this report. 8 This issue is explored in subsequent sections of this report. 35 of South Africa’s skills development strategy and the varying expectations of different role players for the system and the way in which the anticipated role of the SETAs has changed over time. 3.2.2 Interviews with Individuals involved in the Development of the Skills Development framework The research team conducted a series of interviews with a number of individuals who were, at different points, centrally involved in the development of South Africa’s skills development strategy. These interviews aimed specifically to interrogate the following: • • • • • Perceptions of the original objectives of the skills development strategy; Original thinking on how the objectives would be achieved; Original expectations on how these objectives would be measured; Reflections on the implementation of the skills development strategy to date; and Perceptions on how present challenges could be addressed. Interviews were conducted with the following individuals: • • • • Adrienne Bird (who was in NUMSA and championed the development of the unions policy on skills and was subsequently in the Department of Labour as Chief Director responsible for Skills Development)) Lindsay Falkov; (who was in the Department of labour responsible for the implementation of the skills levy system – and prior to this was responsible for research and development of the skills funding policies) Trevor Coombe (who was responsible for coordinating the Department of Educations involvement in the development of the National Qualification Framework and the Skills Development System) Rachmat Omar (was in COSATU and was responsible for the Federations participation in the development of the skills development strategy) The team also attempted to interview Brian Phillips (who was a key business representative and was responsible for Businesses participation in the development of the skills development strategy) as part of this process, but he was unfortunately reportedly outside of South Africa at the time of the research. 3.2.3 Report on the Statutory Framework Governing SETAs Singizi commissioned Cheadle Thompson & Haysom Inc (CT&H) to compile a comprehensive report on the statutory framework pertaining to skills development and, specifically, the SETAs, with a view to (i) understanding the complex web of legislation governing skills development, (ii) identifying any gaps or contradictions within this framework and (iii) identifying areas within the statutory framework that have presented challenges in terms of implementation. The full report is attached as Appendix A and the data is analysed as part of Section 2 (as well as other sections) of this report. 3.3 COMPONENT TWO: GOVERNANCE AND ACCOUNTABILITY This component of the research reflects on issues pertaining to governance and accountability at the level of the SETAs. The specific research activities conducted to support this section are outlined here plus where relevant the findings from the 36 interviews conducted with the SETA Chairpersons and CEOs and documents collected from the SETAs are also integrated into this section. 3.3.1 Review of Governance Documentation A number of documents that outline key governance issues in both the public sector and the private sector were reviewed as part of this component of the study. In particular, King II, as well as documents produced by government analysing governance issues pertaining to public entities, were consulted. In addition relevant studies that were previously commissioned by the EPP were reviewed. 3.3.2 Engagement with the Auditor General’s Office During the course of the research the team reviewed various reports compiled by the AG’s office on the SETAs. In addition to this the team interviewed individuals from the AG’s office who are responsible for SETA audits. 3.3.3 Analysis of SETA Constitutions Singizi commissioned Cheadle Thompson & Haysom Inc (CT&H) to review the constitutions of the 23 sector education and training authorities (SETAs) established under section 9 of the Skills Development Act 97 of 1998 (SDA) for purposes of identifying general shortcomings in the governance framework provided by these instruments. This was undertaken within the context of the governance framework provided by the SDA, the Skills Development Levies Act 9 of 1999 (SDLA), the South African Qualifications Authority Act 58 of 1995 (SAQA Act), the Public Finance Management Act 1 of 1999 (PFMA) and the Constitution of the Republic of South Africa, 1996 (the Constitution). A full copy of this report is included as Attachment B. 3.3.4 SETA Board Member Self-Completion Questionnaires In order to obtain data from SETA Board members, the research team developed a self-completion questionnaire composed of a series of closed questions and open questions to allow for expanded responses. The Board self-completion questionnaire, attached as Appendix C, was designed primarily to obtain Board perceptions of governance issues, including the following: • • • Overarching issues; Governance of the SETA; Reporting and monitoring. The Board self-completion questionnaires were administered in one of two ways, depending on the preference of the specific SETA. In some instances, the SETA provided the research team with a list of the email addresses of Board members, in which case, the research team distributed the questionnaire and conducted follow up activities directly. In these instances, Board members were given between 3 and 5 electronic reminders to submit the questionnaire. In other instances, the SETAs opted to send the questionnaires to Board members directly, so as to safeguard their contact information. In a few instances, SETAs did not disseminate the questionnaires to the Board members, for a variety of reasons outlined in the table below. The table provides an indication of which party administered the questionnaire, the number of returns received, and any comments/reasons for nonadministration of the instrument. 37 No SETA Administering party Singizi Singizi SETA SETA Singizi Singizi No. sent out 1 2 3 4 5 6 7 8 9 10 11 12 13 AGRISETA BANKSETA CETA CHIETA CTFL ESETA ETDP SETA FASSET FIETA FOODBEV HWSETA INSETA ISETT 14 15 16 LGSETA MAPPP MERSETA 17 MQA 18 PSETA 19 20 21 22 SASSETA SERVICES TETA THETA 23 WRSETA Singizi 11 Total Board Questionnaires returned Singizi Singizi SETA Singizi Singizi Singizi 18 15 Not known 21 24 31 44 16 Not known 17 24 9 No. of returns Comments 2 1 1 6 5 4 4 4 2 1 2 0 Not distributed. Delays in obtaining approval from CEO’s office SETA Singizi Singizi Not known 29 14 – only sent to exco 0 2 2 Singizi SETA SETA 25 Not known Not known 0 3 0 Do not have all Board contact details from SETA Not distributed. Delays in obtaining approval from CEO’s office Board not constituted at time of research Board not constituted at time of research 0 39 Figure 2: Board Self-Completion Questionnaire Returns As indicated in the table above, there were relatively low returns on the Board selfcompletion questionnaire from most SETAs and in the case of 9 SETAs, no Board questionnaires were returned. In two cases, this was as a result of the fact that the Board was not constituted at the time of the research process. As a consequence of the low return rate, the research team has not been able to conduct a SETA-by-SETA analysis of Board responses. Instead, the research team has conducted a cross-SETA analysis of the questionnaires in order to extract broad systemic and crosscutting issues. 38 3.4 COMPONENT THREE: AN ANALYSIS OF THE CORE SETA FUNCTIONS This section focused on reviewing the manner in which SETAs are carrying out their key functions. This includes a particular focus on: • • • • Sector skills strategies and planning with a particular focus on scarce and critical or priority skills as well as Workplace Skills Planning; The collection and disbursement of the skills development levies in the prescribed manner to employers, education and training providers and workers in its sector; Quality Assurance of provision including the monitoring education and training in the sector; and, Establishing and promoting learnerships. The sections outlined below indicate the methodologies adopted for this section of the research. 3.4.1 Interviews with Individuals in Key Departments As part of the above processes, the team sent letters to senior officials in key government departments before the research commenced in order to outline the purposes of the research and to adhere to appropriate protocols before accessing officials. These were distributed to: • • • • SARS Commissioner, Pravin Gordhan DG Treasury, Lesetja Kganyago DG Department of Labour, Vanguard Mkosana CEO SAQA, Sam Isaacs. These departments also all assisted with the project and the officials within these departments were extremely helpful in providing a nuanced understanding of the system as well as in the provision of documents where possible and the research team conducted a small number of interviews with key government officials within these departments, including: • • • • Florus Prinsloo, Department of Labour Andrew Donaldon, Treasury Mark Kingon and team, SARS Yvonne Shapiro, NLRD, SAQA (electronic communication) 3.4.2 SETA Chair Interviews As one of the primary research components of the study, the research team developed a standardised instrument for the purpose of conducting face-to-face or telephonic (depending on the respondents’ preference) interviews with all of the SETA Board Chairs. The instruments was composed of a series of open-ended questions, but also included a small number of closed questions for crosscomparison purposes. The instrument is attached as Appendix D. The instrument aimed to elicit Chair perceptions of the following: • Overarching issues; 39 • • • • Governance of the SETAs; Planning and support for learning and skills development; Quality of provision; Reporting and monitoring activities. The table below reflects which SETA Chairs were interviewed for research purposes. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 SETA AGRISETA BANKSETA CETA CHIETA CTFL ESETA ETDP SETA FASSET FIETA FOODBEV HWSETA INSETA ISETT LGSETA MAPPP MERSETA MQA PSETA SASSETA SERVICES TETA THETA WRSETA Chair Interviewed D Interview not obtained D D D D D D D D D D Interview not obtained D Interview not obtained D D No chair at time of research Interview not obtained Interview not obtained D Interview not obtained D Figure 1: SETA Chairs interviewed All of the interviews were recorded and transcribed for reporting purposes. The qualitative components of the data were coded and sorted for analysis purposes. A full copy of the coded data is available for reference. The quantitative components were captured separately for reporting purposes and are analysed in the body of the report. It should be noted that many SETA Chairs only agreed to be interviewed for research purposes on condition that certain sections of data remained not attributable to a specific source. The data has therefore been analysed to determine themes and systemic issues across all SETAs and is outlined throughout the body of the report. 3.4.3 SETA CEO Interviews In addition to the above, the research team developed a standardised instrument for the purpose of conducting face-to-face interviews with all of the SETA CEOs. The instruments was composed of a series of open-ended questions, but also included a small number of closed questions for cross-comparison purposes. The instrument is attached as Appendix E. The instrument aimed to elicit CEO perceptions of the following: • • Overarching issues; Governance of the SETAs; 40 • • • Planning and support for learning and skills development; Quality of provision; Reporting and monitoring’ The table below reflects which SETA CEOs were interviewed for research purposes. No 1 2 3 4 5 6 7 8 9 10 11 12 13 SETA AGRISETA BANKSETA CETA CHIETA CTFL ESETA ETDP SETA FASSET FIETA FOODBEV HWSETA INSETA ISETT 14 15 16 17 18 19 20 21 22 23 LGSETA MAPPP MERSETA MQA PSETA SASSETA SERVICES TETA THETA WRSETA CEO Interviewed D D D D D D D D D D D D D - Interview obtained with temporarily acting CEO 9 D Interview not obtained D D D D D D D D Figure 2: SETA CEOs interviewed All of the interviews were recorded and transcribed for reporting purposes. The qualitative components of the data were coded and sorted for analysis purposes. A full copy of the coded data is available for reference as Appendix F. The quantitative components were captured separately for reporting purposes and are analysed in the body of the report. It should be noted that many SETA CEOs only agreed to be interviewed for research purposes on condition that certain sections of data remained not attributable to a specific source. The data has therefore been analysed to determine themes and systemic issues across all SETAs and is outlined throughout the body of the report. 3.4.4 ETQA Manager Self-Completion Questionnaires In order to obtain detailed information on SETA quality assurance processes and procedures, the research team also developed an ETQA manager self-completion questionnaire composed of a series of closed and open questions to allow for 9 It is noted that the research team took a decision to only interview CEOs or permanently Acting CEOs in the absence of a permanent incumbent. The research team scheduled several interviews with the ISETT SETA CEO that were not kept. At the end of the field research process, another interview with the CEO was scheduled, but failed to materialise. At this point, the research team decided to interview the temporarily acting CEO only in this one instance. 41 expansion on responses. The ETQA Manager questionnaires, attached as Appendix G, specifically focused on the following: • • • • • • Overall quality assurance activities; Issues relating to the quality assurance of learner achievements, including o Quality assurance of assessment instruments; o Quality assurance of assessors; o Learner registration, resulting and certification; Quality assurance of workplace learning; Issues relating to provider accreditation; Quality assurance of learnerships; and Issue relating to the improvement of learning programmes. The table below outlined those SETAs that submitted ETQA questionnaires: No SETA ETQA Questionnaire Submitted 1 2 3 4 5 6 7 8 9 10 11 12 13 14 AGRISETA BANKSETA CETA CHIETA CTFL ESETA ETDP SETA FASSET FIETA FOODBEV HWSETA INSETA ISETT LGSETA 15 16 17 18 19 20 21 22 23 MAPPP MERSETA MQA PSETA SASSETA SERVICES TETA THETA WRSETA D D Not submitted D D Not submitted D D D D D D Not submitted Not submitted – no ETQA manager at time of research Not submitted D D D Not submitted D D D D Figure 3: ETQA Manager Self-Completion Questionnaire Returns The instruments were emailed to ETQA managers for completion (or submitted to the CEO’s office, depending on SETA preference) and several follow-ups were instituted over the field research period. The data obtained from the ETQA manager questionnaires was captured for reporting purposes and is analysed in Chapter 11. 3.5 COMPONENT FOUR: RELEVANCE OF OUTPUTS This forth component of the study aimed to understand what has been achieved by each of the SETAs, how this relates to targets and objectives that were set and the relevance of these achievements in terms of sector requirements. This section drew on the data as outlined in the previous component, as well as interviews that were conducted with senior individuals and human resource managers from large levy paying workplaces as described below. 42 3.5.1 Documentation and Data Requested from SETAs In addition to the research activities at SETAs outlined above, the team also attempted to collect a series of documents and select pieces of data from the SETAs. At the point of initial contact with the SETAs, CEOs were requested to appoint an identified support person to assist the SETA to put together the required data and documentation for submission to Singizi. Initially, the documentation requested included the following: • • • • • • • • • • • • • • • All SSPs developed since inception (including annual updates, where relevant); All Annual Reports since inception; Consolidated Annual Training Reports (where available); Any strategic plans or business plans, where relevant, since inception; A copy of recent Service Level Agreement with the Department of Labour; Re-establishment document; Implementation reports to Department of Labour (pre and post reestablishment document); WSP template; List of registered learnerships to date; List of registered skills programmes to date (if applicable); List of NSF projects since inception (including programme title, brief description of programme and which learnerships or skills programmes, where relevant); List of DG funding priorities per year since inception (please specify titles of learnerships or skills programmes, where relevant); Any policy documents or other that lay out specifications for funding norms (i.e. what percentage of funding for e.g. a learnership goes to development, implementation, learner stipends, etc); Any evaluations (including evaluation for the NSF projects) completed by the SETA on the implementation of learning programmes; Data on learner results (this was specifically requested from ETQA Managers), including: o o o o Learner results by programme; Learner pass rates by programme; Learner throughput rates by programme; A list of providers, what unit standards/skills programmes they have been accredited to provide and the provinces in which they operate. In order to assist the SETAs where possible, the team downloaded whatever documentation was available on SETA Websites and informed the relevant SETA accordingly. In addition, ongoing follow-ups were instituted in order to obtain a maximum number of complete data sets for analysis purposes. Data returns from some of the SETAs, however, were generally low and so several weeks into the fieldwork process, the research team agreed to prioritise the required list of data even further in order to focus on acquiring some complete data sets to be used for analysis purposes. Ultimately, the research team was able to achieve almost complete sets of data for the following: • SSPs for the 2005-2009/10 period (a complete batch of the SSP Updates for 2006/7 was also obtained from SETAs and other sources); 43 • • • • Annual Reports for the periods 2004-2005 and 2005-2006; Lists of registered learnerships; Learner data; and WSP templates. This data was then analysed and where immediate gaps could be seen, a follow-up process was undertaken with the relevant SETA. The data was analysed for the following: • • • • A review of achievements against targets for each of the NSDS objectives: This data was extracted primarily from SETA Annual Reports, but augmented in some instances where gaps existed from SSPs and, in one instance, a Service Level Agreement; An analysis of the extent that the learner profiles (in terms of gender, race and disability) reported by SETAs are consistent with national equity targets as spelt out in the NSDS. This data was obtained from various sources, including Annual Reports, SSPs. SSP Updates and learner records provided to the research team by the SETAs; A breakdown of the percentage of training towards a qualification that is aimed at addressing scarce skills 10. This data was obtained by attempting to match learnership, apprenticeship and bursary data (obtained from Annual Reports, SSPs. SSP Updates and learner records provided to the research team by the SETAs) to scare skills lists from SSP Updates. A review of the financials of each of the SETAs to look at whether expenditure trends were consistent with intended increase in spending on training. This financial data was primarily drawn from SETA Annual Reports and the learner output is drawn from the tables as outlined above. As evidenced from the points above, the team analysed the data with a view to developing some indicative findings on NSDS achievement, learner profiles and training against scarce skills. Again, as mentioned, this required extracting data from a variety of different data sets for comparative purposes. The team adopted a strategy of consulting with the relevant SETAs wherever the team required clarification about the status of the data, as well as where data gaps and inconsistencies emerged. A number of disclaimers are made about this data and this is captured in Section 3.6 of this Report. 3.5.2 Documentation and Data Obtained from other Sources Data from SAQA: As outlined in 3.4.5, the research team asked all of the SETAs to submit their most recent learner results, throughput and pass rates by programme. In addition, the team also approached the NLRD division at SAQA for this learner data, so as to provide a point of data triangulation in this regard. Data from the LFS: LFS data from the last 5 years was obtained in order to analyse whether there has been an increase in the numbers that have benefited from training programmes. 10 Note that the research team used data pertaining to programmes that enable learners to achieve qualifications in both its analysis of scarce skills provision, as well as to calculate the total training (that is for the purposes of scarce skills we did not include data pertaining to skills programmes or structured learning programmes. This takes into account the definition of scarce skills, which is defined by the Department of Labour as follows: “Scarce skill is reserved for those occupations in which there is a scarcity of qualified and experienced people – current or anticipated. Critical skill, on the other hand is reserved for a particular skill within an occupation”. 44 Secondary Sources: The team used a wide range of secondary sources referenced in the text of this report. These included previous studies supplied by the EPP, including: Sean Archer, The International Literature on Skills Training and the Scope for South African Application, Economics Department, UCT, 2006 and Reza Daniels, Skills Shortages in South Africa: A Literature Review, School of Economics, UCT, 2006. 3.5.3 Interviews with Individuals in the Workplace In order to obtain an initial indication of skills supply, and the contribution of SETAs thereto, the research team selected a sample of 46 companies/organisations in South Africa for the purpose of (i) interviews with company CEOs/leaders and (ii) obtaining self-completion questionnaires from HR managers. The research team selected 2 large prominent companies/organisations for each sector represented by the 23 SETAs for these purposes. The companies and organisations selected were done so on the basis that they likely contribute significant skills development levies to their respective SETAs (it should be noted that this has not been validated, as SARS informed the research team that information pertaining to individual organisations’ contributions to levies is confidential. Nonetheless, the size of the organisations selected for this purposes assumes high levy contributions). The companies and organisations that participated in the research process are outlined in the table below. No. SETA Companies interviewed 1 AGISETA Tongaat Hullet Sugar British American Tobacco 2 BANKSETA Standard Bank Absa 3 CETA M&R Grinaker 4 CHIETA Engen Shell 5 CTFL Frame Textiles – part of Seardell Pep clothing 6 ESETA Eskom Rand Water 7 ETDP UCT Wits 8 FASSET HR Manager Questionnaires returned Tongaat Hullet Sugar Grinaker Frame Textiles UCT Wits Deloitte Pricewaterhouse Coopers 9 FIETA Mondi Steinhof Mondi Steinhof 10 FOODBEV SAB Miller Tiger Brands SAB Miller Tiger Brands 11 HWSETA Afrox health care Netcare holdings Netcare holdings 12 INSETA Discovery Old Mutual Discovery 45 13 ISETT SABC Telkom 14 LGSETA Pikitup Umgeni Water 15 MAPPP Media 24 Nampak Nampak 16 MERSETA VW Toyota Toyota 17 MQA Anglogold Ashanti Gold Fields 18 PSETA 19 SASSETA DOE Public works SAPS Fidelity 20 SERVICES SETA Kelly Drake International 21 TETA Transnet Spoornet 22 THETA Sun International Three Cities Sun International Three Cities W&RSETA Woolworths Pick n Pay Massmart Woolworths 23 Telkom Pikitup Anglogold Ashanti Kelly Drake International Figure 4: Workplace Interviews and Questionnaire Returns In terms of the CEOs/leaders, the research instrument (attached as Appendix H), aimed to elicit information on the following: • • • Perceptions of the impact of skills development on the company/organisation to date, including o Impact on recruitment and selection; o Impact on productivity; o Impact on employment equity; Perceptions of the role of the SETAs in terms of skills development initiatives, including o Value add by SETAs in terms of skills development; o Accessibility and user-friendliness of skills levy system; o Perceptions of SETA contributions to ameliorating scarce and critical skills; Perceptions of the credibility of learner results emanating from the SETAs The methodology had specifically aimed to target company CEOs or leaders in order to obtain a very high-level perspective on perceptions of the impact of skills development. However, despite considerable attempts to do so, the research team was often referred to Human Resource or related senior executives. The views emanating from this data therefore represent the perceptions of some company CEOs but in many cases are the views of senior HR executives. The coded data for the CEO interviews is available as Appendix I. As outlined, the research team also disseminated a self-completion questionnaire to the above-mentioned company HR managers in order to obtain more specific and detailed information on skills development. The self-completion questionnaire 46 included a series of closed and open questions for expanded responses. The questionnaire (attached as Appendix J) aimed to elicit information on the following: • • • • • • Perceptions of the impact of skills development on the company/organisation to date, including o Impact on recruitment and selection; o Impact on productivity; o Impact on employment equity; Issues pertaining to the hosting of unemployed learners on learnerships, as relevant; Questions relating to whether and how the company measures the impact of skills development; Nature of skills training taking place at the company; Perceptions of the role of the SETAs in terms of skills development initiatives, including o Value add by SETAs in terms of skills development; o Accessibility and user-friendliness of skills levy system; o Perceptions of SETA contributions to ameliorating scarce and critical skills; o Perceptions of SETA contributions to the pool of accredited training providers. Perceptions of the credibility of learner results emanating from the SETAs. The quantitative data from both of the above processes was captured in a database, and the qualitative data coded for analysis purposes. The findings of this component of the research are analysed in relevant sections of the report. 3.6 METHODOLOGICAL NOTES AND LIMITATIONS Many of the questions posed to respondents outlined in the methodology above aimed to elicit perceptions about the activities of the SETA as well as to develop a more accurate picture of the processes and procedures that are followed, With regard to the perception data that is captured graphically a number of points need to be made 1) representation of this data does not include “no responses”, i.e. the team used the total population that responded to any particular question in order to develop the graphs. This was done on the basis that an analysis of no responses showed no specific patterns and the team wanted to represent the data in an easy to access form, and 2) in some cases the sample size prevented a SETA by SETA analysis, and where this was the case this is noted in the report. With regards to the data provided by the SETAs a number of issues that need to be borne in mind in the reading of this report: • Extracting complete sets of data from all of the SETAs: the research team made a conscious decision to extract much of the required data directly from the SETAs. This decision was made for three reasons, i.e. (i) that the team could be assured of getting the most up-to-date information available at a SETA level, (ii) that the team could use external data from other bodies for triangulation purposes and (iii), most importantly, that data reported on in the body of this report was used with the express permission of the SETAs concerned. In the final event, however, whilst many SETAs were able to supply all of the requested data within the specified timeframe, certain SETAs did not provide this data. This was attributed to a number of factors: capacity problems at a SETA level that mitigated against the SETA providing full sets of data. In some cases, the SETA 47 indicated that they no longer had copies of some of the requested pieces of data, e.g. early Annual Reports and so on. Further, some SETAs considered some of the requested data as confidential, and on this basis were unwilling to release them to the research team. The research team instituted intensive follow-up procedures and for the purposes of comparative analysis relied primarily on those sets of data where at least a few full sets of data were obtained, most notably Annual Reports, Sector Skills Plans and learner data. • Internal validity and reliability of the data: The team has undergone and extensive exercise in an attempt to analyse key pieces of SETA data for this report. One of the most significant challenges in this regard related to internal inconsistencies within the data sets. In some instances, this can be accounted for by different reporting timeframes, but in others this is not the case. For example, there were instances in which the numbers of learners recorded as having completed a programme was greater than the number of learners recorded as enrolled. This issue appears to reflect some problems with the internal consistency of data sets that are used for different reporting purposes. Data that spoke to NSDS and achievements, for example, could not be reconciled with a breakdown in learner numbers in terms of race, gender and disability, nor – in the main – could these figures be compared with the completion rate per programme. It is also noted that learner data reporting in different contexts did not reconcile. In some instances, this was a result of the fact that learner data in some contexts refers to learners trained with monies allocated as part of the grant processes. In other instances, learner data only related to those learners that attended programmes within the ETQAs primary focus. Further, certain data sets appeared contradictory; in one example a review of the equity profile of learners using the SETAs learner records provided different data than the figures provided in the Annual Report pertaining to the learner equity profile. Finally, different SETAs have captured their data differently in terms of reporting timeframes which makes comparability more complex. • Validity and reliability of external data: in some cases, the team also came across problems with the validity and reliability of external data sources, such as the NLRD which made triangulation of data virtually impossible. This is outlined in more detail in the body of the report. In addition, there were a number of departmental documents that the team could not access as the relevant department did not regard these as being in the public domain. The issue of public access to documents pertaining to SETAs, that are in fact public entities, is clearly one that requires consideration if we are to increase levels of accountability in the system and will be touched upon in the recommendations contained in this report. Despite the above, however, the research team took a position that a preliminary analysis of these pieces of data could at least provide a broad picture of the SETAs achievements. However, these problems point to the critical need to improve the data capture, management and reporting systems used by the SETAs and this issue is explored further in this report. 48 SECTION TWO: THE SKILLS DEVELOPMENT STATUTORY AND POLICY FRAMEWORK This section provides a brief review of the evolution of the current framework, and then considers the current statutory and policy framework in some depth. This has been developed with a view to understanding: • • the aims and objectives of the skills development system; the institutional arrangements established to achieve these aims and objectives including o governance arrangements; o planning and steering mechanisms; o the nature of learning programmes and quality assurance; o the funding and disbursement arrangements; and o points of accountability in the system. 4 THE EVOLUTION OF THE SYSTEM The need for a brief analysis of the history of the skills development framework rests on the assumption that some of the complexities that bedevil the current system lie within its genesis. South Africa’s current skills development system emerged out of a process that saw organised labour, business, educationalists and other stakeholders developing their independent visions for skills development and education and training, and then coming together to work towards what ostensibly appeared to be a single vision, but that inherently retained the legacy of competing imperatives and expectations. Further, some of the imperatives that emerge as challenges in the present statutory framework also stem from the early evolution of the system, including the manner in which stakeholder involvement was conceptualised. Badroodien and McGrath 11, in their paper on the evolution of South Africa’s skills development strategy, highlight that South Africa’s skills development system and its performance are profoundly shaped by the history of South Africa and its labour market, which has been characterised by excessive capital intensiveness in high skill white enclaves, alongside low skill African labour in South Africa. This assertion is borne out by the approach adopted by COSATU, and particularly certain affiliates such as the National Union of Metalworkers (NUMSA), which took a lead in developing a practical strategy for training reform. Badroodien and McGrath detail the activities that were undertaken by NUMSA and highlight that the report of the NUMSA Vocational Training Project (NUMSA 1991) laid out key elements of the policy debate that has shaped South African skills development till the present. They state that “the report showed considerable influences from industrialised country debates about the need to move onto higher skill paths, particularly from the Australian trade unions. However, it was also firmly grounded in the aspirations of NUMSA members and the obstacles to advancement they faced. The project’s findings stressed the need for a system of paid education and training leave and recognition of prior learning (RPL) as central underpinnings of a shift towards lifelong education and training. The document also developed the notion of a nexus between training, skills, grading and wages that would provide the framework through which both career paths and closer linkages between formal education, adult education and 11 Badroodien, A. and McGrath, S., International Influences on the Evolution of South Africa’s National Skills Development Strategy, 1989-2004, GTZ, commissioned by Federal Ministry for Economic Cooperation and Development, 2005. 49 training would be stressed”. This NUMSA research fed into the COSATU-wide Participatory Research Project (PRP), which took these policy debates further and ensured that the discussions were held across all affiliates. During this time the democratic education movement, led by the National Education Coordinating Committee (NECC) was also exploring the options of a post-apartheid education and training system, and this led to new possibilities for interaction between COSATU and educationalists. The NEPI process took on board many of the issues emerging from this NUMSA and COSATU processes and by 1993, COSATU and the ANC were working closely on developing plans for the development of a national skills strategy, and in building the ANC’s education and training strategy for its anticipated accession to power. These deliberations led to the development of a position that called for a National Qualifications Framework (NQF), alongside a push for better links between training and the education system. The above points highlight that the NQF was conceived in the democratic labour movement, but that at this juncture, elements of the business community also entered the fray. This is evidenced by the changes that were taking place in the early 1990s, where many of the new Industry Training Boards (which were employer-run) had also imported ideas of competency-based modular training (BITB 1991; PITB 1993). Notions of career paths, multi-skilling and RPL were thus already prevalent in a few industries (BITB 1991; Burroughs 1993; Eskom 1993). These practical developments in education and training were accompanied by interventions at the policy level. Godsell notes that as early as 1992 there was an acceptance within at least a section of the business community of the merits of negotiating with COSATU around ways in which to upskill workers at all levels (Godsell 1992). Badroodien and McGrath elaborate on this point, and observe that what helped the business representatives to find a degree of common ground with COSATU was that many of the debates that the union representatives were largely adopting from Australia were mirrored by debates in England, New Zealand and Scotland, albeit in more business-friendly ways. Further, employer respondents to, and participants in, the Wiehahn Commission (Wiehahn 1981) raised a number of concerns about the existing skills development system. With the deracialisation of apprenticeship in 1981, sectors with large artisanal components argued against the requirement that apprentices had to attend different theory providers according to their racial categories. Moreover, many firms were concerned about the need for upskilling as a result of global technological changes. Taken together, these examples suggested that the integration of education and training could be organised in the interests of some members of big business. Moreover, for the large number of transnationals represented in South Africa, much of the COSATU-inspired debate about changes in labour processes and skills development resonated with similar debates in their home countries. Ultimately the recommendations emerging from these different interactions and engagements were fed into, and informed, the development of the National Training Strategy Initiative (NTSI) (NTB 1994), in which many of the items of this debate were negotiated with other stakeholders. The core strategy of the NTSI 12 was the notion that "education and training must: • • Empower the individual; Improve quality of life; and, 12 A Discussion Document on a National Training Strategy Initiative, A preliminary Report by the National Training Board, April 1994. 50 • Contribute towards development targets in the national economic plan through a national qualification framework”. This approach was further promoted by the publication of a White Paper on Education and Training on 15 March 1995 (which specifically promoted an integrated approach to education and training) and a National Qualifications Framework (NQF) Bill on 2 June 1995 by the Department of Education. The NQF’s first objective was to deal with the legacies of job reservation and retrogressive and discriminatory training practices in the South African labour force by creating ladders of opportunity or learning and career pathways. Closing skills gaps, improving equity, and achieving greater labour market efficiency and higher levels of productivity were assumed to be outcomes of a national qualifications framework. The NTSI also outlined the proposed structures to be put in place in order to manage the strategy. These included a Ministry of Education and Training, a National Council for Learning, a number of other Statutory Councils (including a National Education and Training Council), SAQA and education and training providers. It should be noted that the NTSI also “started from a clear position about the need for representivity and transparency [that] led to a series of eight task teams, which drew on more than 150 representatives from the state, business, labour and providers 13”. The NTSI also began to explore the establishment of Sector Education and Training Organisations (SETOs) under the National Education and Training Council. The establishment of these structures took into account the concerns that were raised within the NTSI about the Industry Training Boards (ITBs). These included the concern that these bodies were “not fully representative of the industry sectors which they aim to serve. In addition the formal sector (including the public sector) is not adequately covered by ITBs with approximately two thirds of the workforce not represented by an ITB”. ITBs were also seen to not provide for adequate trade union representation and seen to have “representation based on proportional paid up membership”. The NTSI proposed that the Sector Education and Training Organisations (SETOs) should be established 14 in order to overcome some of the above limitations. It was therefore agreed that “through a process of negotiation and evolution in the Industry Training Boards should change their structure and role and emphasis should be placed on the development of efficient, effective organisations designed to meet the revised role and to have a positive influence on the development of human resources served by the particular organisation.” 13 14 Ibid,. p.11. It was agreed that a change of name would signify the changes needed 51 Figure 5: Current Statutory Framework Grant Regulations Service Level Agreement Regulations Levies Regulations Learnership Regulations Skills Development Act, 1991 Skills Development Levies Act, 1999 Sector Education & Training Authorities Constitution of the Republic of South Africa, 1996 Public Finance Management Act, 1999 Treasury Regulations South African Qualifications Authority Act, 1995 SETA constitutions ETQA Regulations 5 OVERVIEW OF THE CURRENT STATUTORY FRAMEWORK The diagram above provides an overview of the current policy, legislation and regulations that make up the statutory framework governing skills development in South Africa. This section provides a brief overview of each of these pieces of the framework, and then begins to suggest some of the issues that have arisen out of this framework at the level of policy. The remainder of this research report picks up on the issues emerging here and reviews in more detail where these issues manifest at the level of application and implementation. 5.1 THE SKILLS DEVELOPMENT GREEN PAPER Reformulations of the pre-election debates led to the publication of a draft Green Paper in March 1997 (DoL 1997a), followed by a final version in July (DoL 1997b). The Green Paper stated that there was a need to increase competency levels in the country so as to promote economic and employment growth and social development. To do this the following objectives were identified: 52 • • • • Facilitate a general increase in the skills profile of the population, through accredited high quality education and training linked to the National Qualifications Framework; to increase the quality and quantity of intermediate levels skills in the country; to facilitate, through uplifting applied competency levels, more efficient social and infrastructural delivery; To raise the quality, relevance and cost-effectiveness of skills development throughout the country. The Green Paper further stated that workers should be supported to achieve nationally recognised qualifications, so that they can assume increased independence and responsibility, and so that employers can achieve rising levels of productivity and competitiveness. These objectives were expressed as follows: • • • To facilitate more structured and targeted skills development within enterprises; To increase access by workers to education and training; To increase the proportion of intermediate levels skills in enterprises. Finally, to support the people who are most vulnerable in the labour market, including those in micro enterprises, to enter and successfully remain in employment/selfemployment and enjoy a rising standard of living, the following would be required: • • • To support target groups to enter regular employment or to sustain microlevel income generating activities; To support the establishment of viable small and micro enterprises; To increase assess to entry-level education and training. These objectives focused more directly than the NTSI on the nature of skills and skills development, and its relationship to social and economic development. To support the achievement of the above objectives, the Green Paper outlined a number of structures and interventions. This includes the expansion of the proposed roles for the SETOs. It stated that the SETOs would “combine the functions of industry training boards, education and training quality assurors and those additional functions required to implement the Skills Development Strategy”. The Green Paper allocated an extensive list of responsibilities to the SETOs, and focused extensively on the role of the SETOs to ensure that the supply of skills were consistent with the needs of the economy and supported growth, as well as specifically SMME development. It further stated that the SETOs would also be responsible for the quality assurance of providers and for improving the quality of provision within this context. 5.2 SKILLS DEVELOPMENT ACT The core of the Green Paper was given legal expression in the Skills Development Act (1998), which was promulgated two years after the Green Paper. Other aspects of the Green Paper were included in the Skills Development Levies Act (1999). The purposes of the SDA are – • To develop the skills of the South African workforceto improve the quality of life of workers, their prospects of work and labour mobility; 53 • • • • • • to improve productivity in the workplace and the competitiveness of employers; to promote self-employment; and to improve the delivery of social services; To increase the levels of investment in education and training in the labour market and to improve the return on that investment; To encourage employersto use the workplace as an active learning environment; to provide employees with the opportunity to acquire new skills; to provide opportunities for new entrants to the labour market to gain work experience; and to employ persons who find it difficult to be employed; to encourage workers to participate in learnerships and other training programs; to improve the employment prospects of persons previously disadvantaged by unfair discrimination and to redress those disadvantages through training and education; To ensure the quality of education and training in and for the workplace; To assistwork seekers to find work; retrenched workers to re-enter the labour market; and employers to find qualified employees. 15 Included in the Skills Development Act was the legal establishment of what was now referred to as the Sector Education and Training Authorities (SETAs). The functions of the SETA were described as: a. Develop a sector skills plan within the framework of the national skills development strategy; b. implement its sector skills plan byi. establishing learnerships; ii. approving workplace skills plans; iii. allocating grants in the prescribed manner to employers, education and training providers and workers; and iv. monitoring education and training in the sector; c. promote learnerships by-i. identifying workplaces for practical work experience; ii. supporting the development of learning materials; iii. improving the facilitation of learning; and iv. assisting in the conclusion of learnership agreements; d. register learnership agreements; e. within a week from its establishment, apply to the South African Qualifications Authority for accreditation as a body contemplated in section 5 (1) (a) (ii) (bb) and must, within 18 months from the date of that application, be so accredited; f. collect and disburse the skills development levies in its sector; g. liaise with the National Skills Authority on-i. the national skills development policy; ii. the national skills development strategy; and iii. its sector skills plan; h. report to the Director-General on-i. its income and expenditure; and 15 Section 5, SDA. 54 ii. the implementation of its sector skills plan; liaise with the employment services of the Department and any education body established under any law regulating education in the Republic to improve information-i. about employment opportunities; and ii. between education and training providers and the labour market; j. appoint staff necessary for the performance of its functions; and k. perform any other duties imposed by this Act or consistent with the purposes of this Act. i. Of most relevance to SETAs in the statutory scheme established by the SDA and the SDLA, are those parts dealing with - the national skills development strategy; governance of the SETA, sector skills plans; learnerships, skills programmes and quality assurance; and the levy-financing system and training grant disbursements. 5.3 SKILLS DEVELOPMENT LEVIES ACT AND RELATED REGULATIONS The Skills Development Levies Act 9 of 1999 (SDLA) established the system of levyfinancing to fund skills development, and allowed for additional regulations under the SDLA which provide for the allocation of grants by SETAs. These regulations set out how the SETAs disburse training grants to employers, training providers and workers (defined in section 1 of the SDA to include employees, unemployed persons and work seekers) within their sector. The current framework for allocating grants by SETAs is provided by the Grant Regulations, 2005 16 and states that: • • • mandatory grants: SETAs are required to allocate mandatory grants to employers who submit workplace skills plans or training reports in accordance with the Grant Regulations, 2005 ; discretionary grants paid to employers to cover the cost of learnerships, learnership allowances, skills programmes and apprenticeship training; and, discretionary grants paid to education and training providers and institutions and towards other activities that implement a sector skills plan. In this way the system of levy-financing introduced by the SDA and the SDLA provides incentives for employers to adopt a pro-active approach to skills development within the framework of the SDA. An overview of the regulations governing grant allocations by SETAs since 2000 is located within Annexure A. 5.4 SKILLS DEVELOPMENT AMENDMENT ACT, 2003 The Skills Development Amendment Act 31 of 2003 introduced a number of significant changes to the SDA, the key objective of which was to strengthen the Minister of Labour’s powers to influence the work of and to hold to tighter account, the SETAs. This was in response to various problems that had been experienced in a number of SETAs and the perceived inability of the Minister to intervene decisively under the legislation in force at the time. 17 The key amendments introduced in relation to SETAs were- 16 Sector Education and Training Authorities (SETAs) Grant Regulations regarding monies received by a SETA and related matters (GN R713, GG 27801 of 18 July 2005). 17 See paragraph 1, Memorandum on the Object of the Skills Development Amendment Bill, 2003. 55 • • • • • • • • amending the Minister’s regulation-making powers to prescribe requirements for the performance of SETA functions includingo standards and criteria for the allocation of grants to employers, education and training providers and workers; and o standards and criteria for the use of monies received by SETAs, including expenditure on administration and salary bands and performance related payments in relation to staff; 18 providing for the amalgamation and dissolution of SETAs; 19 requiring that SETAs conclude annual service level agreements with the Director-General: Labour concerning the performance of their functions under the Act and the National Skills Development Strategy, their annual business plans and any assistance to be provided to the SETA by the Director-General in order to enable it to perform its functions; 20 empowering the Minister to issue written instructions to SETAs where they fail to perform their functions or comply with service level agreements, do not manage their finances in accordance with the SDA or where their membership is not representative of their constituencies or they have not prepared and implemented an employment equity plan as contemplated under the Employment Equity Act 55 of 1998; 21 requiring SETAs to ensure that their membership is representative of designated groups (black people, women and people with disabilities); 22 requiring SETAs to be managed in accordance with the PFMA; 23 extending the grounds on which the Minister may take over the administration of a SETA to include the failure by a SETA to comply with its service level agreement or with an instruction issued to it by the Minister of Labour; 24 and by adding an additional statutory function - promoting the national standard of good practice on skills development. 25 A further significant amendment was the introduction of a new learnership concept, allowing employers to contract a dedicated agency to perform their functions in the learnership agreement and contract of employment. The amendment Act empowered the Minister to make regulations to this effect and to prescribe the relationship between employers and the dedicated agency. 26 In general, the amendment Act tightened significantly the accountability of SETAs to the Minister of Labour and to the Director-General: Labour. 5.5 THE NATIONAL STRATEGY FOR SKILLS DEVELOPMENT (NSDS) The priorities of South Africa’s skills development programme and indicators to measure progress in its implementation are set out in the second National Skills Development Strategy: 1 April 2005 – 31 March 2010 which replaced the first National Skills Development Strategy which covered the period 2001-2005. The priorities set out in the NSDS are particularly important in the context of the Skills Development Amendment Act 31 of 2003 (described above) which requires that the SETAs’ annual service level agreements with the Director-General: Labour should 18 Sections 6, 9 and 24, Skills Development Amendment Act, 2003. Section 5, Skills Development Amendment Act, 2003. 20 Section 7, Skills Development Amendment Act, 2003. 21 Section 10, Skills Development Amendment Act, 2003. 22 Section 8, Skills Development Amendment Act, 2003. 23 Section 9, Skills Development Amendment Act, 2003. 24 Section 11, Skills Development Amendment Act, 2003. 25 Section 6, Skills Development Amendment Act, 2003. 26 Section 12, Skills Development Amendment Act, 2003. 19 56 include a focus of the performance of the SETA in terms of the National Skills Development Strategy. The objectives of the current NSDS in relation to those of the first NSDS are set out below: New and old National Skills Development Strategy objectives NSDS 1 April 2005 - 31 March 2010 NSDS 1 April 2001 - 31 March 2005 Supporting economic growth for employment creation and poverty eradication Developing a culture of high quality life long learning. Promoting productive citizenship for all by aligning skills development with national strategies for growth and development Fostering skills development in the formal economy for productivity and employability Accelerating Broad-based Black Economic Empowerment and Employment Equity (85% Black, 54% women and 4% people with disabilities, including youth in all categories). Learners with disabilities to be provided with reasonable accommodation such as assistive devices and access to learning and training material to enable them to have access to and participate in skills development Stimulating and supporting skills development in small business Supporting, monitoring and evaluating the delivery and quality assurance systems necessary for the implementation of the NSDS Promoting skills development for employability and sustained livelihoods through social development initiatives Advancing the culture of excellence in skills development and lifelong learning Assisting new entrants into employment 5.6 SAQA AND THE NQF The provisions of the SDA are aligned with those of the SAQA Act. The purpose of this alignment is to promote the quality of learning in, and for, the labour market and to ensure that the training institutions and mechanisms created by the Act, articulate with the National Qualifications Framework (NQF). 27 The SDA requires SETAs to seek and to obtain accreditation from SAQA as ETQAs, define learnerships and skills programmes in relation to qualifications registered by SAQA on the NQF and restrict learnership agreements and training provider grants to training providers accredited by an ETQA. This articulation draws SETAs into the heart of the regulatory framework established by the SAQA Act and, for this reason, issues that are confronted in relation to the implementation of the NQF directly impact on the ability of SETAs to deliver in terms of their mandates. As mentioned, SAQA requires SETAs to obtain accreditation from SAQA as an ETQA. According to the SAQA Regulations, ETQAs must 28: • • • • • • Accredit providers for specific standards or qualifications; Promote quality amongst providers; Monitor provision by providers; Evaluate assessment and facilitate moderation amongst providers Register assessors; Take responsibility for the certification of learners; 27 See paragraph 1, Memorandum on the Objects of the Skills Development Bill, 1998. Regulations under the South African Qualifications Authority Act, 1995, Regulations Gazette No. 6290, Government Gazette, 8 September 1998 28 57 • • • • • Cooperate with the relevant body or bodies appointed to moderate across ETQAs; Recommend new standards or qualifications to the National Standards Bodies for consideration; Maintain a database acceptable to the authority; Submit reports to the Authority; Perform such other functions assigned to it by the Authority. In turn, SETA ETQAs are responsible for accrediting education and training providers. SAQA states that: “A body may be accredited as a provider by an Education and Training Quality Assurance Body whose primary focus coincides with the primary focus of the provider, provided that the body seeking accreditation – (a) Is registered as a provider in terms of the applicable legislation at the time of application for accreditation; (b) Has a quality management system which includes but is not limited to – (i) Quality management policies which define that which the provider wishes to achieve; (ii) Quality management of procedures which enable the provider to practise its defined quality management policies; or (iii) Review mechanisms which ensure that the quality management policies and procedures defined are applied and remain effective’ (c) Is able to develop, deliver and evaluate learning programmes which culminate in specified registered standards or qualifications; (d) Has the – (i) Necessary financial, administrative and physical resources; (ii) Policies and practices for staff selection, appraisal and development; (iii) Policies and practices for learner entry, guidance and support systems; (iv) Policies and practices for the management of off-site practical or work-sire components where appropriate; (v) Policies and practices for the management of assessment which include appeals systems; (vi) Necessary reporting procedures; and (vii) The ability to achieve the desired outcomes, using available resources and procedures considered by the Education and Training Quality Assurance Body to be needed to develop, deliver and evaluate learning programmes which culminate in specified registered standards or qualifications contemplated in paragraph (c); and (e) Has not already been granted accreditation by or applied for accreditation to another Education and Training Quality Assurance Body contemplated in Regulation 2 of the ETQA Regulations” 29. 5.7 PUBLIC FINANCE MANAGEMENT ACT The SDA requires that SETAs must be managed in accordance with the PFMA. 30 This requirement, together with the Minister of Finance’s listing of SETAs as 29 30 Criteria and Guidelines for Providers, SAQA, October 2001 Sections 14(4) and (5), SDA. 58 schedule 3 public entities under the PFMA 31, places the PFMA at the centre of SETA operations. The PFMA seeks to secure transparency, accountability, and sound management of the revenue, expenditure, assets and liabilities of public institutions. 5.8 CONSTITUTION SETAs are important institutions in the public administration. They exercise public powers and perform public functions in terms of the SDA and the SDLA (and also in terms of the SAQA Act in their capacity as ETQAs). In this capacity, SETAs are required to respect, protect, promote and fulfil the fundamental rights contained in the Constitution; to comply with the basic values and principles governing the public administration; and to apply the principles of co-operative government and intergovernmental relations. 32 SETAs exercise statutory powers and functions relating to skills development and quality assurance that have far reaching implications for the rights and interests of participants in the system. They determine matters of significant importance such as the registration of learnerships, the allocation of training grants, and the accreditation of training providers. Generally speaking, when SETAs exercise these public powers and functions, they are subject to the constitutional right to just administrative action and their determinations must be lawful, reasonable and procedurally fair. 6 EMERGING POLICY ISSUES Based on the descriptions provided above, there is a need to consider some of the salient issues that have arisen within the policy context and that potentially have a bearing on the manner in which the system is implemented. This analysis takes into consideration the policy and legislation that has been outlined and considers where they may be any gaps or inconsistencies in policy. This section is also augmented by data obtained from the interviewees that were interviewed as part of component one, as well as information emerging from documents that reflect current review processes that are taking place. The issues that are flagged in this section will be monitored and reviewed in the remaining sections of this report. There are also nuances that have emerged through the research process that add further insight into the manner in which these issues are applied in practice and the implications of this for the policy environment. 6.1 CONFLICTING OBJECTIVES AND APPROACHES The analysis of the evolution of the system, the documentary evidence reviewed, as well as interviews that were conducted as part of this initial phase of the research process, suggests that the manner in which the skills development system was developed gave rise to a system wherein stakeholders and role players emerged from different sectors/interests with a myriad of related expectations, which do not always sit comfortably with each other. The analysis suggests that this has found expression in the way in which the purposes and objectives for the skills development systems are stated in different policy documents. One such example relates to the NSDS and the Sector Skills Plans. While the NSDS has a strong redress and equity discourse the policy intention 31 In terms of section 47(1), PFMA. See sections 7(2), 41, 195 and 239, Constitution. SETAs are also subject to constitutionally mandated laws, such as the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and the Promotion of Access to Information Act 32 of 2000 (PAIA). 32 59 behind the SSPs is that of focusing on the development of a plan with specific sectoral economic imperatives aimed at economic growth – which could be read as equitable growth none-the-less the focus remains on growth. Yet the policy states that the SSPs must be developed within the framework of the NSDS, and the extent that the imperatives of the NSDS and SSP can adequately be aligned is questionable. One of the systems issues that have likely contributed to the myriad of expectations and multiple objectives relates to the manner in which representivity has been translated in policy into a requirement, stemming from the origins of the SDA, for a multitude of stakeholder structures and forums. The implications of this will be explored within further within this chapter and then will be addressed in subsequent chapters in this report. 6.2 SETA GOVERNANCE The statutory framework outlined has highlighted the governance requirements of the SETAs. These include the requirement that membership of a SETA be limited to representatives of organised labour, organised employers (including small business), relevant government departments in the sector, and/or interested professional bodies or bargaining councils in the sector (if the Minister so determines). Further, SETAs are required to provide in their constitutions that constituencies must be represented by members who are sufficiently representative of designated groups - defined as black people, women and people with disabilities. However, the SDA does not stipulate any other criteria for membership of a SETA Board. Thus, while the Act stipulates that members of the SETA - unlike bargaining councils under the Labour Relations Act 66 of 1995 (LRA) - trade unions, employer organisations and the state do not have the status of parties to a SETA. 33 They are represented on a SETA by the members they have nominated. The Act is silent on how the representation of organised labour and organised employers on the SETA should be determined or how disputes about representation should be resolved. Further, no additional qualifications for membership, such as special experience or expertise, are required. Nor does the SDA provide specific disqualifications from appointment to membership of a SETA. These governance and representation requirements, read together with the large number of institutions created by the SDA and related acts, as well as the points made previously about the emphasis on stakeholder involvement in a range of other forums, creates the concern about the proliferation of the new institutions with insufficient regard given to society’s capacity to manage and steer the new structures. Further, the absence of requirements pertaining to expertise, linked to the fact the constituents nominate representatives, means that there exists the potential for inadequate set of expertise on the governance structure, which could make it difficult for the SETA to fulfil all its functions and adopt a strategic direction and this will also be explored in this report. Other issues that emerge from this policy analysis and will be addressed in the report include: 33 Bargaining councils are voluntarily collective institutions, established by agreement between registered trade unions and registered employers organizations and registered under the LRA. Their primary functions are the conclusion and enforcement of collective agreements and the prevention and resolution of labour disputes. Collective agreements are written agreements concerning terms and conditions of employment and any other matter of mutual interest concluded by registered trade unions on the one hand and employers or registered employers organizations on the other. 60 • • • The pressures to have large governance structures to accommodate all constituents, which could make the management of the work of the SETA cumbersome; The possibility of SETA members adopting bargaining council postures, despite the notion of being members not parties; The possibility that despite Code of Conducts, members could potentially operate in terms of specific interests rather than a sectoral perspective. 6.3 SECTOR SKILLS PLANNING The legislative framework states that the SETAs are required to develop and implement a Sector Skills Plan for their sector within the framework of the National Skills Development Strategy. There are a few emergent issues in this regard. The first of these relates to the compatibility of SSP requirements with other stated policy objectives. It has already been noted that there is a potential issue in what may be differing points of emphasis between that of the NSDS which focuses on redress and equity and the SSP which emphasises the need for sectoral economic growth. The second issue relates to the comprehensiveness of policies and regulations related to SSP processes. The policy and related regulations provide very limited guidance about the requirements for a SSP (as compared to other aspects of the system such as learnerships). This creates the potential for processes and procedures for skills planning to be devised using an endless variety of techniques, methodologies and data sources that could potentially be variable in terms of voracity, validity and reliability. Further, this policy vacuum creates ambiguity as to the purpose of the SSP and its intended relationship with WSPs, economic growth skills planning strategies and the NSDS. 6.4 LEARNING PROGRAMMES As stated the SDA created two new legal mechanisms to promote skills development - learnerships and skills programmes. Further, from 20 March 2000 onwards, SETAs performed the functions of training boards in respect of contracts of apprenticeship. For this purpose, all sections of the Manpower Training Act that concerned apprentices remained in force, as if that Act had not been repealed. In this regard: • • • any function of the apprenticeship registrar under the Manpower Training Act must be performed by an official of the Department of Labour designated for that purpose in writing by the Minister; any function of a training board must be performed by the SETA to whom the assets, rights, liabilities and obligations of the training board were transferred; and any function of the National Training Board concerning apprentices must be performed by the National Skills Authority. 34 It is further stated that: • this interim situation will continue until a date determined by the Minister; 35 34 Item 4(5), Schedule 2, Transitional Provisions, SDA. The formulation of item 4(5), Schedule 2, Transitional Provisions was substituted by the Skills Development Amendment Act 31 of 2003. In this regard, the initial formulation of the item was ambiguous and led to some uncertainty regarding whether all sections of the Manpower Training Act 35 61 • • thereafter, any contract of apprenticeship registered under the Manpower Training Act will be deemed to be a learnership agreement and a contract of employment contemplated in the SDA; and any apprentice will be regarded as a learner under the SDA. Furthermore, from that date, any trade designated under the Manpower Training Act is to be regarded as a qualification for purposes of the SDA. 36 For current purposes therefore, the apprenticeship system continues to operate parallel to the learnership system, and remains subject to the provisions of the Manpower Training Act, despite its repeal. There are no necessary statutory obstacles to the articulation between apprenticeship and NQF frameworks. These provisions potentially give rise to a number of issues pertaining to the provision of learning programmes resulting in a lack of clarity relating to the nature of apprenticeships and learnerships, how these relate to each other, and whether or not individuals can attain their trade qualification through either route; as well as whether there is still an intention to discontinue the apprenticeship scheme, as originally stipulated. This could impact on the willingness of employers to conclude new contracts of apprenticeship and creates further policy ambiguity as to whether trade qualifications should be developed and aligned to SAQA processes or not. 6.5 QUALITY ASSURANCE As indicated, the development of the NQF was seen as integral to the success of the skills development strategy. However, almost since inception there have been processes to review its implementation. In 2001 the Minister of Education and the Minister of Labour appointed a Study Team to assess and review the implementation of the NQF and to improve its efficacy and efficiency. The review was seen as a response to a range of concerns regarding the unfolding mechanisms and instruments used to realise the objectives of the NQF. Stakeholders, including the sponsoring government departments made representation to the Study Team, which included (but were not limited to) the following concerns: • • • • • • The proliferation of NQF bodies and structures especially for standards generation of quality assurance, leading to confusion and duplication of effort and responsibility. The architecture of the NQF, embracing policies, regulations, procedures, structures and language, is experienced as unduly complex, confusing, time consuming and unsustainable. Misplaced application of the “stakeholder principle” leading to failure to give experts in qualifications design and quality assurance their due. Lack of recognition of the diversity of approaches and practices within the education, training and skills development system resulting in the design of the NQF architecture with a “one size fits all” approach. The disjuncture between qualifications and curricula, which create enormous pressure on providers to develop appropriate curricula and learning materials and allows for uneven quality. The qualifications similarly do not offer guidance about the nature of assessment leading to very varied assessment practices and requirements for assessors even within the same field. dealing with apprentices remained in effect for the interim period. The 2003 amendment resolved any ambiguity regarding the matter. 36 Item 4(6), Schedule 2, Transitional Provisions, SDA. 62 The Study Team reported to the two Ministers in May 2002. Public comments were received at the end of 2002. In response, the Department of Education and Department of Labour published the NQF Consultative Document in July 2003. The consultative document stated which of the recommendations emerging from the Study Team were accepted by the Ministers of Education and Labour. Some of the recommendations that were agreed to and have a bearing on this report include: • • • • • • • The NQF should be based on 10 levels, reflecting the qualification requirements of the respective NQF bands and taking account of international comparability. Qualifications must be designed as a whole and should be fit for their respective purposes Both “unit standards-based” and “whole qualifications” are equally valid expressions of outcomes-based qualifications design. The twelve National Standards Bodies established by SAQA should be disestablished in a properly phased manner and their functions allocated to designated structures. The number of ETQAs should be limited. The current quality assurance model should be modified to emphasise an integrated partnership approach to quality, which would rely on five main processes: self-evaluation by providers; institutional accreditation; the ongoing monitoring of provider activities; the quality assurance of learning achievements; and quality audits. Recognition of Prior Learning (RPL) implementation should be accorded priority, provided with appropriate incentives and targets and speeded up through the simplification of standards setting and quality assurance arrangements. The Consultative Document then went further and argued for a revised architecture for NQF implementation, based on structures responsible for Qualifications and Quality Assurance, known as Quality Councils or “QC’s”. Three such structures were proposed, for General and Further Education and Training, Higher Education, and Trades, Occupations and Professions. Some of these recommendations were acted on almost immediately such as the dissolution of the NSBs, however others have taken longer to resolve and there has only recently been an indication that the proposal, as outlined here, for the three QCs is likely to be implemented. This agreement will have a profound impact on the role of the SETA ETQAs. This is explained in this report. Issues pertaining to the nature of the qualifications, the non-alignment between trade qualifications and NQF qualifications and the continued requirement for fundamentals at the level of the qualification are areas that do not yet appear to be resolved. Further, as indicated previously, the relationship and relative status of the external trade test versus internal assessment of other NQF programmes is also not clarified in the policy statements. 6.6 MANDATORY GRANT ALLOCATIONS As indicated, the Minister now has increased regulation-making powers to prescribe requirements for the performance of SETA functions including: • standards and criteria for the allocation of grants to employers; education and training providers and workers; and 63 • standards and criteria for the use of monies received by SETAs, including expenditure on administration and salary bands and performance related payments in relation to staff. 37 However despite these increased powers, the “claim versus steer” dilemma alluded to previously in terms of mandatory grants emerges: SETAs are required to implement their Sector Skills Plans inter alia by approving Workplace Skills Plans (section 10(1)(b)(ii)). The Act and the Grant Regulations do not specify procedures or criteria for the approval of Workplace Skills Plans. However, while the Act states that SETAs must approve the WSPs, as stated previously, the practice note by Treasury indicate that the SETAs are required to process and pay the mandatory grant if the minimum legal conditions are complied with. The statutory framework is therefore not clear in terms of the extent that the mandatory grant should (or can) be used to guide the nature of training in the sector. 6.7 REPORTING AND ACCOUNTABILITY The several laws under which SETAs operate establish a diverse range of accountability relationships. In this regard, SETAs are accountable and must report – • • • to the Minister of Labour and the Director-General: Labour in respect of the exercise and performance of their powers and functions under the SDA and the SDLA; to SAQA for the exercise of their powers and the performance of their functions as ETQAs under the SAQA Act; and to the Minister of Labour, the Director-General: Labour, the National Treasury and the Auditor-General in respect of their management of public finances and other public resources under the PFMA. In terms of the above, the Skills Development Amendment Act 31 of 2003 introduced a number of significant changes to the SDA. The key objective of the Amendment was to strengthen the Minister of Labour’s powers to influence the work of and to hold to tighter account, the SETAs. This was in response to various problems that had been experienced in a number of SETAs and the perceived inability of the Minister to intervene decisively under the legislation in force at the time. 38 The extent to which the Amendment has been applied in practice will be reviewed in the body of this report; including the introduction of the SLA and the extent to which this is impacting on SETA performance. Finally, considering the complex reporting environment, and the differing reporting requirements related to each of these, it is important to explore the extent to which reporting provides an integrated set of data against which to measure SETA performance. 6.8 INCENTIVE ENVIRONMENT The policy environment highlights the discrepancies in the various incentives that are in place in terms of learnerships and apprenticeships as well as other learning programmes. The implications of this are explored in more depth in this study. 37 38 Sections 6, 9 and 24, Skills Development Amendment Act, 2003. See paragraph 1, Memorandum on the Object of the Skills Development Amendment Bill, 2003. 64 SECTION THREE: GOVERNANCE AND ACCOUNTABILITY 7 GOVERNANCE The skills development system is comprised of a complex arrangement of institutions and mechanisms, of which the SETAs constitute a vital part. While the Minister of Labour bears primary responsibility for the governance of this system, an inclusive model has been instituted to broaden stakeholder participation in governance. This model is based on a tri-partite configuration, involving labour, business and government, and is aimed at mobilising optimal contributions into the formulation, ownership and stewardship of the skills development system. The system operates on a devolution model (as opposed to being Public Sector centred) where various institutions such as the SETAs; the National Skills Authority and SAQA all play a key role in implementation of skills development. All these institutions mediate the training nexus, which primarily involves the learner, provider and funder. The main motivation for the establishment of the complex institutional arrangements is to improve the conditions that will contribute to optimising the relevance, quality, impact and equity outcomes of training. However, greater complexity of institutional arrangements increase the number of meetings and actors involved in the decisionmaking and implementation chains; which are collectively described as “transactional costs”. From an institutional and system effectiveness perspective, it is therefore important to monitor and assess the trade-off between the advantages of complex institutional arrangements and the transactional costs related to them. It is important to distinguish between systemic governance and corporate governance within the skills development system. Systemic governance is geared toward ensuring that the various constituent institutions (such as the SETAs collectively, the NSA and oversight institutions) all operate in a manner that promotes effective governance of the system of skills development in South Africa. Various institutions are responsible for the effective systemic governance, including: the legislature, the Minister of Labour (as Executing Authority of the SETAs and primary custodian of the SDA and SDLA); the Department of Labour; the National Treasury; and the Auditor-General. Corporate governance, by contrast, relates to governance at an individual institutional level. Within the scope of this review, corporate governance relates to governance of individual SETAs. In terms of the scope of this study, the main thrust of the governance review is focussed on corporate governance at SETA level. However, to the extent that systemic governance inevitably arises as an important factor in SETA performance; we do make some observations about it, albeit much more briefly. 7.1 PRINCIPLES OF GOOD GOVERNANCE Governance principles and codes provide a normative framework, which seeks to ensure that institutions and systems comply with both the letter and spirit of public policy aims and objectives allowing for a convergence of public interest with narrow institutional performance objectives. In addition, sustainable institutional 65 effectiveness is contingent on a pervasive adherence to good governance within a system, the economy and even global trade. The legislative and policy provisions for governance of public institutions are informed by specific principles that have strong resonance with the private sector and international practice. The key principles that shape the governance framework of public institutions in South Africa are briefly outlined below. • Public institutions should contribute to the effective and efficient performance of their specific public mandate (delivery of public goods, services and programs, exercise and performance of public powers and functions) and provide for proper accountability mechanisms and relationships. • Public institutions must be effective and efficient in the performance of their specified public mandates. Public powers and functions must be exercised and performed effectively and public goods, services and programs must be delivered efficiently. This requires clarity of the institution’s public purpose and objectives and clearly defined roles and responsibilities both within the institution and between the institution and other public authorities. • Public institutions must be accountable for achieving their specified public mandates and must be subject to external scrutiny. This requires – effective accountability mechanisms to higher executive authority, to stakeholders and to the general public for the exercise and performance of the institution’s powers and functions and for the delivery of public goods, services and programs; proper management, control and safeguarding of public finances and other public resources of the institution; and, regular and accurate performance review and assessment. 7.2 SYSTEMIC GOVERNANCE OF THE SKILLS DEVELOPMENT LANDSCAPE An analysis of the governance legislative framework was presented in Section 2 (there is also a more detailed analysis in Annexure A). The discussion which follows is based on an application of this analysis. The key dimensions of the governance of SETAs at a systemic level, relates to performance management and accountability The SETAs operate under a number of laws which establish a diverse range of accountability relationships. Of these, the most significant accountability relationships are with: • • the Minister of Labour and the Director-General: Labour in respect of the exercise and performance of their powers and functions under the SDA and the SDLA; SAQA for the exercise of their powers and the performance of their functions as ETQAs under the SAQA Act; and 66 • the Minister of Labour, the Director-General: Labour, the National Treasury and the Auditor-General in respect of their management of public finances and other public resources under the PFMA. In terms of performance management, the SDA provides a number of important mechanisms for the performance management of SETAs. These take the form of annual service level agreements, written instructions by the Minister (with which a SETA must comply). In addition to the above, the legislation empowers the Minister with specific mechanisms for intervening to address serious performance shortcomings of any SETA. These mechanisms are fairly exacting and allows, in situations of serious performance and compliance shortcomings, for the appointment of an administrator to perform the functions of a SETA (see Annexure A, for a detailed overview of these provisions). There have been some widely reported shortcomings of a very serious nature in respect of some SETAs. In some instances, these reports have coincided with forensic audit reports and those of the Auditor-General that catalogue a series of serious shortcomings in performance, governance or financial stewardship. The seriousness of the shortcomings combined with the credibility of a case made by an audit report should provide a compelling basis for invoking the provisions in the legislation for taking action against such SETAs. However, such interventions have not yet been made. Some of the culpable SETAs appear to be continuing along a trajectory that shows little remediation. While there may be very good reason why the strong intervention has not materialised; these reasons are not evident within the sector and, therefore, have the effect of reducing the signalling and accountability power of these provisions. 7.3 CORPORATE GOVERNANCE According following: • • • • • • to King (insert ref), the purview of Corporate Governance, includes the Boards and directors; Risk management; Internal audit; Integrated sustainability reporting; Accounting and auditing; Compliance and enforcement. In terms of the PFMA, as it applies to Public Entities, the SETA board is the Accounting Authority for the SETA. This is in contrast to Government Departments, where the head of department is typically designated by the Act as the Accounting Officer. Through this provision, the key point of accountability is embodied within an individual person who works in close proximity with the Minister who is designated by the Act as the Executing Authority. In the case of Public Entities, the point of accountability is diffused within the entire Board. This has two significant implications. First, it significantly raises the responsibilities of the Board and, therefore, the responsibilities of individual board members. Second, it conceivably renders the enforcement of accountability provisions of the Act much more complex than is the case where an individual is the Accounting Authority. 67 The PFMA assigns a number of exacting responsibilities to the Board as Accounting Authority, including the requirements to establish and maintain effective, efficient and transparent systems of financial and risk management and internal control; a system of internal audit under the control of an audit committee; an appropriate system of procurement and provisioning; and a system for properly evaluating all major capital projects prior to the final decision on the project. These are extremely onerous responsibilities for which a number of Government Departments have come under severe criticism in the media and through oversight institutions (such as the legislatures and the Public Service Commission). The performance management provisions in the PSA that can be invoked to institute remedial action have a clear focus in that they are directed toward a single full-time official: the head of department. Assigning culpability in response lapses in the proper discharging of fiduciary responsibilities has to be much easier than in instances where the accountability chain is complex and diffused, as is the case with the provisions for public entities. The accountability loop in the case of a collective of individuals that constitute a board is much more complex, making remedial action correspondingly more complex. A second important implication of this provision is that many board members (and even some CEOs) appear not to be aware of the full extent of responsibilities that accrue to them through various legislative provisions. The onerous nature of these responsibilities require that very purposeful consideration be applied to the appointment of persons to the board (related to competence and work ethic); the preparation for board meetings and the evaluation of the board and of individual board members. We show, below, that there are no provisions within SETA constitutions which credibly seek to ensure that SETA Boards are comprised of members that have the required attributes. One of the most significant challenges in the present governance policy provisions is the fact that the complex and serious nature of board members’ responsibilities do not reconcile well with the part-time nature of their tenure and casual nature of practice. This phenomenon does not apply, in the same way, to boards in the private sector where responsibilities tend to accrue to executive directors (board members) who happen to be full-time. We recommend that this matter receive urgent attention, as the status quo is certainly untenable in the long-term. 7.4 COMPOSITION OF SETA BOARDS As mentioned previously, the SDA prescribes that membership of a SETA must be comprised of representatives of organised labour; organised employers (including small business); relevant government departments in the sector; and interested professional bodies or bargaining councils in the sector (if the Minister so determines). In addition, the Act requires that due regard be given to representivity when constituting the board (SETAs are required to provide in their constitutions that constituencies must be represented by members who are sufficiently representative of designated groups - defined as black people, women and people with disabilities). Apart from those criteria listed above, the SETA policy and legislative frameworks do not provide any additional guidelines on the characteristics (such as experience or expertise) required for membership of boards. While the door is certainly left open for individual SETAs to make such provision in their individual constitutions, none appear to have done so. In contrast, the King Code provides clear guidelines, as outlined below, on the characteristics of board members (or directors, in the case of companies). 68 A potential or actual director (which can be read as “board member” in the case of SETAs) should exhibit the following characteristics: (i) competence Ensure he/she is • is qualified with a sufficient understanding of the business and the effect of the economy, so as to discharge duties properly (including reliance on expert advice if needed); • is informed about the financial, industrial and social environment of the company; • is satisfied that he or she is in a position to take informed decisions; • ensures all papers and information are provided timeously for the purposes of these decisions. (ii) commitment Be able to • find the time to properly carry out his/her duties and responsibilities; • be diligent in discharging these responsibilities by regular attendance at meetings and a meaningful contribution to the company’s direction; • act with enterprise for the company, striving to increase shareholders’ value with due regard to the interests of other stakeholders. (iii) Fiduciary responsibilities Be able to • exercise utmost good faith, honesty and integrity, acting independently from any outside fetter or instruction; • always act in the best interests of the company and not in sectoral interests; • avoid conflicts of duties and interests, disclosing potential conflicts at the earliest possible opportunity; • (if need be) disagree with colleagues on the board, including the chairperson and chief executive (iv) Oversight • Ensure procedures and systems are in place to act as checks and balances on information received, ensuring preparation of annual budgets and forecasts against which performance can be monitored; • Treat confidential matters as such and not divulge them to anyone without authority to do so; • Where in doubt, obtain independent professional advice at the earliest opportunity. A discussion on the role and responsibilities of SETA Boards when read in conjunction with the above discussion on the composition of Board, points to a significant dissonance between the capacity of SETA Boards and their ability to effectively discharge their mandates. In addition, there are numerous anecdotal reports (which are widespread enough to be taken note of) that paint a disturbing picture about the capacity of SETA Boards to discharge their responsibilities. 69 8 ACCOUNTABILITY 8.1 ASSESSMENT OF SETA COMPLIANCE WITH THEIR OBLIGATIONS The assessment of the extent to which SETAs are complying with their fiduciary responsibilities, presented below, is based on two main information sources: (1) unstructured interviews conducted, for the purpose of this study, with members of the Office of the Auditor-General who have responsibility for the audit, as stipulated in the PFMA, of the SETAs; and (2) documents produced by the Office of the AuditorGeneral, including the General Report of the Auditor-General on Audit Outcomes 2005-06 (www.pmg.org.za/docs). Table 8 provides a summary of audit outcomes across all SETAs for 2004/05 and 2005/06, while Figures 9 and 10 provide an indication of the distribution of Audit opinions across SETAs. In broad terms, the best opinion the AG can confer following an audit is a clean report. An unqualified report is generally also considered to be acceptable, albeit not as good as a clean report. The AG, however, hastens to clarify that the “emphasis of matter” raised in an unqualified report are important and demand urgency of purpose to ameliorate. On the other hand, “qualified” and “disclaimed” opinions are unfavourable, with a disclaimer being particularly unfavourable. It essentially means that the AG has been unable to pronounce an opinion on account of serious shortcomings in the accounting and systems of the entity. The worse opinion that the AG can pronounce is an “adverse” opinion. A fairly large proportion of SETAs obtain clean or unqualified audit reports in both years (79 per cent and 80 per cent for 2004/05 and 2005/06, respectively). However, the proportion of clean reports within these numbers decreased from 54 per cent in 2004/05 to 42 per cent 2005/06. Similarly, while the total of qualified and disclaimed audit opinions was 21 per cent and 20 per cent for 2004/05 and 2005/06 respectively, the proportion of SETAs receiving a “disclaimed” opinion increased from one SETA in 2004/05 to two SETAs in 2005/06. SETA AGRISETA* BANKSETA CETA CHIETA CTFL DIDTETA*** ESETA ETDP SETA FASSET FIETA FOODBEV HWSETA INSETA ISETT LGSETA MAPPP MERSETA Clean 2004/2005 Opinion Unqualified Qualified with with Emphasis of Emphasis Matter of Matter Disclaimer with Emphasis of Matter Clean 2005/2006 Opinion Unqualified Qualified with with Emphasis of Emphasis Matter of Matter Disclaimer with Emphasis of Matter x x x X x x x x x X x x X x x x x x x x x x x x x x x x x X x x x 70 MQA POSLEC*** PAETA*** SASSETA** SETASA*** SERVICES TETA THETA WRSETA FREQUENCY (Total number of SETAs that received opinion) % of Total SETAs x x x x x x x x x x x x x x X x x 13 6 4 1 11 10 3 2 54 25 17 4 42 38 12 8 Figure 6: Consolidated Audit Outcomes across SETAs for 2004/05 and 2005/06 (*) PAETA and SETASA amalgamated to form AGRISETA on 1 July 2005. Financial statements for AGRISETA cover nine months from 1 July 2005. (**) POSLEC and DIDTETA amalgamated to form SASSETA on 1 July 2005. Financial statements for AGRISETA cover nine months from 1 July 2005. (***) Financial Statements and the Audit Reports cover a three-month period from 1 April 2005 to 31 June 2005. Distribution of Audit Opinions Accross all SETAs: 2004/2005 Clean Reports 17% 4% Unqualified with Emphassis of Matter 54% 25% Qualified with Emphassis of Matter Disclaimed Figure 7: Distribution of Audit Opinions Across all SETAs 2004/5 Distribution of Audit Opinions Accross all SETAs: 2005/2006 Clean Reports 12% 38% 8% 42% Unqualified with Emphassis of Matter Qualified with Emphassis of Matter Disclaimed Figure 10: Distribution of Audit Opinions Across all SETAs 2005/6 71 In order to put the findings reported pertaining to SETAs into perspective, we compare the Audit outcomes of SETAs with those of National Departments and Public Entities (including SETAs). If it is accepted that the process of institution building within the process of large-scale policy implementation takes time, then it follows that it is unlikely that SETAs would demonstrate high-levels of compliance immediately on their inception. It is therefore more realistic to expect that SETAs will improve progressively in this regard. For the purpose of a review, it is perhaps most appropriate to assess the overall performance of SETAs in relation to broadly comparable institutions. It is with these considerations in mind that we have compared, in Table 11, the audit outcomes of SETAS with those of national departments and other public entities for 2004/05 and 2005/06. Figures 12 and 13 provide a graphical representation of the figures contained in Table 11. The figures show that SETAs, in aggregate, compare very well to National Departments and Public Entities with regard to audit outcomes. Indeed, there was a greater proportion of SETAs that achieved clean reports in both years compared to the other categories. These findings may run counter to general perceptions, as most people are more likely to expect SETAs are much worse in a comparison of this nature. AUDIT OUTCOMES FOR NATIONAL DEPARTMENTS, NATIONAL PUBLIC ENTITIES 39 AND SETAs FOR 04/05 AND 05/06 % Clean Reports 04/ 05/ 05 06 National Departments All National Public Entities All SETAs % Unqualified Emphasis of Matter % Qualified Emphasis of Matter % Disclaimed 04/05 05/06 04/05 05/06 04/05 05/06 6 12 74 56 21 32 0 0 38 54 32 42 44 25 42 38 16 17 16 12 0 4 0 8 Figure 8: Audit Outcomes for National Departments, National Public Entities and SETAs for 04/05 and 05/06 39 Including SETAs 72 Comparison of the Distribution of Audit Opinions: 2004/2005 80 70 60 % 50 National Departments All National Public Entities All SETAs 40 30 20 10 0 Clean Emphassis Qualified Disclaimed Figure 9: Comparison of the Distribution of Audit Opinions: 2004/2005. Source: AG Comparison of the distribution of Audit Opinions: 2005/2006 60 50 % 40 National Departments All National Public Entities All SETAs 30 20 10 0 Clean Emphassis Qualified Disclaimed Figure 10: Comparison of the Distribution of Audit Opinions: 2005/2006. Source: AG While SETAs, in aggregate, are clearly not performing any worse than comparable public sector entities, in aggregate, the audit reports suggest that there are serious shortcomings in respect of fiduciary accountability of a small number of SETAs. The following selection of some of these shortcomings extracted from the lists of emphasis of matter contained in the AG’s reports on SETAs raise serious concern about effective governance: • CETA: Due to lack of internal controls and supporting documents, learnership expenses amounting to R199 million could not be verified; Due to inadequate 73 monitoring, CETA is technically insolvent as it has a net liability amounting to R9,9 million and a negative reserve amounting to R7,9 million; no delegation of authority to the CFO; no risk management strategy; no fraud prevention plan; ineffective internal audit function; budget was not submitted for approval. • ISETT SETA: no reporting documentation for NSF income and expenditure amounting to R20,3 million; due to inadequate compliance monitoring, the internal audit was not in place or functional for the full year. • MAPPP SETA: no supporting documentation for discretionary grant payments to training institutions amounting to R12 million; Audit Committee did not perform all required duties; no delegation of authority by the executive authority; over-expenditure on administration amounting to R2,4 million. • THETA: No approved supply chain management system; inadequate procurement processes in awarding contracts to suppliers amounting to R14 million; no direct or indirect interests were disclosed by the tender committee members; payments were made to suppliers who did not delivery adequately In addition to the above, the following list includes emphasis of matter that are not as serious as those raised above, but which nonetheless require careful monitoring and problem-solving: • CTFL SETA: No internal audit plan; Internal audit did not report at all audit committee meetings and no reports were submitted to the audit committee. • ESETA: Due to inadequate monitoring of the mandatory grant, payments amounting to R8,5 million were made to employers that did not submit documents timeously; no functional internal audit; no training in supply chain management; no supply chain management unit • LGWSETA: no CFO appointed or written delegation of authority for the position; supply chain management framework not implemented. • MERSETA: no approval from the executive authority for the acquisition of an outsourced accounting function; no tenders for significant contracts. • SASSETA: No mechanism in place to record or track related-party transactions and relationships. • TETA: Financial statements did not include the report of the accounting authority; incorrect tender evaluation system. The integrity of the systemic governance system dictates that the serious matters raised above is addressed as a matter of urgency. A credible forensic audit that reports to the executing authority (unfettered by management and the board) needs to be undertaken to investigate the extent of the lapse in financial management and whether any culpability exists. This action will also serve to emphatically clear any misconceived perceptions of financial impropriety. If culpability is uncovered in the process, it would be important that the provisions of the law are invoked to protect the integrity of the SETA governance system. Whether through innocent misapplication of requirements and procedures or intentional self-enrichment, a severe shortcoming in fiduciary management tend to 74 militate against the efficacy of a SETA, and consequently, compromises the skills development goals of the country. In addition to the matters referred to above, the AG’s reports raised the following issues of concern that apply across SETAs: • • • • • • • • • Some of the transversal accounting problems identified by the AG include problems in respect of completeness of revenue, non-compliance with GRAP, mandatory grant disbursement and accrual. There are significant variations in the remuneration of senior officials across SETAs: CEO salaries vary significantly: from R457 000 to R1224000. The upper limit is clearly extremely high when compared to the salaries of other senior civil servants, such as Directors-General. CFO salaries vary significantly, from R367000 to R774000. Here again, the upper limit suggests that these salaries are extremely high when compared with CFO positions in the public sector. It was also reported that the overwhelming majority of CFOs are not qualified as Chartered Accountants. Performance bonuses may not be properly linked to performance (one illustration of this being the payment of performance bonuses even while the entity received a qualified audit opinion). The Office of the Auditor-General has identified the lack of standardisation in the areas of financial accounting and management as a source of significant concerns. Apart from the problem of inefficiencies, the lack of standardisation serves to confound effective monitoring and evaluation and stewardship of the skills development system. As at 05/06, SETAs did not have a common format for financial statements. It appears that efforts have been made to address this problem of the 06/07 financial year; although stronger collaboration and clarification of roles in this regard between the National Treasury and the Department of Labour is required optimal success. The Office of the AG reports that at least five different financial management computer software packages are being used across the SETAs. There are also three different software solutions for HR management and, no less than eleven different software solutions for their Management Information Systems. Here again, the lack of standardisation contributes to inefficiencies and militates against effective stewardship of the system. It also dissipates valuable resources, in that even though the information is captured it is not easily accessible for the critical functions pertaining to SETA governance to be performed. It appears that individual SETA autonomy with regard to the determination of systems is not being sufficiently balanced against the systemic imperatives of coherence, co-ordination and monitoring and evaluation. In this regard, it appears that the stewardship of the system is predicted to an approach of “non-interference”. But whatever the virtues of this approach might be, it certainly appears to be retarding the pace of institution building and policy implementation in the sector and, therefore, deserve careful consideration. In the same vein as the above, there is an urgent need to standardise the process and formats for the development of annual reports. A lack of standardisation, in this regard, compromises the credibility of annual reporting and compromises the integrity of the mechanisms for systemic stewardship and planning within the skills development sector. A number of important concerns around financial management are revealed in the audit reports and the interviews with the office of the AG. The AG’s finding that one of the SETAs is technically insolvent, as referred to above, is 75 • a matter of serious concern and calls for urgent intervention. The Estimates of National Expenditure, project deficits in expenditure for SETAs over the MTEF. No explanation is offered to clarify the significance of this, but we believe that is perhaps a matter of serious concern. The law does not provide a mechanism for SETAs to finance these deficits, except through the adjustment of their budgets. It would also be important to understand the reason or motivation of the deficit budgeting. In some SETAs, the board has apparently sought to ring-fence discretionary grants so that only levy-paying enterprises can benefit from allocation. This practice runs counter to the spirit and letter of the policy and legislation. 8.2 REVIEW OF SETA CONSTITUTIONS A comprehensive review of SETA constitutions was conducted, as part of this review, with the purpose of assessing their compliance and appropriateness in terms of the letter and spirit of the policy and legislative frameworks pertaining to governance. The detailed report of this review is attached at Annexure B. A summary of the key findings of the review of constitutions and our proposals for their remediation are presented in Table 14, below. No Shortcoming identified Remedial proposal Implementation mechanism 1 Excessive size of SETA governing bodies Limit size of governing bodies to a maximum of 20 persons Amend SETA constitutions 2 Appointment of alternate members Disallow the appointment of alternate members (alternatively, limit substantially the number of alternates per stakeholder) Amend SETA constitutions 3 Insufficient eligibility criteria for members Introduce additional eligibility criteria necessary skills, expertise, experience, knowledge and probity required for the effective performance of duties Amend SETA constitutions 4 No membership disqualifications Introduce membership disqualifications based on legal disability, insolvency, misconduct requiring or justifying removal from an office of trust or criminal convictions in respect of offences involving theft, fraud, forgery or other offences involving the element of dishonesty Amend SETA constitutions 5 Non-standard terms of office for members Introduce standard terms of office – 3 years, limit to two consecutive terms of office, provide for continuity and renewal of membership Amend SETA constitutions 6 Non-standard provision for governing body remuneration Introduce standard provision for remuneration for members of governing bodies and governance committees Promulgate regulations in terms of s14(3A)(b)(iv), SDA Amend SETA constitutions 7 No provision for induction and ongoing training of members Introduce provisions for induction and ongoing training of members Amend SETA constitutions Include in s 10(A) service level agreements 76 No Shortcoming identified Remedial proposal Implementation mechanism 8 Non-standard provision for codes of ethical conduct Introduce standard codes of conduct and associated procedures, including registers of members interests Amend SETA constitutions 9 Uncertain SETA composition in respect of 7 SETAs Provide certainty regarding the number and manner of appointment of SETA members and the rights of parties in respect of their nomination and appointment process Amend SETA constitutions 10 Uncertain and different decision– making formalities and procedures Provide certainty on decision–making formalities and procedures Standardise the quorum for meetings, the manner of voting and the voting thresholds required for different categories of decision Amend SETA constitutions 11 Unlawful delegations provided in 2 SETA constitutions Provide for lawful delegations Amend SETA constitutions 12 No provision for formal governing body or individual member charters or terms of reference Provide for formal governing body charters and letters of appointment of individual members of governing bodies Amend SETA constitutions or include in s 10(A) service level agreements 13 Non-standard specifications of the role and functions of the chief executive officer Provide for written specification of the role and functions of the chief executive officer Include in s 10(A) service level agreements 14 Limited mechanisms for stakeholder participation Provide additional mechanisms for stakeholder participation - could include providing for annual reporting to broad stakeholder forums and promoting active stakeholder participation in the development and implementation of sector skills plans Amend SETA constitutions or include in s 10(A) service level agreements Figure 11: Summary of key findings arising from the review of SETA constitutions and proposals for the remediation of shortcomings identified The Office of the AG has, in the course of its audits of SETAs, also conducted a review of SETA constitutions. The key findings from the Office of the AG’s review are as follows: • • • • • • The nomenclature for the authority varies across SETAs, and includes: “authority”, “board”, “managing board” and “council”. The terms of office for members are not always specified and do not account for the period for which the SETA has been established. Not all SETAs specifies any limits for the re-election of members. The disqualification of members is not catered for. The process for ensuring that all constituencies are represented is not specified. Only one SETA makes reference to the skills and competencies required for membership of committees The size of the board does not always correspond to size of the SETA 77 • • • • • • In the case of most SETAs, the CEO is not a voting member of the authority In the case of most SETAs, the CEO is not a voting member of the committees Two SETAs did not include the code of conduct (as required by legislation) Most SETAs do not have provision for procedures for appointment of employees nor the terms and conditions of employees, including the CEO Two SETAs did not make provision for committees (including Executive Committee and Audit Committee) Some SETAs have provisions pertaining to finances, limitation of liability, functions, scope which may be in contravention of the SDA, the PFMA and other legislation While some of the shortcomings and inconsistencies with regard to the constitutions of SETAs are relatively minor in their consequence, there are some that are indeed of a serious nature. As was argued above, the application of the principle of standardisation is likely to produce very positive results. Standardisation needs to be proactively promoted and it may best be served if the Department of Labour, as coordinating Department, were to outline the legislative requirements and indicate key matters that need to be provided for in SETA constitutions. Further, the approval of constitutions should be based on a rigorous assessment of compliance to these requirements. 8.3 PERCEPTIONS OF KEY SETA AGENTS ON THE FUNCTIONING AND EFFICACY OF SETA BOARDS The perception of external entities (such as, the media, parliament and the AuditorGeneral) is often less than generous about the functioning and the efficacy of the SETA Boards. We sought to juxtapose these perceptions with those of key actors within the SETAs. For this purpose, the Chairperson of the Board, one other member of the Board and the CEO of each of the SETAs were interviewed. The findings of these interviews are presented in Tables 15 to 23, below. SETA CEOs 10% 10% 0% 20% SETA Board Members 0% 38% 45% 35% 100% 60% 20% 100% 50% 13% 100% Not at all Somewhat Clearly defined Very clearly defined Total SETA Chairs Figure 12: Do you think that the SETA Board has clearly defined and articulated roles and responsibilities? SETA CEO's Never productive Sometimes productive Mostly productive Always productive Total SETA Chairs 6% 11% 56% 28% 100% SETA Board Members 0% 27% 60% 13% 100% 0% 23% 49% 29% 100% Figure 13: Overall how would you rate the overall productivity of the Board meetings? SETA CEO's Not at Sometimes Usually measures achievements Always measures achievements 12% 6% 18% SETA Chairs 21% 7% 50% SETA Board Members 5% 18% 44% 65% 21% 33% 78 systematically Total 100% 100% 100% Figure 14: Does the Board actively measure how the SETA is succeeding in achieving these priorities? SETA CEO's Not at all Somewhat appropriate Mostly appropriate Appropriately Total 11% 21% 37% 32% 100% SETA Chairs 0% 20% 67% 13% 100% SETA Board Members 3% 30% 30% 38% 100% Figure 15: In broad terms, do you believe that the composition of the Board is appropriate for the optimal functioning of the SETA? SETA CEO's Not at Somewhat Appropriate expertise Excellent expertise Total 11% 58% 26% 5% 100% SETA Chairs 0% 33% 67% 0% 100% SETA Board Members 8% 39% 37% 16% 100% Figure 16: Overall, do you believe that individuals with the appropriate kinds and levels of expertise are sitting on the Board? SETA CEO's Not at all Somewhat Mostly Completely Total 5% 30% 40% 25% 100% SETA Chairs 0% 27% 67% 7% 100% SETA Board Members 0% 11% 54% 35% 100% Figure 17: Generally speaking do you think that the division of responsibility between management and the board is appropriate and clear? SETA CEO's Yes No Don’t know Total 92% 8% 0% 100% SETA Chairs 100% 0% 0% 100% SETA Board Members 92% 5% 3% 100% Figure 18: Has the SETA complied with requirement to be audited every year? Yes No Don’t know Total SETA CEO's 100% 0% 0% 100% SETA Chairs 100% 0% 0% 100% SETA Board Members 97% 0% 3% 100% Figure 19: Has the SETA submitted its annual report every year? SETA CEO's Yes No Don’t know Total 20% 80% 0% 100% SETA Chairs 63% 38% 0% 100% SETA Board Members 77% 3% 20% 100% Figure 20: Has the SETA submitted an annual training report every year? Respondents were asked whether they felt that the SETA board had clearly defined roles and responsibilities. The Chairperson respondents were, overall, very positive in their views on the functioning of Boards. Table 15, shows that 60 per cent of chairperson respondents felt that SETA boards had clearly defined and articulated roles and responsibilities, while a further 20 per cent felt that the roles and responsibilities were very clearly defined. In contrast, only 20 per cent of chairperson respondents had a less than positive view on this question. While 50 per cent of board members felt that board roles and responsibilities were clearly defined, a fairly 79 large proportion of 38 per cent felt that this was somewhat the case. These findings are very similar to those of the CEO respondents, where 45 per cent and 35 per cent indicated that their SETA Board has clearly defined and very clearly defined roles and responsibilities, respectively. However, 10 per cent of CEO respondents felt that roles and responsibilities were not at all clearly defined. These findings suggest that while the majority of CEOs, chairpersons and board members share a fairly common perspective on this question, a smaller but significant proportion have less optimistic and divergent perspectives. In response to how they would rate the overall productivity of board meetings, 60 per cent of Chairperson respondents felt that Board meetings were mostly productive as compared to 13 per cent that rated them as always productive. This gives a total 73 per cent who were positive about the productivity of board meetings. The percentage of CEO respondents who felt board meetings were mostly productive were very similar those of Chairpersons, while 49 per cent of Board members felt likewise. A significantly higher proportion of CEOs and board members (28 per cent and 29 per cent, respectively) considered board meetings to be always productive as compared to chairpersons (13 per cent). Interestingly, 6 per cent of CEO respondents felt that board meetings were never productive. On the question of the composition of the Boards, 67% of Chairpersons felt that this was mostly appropriate compared to 13 per cent of chairpersons who felt that it was appropriate. In contrast, 37 per cent of CEOs and 30 per cent of board members felt that the composition was mostly appropriate and, a relatively high (when compared to Chairperson respondents), 32 per cent of CEOs and 38 per cent of board members in the sample felt that they were appropriate. The CEOs view is important because the consequences of board actions have a very real impact on their work. It is therefore significant that a fairly high percentage of CEOs are fairly satisfied with the composition of Boards. However, it is significant that 11 per cent of CEOs felt that the composition of the board was not at all appropriate. All Chairperson respondents felt that members of SETA boards had somewhat or appropriate kinds and levels of expertise required to discharge their functions on the board. No Chairperson felt that board members were not at all equipped with the kinds and levels of expertise required. In contrast, 11 per cent of CEO \and 8 per cent of board members in the sample felt that, overall, board members were not at all equipped with the required kinds and levels of expertise required. Significantly, the majority of CEO respondents (58 per cent) felt that the levels of expertise of board members were only somewhat appropriate. Also significant is that 39 per cent of board member respondents felt that levels of expertise were somewhat appropriate and a further 8 per cent felt that it was not at all appropriate. While these views appear to lend credence to the dominant perspective that SETA board members generally do not have the appropriate kinds and levels of expertise; it appears not to be uniformly applicable to all SETAs. A total of 71 per cent of Chairpersons felt that the Board usually or always measures achievement of the SETA against priorities. Of these, 21 per cent felt that achievement was always systematically measured. In the case of board member respondents, 44 per cent felt that the board usually measures achievement while 33 per cent reported that the board always measured achievements systematically. Of the CEO respondents, a slightly higher 83 per cent felt that their Board usually or always measures achievement. However, of these, 65 per cent felt that the Board always measured achievement systematically. This is a significantly higher than the percentage of Chairpersons and board members that felt the same. 80 Seventy-four per cent of Chairpersons felt that the division of responsibilities between the board and management was mostly or completely clear. Eighty-nine per cent of board members and a significantly smaller percentage (65 per cent) of CEOs felt the same way. However, interestingly of the Chairpersons who felt this way, only 7 per cent felt that the division of responsibilities were completely appropriate and clear. This is in sharp contrast to the 25 per cent of CEOs and 35 per cent of board members who felt the same way. With regard to compliance with auditing and annual reporting requirements, there is a very high correspondence between the responses of Chairpersons, board members and those of CEOs. However, while 63 per cent of Chairpersons and 77 per cent of board member indicated that Annual Training Reports were submitted every year, only 20 per cent of CEOs responded similarly. One must assume that CEOs are familiar with whether or not they have submitted ATRs and have a strong disincentive to admit to not submitting annual training reports in their responses. These findings may suggest that Chairpersons are not always familiar with the level of compliance regarding some of the important obligations that accrue to SETAs. In respect of board members, 20 per cent indicated that they do not know. In reality few of the SETAs appear to have compiled ATRs which fundamentally impacts on their ability to report with any accuracy the nature and extent of training taking place in the workplace. The above findings suggest that the majority of CEOs, board chairpersons and board members in the sample have a fairly positive impression of the functioning of SETA boards. This positive perspective is generally not reflected in public opinions on SETAs. However, the proportion is fairly similar to the proportion of SETAs that have received positive (clean and unqualified) audit reports from the Auditor-General. The proportion of those that are not positive is, however, fairly significant and may be a fairly accurate reflection of the number of SETAs that are experiencing challenges along a number of the dimensions assessed in this review. 8.4 ISSUES RELATING TO ACCOUNTABILITY IN TERMS OF REPORTING Section 8.1. above notes that there are issues relating to the standardisation of formats for reporting templates, including the annual reporting templates. Further, section 8.3 notes issues relating to the differing perceptions of SETA CEOs and Chairs with regards to auditing and annual reporting requirements. These issues, however, also relate more broadly to a number of other matters relating to accountability in terms of reporting. SETAs are required to report to a formidable number of entities, including the Department of Labour, Treasury, the National Skills Authority, the Auditor General, SAQA and others. Each of these entities, in turn, requires different sets of data from the SETAs. For example, SETAs report to the Department of Labour against their Service Level Agreements which are informed by the NSDS targets set by the National Skills Authority. SETA ETQAs, in turn, are subjected to two-yearly audits by SAQA, and are required to submit quarterly reports to SAQA against criteria such as the number of providers accredited and assessor registered. Further, SETA ETQAs are also required to submit learner enrolment and pass rate data to the NLRD. All of the above data sets, and the reports that are generated there-from should, in theory, be derived from a single comprehensive - or at least several but compatible data set/s. What has been found in the course of this research process, however, is that different reports to different entities do not necessarily show a correlation, 81 bringing the voracity of reported data, as well as the accountability issues linked thereto, into question. Further, the reports are often against outputs rather than a cogent set of indicators which contribute to the achievement of objectives. The manner in which current reporting takes place in reality makes a comprehensive review of SETA contributions to the national skills development strategy extremely difficult to ascertain with any degree of certainty. The above raises three important issues. The first relates to the extent that SETAs have internal management information systems in place that create a system of internal data monitoring and validation before report submission. One SETA CEO commented that the MIS and the monitoring and validation of data was “a new thing that we have just developed since last year or the year before last. Before we never used to do that. The Department of Labour has their own instrument which is – they call it the “Balanced Focus”, by which they utilise to measure success. So we have taken that Balanced Focus approach and modified it to include other elements and we use that to measure our success as measured against our previous plan and the implementation of our previous plan”. The difficulty that the research team has had in attempting to ascertain global indicators of achievement within and across SETAs, such as equity profiles of learners and skills initiatives against the scarce skills list, also brings into question the extent that SETA Boards are adequately informed about, and therefore are able to be accountable for the broad imperatives of the SETAs. The second issue relates to the extent to which data emanating from the SETAs is comprehensively validated externally. At present, data reported in one source often does not correlate with another, bringing both sets of data, and the credibility of reporting at large, into question. The third issue, linked to the above, relates to the extent that data measures achievements against outputs rather than against a coherent set of indicators in a manner that provides important and critical national information to determine the extent to which primary objectives and secondary objectives are being achieved. Comprehensive data sets of this nature would, for example, permit analyses of which objectives are being achieved. This would also start to permit real debate about what objectives need to be prioritised, and which ways skills development imperatives need to be best addressed. This set of significant systemic data and reporting issues does not necessarily have a simple solution, but it is apparent that the present situation most likely has the effect of undermining accountability, both to the governance structures of the SETAs, and between the SETAs and the entities to which they report. It is acknowledged that there are different reporting requirements, and that these will not always be potentially accommodated within a single data system, but there is a clear need to ensure greater articulation, in terms of: what data is collected and captured, as well as how this data is reported to different entities to ensure increased transparency, accountability and credibility; and, to ensure that this data can be analysed against a comprehensive set of indicators that point to the achievement of the primary and secondary objectives. 9 EMERGING ISSUES 1. The institutional arrangements that have been established to operationalise South Africa’s skills development policies are indeed very complex. The success of these arrangements are ultimately measured in terms of the extent 82 to which the objectives of the policies are achieved and whether they have, in the long-term, generated the desired outcomes. However, when it comes to governance as it pertains to these institutional arrangements it is important to acknowledge that there is a distinction between good governance, on the one hand, and good performance and success, on the other. At an institutional level, it is possible for good governance to co-exist with poor performance (this applies equally to the converse, where governance failures can co-exist with good performance). 2. The conception of good governance and how it is measured are matters that require careful consideration. Notions of good governance often raise expectations of perfect performance and success. However, the education and training milieu and the enterprise of SETAs is far too complex for such a simplistic criterion to apply to good governance. Good governance needs to ensure that there is adequate disclosure on risks undertaken and that, where enterprises do run into difficulties, these are handled with wisdom and integrity, in the best interests of the enterprise, and adequately communicated to the Executing Authority and key stakeholders. 3. The system of governance and the related legislation and policy that are designed to promote accountability and effectiveness are predicated on a high level of devolution. This approach is intended to simplify decision-making and, in so doing, enhance effectiveness. But devolution inevitably increases the risk of financial mismanagement and the system seeks to mitigate these risks through various institutional mechanisms. The pre-eminent institutional mechanisms, in this regard, are the system of internal audit and policies and procedures for Supply Chain Management and risk management. A significant number of SETAs have not been able to implement these crucial institutional mechanisms. Particularly worrying is the fact that a number of SETAs have not been able to establish a credible internal audit capability. In view of the importance of this capability, a senior official of the National Treasury interviewed for this review proffered a suggestion that the option of establishing internal audit capability that can be shared by a few SETAs. This will allow for economies of scale and assist in solving the recruitment problems in this area of scarce skill. This is an idea that may be worth pursuing. 4. The requirements and challenges for achieving good governance are extremely onerous. Success demands sustained and significant investment of various actors and especially board members who undertake board responsibilities on a part time basis and often with very little preparation. The compliance requirements are fairly complex and demand a fairly sophisticated understanding of the spirit and letter of the legislation. To assist in addressing these challenges, we propose that the following be considered: • Criteria for board membership needs to be carefully formulated and implemented. These formulations need to give due regard to the kinds of attributes that are required to ensure optimal effectiveness of the board in discharging its critical role in the skills development system. • Induction and training of board members needs to be urgently addressed. However, the option of crash courses have proven to have very little value in addressing the challenges discussed in this report. It is perhaps best to start by formulating a detailed capacity development strategy before embarking on any training. It is extremely important that the formulation of such a strategy be driven by people who have no link to training provision in this area, in order to avoid possible perversions or suspicion of perversions. • The Department of Labour is best placed to play a much-needed role in standardising various aspects related to systems and the constitutions of 83 • SETAs. This will go a long way in improving the effectiveness of the systems of accountability and stewardship. The complexity of the compliance burden for governance in the private sector is very similar to the burden that accrues to SETAs. However, it appears that the institutional mechanisms established to support corporate governance in the private sector is not matched in the public sector. One notable example is the concept of a company secretary who is a very high-level and skilled person appointed to service the board though expert advice on compliance to corporate governance provisions. It may be advisable to consider a similar facility in the case of SETAs. However, such a person is not the same as someone who simply services the logistical and minute-taking requirements of the board. It likely that the recruitment of suitably qualified persons (for example, with a Chartered Institute of Secretaries – CIS - qualification) will not be easy and the option of a shared facility between a few SETAs may be an option to assess as an alternative. In addition, it may be advisable for the Department of Labour to play a proactive and explicitly developmental role in promoting capacity for good governance in SETAs. This may take the form of appointing a person who could resource the corporate governance capacity development needs of SETAs. 84 SECTION FOUR: REVIEW OF THE IMPLEMENTATION OF SETA CORE FUNCTIONS 10 PLANNING i The skills planning function required of SETAs has come under considerable pressure and review. As indicated in the relevant regulations, few clear minimal requirements for planning are stipulated. However, the Department of Labour has supported a number of research processes pertaining to planning, and has developed guidelines to support these. The Department has also reviewed the SSPs that have been submitted. The criteria that were used for this review are listed in this report. Despite the absence of regulatory guidelines and any consensus on a planning model, the importance of this planning function continues to escalate, as national processes such as the Master Scarce Skills List (which is critical in terms of fund allocations, as well as the quota lists) and JIPSA are requiring credible data to support effective prioritisation. This section reviews the existing planning processes that take place at a SETA level, and then provides an analysis as to the extent that SETAs have implemented credible planning processes in their respective sectors. The extent that SETAs have met the targets outlined in these plans is then examined in Chapter 14, which deals with the efficacy of the system. 10.1 THE LOGIC OF THE SKILLS PLANNING SYSTEM In South Africa, the planning system is predicated on three interacting levels; workplace level, sector level and national level. Each has designated mechanisms for achieving a flow and coherence of planning. 10.1.1 Workplace Planning At the workplace level, enterprises complete Workplace Skills Plans (WSPs) that give employee status against both an equity profile and an occupational breakdown (now contained in an organising framework for occupations (OFO)). Intended training per occupation is compiled into a training plan and, at the end of each year, an annual training report (ATR) is submitted. This specifies progress against the plans. Workplaces receive their mandatory grants against the submission of the WSPs and the ATR. 10.1.2 Sector Planning At sector level, the WSPs and ATRs are intended to be used by the SETAs as one of the inputs into the Sector Skills Plan (SSP). The Sector Skills Plan analyses developments and progress in the sector as a whole, the supply and demand of skills, and sets out a strategy for intervening. The SSP is also heavily influenced by the national skills development plan. This relationship is reflected in the statement outlined within the Department of Labour Guidelines on SSPs 40, which states that, 40 Guide for Development of Five-Year Sector Skills Plans and Annual Updates for 2005-2010, August 2005, Prepared by the Scarce Skills Working Group appointed by the Department of Labour: Quality Learning Forum 85 “SSPs need to be aligned with the NSDS objectives, success indicators and other national targets and take into account other national and sectoral growth and development strategies. SETAs are required to submit SSP updates annually. The SSP / annual update forms the basis for the Annual Strategic Plan contained in the SLA, entered into by the DG: Labour and SETAs for each year within the 5 year planning cycle. The Annual Strategic Plan sets out the SETA’s plan for addressing the skills development needs of its sector in line with the NSDS and therefore represents how the SETA intends to operationalise its SSP. The SLA sets out the annual targets the SETA undertakes to achieve. It reflects the agreement between the DoL and each SETA against which the SETA will support and enhance training and skills development in line with its SSP. Jointly all SLAs will contribute towards and result in the achievement of the objectives and targets of the NSDS.” 10.1.3 National Planning Framework In conception, the sector skills plans feed into the National Skills Authority (NSA) deliberations in refining and adapting the National Skills Development Strategy (NSDS). The NSDS also takes national imperatives into account, and is therefore intended, in turn, to frame the SSPs. 10.2 REVIEW OF THE IMPLEMENTATION OF PLANNING PROCESSES The realities of planning in any system are that it often pans out somewhat differently from what was intended. The South African system is no different in this regard. It is, however, worth investigating some of the realities that shape behaviour and outcomes in the system. 10.2.1 NSDS Targets Although theoretically derived in both top down and bottom up processes, NSDS targets appear to be articulated as expressions of a basket of government policies, rather than as needs extrapolated from data coming up from the sectors. Objective 1: Prioritising and communicating critical skills for sustainable growth, development and equity 1.1 Skills development supports national & sectoral growth, development and equity priorities 1.2 Information on critical skills is widely available to learners. Impact of information dissemination researched, measured and communicated in terms of rising entry, completion and placement of learners Objective 2: Promoting and accelerating quality training for all in the workplace 2.1 80% of large firms and at least 60% of medium firms employment equity targets are supported by skills development. Impact on overall equity profile assessed 2.2 Skills development in at least 40% of small levy paying firms supported and the impact of the support measured 2.3 80% of government departments spend at least 1% of personnel budget on training and impact of training on service delivery measured and reported 86 2.4 At least 500 enterprises achieve a national standard of good practise in skills development approved by Minister of Labour 2.5 Annually increasing number of small BEE firms & BEE co-operatives supported by skills development. Progress measured through an annual survey of BEE firms & BEE co-operatives within the sector from the second year onwards. Impact of support measured 2.6 There is an annually increasing number of people who benefit from incentivised training for employment or re-employment in new investments and expansion initiatives. Training equity targets achieved. Of number trained, 100% to be SA citizens 2.7 At least 700000 workers have achieved at least ABET level 4 2.8 At least 125000 workers assisted to enter and at least 50% successfully complete programmes, including learnerships & apprenticeships, leading to basic entry, intermediate & high level scarce skills. Impact of assistance measured Objective 3: Promoting employability and sustainable livelihoods through skills development 3.1 At least 450 000 unemployed people are trained. Training quality assured. No less than 25% of people trained undergo accredited training. Of those trained at least 70% should be placed in employment, self employment or social development programmes including (EPWP), or should be engaged in further studies. Placement categories each to be defined, measured, reported and sustainability assessed 3.2 At least 2 000 non-levy paying enterprises, Non-governmental Organisations (NGOs), Community Based Organisations (CBOs) and community - based co-operatives supported by skills development. Impact of support on sustainability measured with a targeted 75% success rate 3.3 At least 100 000 unemployed people have participated in ABET level programmes of which at least 70% have achieved ABET Level 4 Objective 4: Assisting designated groups, including new entrants to participate in accredited work - integrated learning & work-based programmes to acquire critical skills to enter the labour market & self-employment 4.1 At least 125 000 unemployed people assisted to enter and at least 50% successfully complete programmes, including learnerships and apprenticeships, leading to basic entry, intermediate and high level scarce skills. Impact of assistance measured 4.2 At least 100% of learners in critical skills programmes covered by sector agreements from Further Education and Training (FET) and Higher Education and Training (HET) institutions assisted to gain work experience locally or abroad, of whom at least 70% find placement in employment or self-employment 4.3 10 000 young people trained and mentored to form sustainable new ventures and at least 70% of new ventures in operation 12 months after completion of programme Objective 5: Improving the quality and relevance of provision 5.1 Each SETA recongises and supports at least 5 Institutes of Sectoral or Occupational Excellence (ISOE) within public or private institutions and through the Public Private Partnerships (PPPs) where appropriate, spread as widely as possible geographically for the development of people to attain identified critical occupational skills, whose excellence is measured in the number of learners successfully placed in the sector and employer satisfaction ratings of their training 5.2 Each province has at least two provider institutions accredited to manage the delivery of the new venture creation qualification. 70% of new ventures still operating after 12 months will be used as a measure of the institutions success. 87 5.3 There are measurable improvements in the quality of the services delivered by skills development institutions and those institutions responsible for the implementation of the National Qualifications Framework (NQF) in support of the NSDS 5.4 There is an NSA constituency based assessment of an improvement in stakeholder capacity and commitment to the National Skills Development Strategy Figure24: NSDS Objectives and targets Further, the wide scope of areas covered by the targets presents difficulties for planning. Whilst the 5 objectives cover a reasonable range of skills priorities, the 20 success indicators have been constituted as de facto objectives when allocated to SETAs. These issues result in a number of complications, as follows: • It is assumed that there is an unproblematic coherence between national, sectoral and equity priorities. Whilst some SETA CEOs and Chairs reported that there generally was a good synergy between national and sectoral priorities, others commented on the sometimes uncomfortable lack of synergy between the objectives of the NSDS and sectoral needs and priorities. As one SETA CEO commented, “industry has identified its priorities. We are expected to support this, but have to meet NSDS targets and these two do not talk to each other and it put us in a very difficult position. It is about what industry expects us to do and what Labour expects us to do”. Another SETA CEO commented that it was his view that the sectoral needs of the sector represented by his SETA were not addressed in the NSDS, as the sector was particularly lacking in “economic muscle” and strong economic representation. This, the CEO reported, put the SETA in a situation where it was expected to meet NSDS targets that did not align with industry needs and priorities. • The number of different ways in which learner numbers that enter the system, that complete and that are placed are captured in different data sets and reports make it difficult to get an accurate understanding of numbers of learners across the system • It might coherently be argued that ABET is in fact a pre- or below- sector educational intervention into the human resource needs of the country. Also on the matter of ABET, one SETA CEOs interviewed for these purposes commented that the SETA was “seriously in breach of its SLA” on account of not meeting ABET targets. The respondent commented that this was largely as a result of the fact that there was very little take-up of ABET from constituent workplaces, despite incentives being put in place, due to a perceived lack of need in this area. • All references to tracking placement such as those in 1.2, 3.1, 4.2, & 4.3 are practically very difficult and costly. Also, the extent to which placement data can directly be used to evaluate achievement against objectives is somewhat tenuous, as there are a number of variables that impact on the achievement of placements. (Section 12 provides more detail on the extent to which SETAs are currently tracking learners and also highlights challenges with regards to tracking processes). • In addition to the complications arising from specific targets, there is a further concerning issue that arises when targets are allocated to sectors. Interviewees report that this process is undertaken by the Department of Labour in a proportional allocation, with little regard given to sector Skills Plans or other data coming up through the system. There is thus an instant 88 incoherence in the planning logic between top down and bottom up. As one SETA CEO commented, NSDS targets are just the application of a “mathematical equation” rather than on the basis of considered research. 10.2.2 An analysis of the Sector Skills Plans produced by SETAs Sector Skills Plans (SSPs) form the mediation between enterprise planning and national planning. The SSPs are intended to provide an overview of the sector and of supply and demand of skills, leading to a plan for intervention over 5 years. The following are set out as requirements for the SSP by the Department of Labour 41: CHAPTER / SECTION SUMMARY DESCRIPTION OF CONTENT Foreword Brief executive summary by CEO Chapter 1: This chapter outlines the scope in terms of industrial and occupational coverage and highlights sector and non-sector specific issues that affect change. Sector Profile It also outlines key economic indicators of the sector both current and in future with specific reference to legislative, national and sectoral economic growth imperatives, globalisation, etc – that have an impact on skills demand. The content of this chapter sets the scene for skills development and highlights issues responsible for changes that have arisen since the previous plan. Chapter 2: Demand for skills Based on the economic profile, this section should highlight issues affecting the demand for specific skills in the short, medium, and long term. Particular attention is to be paid to industry specific requirements, including an analysis of trends emerging from workplace skills plans (WSPs) as well as sectoral growth and development strategies. The content of this chapter provides an indication of the current skills needs by occupation and includes an indication of numbers of learners required per annum. Use of tables with commentary is recommended. Chapter 3: Supply of skills Based on current supply side initiatives, this section should highlight the current and required skills level. Issues affecting the supply of specific skills in the short, medium and long term should also be highlighted. The analysis should also address expected output from education and training institutions and any support required. The content of this chapter provides an overview of the provision of skills per occupation including some indication of numbers of learners in the supply chain per annum. Use of tables with commentary is recommended. Chapter 4: Scarce and Critical Skills Identification This chapter defines the scarce and critical skills requirements. It provides a consolidated interpretation of the two previous chapters in terms of imbalances in demand and supply in the short term, and projected into the future. The final output of the section is a scarce and critical skills list in the format as supplied 41 Guide for Development of Five-Year Sector Skills Plans and Annual Updates for 2005-2010, August 2005, Prepared by the Scarce Skills Working Group appointed by the Department of Labour: Quality Learning Forum 89 CHAPTER / SECTION SUMMARY DESCRIPTION OF CONTENT by the DoL in the Framework for Identifying & Monitoring Scarce and Critical Skills. The scarce skills list from each sector will form the basis for the State of Skills publication to be used for information dissemination across the country. Use of the template provided is compulsory. Chapter 5: Small Business, Entrepreneurial opportunities and other NSDS priorities This chapter highlights issues related to NSDS indicators not directly addressed in respect of scarce or critical skills or occupations. It deals specifically with: • small business opportunities that could support sustainable new ventures, as well as support to small levy and non levy paying firms • the need for Adult Basic Education and Training provision (ABET) • the National Standard of good practice and • stakeholder capacity building. Use of tables with commentary is recommended. Figure 215: SSP Chapter Templates While this template is expansive, reviews of the SSPs have suggested that the absence of a clear chapter that focuses on strategic planning is a weakness that limits the extent to which the SETAs see the SSPs as a planning tool. Instead the focus has tended to be on the collation of scarce skills lists. This study has reviewed each of the SSPs in terms of the credibility of the planning process. The criteria and analysis against these are provided below. To augment this analysis, the team also considered the reviews of the SSPs commissioned by the Department of Labour in 2006. While the team did not have access to the final reports for the purposes of analysis, interviews were conducted with the reviewers and the summary of the findings is reproduced in Appendix K. The Appendix contains the review of 21 of the 23 SETAs. The DoL reviews took place against the following template 42. SSP Assessment Template Criteria for evaluation • • • • • Evidence of stakeholder participation in the development of the Plan Analysis of the state of the sector, and presentation of conclusions in that regard Identification of skills needs within the sector, including list of priority skills by occupation and skill area Completeness and comprehensiveness of the SSP Presentation overall and the use of graphics Assessment Template A copy of the assessment template is attached below. 1 Stakeholder Participation 42 Guide for Development of Five-Year Sector Skills Plans and Annual Updates for 2005-2010, August 2005, Prepared by the Scarce Skills Working Group appointed by the Department of Labour: Quality Learning Forum 90 Evidence of key stakeholders involved in the formulation of the SSP a. Have key stakeholders been identified and acknowledged in the SSP? b. Does the SSP show evidence of stakeholder involvement in the formulation process? (e.g. varied information and data sources) Rating Basis for rating A There is evidence that key stakeholders have been fully involved in the process by means of data sources, inputs, and other references B The text indicates that stakeholders were identified and involved in some stages of the formulation process C Stakeholder participation is weak 1 Stakeholder Participation Rating Comment i. Evidence of key stakeholder participation 2 Data Analysis Analysis of policies that impact on skills development Current and future government policies that are likely to have an impact on the sector have been considered Analysis of the economic environment within the sector Economic, market, and business environment, including profile of the enterprises in the sector, trade issues, globalisation, and comparative advantage of SA within that sector have been considered Analysis of the social environment within the sector Social issues impacting on the sector, including equity, health and safety, emigration/immigration, skills poaching, and labour relations have been considered Analysis of the technological changes impacting on the sector The impact of technological advancements impacting on the sector has been considered Analysis of the environmental changes impacting on the sector Relevant environmental issues have been explored and discussed Analysis of the legislative changes impacting on the sector Current or pending legislation and its impact have been considered Conclusions and/or recommendations Conclusions have been drawn based on above analyses, identifying opportunities or threats for the sector, the impact on employment, and the impact on skills requirements. Appropriate recommendations have been made. Rating Basis for rating A Interpretation of the data is based on a thorough analysis that takes into account past, present and future developments within the sector. Key economic indicators are taken into account in assessing current and future opportunities and threats for employment creation and skills development. B Sound analysis of the status quo, with some identification of trends. No concrete conclusions reached for future strategy. C Data presented with little or no analysis or conclusions 2 i. Data Analysis Rating Comment PESTEL analysis carried out effectively to support conclusions and recommendations ii. Conclusions and recommendations in line with the analysis 3 Identification of Skills Needs Current employment Baseline employment figures provided by SIC Employment trends and patterns Analysis of employment patterns over time to identify trends Future employment signalling Interpretation of trends to signal possible future developments within the sector Current stock of skills and qualifications Baseline data on current stocks of skills and qualifications Flows of skills and qualifications Analysis of outputs from education and training institutions and timeframes Skills shortages, gaps and other constraints Identification or shortages or deficiencies within the labour market Conclusions Sound conclusions drawn regarding the current and future demand and supply of skills within the sector Rating Basis for rating 91 A B C Relevant skills needs have been identified and justified by analysis Some skills needs have been identified, but not comprehensively Identified skills needs not justified by the data presented or no skills needs have been identified 3 i. Identification of Skills Needs Analysis of demand and supply is adequate to draws conclusions on skills needs Conclusions and recommendations in line with the analysis ii. 4 Rating Comment Comprehensiveness Completeness Sufficient information is provided where required; information is broken down into useful categories Coherence Information and data are presented in a clear and logical manner Consistency Information, data, and methodologies have been applied in a uniform, non-contradictory manner All relevant data supported by references The source and date of all data is acknowledged properly Acknowledgement of missing data Gaps in key information needed to draw conclusions are noted; inadequacies or deficiencies of existing data are highlighted. Rating Basis for rating A The SSP is complete, coherent, and consistent; data sources are identified, and data weaknesses are noted. B The SSP includes key information, but lacks coherence and consistency C Information is presented in a fragmented manner, and key information is missing 4 i. Comprehensiveness Rating Comment The SSP is complete, coherent, and consistent; data sources are identified, and data weaknesses are noted. 5 Presentation overall Adherence to page limitation The main body of the SSP is 60 pages or less in length Flow of information There is a logical and understandable flow of information within chapters, and between chapters. Appropriate use of graphics Graphics are used appropriately to present data; they are clear, and they support the text with which they are presented. Rating Basis for rating A The SSP is presented within the given page limitation; information flows, and suitable graphics are used to support the analysis B The SSP is within the page limitation, but is disjointed or is not supported by appropriate graphics C The SSP exceeds the page limitation; it contains too much unrelated information; the use of graphics is not suitable to the analysis 5 i. Presentation overall The overall presentation of the SSP with respect to length, information flow, and use of graphics is adequate Rating Comment Figure 26 : SSP Assessment Template This next section captures the key themes that emerge based on the reviews that were conducted for the Department of Labour. This is augmented by data emerging from the interviews conducted as part of this research process as well as a more recent survey of SSPs that was undertaken by this team as part of this research process.: 92 10.2.2.1 Sector Profiles With regard to sector profiling in the SSPs, the Department of Labour review team focused on the PESTEL analyses, referencing of source data and the use of occupational categories. They suggested, and this resonated with the review that was carried out by this research team, that the weaknesses here relate to a lack of future focus, a disconnect between major strategies taking place elsewhere in the sector and the SSP, the unequal treatment of sub-sectors and the weak links between the PESTEL and the rest of the SSP. 10.2.2.2 Skills Demand With regards to demand analyses these combined processes indicate that this was dogged by attempts to accurately measure, rather than model, occupational requirements required in the sector. SSPs tended to lack nuance or take into account broad socio-economic and labour market signals, and draw conclusions on the trends that indicate how demand is shifting over time. In addition, demand analyses tended to focus on SETA scope rather than whole sector. In many cases the links between the earlier sector profile and the demand overviews were weak or nonexistent. Consistently, demand analyses focused on the current picture without good tools for forecasting or for making scenarios for future demand. Data tended to be collected due to its convenience rather than comprehensiveness and consultation with large numbers of stakeholders tended to dilute the value of the information. 10.2.2.3 Skills Supply The reviewers suggested that the review of supply was possibly the least understood of the analytic chapters. With few exceptions, SETAs struggled to provide reasoned analyses of the current or future issues that could impact on the availability of skills in the labour market. Most took a snap shot descriptive approach to current supply, rather than looking at projected throughput and the implications for the availability of skills in the foreseeable future. Alternatively, some took a manpower planning approach. Analyses of supply were conceptualised independently of the sector analysis in chapter one, or the analysis of demand in chapter two. Quantitative data was often thin, and analysis seemed guided by availability of statistics rather than relevance to analysing the needs of the sector. Often, the review was SETA-centric rather than broader sector based–that is, it focused on what the SETA has or is able to deliver, particularly on learnerships. Finally, very little attention was paid to the lag between skills formation and skills availability. For example, if a the demand for engineers was expected to grow due to the planned government investments in infrastructure, little attention is paid to the length of time it would take to actually produce a qualified engineer (approx 7-10 years). 10.2.2.4 Scarce and Critical Skills The requirements for this chapter have been re-defined by the Department of Labour since the first submission of SSPs in 2004. The main addition to the requirements was the introduction of the Organising Framework of Occupations, by which SETAs were supposed to present their final list of scarce and critical skills requirements for the SSP period. The reviewers suggest that data here was muddled, consisted of mere lists with no analysis or weighting, and there was confusion between areas experiencing scarcity, and those where particular skills are scarce or critical. This is borne out in the analysis conducted by this research team which is discussed at more length in this Chapter as well as in Section Five. 93 10.2.2.5 Small Business Entrepreneurial Opportunities and other NSDS Priorities The chapter was introduced in place of the SETA Strategic Plan in the SSP. Its intention is unclear, but it acts as a catch-all for any and all issues identified in the NSDS that are not addressed elsewhere in the SSP. As a result of this lack of focus, many SETAs struggled with it. The quality of inputs across the SSPs was uniformly random and lacked coherence. Some SETAs approached this chapter in a haphazard way, and some did not address all the remaining NSDS indicators. The majority did, however, make some input on ABET and on SMME support, including the new venture creation initiatives. However, the inputs varied from wish lists of what could be supported to descriptive representations of what is happening in the sector. 10.3 SETA ANALYSIS Within the context of this review, further criteria were developed against which the team undertook a rigorous review of the SETA SSPs. These criteria were identified as those that are critical for a credible SSP and build on and extend those provided by the DoL. This analysis was conducted in order to understand the level of rigour associated with the planning process and the plan so as to locate the subsequent analysis in which we compare SETA targets against their achievements. That is, the rigour of planning needs to be considered when making any evaluative comment about whether a SETA has achieved all their targets. As indicated, the relationship between effective planning and meeting targets will be explored in Section Five. The analysis of each of the SETAs against these criteria and rating scale is provided on the following pages: 94 Skills demand (Weighting: 2) INSETA FASSET ETDP SETA ESETA CTFL CHIETA CETA BANK SETA FOODBEV No evidence of future development path of the sector Very poor Some references to the future of the sector poor Coherent focus on the future of the sector good Clear focus on future of the sector including models/theory of growth paths in this type of sector Very good x x x x 4 4 4 x X 2 x x x x 4 4 4 4 2 2 3 3 x x x 6 6 6 Does the description of demand link in some way to the sector overview? In other words demand should not simply be a list of skills, but should refer to this demand in the context of the earlier review of the sector and particularly looking towards the future Demand does not explicitly link to the sector overview Very poor Demand links to the overview section poor Demand links to overview and includes future demand good Demand makes reference to general models or theories of skills requirements in this sector Very good x x x x x 6 6 6 6 x x 6 6 x 8 x 8 4 Is there an analysis of the information contained in the WSPs that links to the sector? WSP data is not mentioned Very poor WSP data is collated but no evidence of real analysis poor WSP data is analysed or interpreted and patterns drawn good WSP data is explicitly linked to the earlier overview of the sector Very good x x x x x x x x 6 6 2 8 x x x 6 6 6 x 4 6 8 4 Is the analysis of skills supply sector wide? Analysis refers to SETA related skills only Very poor Analysis is patchy and seems driven by available information poor analysis is coherent and widely covers sector supply including higher education good Analysis is comprehensive and includes reference to both stock and flow of skills Very good x x x x x 6 Supply and demand compared (Weighting: 3) x Is there a future focus such as use of scenarios, projections or assumptions on the future of the sector? 6 Skills supply (Weighting: 2) x HWSETA Skills demand (Weighting: 2) FIETA Sector overview (Weighting: 1) AGRI SETA Issue 8 6 x x x 8 8 x x 2 x x x 8 8 8 x x 6 x 4 6 x x 9 9 Is there an analysis of the implications of the supply versus the demand for skills in the sector? No bringing together of supply and demand Very poor Simplistic comparisons of supply and demand poor Supply and demand are measured against each other good Supply and demand are measured against each other and implications are drawn in a context of the sector overview Very good x x x x x 6 9 12 x 6 6 3 9 6 6 95 12 poor Sources referenced with evidence of a range of sources including Stats SA data or DTI data and qualitative methods including interviews with key stakeholders and focus groups good Evidence of criteria in good (above) plus evidence of quantitative modelling Very good FIETA FASSET ETDP SETA ESETA CTFL CHIETA CETA BANK SETA x x x x x x x 8 6 6 8 x x x 4 6 6 6 x x x x x 6 6 4 Is there an analysis of the information contained in the ATRs that links to scarce skills? ATR data is not mentioned Very poor ATR data is collated but no evidence of real analysis poor ATR data is analysed or interpreted and patterns drawn good ATR data is explicitly linked to the earlier overview of the sector Very good x x x x x x x 4 4 4 12 4 8 4 8 4 4 8 x x 12 12 16 x x 8 8 x x 3 3 Has the SSP plan clearly distinguished between scarce and critical skills? Complete and frequent conflation or muddling of scarce and critical skills Very poor Some confusion between scarce and critical skills, but confined to an example or two poor No confusion between scarce and critical skills good Explicit examples used or explanations given in the context of the sector that makes clear the distinction between scarce and critical (simply repeating DOL’s definition does fulfil this criterion) Very good x x x x x 12 12 x 8 16 x x 16 x 4 12 x x 16 x 4 Does the scarce skills list relate to the supply and demand analysis earlier in the SSP? No evidence of any link Very poor Some areas seem to link with earlier analyses poor There is explicit linking between scarce skills and sector analysis good Scarce skills analysis makes reference to models or theory of sector growth and skills demand Very good x x x x x x x x 8 SMEs (Weighting: 1) INSETA Very poor Sources referenced but limited 8 Scarce skills (Weighting: 4) HWSETA Sources not or poorly referenced 6 Scarce skills (Weighting: 4) x How comprehensive are the sources of data used in supply and demand analysis? x Scarce skills (Weighting: 4) FOODBEV Sources of data (Weighting: 2) AGRI SETA Issue 12 8 12 16 8 8 12 8 12 Is the SME analysis linked to the sector overview? No reference in this section to the sector overview Very poor Some reference to the sector overview but no evidence of analysis poor Explicit analysis of what implications the sector overview has for SMEs good Explicit analysis of what implications the sector overview has for SMEs plus implications fro training are well described and supported Very good x x x x x x x x x 1 3 2 4 2 3 2 3 2 96 0 Sector overview (Weighting: 1) No evidence of future development path of the sector Very poor Some references to the future of the sector poor Coherent focus on the future of the sector good Clear focus on future of the sector including models/theory of growth paths in this type of sector Very good x x WRSETA THETA TETA SERVICES SASSETA PSETA x x x x x 3 1 3 4 x 3 2 3 2 4 3 Does the description of demand link in some way to the sector overview? In other words demand should not simply be a list of skills, but should refer to this demand in the context of the earlier review of the sector and particularly looking towards the future Demand does not explicitly link to the sector overview Very poor Demand links to the overview section poor Demand links to overview and includes future demand good Demand makes reference to general models or theories of skills requirements in this sector Very good 1 x x x x 6 6 x x x 6 2 x x 8 x 4 8 6 x x 8 8 Is there an analysis of the information contained in the WSPs that links to the sector? WSP data is not mentioned Very poor WSP data is collated but no evidence of real analysis poor WSP data is analysed or interpreted and patterns drawn good WSP data is explicitly linked to the earlier overview of the sector Very good x x x x 6 6 6 x x x x x 4 4 4 6 x x 4 6 x x 6 6 8 Is the analysis of skills supply sector wide? Analysis refers to SETA related skills only Very poor Analysis is patchy and seems driven by available information poor analysis is coherent and widely covers sector supply including higher education good Analysis is comprehensive and includes reference to both stock and flow of skills Very good x x x x 8 Supply and demand compared (Weighting: 3) MQA x x 8 Skills supply (Weighting: 2) MERSETA x 8 Skills demand (Weighting: 2) MAPPP Is there a future focus such as use of scenarios, projections or assumptions on the future of the sector? 4 Skills demand (Weighting: 2) LGSETA ISETT Issue 6 4 6 x x 8 8 4 4 x x x x 8 Is there an analysis of the implications of the supply versus the demand for skills in the sector? No bringing together of supply and demand Very poor Simplistic comparisons of supply and demand poor Supply and demand are measured against each other good Supply and demand are measured against each other and implications are drawn in a context of the sector overview Very good x x x x x x x x 3 6 3 9 12 3 3 3 97 9 3 6 Sources of data (Weighting: 2) Sources not or poorly referenced Very poor Sources referenced but limited poor Sources referenced with evidence of a range of sources including Stats SA data or DTI data and qualitative methods including interviews with key stakeholders and focus groups good Evidence of criteria in good (above) plus evidence of quantitative modelling Very good x ATR data is not mentioned Very poor ATR data is collated but no evidence of real analysis poor WRSETA THETA TETA SERVICES SASSETA PSETA MQA x 4 ATR data is analysed or interpreted and patterns drawn good ATR data is explicitly linked to the earlier overview of the sector Very good x x x x 2 6 6 x x x x x x 4 2 4 x x x x 6 2 6 x x x x 8 4 4 x x x 8 4 4 4 8 8 8 x x Has the SSP plan clearly distinguished between scarce and critical skills? Complete and frequent conflation or muddling of scarce and critical skills Very poor Some confusion between scarce and critical skills, but confined to an example or two poor No confusion between scarce and critical skills good Explicit examples used or explanations given in the context of the sector that makes clear the distinction between scarce and critical (simply repeating DOL’s definition does fulfil this criterion) Very good x x x x x 12 12 12 12 4 4 x x x x 8 8 8 8 x 4 4 4 x x 16 Does the scarce skills list relate to the supply and demand analysis earlier in the SSP? No evidence of any link Very poor Some areas seem to link with earlier analyses poor There is explicit linking between scarce skills and sector analysis good Scarce skills analysis makes reference to models or theory of sector growth and skills demand Very good x x x x 12 12 x 12 SMEs (Weighting: 1) x Is there an analysis of the information contained in the ATRs that links to scarce skills? 8 Scarce skills (Weighting: 4) MERSETA x 4 Scarce skills (Weighting: 4) MAPPP How comprehensive are the sources of data used in supply and demand analysis? 4 Scarce skills (Weighting: 4) LGSETA ISETT Issue 8 4 4 16 Is the SME analysis linked to the sector overview? 98 10.4 KEY SYSTEM WEAKNESSES AND UNDERPINNING PLANNING Based on the analysis of each of the SETAs SSPs undertaken against the criteria provided above, the following issues emerged. This resonate with the issues highlighted by the team that undertook the DoL reviews and serve to amplify the seriousness of these issues and to underscore the need to carefully consider the performance ratings of the SETAs where they are being reviewed against targets which are determined through a planning process that has a number of weaknesses. These are outlined below: 10.4.1 Poor Data There is strong emphasis in the system on the collection of data. This is evidenced in the emphasis on very detailed Workplace Skills Plans, on the collection of this data into Sector Skills Plans and on the collection of SSP data into higher levels of data for the NSDS. Data collection is essential to crafting strategies and making plans for the sector. As such there should be an ever-increasing emphasis on data collection. However, there are concerns about the veracity of the data that is collected, as evidenced by many of the data sets that were provided to this team which had both internal contradictions and were not verified anywhere in the system. 10.4.2 Collection Rather than Analysis Another problem with the quantitative focus is that the collection of data, rather than its analysis becomes paramount. Critically, this pertains to two factors: (i) that the majority of the SETAs were unable to provide different scenarios for their sectors and relate this to a skills planning process, and (ii) the limited planning strategic planning relating to the perceived needs in the sector, and linking this data with the resources and capacity available to meet these needs. . 10.4.3 Feedback Distortions The final issue that is raised in this context is that the research suggests that the feedback loop may lead to unintended consequences. The figure below provides an overview of existing mechanisms and their intentions against some emerging trends, as reported in interviews and from reviews that have been carried out. Mechanism Annual training reports matched against planned training Intended signal That enterprises should be accountable for their planned training Real signal That enterprises should set or at least report on low targets in order to ‘under promise and ‘over deliver’ That target achievement is more important than meaningful training and that if the two differ than the WSP should reflect compliance rather than reality Sector skills plan An important sector level contribution to planning SETA interventions SSPs are no longer significantly important except for the sake of compiling scarce and critical lists and for formal compliance with regulations That the NSDS targets are more important that those priorities determined by the sector. Scarce and critical skills in WSPs That scarce and critical skills will give some indication of trends and areas to be addressed in the sector. To have any chance of receiving discretionary funding in the system enterprises should ensure that the sector list of scarce skills reflects as closely as possible their own. That all enterprise skills needs should be called scarce skills. Figure 28: Overview of Mechanisms, Intended Signals and Real Signals 99 10.5 IN SUMMARY: SOME KEY QUESTIONS In summary, the unintended consequences elaborated in the last section are attributed to a range of underpinning causes. Some of these emerge from the SSP reviews. The capacity for labour market analysis is still very limited in South Africa. This is due to structural problems such as poor information, as well as inadequate analytic capability among the majority of participants in the field of skills development. This is illustrated in the chapter that reviews the SSPs in detail (Chapter 14) SETAs are constrained by the many demands that they are required to fulfil. As a result, they are wont to respond only to those requirements that directly impact on their performance assessment. Interviewees suggest that their main focus is on the Service Level Agreement, which they have to sign with the Department of Labour. They state that the focus of the SLA is on the NSDS targets, which then form the basis against which the SETAs’ performance will be judged. This is complicated by the fact that SLAs have a one-year timeframe, which further impacts on the ability of the SETAs to develop any strategic long-term planning. This is particularly concerning given the number of years it takes from the point of enrolment to completion in the majority of occupations regarded as scarce. It should, however, be noted that two SETA CEO interviewees stated that they had developed their plans and had insisted that their plans form the basis of the SLA. They indicate that with the full support of the Board, this position was agreed to, and their plans therefore directly talk to their perceived sectoral needs. The final issue that is raised in this section pertaining to the planning process relates to the removal of the Strategic Planning chapter. The reviewers suggest that this has resulted in targets without a plan to inform the achievement of these targets and that this is particularly concerning, given the number of systemic issues that impact on the ability of the SETAs to support the achievement of these scarce skill targets. A systemic approach to reviewing the skills planning system is required. This should consider the manner in which the different levels within the system can and should inform planning and target setting. This is seen as vital, as the issues highlighted above lead to a situation that those SETAs which are proving to be successful at planning for their sectors suggest that this takes place despite, and not because, of the system, whilst those that fail at competent planning have at least a partial mitigation of, ‘the system made us do it’’ 43. 1 Data for Chapter 10 of this report was compiled with reference to the following sources: Ashton, D. (1999). The skills formation process: a paradigm shift? In Journal of education and work, Vol. No.3. Ashton, D. Green, F. & Sung, J. (1999) Education and training for development in East Asia: the political economy of skill formation in newly industrializing East Asian economies. London & New York. Routledge. Ashton, D. Sung, J. & Turbin, J. (2000). Towards a framework for the comparative analysis of national skills formation in International journal of training and development, 4:1. Blackwell Publishers Ltd. Barasa, F.S. & Kaabwe, E.S.M. (2001). Fallacies in policy and strategies of skills training for the informal sector: evidence from the Jua Kali sector in Kenya in journal of education and work, Vol.14, No.3. Drucker, P. 1970. The age of discontinuity. New York. Harper Torch Books. 43 The ‘system plea’ does not of course cover clear dereliction of duty on simply mandates such as the keeping of accurate records or the reporting on activities. 100 Field, John. (1991) Competency and the Pedagogy of Labour in Studies in the Education of Adults, Vol 23, Issue 1, 1991. Foster, P.J. (1965) The vocational school fallacy in development planning, in C.A. Anderson & M.J. Bowman (Eds) Education and economic development, pp.142-146. Chicago. Aldine. James, D. et al. (1999). The role of the state in skill formation: evidence from the Republic of Korea, Singapore, and Taiwan in Oxford review of economic policy, Volume 15, No.1. Kraak, Andre & Young, Michael (eds) (2001) Education in Retrospect: Policy and implementation since 1990, , Pretoria, HSRC. Kuruvilla, S. Erickson, C.L. & Hwang, A. (2002). An assessment of the Singapore skills development system:does it constitute a viable model for other developing nations? In World Development, Volume 30, no8, August 2002. Middleton, J., Ziderman, A., & Van Adams. A. (1993) Skills for productivity. New York. Oxford University Press. South African Departments of Education & Labour. (2002) Report of the study team on the implementation of the National Qualifications Framework, Pretoria, DoE & DoL South African Departments of Education & Labour. (2003) An interdependent National Qualifications Framework System: Consultative Document, , Pretoria, DOE & DOL World Bank (1993) The east Asian miracle: economic growth and public policy, New York. Oxford University Press. World Bank (1997) World development report 1997: the state in a changing world. New York. Oxford University Press. Young, Michael Options for the NQF in South Africa Institute for Education, University of London, October 2003. Young, Michael. (1996) The Outcomes Approach to Education and Training: Theoretical Grounding and an International Perspective, London. Institute of Education, University of London. 101 11 REVIEW OF SETA ETQAS’ CONTRIBUTIONS TO THE QUALITY ASSURANCE OF PROVIDERS This section of the report explores the manner in which the SETA ETQAs undertake their designated roles and responsibilities, and considers the effect that this has on supporting quality provision and the achievement of credible and valid learner results. This section draws on the questionnaires and learner data submitted by the ETQAs as well as policy and procedure documentation provided by the SETA ETQAs. Where a SETA ETQA did not submit the questionnaire, this is indicated in the tables. It should be noted that the methodology employed has not allowed the research team to validate whether the responses pertaining to policies and procedures are consistently applied in practice. However, this data is augmented by data and correspondence with SAQA and the band ETQAs, SETA submissions pertaining to learner enrolment and certification, previous research conducted about the SETA ETQAs, and by qualitative data received from SETA CEOs and Chairpersons. This section also contains some quantitative data from SETA CEOs and Chairs, as well as company leaders and HR Managers. 11.1 QUALITY ASSURANCE ROLES OF SETA ETQAS In broad terms SETA ETQAs are required to accredit providers and to quality assure learner results. A full description of the requirements of ETQAs as set out in the legislation can be found in Section 2. The accreditation of providers is referred to in this report as front-end quality assurance, i.e. the quality assurance that takes place prior to a programme being offered to learners and typically includes both an institutional audit and programme evaluation. Back-end quality assurance includes the monitoring of the providers through a number of mechanisms, including review of the manner in which the provider adheres to the agreed upon criteria for accreditation, the moderation and verification of learner results and monitoring the extent that learners are able to successfully complete programmes at a particular provider. 11.1.1 Front-End Quality Assurance: Accreditation of Providers Provider accreditation processes are one of the fundamental responsibilities of SETA ETQAs. In accordance with guidelines developed with SAQA 44, the SETA ETQAs have each developed a set of accreditation and programme approval processes 45 and procedures in order to accredit providers. This section highlights the different activities that the SETA ETQAs have undertaken as part of the front-end quality assurance arrangements. These speak to what requirements the ETQAs have put in place to allow providers to offer programmes against standards and/or qualifications on the NQF. 44 Criteria and Guidelines for Providers, SAQA, October 2001 In accordance with SAQA requirements, each individual provider can only be accredited by one ETQA. There are, however, instances in which providers may wish to offer programmes that fall outside of the primary focus of their accrediting ETQA. In such instances, the provider is required to seek “programme approval” status, rather than accreditation status, from the ETQA in whose primary focus the programme may fall. This requires the signing of an MOU between the accrediting ETQA and the “programme approval” ETQA. The “programme approval” ETQA will have criteria in place that the provider is required to meet pertaining to the quality assurance of the programme. 45 102 11.1.1.1 Institutional Audit As indicated, the accreditation of providers within the current SETA ETQA system primarily relies on an institutional audit that focuses on establishing whether or not the provider has the requisite systems and resources in place to support learners and offer and assess learning programmes. An issue that has arisen pertaining to the institutional audit is that in some instances SETA ETQAs have put extensive criteria and evidence requirements in place, and the extent to which all of these criteria directly contribute to the quality of provision has been questioned. This also relates to the concomitant extensive documentary evidence requirements that providers are required to submit or keep on site, and it has been suggested that this can lead to a focus on bureaucracy rather than on provision. Particularly as interviewees suggest that there is no, or limited, capacity within SETA ETQAs to adequately analyse this documentation for quality purposes. As one SETA Chair commented, “I think QALA and accreditation are too cumbersome administratively. They are very focused on paper work. Like with ISO 9000, you can make the [poorest] product, but you have twenty files of process and you look fabulous”. 11.1.1.2 Programme Evaluation SETA ETQAs also undertake a programme evaluation of each of the programmes that the provider wishes to offer against standards/qualifications registered on the NQF. The programme evaluation essentially establishes whether or not the programme outline, the materials and the human resources are in place to ensure that the programme can enable the learner to successfully achieve the credits against the identified standards/qualifications. Questions about the capacity of SETA ETQAs to undertake this role has been raised in several research reports, as well as by a number of interviewees interviewed for this process. The issue of capacity pertains to both the level of expertise required in SETA ETQAs to review the range of programmes that are required, as well as the resource capacity that is required, given the large number of providers and programmes. A critical part of the programme evaluation process includes a review or moderation of the assessment instruments. ETQAs were asked to outline their processes and procedures for the moderation of assessment instruments. Some SETAs reported that assessment instruments are moderated as part of programme approval processes. One SETA reported that assessment instruments are usually only moderated when a concern about either the provider or the programme is raised. All but one of the reporting SETAs (ETDP SETA) indicated that they felt that the moderation of assessment instruments contributed to supporting quality learning and teaching. A number of SETAs suggested that it would be preferable to rather have a standard set of instruments or “national assessment criteria” across sectors than rely on the moderation of assessment instruments which is seen as both cumbersome and complex. 11.1.1.3 Registration of Assessors In terms of the registration of assessors, ETQAs were requested to provide an indication of the criteria for registration. SETA ETQAs reported that the primary requirement for registration is successful completion of the generic assessor unit standard. Above that, SETAs have also put in place requirements for subject matter expertise and, in some instances, a specified number of years of work experience in 103 the relevant area in which assessments will be conducted. One of the variables in terms of the assessor registration process links to the NQF levels against which the assessor can assess. In some instances, the criteria for registration require competence in the unit standard or qualification at the level at which assessments are to be conducted. In other instances, the requirement is competence above the level at which the assessor will be able to assess. SETAs were also requested to indicate whether or not they registered assessors against full qualifications and/or against component of a qualification. The responses to this are reflected below: # SETA 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 AGRISETA BANKSETA CETA CHIETA CTFL ESETA ETDP SETA FASSET FIETA FOODBEV HWSETA INSETA ISETT LGSETA MAPPP MERSETA MQA PSETA SASSETA SERVICES TETA THETA WRSETA Assessors registered against full qualification or component parts Full Component NR Full Component Full Component Component Full Full Both Full Full Both Component Full Component Figure 22: Assessor Registration Against Full Qualification or Component Parts As indicated, practices vary across SETAs, with six reporting that they registered assessors against the individual components or unit standards of a qualification, eight reporting that they registered assessors against full qualification and two reporting that both practices were implemented, depending on the unit standards and/or qualifications. Where SETAs register assessors against the full qualification it is assumed that the assessor can assess against the occupational standards as well as the fundamentals as well as in certain cases cross cutting standards, such as IT or team work. SETA ETQAs report very varied practices in terms of the assessment requirements with regards to these standards. One SETA ETQA reported that their understanding is that in terms of the SAQA regulations SETA ETQAs should only register assessors against occupational standards, and not the generic standards such as the fundamentals. The SETA respondent states that while SAQA verbally states that assessors should be registered for all parts of a qualification, thus creating confusion and challenges in determining processes and procedures for the assessment of fundamentals. SETA ETQAs respondents highlight a concern that those assessors with occupational 104 subject matter expertise often do not have expertise in the fundamentals, and those who apply for registration to assess the fundamentals do not have occupational expertise and are unable to assess the fundamentals where they have been ‘contextualised’. In terms of general mentions of challenges with regards to the registration of assessors, and assessors in general, some SETAs commented that there are some challenges with assessor capacity, assessor interpretation of outcomes and assessment criteria and that there are some areas in which there is a shortage of registered assessors and moderators in order to conduct and moderate learner assessments. One SETA also reported that the assessor registration process is also too time-consuming and onerous. 11.1.2 Back-end Quality Assurance The monitoring of accredited providers has a number of different aspects and is seen as critical to ensure that providers adhere to the conditions of their accreditation, are offering quality programmes and critically to validate the results achieved by learners. This section reviews these back-end quality assurance activities. 11.1.2.1 Monitoring of Adherence to Criteria SETA ETQAs were requested to indicate what forms of monitoring and evaluation they undertook to broadly review adherence to accreditation criteria. ETQAs indicated that there are a variety of mechanisms, such as reviewing reports from providers, as well as site visits. A table indicating the activities that each of the SETA ETQA undertakes as part of this monitoring process is provided below: # SETA 1 2 AGRISETA BANKSETA 3 4 5 6 7 8 CETA CHIETA CTFL ESETA ETDP SETA FASSET 9 10 11 FIETA FOODBEV HWSETA A No monitoring and evaluation takes place at present B Providers submit regular reports to ETQA X X C Frequency Twice annually D ETQA conducts site visits to providers E Frequency X X NR Before accreditation and at least every second year X X Once annually Once annually X NR X Annual and audits as per accreditation cycle Every 3 years Once annually NR X X X 105 12 13 14 15 16 17 18 INSETA ISETT LGSETA MAPPP MERSETA MQA PSETA X Quarterly 19 20 21 SASSETA SERVICES TETA X Communication is ongoing 22 THETA 23 WRSETA X Once annually X X X 6 monthly NR Once annually and unscheduled if a learnership is being offered or if red flag emerges X X Annually Twice annually or subject to developmental needs of the provider Twice annually X X X Figure 23: ETQA Monitoring of Providers As indicated in the table, all of the reporting SETA ETQAs indicate that there is some form of monitoring activities that take place. However, only five of the seventeen responding SETAs report that part of the monitoring and evaluation systems require provider reports to the SETA on a regular basis. The two SETAs that provided the frequency for these submissions, CHIETA and PSETA, require these reports twice annually and quarterly respectively. All seventeen of the respondents reported that on-site monitoring visits form part of the provider monitoring processes. The frequency of these visits, however, varies considerably across ETQAs. THETA, TETA and MERSETA, for example, report that the visits take place twice annually, whilst FIETA conducts site visits every 3 years. These results indicate significant variability in moderating practices. 11.1.2.2 Monitoring of Providers with Regards to Learner Throughput, Pass Rates and Post-Programme Achievements This research process also attempted to ascertain the extent to which SETA ETQAs analyse learner data for the purposes of monitoring and evaluating providers. # 1 2 SETA AGRISETA BANKSETA A ETQA keeps learner throughput data per provider Yes Yes for l/ships B ETQA keeps learner pass rate data per provider No No C ETQA analyses results across provider and programme D Frequency of analyses E Tracking learner placement postprogramme No Yes for l/ships As required No ETQA tracks unemployed 106 learners on l/ships 3 4 CETA CHIETA Yes Yes No - 5 CTFL Yes Yes Yes Monitoring visits & selfevaluations 6 7 8 ESETA ETDP SETA FASSET Yes Yes No Yes Will be quarterly 9 FIETA No No No No but going forward No 10 FOODBEV Yes Yes Yes 11 12 13 14 15 16 17 HWSETA INSETA ISETT LGSETA MAPPP MERSETA MQA Yes No Yes No No No When required by SAQA - No Yes No Yes No Yes 18 PSETA Yes going forward Yes going forward Yes going forward 19 20 SASSETA SERVICES Yes Yes Yes 21 TETA 22 23 No ETQA tracks learners Providers required to track No No No If provider issue emerges - No No Annually Not in postprogramme period No but will be conducted in the future No Quarterly through external moderation, through programme eval updates and monitoring visits bi-annually THETA Yes Yes No Data is available Providers required to extract any to track time WRSETA Yes Yes Yes External No moderations, verification visits Figure 24: ETQA Maintenance and Analysis of Learner Data by Provider Yes Yes, data on system but not analysed Yes - ETQA tracks learners ETQA tracks learners As indicated in Column A above, thirteen of the seventeen SETAs that responded reported that they do keep throughput data for learners per provider. Throughput data allows a comparison of the number of learners who originally registered for a programme, and the final number of learners that completed the programme (including both the group of learners that were found to be competent as well as those that were found to be not yet competent). Column B indicates that only ten of the seventeen responding SETAs reported that they keep pass rate data per provider. Column C indicates whether or not SETA ETQAs actively analyse the data that they are keeping on learner throughput and pass rates. Just seven of the ETQAs reported that they currently analyse this data and a further two SETAs reported that they will be conducting such analyses in the future. Of the seven SETAs currently analysing data, four of these conduct systematic analyses and the remaining three conduct these on an ad hoc basis, such as when required by SAQA or if a provider issue emerges. One of the SETAs reported that it did not currently have the internal capacity to conduct systematic analyses, and another reported that the MIS currently did not permit such analyses, but that a new version of the MIS was due to be instituted. 107 This is an important finding, as it suggests that many ETQAs are not currently using relatively simple data collection and analyses techniques as monitoring tools that are effective, both in terms of cost and in terms of monitoring responsibilities. These monitoring tools could allow the ETQA to establish a benchmark for throughput and pass rate, and to investigate the issue when a provider’s throughput or pass rate is below the benchmark. The ETQA could then determine an appropriate intervention based on the findings. These could include: • • • a review of the type of learner support that may be required and why these issues were impacting so adversely on throughput and pass rate; an analysis of the programme and a consideration as to whether adaptations may be required; alternatively, where a larger pool of providers are below the benchmark, this may be linked to either the nature of the assessment, or even the standards and qualifications themselves. Column E indicates whether or not the ETQA has mechanisms in place to track learners in the post-programme period to determine whether or not the training has resulted in placement in terms of employment, promotion or further learning. Seven of the seventeen respondents report that they have such a mechanism in place. Of these, three require providers to track learners (although the differing understanding of tracking is illustrated by one of the SETAs comments that the tracking does not extend once the learner has left the institution) and four report that the ETQA itself tracks learners. One of these SETAs, the BANKSETA, only tracks unemployed learners on a learnership. The research data did not elicit more detailed information on the frequency and nature of learner tracking processes, and so more detailed information on those SETAs who do report on conducting tracking activities is not analysed here. 11.1.2.3 Quality Assurance of Learner Achievements (QALA) SETA ETQAs were requested to respond to a number of questions regarding quality assurance of learner achievements and assessments processes. In addition to the above, SETA ETQAs were also asked to indicate challenges or obstacles to QALA processes in general. As indicated previously, SETA ETQAs primarily (with the exception of the trade tests) rely on the internal assessment of providers. Therefore the system has been designed to ensure that each individual provider has policies and procedures in place for internal assessment and moderation. The SETA ETQAs in turn are required to have policies and procedures in place whereby assessment and, related to this, the learner results of each individual provider are validated and monitored. It should be noted that this system of QALA processes and procedures differs from that adopted by other ETQAs, such as UMALUSI. UMALUSI has taken a different approach to quality assurance, wherein the ETQA does not believe quality assuring learner achievements across individual providers, qualifications and unit standards is a realistic and feasible way for a national quality assurance body to maintain standards. Instead, UMALUSI took a decision that it can only issue certificates for qualifications that have at least a 50% component of external assessment. UMALUSI believes that this is building on good existing practice in the system, as schools and colleges have always been involved in external examinations, and the trade test system is a viable way of ensuring appropriate standards in artisan qualifications. In this way, UMALUSI aims to ensure some degree of standardisation across the country and across different providers at a reasonable cost to the tax payer. 108 The table below represents SETA ETQA responses about the internal moderation systems required by providers and the manner in which the ETQA validates the assessment processes as well as the learner results. Each of these is discussed in turn, along with qualitative responses received from respondents regarding challenges and obstacles. A Providers required to moderate learner assessments B Providers adhere to this criterion C ETQA validates learner results D ETQA Moderates Assessors Yes Yes Most All Yes Yes No No Yes Yes All Most Yes Yes Yes NR Very effective Effective Yes Most Yes No FASSET FIETA Yes Yes All All Yes Yes Yes Yes 10 11 12 13 14 15 16 17 18 FOODBEV HWSETA INSETA ISETT LGSETA MAPPP MERSETA MQA PSETA Yes Yes Yes Most Most Most Yes Yes Yes Yes Yes Yes Somewhat effective Very effective Somewhat effective Very effective Effective Very effective Yes Yes Yes Most All All Yes Yes Yes Yes No Yes Effective Very effective Somewhat effective 19 20 21 22 23 SASSETA SERVICES TETA THETA WRSETA Yes Yes Yes Yes Most Some All All Yes Yes Yes Yes Yes Yes No Yes Very effective Effective Very effective Very effective # SETA 1 2 AGRISETA BANKSETA 3 4 5 6 7 CETA CHIETA CTFL ESETA ETDP SETA 8 9 E ETQA perception of the effectiveness of their QALA system Effective Somewhat effective Figure 25: Provider Moderation and ETQA Validation Processes As evidenced in Column A above, all of the ETQAs that responded to the questionnaire reported that the providers are required to moderate learner results. When asked whether or not providers adhered to such criteria in practice (Column B), the majority of ETQAs reported that all or most providers adhere to the criterion, with the exception of TETA, which reported that only some providers adhere to the criterion. The SETA indicates that as a developmental intervention they appoint external moderators to deal with the moderation of learner achievements. The SETA reports that it envisages that all providers will have at least one internal moderator by 2007/8. Other SETAs reported that some providers are under financial constraint and take “short cuts” in terms of moderation procedures and some reported that providers were still undergoing learning phases in their development as accredited institutions. Other SETAs reported that provider adherence to the moderation criteria are strictly monitored as part of overall ETQA monitoring and evaluation processes. 109 When asked whether or not the ETQA also validates/verifies/moderates a sample of learner assessments, all responding SETAs replied in the affirmative (Column C). Interviewees and policy document suggest that some SETAs undertake the validations by selecting a sample of learner assessments and moderating these. Where SETAs reported the size of the sample used for validation purposes, this was reported as 10% of all learner assessments. One ETQA commented that this process was sometimes problematic, as providers were required to submit the a selection of assessments for validation and that it was possible that there were “skewed results” due to a possibility of skewed sampling on the part of the provider. Another SETA reported that it used random sampling to conduct the validations and that no assessments would be validated unless the provider had already performed an internal moderation process. In process terms, some SETAs require providers to submit reports, either quarterly or annually, outlining their moderation procedures and ETQAs also use site visits or verification visits in order to conduct some validations on site. Table 30 indicates the frequency of site visits per ETQA, which varies from six-monthly to once every three years. SETA ETQAs were also requested to indicate (Column D) whether or not ETQAs moderated assessors (i.e. check for reliability and validity across assessments conducted by any individual assessor). Eleven of the ETQAs reported that they moderated assessors and five reported that they did not moderate individual assessors. One of these SETAs commented that it is the responsibility of the provider to moderate their own assessors and assessment practices. Finally, Column E highlights the perceptions of the SETA ETQA Managers of the overall effectiveness of quality assurance learner achievements in the SETA. There is some correlation between the activities undertaken by the SETA in terms of QALA and their own assessment rating. As highlighted in yellow, most of the SETAs that rate their processes as very effective have put in place the different QALA processes. However, certain of the SETAs did not rate themselves as very effective, although they had all the processes in place. This points to the challenges of self-rating processes. Nonetheless, these SETAs acknowledged that there are still challenges in implementing QALA related processes, including weaknesses in assessment and moderation, providers requiring high levels of support, and providers not understanding the importance of quality assurance processes. For those SETAs that reported that QALA was somewhat effective, reasons for this response were variable. One of the SETAs, for example, reported that there is little assessment against unit standards within the sector and that workplace assessment against standards is regarded as cumbersome. The ETQA suggests that employers continue to have a preference for results from a respected tertiary institution, rather than an in-house unit standard-based qualification. Another SETA reported that the ETQA has placed very limited focus on the monitoring of providers in the past and states that “there are mixed feelings (regarding constituents' belief in credibility of learner results). At times they don’t even trust us, you see. And, you see, with all of this, you have the providers. Even ourselves, we trust some, we don’t trust some in terms of the quality. Hence I am saying that I think the main focus should be on the quality now and not on quantity…”. 110 Linked to the point above, the graph below provides an indication of respondents’ (SETA CEOs and Chairs, business leaders and business HR managers) overall perceptions of the credibility of learner results. As evidenced, the graph illustrates a relatively high consensus that results emanating from the SETAs are perceived to be credible, notwithstanding the issues that ETQAs have raised. Do you believe that the results learners achieve are credible (do you trust them)? 120% 100% 80% 60% 40% 20% 0% 94% 78% 100% 86% 14% Yes 6% 14% 0% No Business Leaders Business HR Managers 8% 0% 0% 0% Don’t know SETA CEO's SETA Chairs Figure 26: Perceptions of Credibility of Learner Results One of the issues linked to QALA process is the certification of learners on completion of the validation of learner results. SETA ETQAs were also requested to indicate the average delay from the completion of learner assessments to learner certification. The table below provides responses in this regard. 1 2 3 4 5 6 7 # SETA AGRISETA BANKSETA CETA CHIETA CTFL ESETA ETDP SETA 8 9 10 11 12 13 14 15 16 17 18 19 20 FASSET FIETA FOODBEV HWSETA INSETA ISETT LGSETA MAPPP MERSETA MQA PSETA SASSETA SERVICES 21 22 23 ETQA reports of delay from final assessment to certification Weeks Weeks 2 months to 6 months depending on providers 1 month Certification devolved to provider. Can only happen once provider uploads learners & receives statements of results NR 3 months Depends on outstanding assessment results & moderations Weeks 1 month from completion of NLRD submissions 8 weeks 1-2 months 3 months Dependent on external moderation processes, but if results accepted, within one to two weeks TETA 2 months THETA Certification batches are printed when 1000 are ready. Approximately 5-6 batches per year. WRSETA Approx 1 month Figure 27: ETQA Reports of Delay from Final Assessment to Certification As indicated, responses varied from weeks to six months. Delays were accounted for by either the late submission or inaccurate submission of results by providers and/or external moderation processes. One of the SETA CEOs commented extensively on the challenges of obtaining reliable data from providers, and the knock-on effect that this had on timeous certification. The CEO commented that “providers are a big 111 challenge. It’s moneymaking and they are not accountable and they complain bitterly and nine times out of ten they are deceitfully. The problem is with them, but it’s convenient to blame the SETA and I think that all the SETAs have suffered that damage to reputation, because of moneymaking providers who don’t do their work and who blame us. That’s a challenge”. One of the ETQAs reported that the certification of learners has been devolved to a provider level. It was not ascertained whether or not certification has been devolved to providers in any of the other SETAs, but it may be argued that certification should remain a process subject to high levels of checks and balances to avoid fraudulence and other related problems. Some of the learning programme evaluations, discussed in Chapter 12, indicate that the timeous certification of learners has been a challenge, from a learner perspective, as learners have on occasion been unable to use their results to apply for jobs or to gain access to further learning on account of long delays. It should be noted in this context that the new Learnership Regulations, which have been signed off by the relevant parties, and will shortly be gazetted, are going to make specific provision for a limited timeframe within which learners must receive their certificates on completion of the learnership. This will necessitate significant improvements in the timeframes for certification for the majority of the SETAs. 11.1.3 The Quality Assurance of Workplace Learning SETA ETQAs were requested to specifically comment on their approaches to the quality assurance of workplace learning, both in terms of front-end and back-end processes. The apprenticeship system, for example, specifies that certain aspects of workplace learning must quality assured. In the case of learnerships, the manner in which workplace learning is quality assured has been left to the discretion of the individual SETAs. SETA ETQAs were requested to indicate whether or not workplace learning was quality assured. The table below provides responses in this regard: # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 SETA AGRISETA BANKSETA CETA CHIETA CTFL ESETA ETDP SETA FASSET FIETA FOODBEV HWSETA INSETA ISETT LGSETA MAPPP MERSETA MQA Does ETQA do any quality assurance of workplace learning? No Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes 112 18 19 20 21 22 23 PSETA SASSETA SERVICES TETA THETA WRSETA Yes Yes Yes Yes Yes Figure 28: Quality Assurance of Workplace Learning The responses indicate that the manner in which the quality of workplace learning is assured varies across SETAs. As indicated in the table below, all but two of the responding SETAs reported that they did quality assure workplace learning. Some SETAs reported that they have quality assurance checklists in place for workplace learning and others reportedly conduct workplace approval processes to assess whether or not workplaces have the required capacity and resources to take on learners. In other instances, the quality assurance of workplace learning remains the responsibility of accredited providers and is incorporated into the overall provider accreditation system. The CHIETA, for example, reported that it requires the accredited provider to sign an MoU with the host employer for the implementation of the learnership and that the provider remains responsible for ensuring assessment procedures are properly followed and assessment results submitted to the SETA. The first years that saw the implementation of learnerships, however, have also raised a host of problems and challenges related to workplace learning on a learnership. Chapter 12 reviews some evaluation reports on the implementation of learnerships and goes into more detail on what challenges and issues have emerged in this regard. In addition, Singizi recently conducted some research on the quality assurance of workplace learning across a sample of SETAs for other purposes. The findings of this process confirmed that SETAs take significantly different approaches to the quality assurance of workplace learning but also noted that some SETAs reported that in practice, these processes are often curtailed due to resource constraints. This data suggests that the management and quality assurance of workplace learning needs to be reviewed. In line with this, the ways in which SETA ETQAs can play a sustainable role in the quality assurance of workplace learning also needs to be reviewed. 11.1.4 Submission of Data to the NLRD This section explores the extent to which SETA ETQAs submit learner enrolments and results to SAQA for submission onto the NLRD. The NLRD is intended to enable SAQA to confirm to prospective employers and education and training institutions whether or not learner achievements reported by an individual are accurate. As importantly, in terms of the existing NLRD fields, this has the potential to allow for a macro analysis of throughput and pass rate, i.e. an analysis per programme rather than per provider, so as to enable SAQA to ascertain which qualifications and standards are being used in programmes and whether or not there are certain programmes in which the throughput or pass rate suggest the need for an investigation as to whether there are problems with the qualification or with the accreditation of the providers offering these qualifications. This is distinct from the previous sections in this chapter, which addressed whether ETQAs analyse throughput and pass rate per provider within their own systems and use this as a monitoring tool. The table below outlines SETA responses as to the way in which they submit their data to the NLRD, as well as the response received from SAQA staff pertaining to the submission of data onto the NLRD. 113 SETA ETQA RESPONSES SAQA NLRD RESPONSES 1 AGRISETA Yes No Months No E Learner Results Data from NLRD available for analysis No 2 BANKSETA Yes Yes Problems are with NLRD No Yes 3 CETA No No 4 CHIETA Yes Yes Yes Yes 5 CTFL No No No No 6 ESETA No No 7 ETDP SETA Yes Yes No No 8 FASSET Yes Yes No Yes 9 FIETA Yes Yes No No 10 FOODBEV Yes Yes Yes Yes 11 12 13 HWSETA INSETA ISETT Yes Yes Yes Yes No No No Yes Yes No 14 15 LGSETA MAPPP Yes No Yes No 16 17 18 MERSETA MQA PSETA Yes Yes Yes Yes Yes Yes Up to date 3 months 2 months Yes Yes No Yes Yes No 19 20 SASSETA SERVICES Yes Yes Yes No Yes No 21 TETA Yes Yes Yes Yes 22 THETA Yes Yes Depends on factors such as external moderation As per SAQA submission deadlines which are on a quarterly basis Quarterly as requested. No No 23 WRSETA SETA A ETQA reports it registers learners on NLRD B ETQA reports it submits results to the NLRD C ETQA reports of delay from final assessment to submission to NLRD D Learner Enrolment Data from NLRD available for analysis Between 3 and 9 months Not uploaded to NLRD yet In normal circumstances 30 days but problems with MIS SAQA accepts data biannually Turn around time is slow as providers do not have SAQA compatible databases Data sent in time Weeks 6 months F Comments from NLRD Unit No data available on NLRD Only partial data received by NLRD. Not available for analysis at present No data available on NLRD No data available on NLRD NLRD notes problems with data and has not released for analysis No data available on NLRD Only partial data received by NLRD. Not available for analysis at present No data available on NLRD Data received by NLRD but still to be analysed by NLRD Data received by NLRD but still to be analysed by NLRD Data received by NLRD but still to be analysed by NLRD Yes Yes NR No Yes Figure 29: ETQA and NLRD Reports on Learner Data Submission to NLRD 114 As per Column A in Table 36 above, all but one of the responding SETAs reported that they register learners on the NLRD. The CTFL SETA reported that it has not submitted any data to the NLRD to date (both registration and results data) because the SETA does not yet have an MIS compliant with the requirements of the NLRD. At present, the CTFL SETA is capturing its data in Excel. Column B indicates whether or not SETAs reported that they are submitting learner results to the NLRD. As indicated, all but two of the responding SETAs reported that they are currently submitting learner results to the NLRD. The case of CTFL is outlined above, and AGRISETA reports that they have experienced a challenge in the submission of results because training providers delay in submitting their results and often submit incorrect data, which then have to be corrected. SETA ETQAs were also requested to indicate the average delay from a learner’s final assessments and results to submission of the data to the NLRD. As indicated in Column C, responses were variable across the SETAs, ranging from weeks to nine months. As with the responses from the CFTL and AGRISETA, a number of SETAs reported challenges in terms of obtaining reliable and timeous information from providers. Another SETA reported that the challenges largely related to a lack of capacity within the ETQA itself to submit the information, and a further SETA commented that the NLRD did not recognise “legacy qualifications” or “provider qualifications” that have been extended by the Directorate: Standard Setting and Development (DSSD). Further, some SETAs reported that they submitted data quarterly, as per SAQA requirements, but one SETA reported that SAQA required data bi-annually, rather than quarterly, indicating an inconsistency in perceptions of reporting timeframes. In the course of the research process, the research team also contacted the SAQA NLRD Unit and requested copies of all learner data received from SETAs on the NLRD to date. Columns D and E provide a summary of the data obtained from the NLRD Unit directly. Column D indicates whether or not SAQA could make learner enrolment data from the NLRD available for analysis by the research team and Column E indicates whether SAQA could make learner results available to the team for analysis. The primary focus learner data provided by the SETAs often stood in contrast to the report provided by SAQA: These discrepancies are highlighted in the table in yellow. However, where there is a discrepancy that SAQA reports is because they have not yet analysed the data, and so could not make it available, then this is not highlighted, as it does not necessarily suggest a breakdown in the SETA to NLRD process. In addition to the discrepancy as to whether a SETA ETQA had submitted registration and/or results, the NLRD Unit also stated that whilst it has received data from some of the SETAs, it could not guarantee that there were no gaps in the data. During the research process it was found that there are areas in which there are significant gaps in the data contained on the NLRD. For example, it was found that in one case data from the NLRD records only two learners from one particular ETQA against a single qualification. The same ETQA has provided the team with learner results data that includes 832 learners against 5 qualifications in its primary focus. It would be extremely unlikely that these learners all completed their qualifications in the last quarter in terms of the lag of submission from finalisation to submission to the NLRD. 115 The above findings point to a concern about the (i) the processes and procedures for submitting data to the NLRD and (ii) the validity of current data on the NLRD. On the former point, it is concerning that some accredited providers are, as reported, failing to submit accurate and timeous data to the SETA ETQAs and that some of the ETQAs themselves are experiencing challenges adhering to the format required by SAQA and/or failing to submit data to the NLRD, despite reporting on achieved learner completions in other contexts. Further, the significant discrepancies of learner data reported on the NLRD and elsewhere suggest that a system of checks and balances is not operating effectively and places questions as to the validity of the data. These issues raise a concern about the overall security of the system. It emerges in the findings that each SETA ETQA must process provider data and then submit this to the NLRD. However, the varied versions of the data suggest that there are security fallibilities in the system. Further, the data gaps and discrepancies mean that the role of the NLRD as a source of information for potential employers and providers is nullified, and that the analysis of throughput and pass rates which could inform further standard setting and support improved quality is not yet possible. Finally, the delays in data submission and data verification and analysis means that it would be difficult for SAQA to implement a form of quality control through linking certification to the NLRD process as in terms of current processes this would result in further delays in the issuing of certificates, and would require significantly more capacity within the NLRD office if this process is to be linked to a formal verification process. 11.2 THEMES AND ISSUES EMERGING 11.2.1 A Multitude of ETQA Bodies As identified in Section 2, an issue that has been highlighted by the NQF reviews that have been undertaken relates to the complexities that have arisen because of the large number of ETQAs. Specifically, interviewees interviewed in this research process, as well as data sourced from other research undertaken 46 point to the difficulty created by the fact that SETA ETQAs (as well as the band ETQAs) apply the broad SAQA criteria in very different ways and, as a consequence, rely on varied forms of evidence to confirm that the provider can be accredited to offer certain programmes. This leads to a perception of uneven quality across the system amongst providers. This can specifically be seen where a provider accredited by one ETQA seeks programme approval from another ETQA. The provider is often required to submit to another institutional audit, as the ETQA that is being requested to grant programme approval status does not ‘trust’ the current accreditation arrangement with the accrediting ETQA, as their criteria are different. Linked to this point are the complexity and costs associated with the myriad of structures. A SETA CEO commented that: “then there is the programme approval and MoU process…and they are not paying levies, but you have to service them and you are not getting anything. Of late, we are getting a lot of programme approval requests. Recently we had eighteen and we can’t charge”. As already outlined in brief, providers accredited by one ETQA, but that wish to seek accreditation for a qualification or unit standard in the primary focus of another ETQA, need to apply to that ETQA for “programme approval” status. In order to do this, the two involved ETQAs need to develop MoUs that outline how the two ETQAs will cooperate and what the responsibilities of each of these will be. MoU processes across SETA 46 Singizi, SAQA Conference Paper, 2004. 116 ETQAs have raised challenges due to the fact already mentioned that ETQAs often have different criteria in place for accreditation and quality assurance processes. As already alluded to, programme approval arrangements have also placed increased burdens on already stretched ETQAs. The matter of the development of MoUs between SETA ETQAs and relevant professional bodies within their sectors have resulted in similar challenges, especially where the criteria put in place by the professional body differ from those put in place by the SETA ETQA. There are examples in which the professional bodies and the ETQAs, however, have worked cooperatively and where such challenges have not necessarily emerged. A further MoU challenge relates to a lack of clarity between SETA ETQAs and the band ETQAs, the HEQC and UMALUSI. Here, arrangements across the ETQAs are complex and inconsistent. Some SETAs, for example, fund learnerships at a higher education level, and a lack of clarity around who should be quality assuring these processes – the HEQC or the funding body – emerge regularly. Quality assurance responsibilities in terms of the fundamentals, which fall within the primary focus of UMALUSI, also present a challenge. The SETA ETQAs take different approaches to the provision and assessment of fundamentals, but here the challenge also emerges at a systemic level, as UMALUSI does not believe quality assuring learner achievements across individual providers, qualifications, and unit standards is a realistic/ feasible way for a national quality assurance body to maintain standards 47. The SETA ETQAs, however, currently quality assures learning on a provider-byprovider basis. The above issues indicate a number of challenges and inconsistencies in the manner in which ETQAs – across the bands and the SETAs – as well as professional bodies currently operate within the overall system. Further, there have been cases in which ETQAs have accredited a number of providers against single unit standards that form part of one qualification, but few or no providers that are equipped to provide the whole qualification in an integrated manner. 11.2.2 Number and Geographic Spread of Providers An issue that was raised throughout this research process relates to the scale and spread of providers. Interviewees and other research suggest that this scale reflects the following policy imperatives: SETA ETQAs are able to accredit providers against a single unit standard and this has had the result of extensively increasing the pool of providers that have to be accredited and, in turn, monitored. At least two SETAs also reported that the geographic spread of accredited providers is a problem. One SETA CEO reported that there were high numbers of accredited providers in the rural areas in that sector, and that the spread of providers made quality assurance and monitoring difficult and costly. Another SETA CEO reported that most of the accredited providers were located in the urban areas, and that accrediting providers in the rural areas had been less successfully achieved. Interviewees suggest that this has place considerable pressure on the ETQAs’ capacity and resources. A number of SETAs reported that ETQA divisions are insufficiently staffed and resourced to deal with the large and growing numbers of providers applying for accreditation, programme approval and re-accreditation. Each accredited or 47 Interview with S. Allais, UMALUSI, 24 January 2007. 117 approved provider, in turn, needs to be monitored. As one SETA CEO commented, “a big challenge is the monitoring of providers, and this is a huge cost. Providers are spread and it costs a lot to monitor them. Monitoring and re-accrediting them after the expiration [of unit standards] is a big challenge”. Further, at least eight of the responding SETAs reported that the ETQA was stretched in terms of its obligations relating to fulfilling its QALA functions consistently across all providers and within a reasonable timeframe and many of these SETAs report that this was becoming increasing challenging as the body of accredited providers grows. 11.2.3 Nature of Provider Support Required The level of support that some providers have required in order to meet accreditation criteria is reported to be very high. This appears to relate to a number of issues: the separation of qualifications from curricula means that the onus is on the provider to develop curricula and materials per programme (although there is some support in certain cases and this is explored in Chapter 12). One ETQA specifically highlighted the challenge associated with enabling providers to develop learning programmes internally. .Further, the fact that most assessment is internal means that providers also need to be able to develop assessment instruments, as well as conduct and moderate assessments. At least five of the SETAs also reported that provider capacity, expertise and resources to adequately conduct QALA activities were sometimes compromised. Even where assessment is not localised to individual providers, but is decentralised, there have been reports of problems, and one SETA reported that there were challenges with certain of the decentralised trade test centres, with perceptions of uneven quality and reports of fraud. The SETA CEO reported that “we need trade centres that are properly staffed and that are more effective”. Flowing from this, interviewees suggest that the expectations of providers, coupled with the policy imperative to ensure that small (in many cases single person providers) and emerging providers are accommodated in the system and are accredited as providers, has impacted on ETQA capacity in different SETAs. Specifically, whilst some SETAs reported that the accreditation of small and emerging providers is perceived as a success, the significant developmental processes related thereto have reportedly further drained internal resources. As one SETA CEO commented, “the problem is that it takes a lot from our staff because that staff members actually has to take that provider by the hand in helping him or her to get accredited”. Whilst some SETAs have used existing administrative funds and capacity to support small and emerging providers, others have instituted special programmes from discretionary funds to support small and emerging providers. 11.2.4 Learner Data Issues The findings of this review have also alluded to problems with learner data emanating from the SETA ETQAs. The report has shown that inconsistencies between ETQA learner data and data submitted to the NLRD brings the validity and reliability of the data into question. The report also indicates that there are also concerns about the security of learner data systems across some the twenty-three ETQAs, and implies the need for a system wherein gaps in data and data security need to be addressed. Another emergent issue relates to the value of using learner data as a tool for monitoring (in the case of ETQAs) and as a source of information for potential employers and providers (in the case of the NLRD). At present, the findings suggest 118 that gaps and inconsistencies in learner data do not allow for such comprehensive analyses on the one hand, and that the data is not being used, in any event, comprehensively and optimally for these purposes on the other. 11.2.5 Capacity (Human and Financial) of the SETA ETQAs The above issues begin to speak to the critical match between the need for ETQAs to fulfil their obligations, and their current status in terms of capacity, both human and financial. As already outlined, front-end provider accreditation and approval processes take place in a context in which there is an every-increasing pool of education and training providers applying for accreditation. Moreover, many of these providers are small and emerging (including high numbers of one-person providers) providers that in some instances reportedly require high levels of support and development. Linked to this, some SETAs report increasing levels of applications for programme approval processes as the system matures and providers aim to add to their lists of accredited programmes. One of the implications of the above is that ETQAs cannot necessarily put proper planning mechanisms in place to ensure that the required capacity is on hand, as accreditation and programme applications are provider-driven processes that lie outside of the control of the ETQA. Back-end accreditation processes, including provider monitoring and QALA processes also have significant implications for capacity. As outlined previously, the system has been designed in such a manner that QALA processes are conducted on a provider-by-provider and programme-by-programme basis and not on system – as is the case with UMALUSI – that relies on external assessments to test quality. Further, provider monitoring activities regularly involve physical site visits to each site on a routine basis. The high and increasing number of providers, as well as their geographic spread, reportedly place significant strain on SETA ETQA resources. As evidenced in the findings, many ETQAs are currently not conducting internal learner data analysis processes as a mechanism of quality assurance and some SETAs confirm that this is directly as a result of limited capacity within the ETQAs. The issues raised here begin to suggest a need to review (i) the current assumptions underlying the systems that have been put in place, (ii) whether or not these assumptions and the systems that have been put in place are sustainable and (ii) what aspects of ETQA functions should be prioritised in terms of their overall contributions to quality. 119 12 THE MANAGEMENT AND PROMOTION OF LEARNERSHIPS The SDA specifies that one of the core functions of the SETAs is to promote learnerships by identifying workplaces for practical work experience; supporting the development of learning materials; improving the facilitation of learning; and assisting in the conclusion of learnership agreements. In the light of the role of learnerships in achieving the objectives of skills development, this chapter explores how learnerships are being managed and implemented. Chapter 14 looks further at issues of effectiveness and the relevance of learnerships being implemented and locates this discussion within the context of other types of learning programmes and the role of these different learning programmes in the achievement of the objectives of the skills development strategy. 12.1 SETA MANAGEMENT OF LEARNERSHIPS As part of the research process, SETAs were asked to indicate overall processes and procedures for the management of learnerships in terms of whether or not SETAs (i) directly select and procure service providers for the implementation of learnership, (ii) only disburse funds for the selection and procurement of providers to employers, and thereby give employers the responsibility for this, or (iii) directly manage the implementation of learnerships in some or all cases. The table below indicates SETA responses to this question. As evidenced in Column C, twelve of the seventeen responding SETAs report that they directly manage the implementation of learnerships. Further, certain of the SETAS (BANKSETA, MERSETA and TETA) also report that they directly select and procure providers. AGRISETA, CHIETA, INSETA and MQA report that in all cases they give the responsibility for the procurement of providers to employers and disburse the required funds therefore to employers, although INSETA also reports that it sometimes procures providers directly. The remaining SETAs use a combination of these strategies to manage learnerships, and twelve report that they directly manage the implementation of learnerships in some or all cases. Further investigations would need to be instituted to examine the reasons for and impact of direct SETA management of learnership implementation, especially in the context of SETA resource constraints being cited in other contexts. # 1 2 3 4 5 6 7 SETA AGRISETA BANKSETA CETA CHIETA CTFL ESETA ETDP SETA A B C SETA directly selects and procures providers for implementation of learnerships SETA disburses funds for the selection and procurement of providers to employers and gives employers responsibility for this SETA manages the implementation of learnerships directly in some or all cases Some cases Some cases All Cases No X X All Cases X No Some cases All Cases X X X X X X X X X X No X X 120 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 FASSET FIETA FOODBEV HWSETA INSETA ISETT LGSETA MAPPP MERSETA MQA PSETA SASSETA SERVICES TETA THETA WRSETA X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Figure 30: SETA Management of Learnerships SETAs were also requested to indicate whether or not the processes for the management of learnerships differed in any way for employed and unemployed learners. All but three SETAs – FIETA, PSETA and WRSETA – indicated that they processes did not differ for employed and unemployed learners. PSETA reported that in 2005 it could only access NSF funding if it directly procured providers and paid learners, but noted that this would not be the case in the future in cases where learnerships are not funded by NSF monies. This case has been the same with many of the SETAs in terms of NSF monies. WRSETA reported that the differences were minimal and related to the nature of unemployed learners’ contracts. Some respondents also commented that the implementation of learnerships was sometimes plagued with issues pertaining to the management thereof. As one CEO commented, “we have had quite a couple of challenges so far where it has cost the SETA quite a lot of money in going through legal actions to recover some funding. Because what happens typically, is you go through the process of providing this, or accrediting this provider and then this provider obviously then gets his learners. He then signs a learnership agreement with you, signs a memorandum of understanding with you and then we start funding. Now, or typically what is going to happen is this provider must pay the learner and it does not happen then. The learner runs off, or the provider runs off with the money”. Other SETA CEOs felt that the length of the average learnership was not sufficient to adequately train learners in some areas. As one respondent commented, “you can’t train people in one year and expect them to be competent. It makes no sense. We get people at too low a level. That guy can never make an artisan”. On a similar vein, a SETA Chair commented “we believe there is a lack of financial assistance where it matters most. We need to move more learners from Point A to Point B. The Department of Labour needs to be convinced that we should have fewer learners, but take them to a higher level, than a mass of training at the low level”. On the other extreme, another respondent from the ICT sector reported that learnerships are often too long to adequately deal with the fast-paced changes happening in the ICT world: “learnerships are 12-month programmes and ICT programmes are often short programmes so the sector is changing on a continuous basis and by the time you complete a learnership the ICT needs or computer programme have already changed”. 121 12.2 ISSUES EMERGING IN THE IMPLEMENTATION OF LEARNERSHIPS As part of the SETAs role in promoting learnerships it is tasked with the responsibility for: identifying workplaces for practical work experience; supporting the development of learning materials; improving the facilitation of learning; assisting in the conclusion of learnership agreements; and, registering learnership agreements. This section considers the extent to which SETAs have been able to specifically support the facilitation of learning including through the development of learning materials and supporting workplace learning. This section of the report is based on a review of a series of evaluation studies conducted of various learnership implementation processes 48. 12.2.1 Recruitment and Selection One of the indicators of the quality of a learning programme, both in terms of design and implementation, relates to learner recruitment and selection processes, the criteria set for these, and the application of the criteria when learners are brought on board. Learner recruitment and selection processes are a key means to ensure that appropriate learners with appropriate levels of knowledge, skills, expertise and 48 These include: • Baseline Evaluation of the Learnership Programme, Jennings, R., Everatt, D., and Smith, M., Strategy & Tactics for the Department of Labour, December 2004. This study reviewed learnership implementation across 10 SETAs, although the study sample was reportedly strongly biased towards a larger sample of FASSET learners, as a result of incomplete learnerships or a lack of learner information within the other SETAs; • Tourism Learnership Project: Phase 2 Evaluation, Final Report Submitted to the Business Trust and THETA, compiled by Prodigy Business Services for THETA and the Business Trust, March 2005. This study reviewed the implementation of the R115 million Tourism Learnership Project funded by the Business Trust and the Department of Labour. The aim of the project was to “improve the skills and service levels of South Africa’s tourism and hospitality workforce” by training 5000 unemployed learners and 3000 employed learners in industry-related qualifications; • FOODBEV SETA Hlumani NSF Project: Evaluation Report on Learnerships and Skills Programmes, Singizi cc for FOODBEV SETA, 25 July 2005. The Hlumani NSF Project aimed to “equip employees within the Food and Beverages Manufacturing Sector with the skills to succeed in the global market and to offer opportunities to individuals for self-advancement to enable them to play a productive role in society”. The project involved a series of initiatives, including increased investment in ABET, a series of bursaries granted, and the implementation of skills upliftment initiatives in the form of learnerships and skills programmes; • FIETA Shintsha Furniture Project: Monitoring and Evaluation Reports, Singizi cc for FIETA. These included a series of 5 monitoring reports, a preliminary impact report and a final evaluation report, ongoing from August 2003 to March 2005. The Shintsha Project included a number of components, the first of which involved the training of employed and unemployed learners in one of a series of furniture-making skills programmes and learnerships across the country. Some of these learners were also selected to participate in a mini-incubator project on completion of the learnership, with the aim of assisting the learners to set up their own microenterprises. Another evaluation of this component of the programme was also conducted by Singizi; • FIETA Shintsha Furniture Project: Learner Tracer Study, Singizi cc for FIETA, September 2005. This study aimed to track learners from the Shintsha project six months (for those learners on the incubator) to one year (for those learners who only completed a learnership or skills programme) after learner completion with a view to ascertaining employment status; • Banking Sector Learnership Impact Study, BANKSETA, September 2005. This brief study reviews organisational perceptions of the value of learnerships in the banking sector for 14 participating organisations; • Evaluation Report of the Biology Foundations Programme and Medical Sales Representative, prepared by Andries Mangokwana-Independent Consultant for CHIETA, July 2004. This evaluation reviews the implementation of a CHIETA pilot programme to train 45 learners in a biology bridging programme and 60 learners in a Medical Sales Representative learnership accredited at NQF 5. 122 interest, are brought on board in such a manner that the learners are not set up to fail, on the one hand, and are most likely to use their skills in the respective sector on programme completion. In this way, learner recruitment and selection processes are one of the means to ensure a good return on investments in skills development initiatives. Many of the evaluation reports outlined above make mention of these processes. The Strategy and Tactics DoL evaluation on learnerships indicates that learner and host employer perceptions of recruitment and selection processes were positive, although small percentages of employers of learners called for “looser” selection criteria and an even smaller percentage called for a “tightening” of selection criteria, although the report notes that SETAs need to play a more active role in monitoring recruitment and selection processes so that they are free from bias. A number of the other evaluation reports, however, revealed a series of challenges with regards to recruitment and selection processes. The FOODBEV evaluation, for example, found that one of the emerging issues related to the extent to which learners selected genuinely wanted to engage with the specific field of training, as opposed to using the learnership system to gain access to the stipend. The report notes that “a number of interviewees stated that they felt that some of the learners were only attending the programmes to access the learnership stipend. This was a view offered by employers, as well as providers”. Similarly, the THETA evaluation also notes that “employers and providers also expressed that insufficient focus on the pre-learnership phase resulted in the placement of learners whose career choice was not within the ambit of tourism and hospitality”. The report also outlines that if given a choice, 85% of the learners indicated that they would have preferred to undertake another learnership in a field such as accounting, information technology, marketing or secretarial skills. The CHIETA evaluation of the Biology Foundation Programme and the Medical Sales representative learnership also found that some learners selected for participation were “applied for the fun of it” or were “motivated by the allowance” that they would receive. Another emergent issue pertaining to selection and recruitment relates to consultation between the various roleplayers, including the SETA, education and training providers and host employers. In the case of the FIETA Shintsha project, for example, learners were recruited by the FIETA and by providers and, in most instances, host employers for the unemployed learners were brought on board only once learners had been selected onto the programme. In some instances, learner discipline problems emerged, and host employers reported reluctance to take on unemployed learners in the future and commented on the need to be involved in the selection of learners. The FOODBEV evaluation also points to this issue. The research findings in this evaluation indicate that host employers showed greater levels of satisfaction with 18.2 learners placed at their workplaces when they had actively participated in the selection process. The above issue relates to the broader issue of how learnerships are managed by various stakeholders overall. As indicated in section 12.1, SETAs adopt different practices with regards to the implementation of learnerships. Some manage the implementation directly, whilst other SETAs give primary responsibility to the education and training provider or the workplace respectively. Whatever the case, some SETAs have acknowledged the need to ensure a close working relationship between these roleplayers in the process of learnership implementation. The 123 CHIETA, for example, has recently developed a set of guidelines for the implementation of learnerships that speaks to how providers and workplaces (where these are different) should work in cooperation to deal with implementation issues, including recruitment and selection processes. 12.2.2 Institutional Training Components Since the evaluations used as the basis for this analysis speak to learnership implementation, the “institutional” or provider-based component is discussed separately to the workplace component, as particular issues emerge for each component in the application of the learnership model. This section assumes that some of the indicators of a quality learning programme, as pertains to the “institutional” component thereof, include: • • • • • Quality and relevance of the content of the curriculum, and the delivery of the programme; Quality, accessibility and relevance of learning materials and equipment; Quality and relevance of practical components of programme; Quality of assessment processes; Quality of learner support, including access to support and broader careerpath related information. This section attempts to extract information on the above issues from the available learning programme evaluation reports. It should be noted that assessments of the above are obviously disparate, depending on the provider and the learning programme being addressed. Further, the individual evaluations do not all make individual assessments of the quality of provision in line with the above-mentioned quality categories. This section aims to extract broad themes pertaining to the quality of provision. The Strategy and Tactics DoL learnership evaluation found that “both employers and learners were highly satisfied with the theoretical training component of learnerships” and that employed learners were generally more positive about the theoretical component than unemployed learners. The report states that this “may reflect difficulties that unemployed people have when suddenly they are given employment and learning opportunities”. The FIETA Shintsha evaluation involved over twenty providers in the course of the delivery of the programme. Over the entire evaluation period, ratings of overall provision of the institutional component remained high, with the majority of learners rating overall provision as good or excellent. The FOODBEV evaluation also points to high levels of satisfaction for learners in terms of overall provision. Four specific issues relating to overall provision, however, do emerge across some of the evaluations. The first of these relates to the provision of fundamentals in the course of delivery. The extent to which fundamentals should be integrated and contextualised into the overall curriculum is an issue of considerable debate at present. Whatever the outcome of the debate, some of the evaluation reports do speak to the extent to which fundamentals affected the overall delivery of training. In the FIETA Shintsha case, it became evident that some providers offered the fundamentals effectively, whilst in other cases this aspect of the curriculum was neglected. One example provided cites a case in which learners who completed an upholstery learnership entered an incubator in the post-learnership period. The 124 incubatees were required to cut fabric for upholstery purposes, and it was reported that there was significant wastage, as a result of the fact that the incubatees struggled to take accurate fabric measurements before cutting the fabric. It was suggested that this was a result of poor mathematics fundamentals in place and the fact that trainers often cut the fabric for learners during the learnership phase, thus not giving learners the appropriate opportunities to apply fundamental skills. In the FIETA case, there were also issues pertaining to requirements for learners with matric or an FETC to repeat the fundamentals, rather than receive RPL credits for these aspects. Some learners felt that they should not be required to repeat the fundamentals in the course of the learnership. The THETA evaluation also speaks to the issue of fundamentals, and reports that there is a need to “bolster” fundamentals. There was also a statements that a “stronger focus needs to be placed on whether providers are in fact equipped to deliver quality training” for the fundamentals. One of the SETA CEOs also commented on the issue as follows: “we have to work with employers and they want vocational stuff, but the fundamentals are required by workers, and we have to work with FET colleges and the relationship between us and them is not clearly defined”. As noted in the previous chapter, the issue of how to quality assure and deal with fundamentals is a challenge that SETAs generally face, and SETAs have taken different approaches in terms of dealing with this. Another issue related to overall provision relates to the inclusion of certain specific lifeskills into the curriculum, with specific mention of workplace preparedness skills. Both the FOODBEV and FIETA evaluations outline workplace perceptions where workplaces report in some cases that unemployed learners are not adequately prepared to enter the workplace at the point of the start of the workplace component. In some instances, this was exacerbated by poor learner discipline in the workplace. The recommendations suggest a need for inclusion of lifeskills that assist learners to understand the needs and requirements of the workplace before placements for the work-based component is initiated. Other lifeskills considered important for inclusion in a learning programme include those required in the post-programme period, such as CV writing and so on. The third issue relates to the language of instruction. In the Strategy and Tactics DoL learnership evaluation, learners were asked whether or not they were comfortable with the language used in the training. Although it is not specified what language/s were used for instruction, 98% of the respondents stated that they were “happy with the language used in the training”. The study also found that 11% felt that the language used by trainers “was of a technical nature and too difficult to understand”. The study also noted that more learners at NQF levels 1-3 (as opposed to those at levels 4-7) raised this as a problem. The report comments that “while this finding is understandable, it is something that those involved in materials development and training provision at the lower NQF levels need to bear in mind”. Language issues also emerged in the THETA evaluation, in which it was commented that “assessors felt that assessments were curtailed by the large number of learners whose first language was not English”. The report did not provide more detail on learner issues in this regard. 125 The FOODBEV evaluation also spoke to issues of language. A small percentage of learners (4%) on the Hlumani programmes also commented that language used was too technical and sometimes presented challenges in terms of understanding. Providers involved in the delivery of the Hlumani programmes held the view that the language of instruction (English) was not a problem, but that the level at which some of the programmes were pitched was too high. Some of the evaluations also speak to the issue of learning materials and other resources for learners as a component of provision. The Strategy and Tactics DoL evaluation reports overall high levels of satisfaction by learners across SETAs with materials provided in the course of provision. The evaluation states that learners found the materials (i) well-written, (ii) applicable to future workplace situations, and (iii) relating to real life situations. In the case of the FIETA Shintsha programme, the evaluation notes that some providers had challenges in terms of the capacity to develop and/or adapt materials internally. As a consequence, some of these materials were developed by the project management team in the course of delivery. In some cases, however, there were delays in providers obtaining learning materials and some learners did not have access to these for certain phases of the programme. Finally, the fourth emerging issue relates to the specific modes of delivery selected for the implementation of programmes. Although there were fewer evaluative comments on this area, some evaluations commented on the extent to which the modes of delivery made allowances for the inclusion of employed or self-employed learners. The FIETA Shintsha programme, for example, aimed to include a percentage of self-employed learners in the programme. Although these learners represented a very small component of the total learner body (approximately 1%), these learners commented that the full-time nature of the course impacted on their ability to continue managing their own enterprises. Unemployed learners also raised occasional concerns about how the programme impacted on their ability to deal with personal matters, such as child-care and related family responsibilities. The evaluation recommended that more flexible modes of delivery would need to be sought if employed or self-employed learners are to be considered as a substantial target. The matter of learner support also emerged in the evaluation reports. In brief, learner support mechanisms include such services as career guidance, services for or referrals for personal or related problems, access to libraries, access to resources such as computers and the Internet, ongoing academic and other support in the course of provision, and post-programme support, such as job placement, CV writing skills and so on. The FIETA evaluation placed emphasis on learner support as part of provision, and learners were requested to indicate whether or not they received adequate support in the course of their learning programmes. The results over the course of the evaluation period indicated that learners were generally satisfied with the provision of support in terms of career guidance, access to academic support and so on. However, depending on the education and training provider, some learners reported more limited access to resources, such as libraries and computers. It was also noted throughout the research process that learners repeatedly called for the inclusion of introductory computer courses and access to computer resources as part of overall learner support. Consequently, the Shintsha project management team introduced computer courses in later stages of delivery, although some learners did not benefit from the late inclusion of this component. The evaluation process found that even though computer skills were not specifically germane to the furniture related courses on offer, learners view access to computer skills and technology as fundamental to engaging with the modern world of work. 126 12.2.3 Workplace Training Component The delivery of a learnership requires that learners complete an institutional component, as well as a workplace component at a host company for a specified period. Most of the practical application of theoretical knowledge gained in the course of the programme takes place at the workplace, although some practical training may also take place in the course of the institutional component of the programme, depending on the design of the curriculum. Some of the evaluations made remarks about the quality of practical components in the institutional component, although the primary issues emergent in the evaluations speak to the workplace-training component and the practical training in this phase of the respective learnerships. One of the first issues emerging with regards to the workplace component of the learnerships evaluated relates to learner preparedness during the institutional phase to enter the workplace. Both of the FIETA and FOODBEV evaluations, for example, commented on the need for more comprehensive workplace preparedness components to be included in the institutional component of the programme in order to facilitate a more smooth transition into workplace ethics and culture, as well as to prevent learner discipline problems from emerging in the workplace component. The THETA evaluation also reported that “inadequate prior work exposure meant that many problems were experienced in terms of developing a work ethic”. The FOODBEV evaluation reports that “learner exposure to the workplace (through activities such as pre-placement visits to a workplace or bringing on board visiting employers to speak to the learners) and the inclusion of relevant lifeskills in the institutional component of the learnership could assist to ensure that learners are more aware of what will be expected of them once the workplace component begins and such activities could further contribute to improved learner discipline”. The above is also linked to issues relating to learner induction upon entering the workplace, and the need for a formal and coordinated process that assists learners to understand their rights, roles and responsibilities on commencement of this component. The Strategy and Tactics DoL evaluation points out that some SETAs interviewed for the evaluation process also recommended inductions for the general staff body, so as to alleviate any potential labour issues that may emerge and to encourage staff to support learnership participants in the workplace. The FOODBEV evaluation also pointed to challenges and problems that emerged between full-time staff members and unemployed learners and recommended that there is a “need to ensure that organised labour is also brought on board in discussions relating to learner placements, and suggests the need to sensitise providers and learners to the different labour relation issues and to develop guidelines as to how these issues should be addressed when they arise. These should also review how a provider deals with a workplace component if there is a strike at the company in which the workplace component is taking place”. In terms of the implementation of the workplace component, the evaluations also point to a number of issues. Firstly, there was reported variability in the extent to which learners received adequate and appropriate workplace experience in the course of the workplace component. The THETA evaluation, for example, reported that over a third of unemployed learners on the programme felt that they did not receive adequate workplace exposure in the course of the workplace component. The evaluation states that “this related to inadequate notional hours, as well as not being placed in a job that was not related to their learnership”. The FIETA evaluation process found that learner satisfaction with the workplace component varied across host employer. Whilst the majority of learners were satisfied that they were receiving adequate workplace experience, up to 20% reported that they were not receiving 127 adequate and/or appropriate experience. Some learners recounted cases in which they reportedly repeated one task for the duration of the workplace component, such as sanding wood or cleaning factory floors, and did not get exposure to a variety of appropriate tasks. Some of the recommendations emerging from the evaluations speak to the need for a more structured approach to workplace learning through the use of planning tools and learner logbooks, etc. Issues relating to supervision, coaching and mentoring activities also emerge in the course of the evaluations. The Strategy and Tactics DoL evaluation, for example, reports that one in eight learners claimed that they did not have a supervisor appointed to them in the course of the workplace component and 7% of the host companies reported that they did not appoint supervisors for the learners. The evaluation found that this was especially the case with learners at NQF levels 1-3, where 57% did not have supervisors. On the other hand, comments from employers in some of the other evaluations indicate that the supervision of learners is sometimes viewed as a cumbersome process and, as the FIETA evaluation indicates, this is exacerbated in instances where the company is small and where the learners are perceived as inadequately prepared for the workplace component. Other FIETA employers, however, viewed the taking on board of unemployed learners as a resource that allowed “extra hands” in the workplace. A related issue emerging in the evaluations concerns the ratio of learners to supervisors and to the number of full-time employees in general. The evaluation findings in these instances suggest that a very high ratio of learners, especially unemployed learners, to permanent staff members limits the extent to which learners can be adequately supervised on an individual basis. Some SETAs have more recently begun considering guidelines for a maximum ratio of learners to staff members to ensure that learners are able to obtain adequately supervised workplace experience. The issue of learner assessment in the workplace is also raised across many of the evaluations. This is reviewed in Chapter 11, which discusses issues relating to assessment across both institutional and workplace components. A final issue that emerges across the evaluations in terms of workplace provision relates to the overall management of the learnership across the SETA, providers and workplaces (where the workplace is not also the accredited provider). Both the FIETA and FOODBEV evaluations talk extensively to the need to find mechanisms to improve the coordination of learning, improved management and improved communication across all parties involved in the implementation of a learnership. The evaluations make recommendations that suggest a need for all implementing parties to understand their respective roles and responsibilities and also recommend the development of guidelines at a SETA level to facilitate this. 12.2.4 Assessment in the Institutional and Workplace Components The issue of assessment is addressed here with reference across both the institutional and workplace components of the programmes. There are a variety of processes and procedures adopted for the assessment of learners on a learnership, depending on the structure of the curriculum and/or the requirements of the SETA ETQA or Learnerships Division. In ideal, assessments should take place throughout 128 the course of the learnership, with some assessments taking place in the institutional component, and others taking place in the workplace component. Whilst assessments within the institutional component are relatively straight forward, there are different mechanisms for the assessment of learners in the workplace. In some instances, the accredited provider remains responsible for either assessing learners in the workplace, or validating third party assessments conducting by supervisors in the workplace. In other cases the workplace may have registered assessor in place, in which instance formal assessments in the workplace component can be conducted by workplace assessors in coordination with the provider. Whatever the processes and procedures adopted, some of the broad issues relating to assessment emergent in the evaluations are outlined below. The first issue that emerged in some of the evaluations relates to the extent to which learners are informed about and understand assessment processes. The FIETA Shintsha evaluation highlighted a few instances in which learners reported dissatisfaction with assessment processes, as they had not adequately been informed when, why and how assessments would be conducted in the course of the programme. Other evaluations reported high levels of satisfaction with the assessment process itself, although the Strategy and Tactics, FIETA and FOODBEV evaluations speak to learner concerns about long delays in the receipt of formal results and, on programme completion, learner certificates. In some instances, the slow rate of receiving assessment results was related to internal provider processes, and in other cases this related to delays in resolving moderations conducted by the respective SETA. The issue of learners receiving certificates very late reportedly impacted on learners’ ability to apply for further learning and/or employment. In this case, the difficulties related to slow submission of results by providers and challenges related to certification processes at a SETA level. A further set of assessment issues relate to assessment in the workplace. The FIETA evaluation reports that although learners were meant to have a percentage of their assessments conducted in the workplace, in some instances very few or no assessments, formal or third party took place during the workplace component. It was noted that this was problematic, as learner application of theoretical knowledge in the workplace did not receive due assessment attention. Evaluation studies suggest that this also related to a lack of structured learning processes in the workplace. In other learnerships, however, employers have raised concern about external providers conducting assessments in the workplace as, according to some employers, external providers do not have the requisite understanding of specific workplace processes in order to conduct valid assessments. Further, in some industries, workplace confidentiality and trade secrets also present challenges in terms of external assessments. 12.2.5 Post-Learnership Data Chapter 11 above begins to provide an indication of the limited extent to which providers and SETA ETQAs track learners after programme completion in order to assess whether or not programmes are having the desired impact, i.e. whether or not unemployed learners are getting employed, whether or not employed learners improve their career opportunities and whether or not learner engage in further learning activities. Such studies are, in any event, costly, time consuming to implement and can only yield data on learner perceptions of the extent to which the corresponding programme led to access in any area. Tracking studies need to be 129 extremely cautious in making any false claims about the causal links between any single programme and an outcome such as employment. Taking this into account, some of the evaluation studies obtained for this analysis begin to provide very preliminary data on the status of learners in the postprogramme phases. . The Strategy and Tactics DoL evaluation, for example, indicates that “more than three quarters (77%) of the 18.2 learners were employed on a full-time basis (69%) or part-time basis (9%) at the time of the interview. Similarly, almost three quarters (73%) of all the 18.2 learners on learnerships with their employers interviewed had been employed on completion of their learnerships”. On deeper probing, the report notes that “18.2 learners within levels 6-7 were far more likely to have gained employment on completion of their learnership – a finding easy to understand given that almost all these learners were from FASSET and had completed a highly sought after certificate. 51% of learners within level 1-3 had secured full-time employment and 10% part-time employment. For those at levels 4-5, 19% were in full-time employment and 20% in part-time employment”. A further 28% were engaged in full time studies. This evaluation included a sample of learners who had completed learnerships across different sectors and SETAs. However, the report does not indicate the average length of time from the completion of the learnerships to the above reported statistics for each set of learners, which may have significantly impacted on findings. The evaluation of the Tourism Learnership project indicates that 60% of the learners achieved “gainful employment” in the post-learnership period. The report does begin to take factors such as whether or not the impact would have occurred without the intervention, etc, but concludes that the programmatic impact was, nonetheless, positive. The CTFL evaluation report, which reviews in brief the implementation of a CTFL learnership, reports that by June 2005, 83% of the unemployed learners who had completed the learnership were still in employment. However, this result would need significantly more clarification, as the duration for the implementation of the learnership was from March 2004 to June 2005, and it is unclear whether or not this figure simply emerges as a result of the fact that learners were still operating under their learnership contracts. A very brief BANKSETA impact study on learnerships in the banking sector states that of a sample of 17 employers, 65% reported that they had been able to employ learners out of the pool of skilled people who completed the learnerships. The study does not indicate what percentage of learners was employed and what percentage of the total population of learners this represented. A tracer study was conducted five months after the formal completion of the FIETA Shintsha Furniture Project, which included a learnership and skills programme intervention for all selected learners, and a post programme incubator for a smaller selected group of graduates. The tracer study compared learner employment levels from the start of the programme to five months after programme completion and found an increase in learner employment rates by a minimum of 23%, an increase in learner selfemployment of 16% and a reduction in learner unemployment by 39%. 130 In a study on the impact of skills development on SMMEs conducted for this review it appears that, for some of the newer entrepreneurs, the impacts of the Strategic Projects have been most striking. For one young African music promoter, his experience on a learnership was the most important factor for his enterprise’s establishment. The same was true for the owner of a new events and artist management company who had also attended a learnership. Of course, such sentiments are to be expected from those just starting off. Nonetheless, some of the more experienced entrepreneurs also saw important benefits in their participation, particularly where this saw their technical skills being complemented by new skills in business management. Overall, however, post-programme data is only available to a limited extent and the complexity of the interference of other variables in such issues as obtaining employment, and so, limits the value that such studies can have in contributing to the quality of provision. 131 13 FINANCE 13.1 INTRODUCTION The global policy discourse on skills development bears a strong utilitarian emphasis and is purposefully directed at assisting people with income generation and employment, lifting enterprise productivity and making the national economy more competitive in global markets. Consequently, policy instruments and mechanisms established in pursuance of the skills development agenda are explicitly focussed on the attainment of these outcomes. This focus is particularly germane to financing policies; which are geared toward ensuring that the outputs are generated in the most cost-effective manner and with a strong emphasis on efficiency (both internal and external efficiecy) and equity. This chapter is focussed on the financial dimension of the review. It begins with a brief summary of the key considerations related to the policies on financing of skills development. This is followed by an analysis of revenue and expenditure trends against the background of the policy considerations. 13.2 THE POLICY CONTEXT Issues related to public finance have become a key dimension of public policy and policy analysis. Indeed, the policies related to the financing of training constitute a very key dimension of the overall skills development policy framework. The importance of financing from an efficiency and equity perspective is explicitly acknowledged in the policy. In addition, the financing policies serve an explicit and significant role as an instrument for steering the system in a manner that enhances the effectiveness of the system so as to meet the set out objectives, The financing policies for skills development in South Africa were formulated against the background of very low levels of investment in training. Drawing on the economics of education and training, it is commonly accepted in public policy that an increase in expenditure on training is justified on grounds that: (1) private investment is not sufficient to maintain the levels required to meet social and economic goals; (2) there is a need to steer the nature and quality of training undertaken; and (3) there is a need to meet equity objectives. The context of training prior to the advent of the SDA satisfied all of these conditions. The Skills Development financing regime adopted in South Africa departs from a general public funding model (as, for example, the regime applied to the financing of public schooling in South Africa) which draws on general tax revenue. Instead a levygrant scheme has been adopted. This model is based on a payroll tax, which has generally been applied in two broad ways in other countries: (1) as a mechanism to generate revenue to finance training provided by public institutions and (2) as a levygrant scheme that essentially serves to create incentives for employers to invest in employee skills development and to finance it wholly or in part through claiming back the levies paid. A simple cost-reimbursement system would have been an alternative model to adopt. In terms of this model employers are reimbursed for training undertaken. The difference is that this model would rely on its financing from the general fiscus. The levy-grant system allowed for a raising of revenue from employers who can then reclaim a proportion of it for approved training undertaken. This system catered for a 132 revenue stream that was not reliant on the fiscus and it further allowed for a steering capacity to be established on account of the conditionality attached to reimbursement. The approach applied in South Africa is a systems approach which is also used in Côte d’Ivoire and Nigeria. In South Africa reimbursement is contingent on the preparation of a workplace skills plan (the enterprise’s skills development plan) which must be approved by the SETA. Companies are required to think in terms of the Sectors’ needs by taking the SSP into account. Further, the NQF is intended to ensure that the training offered upholds the principles of quality, relevance, portability and life-long learning. South Africa’s financing model of the levy-grant system provides that a portion of the levies raised be allocated through the National Skills Fund and Discretionary Grant Funding. This funding is used to meet the strategic objectives of skills development and has a strong emphasis on equity and targeting of scarce and employment creating skills. One may therefore regard the portion that falls outside the minimum that the employer can claim back as being no different to company tax, albeit one that is ear-marked toward training and that a percentage of which can be used for training employees in the workplace. It is therefore perhaps more accurate to describe the financing model adopted in South Africa a mixed or hybrid between a levy-grant and earmarked tax model. . Johanson and Adams (2004) provide a useful comparison of the relative advantages and weaknesses (reproduced in the table below) of the main training financing models applied in different national contexts. Mechanism General training (grants) Levy-grant systems subsidies Company Tax Concessions Main advantages None Costs do not fall on public budgets – they are met by enterprises (or, with incidence shifting, by workers). Can facilitate a more systematic, structured approach to enterprise training None Main weaknesses Cost burden falls on public budgets (increased expenditure Requires sufficient organisational capacity to administer; hence, may not be appropriate in countries with weak administrative capacity Tendency toward reduced effectiveness over time Requires well-developed, broadbased system of corporate taxation Cost burden falls largely on public budgets (reduced revenues) Responsiveness of companies often low because few companies earn sufficient profits to benefit from tax exemptions Figure 38: Advantages and Weaknesses of Main Training Finance Models In view of the preceding analysis and overview of the financing policy context, a formidable list of objectives can be enumerated for the training finance policies: o o o o o o To raise level of investment in training To increase aggregate output of training To increase government spending on training To increase the employer investment in training To increase number of enterprises involved in training To increase SMME involvement in training 133 o o o o o o To improve equity by raising investment in training for the unemployed and vulnerable, previously disadvantaged groups. To improve efficiency of training To promote the establishment of an efficient training market To ensure demand-led training To improve quality of training Improve impact of training All of the above, are reflected in SA’s training financing policies; albeit that some are explicitly stated in policy and law while others remain more implicit. A comprehensive review of financing in the training sector would incorporate all of the above objectives in framing the indicators for the review. Given the limited scope of this study, we have limited the parameters of the finance dimension of the review to only the key objectives listed and only for those that data are readily available. We do however believe that such a comprehensive review is urgently required for developing a more complete picture of the sector. 13.3 SKILLS DEVELOPMENT EXPENDITURE TRENDS PRIOR TO THE IMPLEMENTATIN OF THE SKILLS DEVELOPMENT ACT Government spending on training, prior to the implementation of the SDA, was extremely low. Direct spending funded through the fiscus was estimated to be less than R100m in 1992/1993 (National Training Board, 1994). In addition, the State also made an indirect contribution to enterprise initiated training through tax concessions, which far exceeded its direct expenditure on training. There is no reliable information on the monetary value of these tax concessions, but various efforts at a determination have produced amounts varying from R110million to R500million (ibid). The bulk of state contributions were thus channelled into training through a system of tax incentives. The tax incentives provided for in the Income Tax Act allowed 200% of expenditure on employee training to be tax deductible. A revision to the Act that became effective in September 1984 reduced this amount to 150%. This incentive was finally completely done away with in July 1990. There are no authoritative figures available on the extent of employer expenditure on training in the period prior to the implementation of the SDA. , An estimate by Business and Marketing intelligence (BMI) put the figure for 1990 at about R3.5billion per year. Using this as a base figure, the National Training Initiative (ibid) estimated (using fairly rough projections) employer investment in training to be in the region of R5 billion. On this basis, it was deduced that South Africa was spending approximately 1% of total employment costs on training. This compares badly with other countries (including South Africa’s major trading partners) that spend in the range of 5% to 10%. Using the above figures, NTSI determined that SA was spending four times more on formal education than on training. In some countries these amounts are equal. 134 Figure 39: Consolidated Income and Expenditure Trends for all SETAs Revenue Non-tax revenue (*) Tranfers Received (*) of which Skills Dev Transfers (*) % Growth of Skills Dev Transfers Other transfers (*) Total Revenue (*) Expenses Current Expense (*) of which Compensation of Employees (*) Compensation of employees as % of Current expense Goods and Services (*) Compensation of Employees as % of Goods and Services Goods and Services as % of Transfers and subsidies Depreciation (*) Interest, dividends and rent on land(*) Transfers and subsidies (*) of which Employer Grant (*) % Growth of Employer Grant Employer Grant as % of skills dev revenue of which Discretionary Grant (*) % Growth of Discretionary Grant Discretionary Grant as % of Transfers and subsidies Discretionary grant as % of skills development revenue Total expenses (*) % year-on-year growth Spending Rate Surplus/(Deficit) (*) Audited Outcome 2002/2003 Audited Outcome 2003/2004 Audited Outcome 2004/2005 Estimated Outcome 2005/2006 260479 2843950 2720501 123 449 3104429 333485 3259588 3052063 12% 207525 3593073 298926 4171482 3560828 17% 610654 4470408 232285 4283060 3947200 11% 335860 4515345 235148 4659967 4480309 14% 179659 4895115 218533 5089232 4920271 10% 168961 5307765 217950 5611613 5440344 11% 171269 5829563 473428 633964 1244659 984432 1033045 1067302 1168282 120283 160692 191480 218798 291119 317829 349015 25% 340630 25% 459222 15% 1035915 22% 747249 28% 723915 30% 731473 30% 800308 35% 35% 18% 29% 40% 43% 44% 21% 12453 21% 14014 34% 17183 20% 18062 18% 16813 16% 16743 16% 17638 61 1621188 1543782 36 2236658 1950276 26% 81 3023350 2701642 39% 323 3667681 3172631 17% 1198 4049285 3425421 8% 1258 4510382 3786518 11% 1321 5022064 4248200 12% 57% 77406 64% 286382 270% 76% 321708 12% 80% 495050 54% 76% 623864 26% 77% 723864 16% 78% 773864 7% 5% 13% 11% 13% 15% 16% 15% 3% 2094616 9% 2870622 37% 80% 722451 9% 4268009 49% 95% 202399 13% 4652113 9% 103% -136768 14% 5082330 9% 104% -187215 15% 5577684 10% 105% -269919 14% 6190346 11% 106% -360784 67% 1009814 Medium-term Estimate 2006/2007 2007/2008 2008/2009 (*) R thousand 135 13.4 REVENUE TRENDS In terms of the Skills Development Act, all employers are required to pay a Skills Development Levy amounting to 1 per cent of the enterprise’s payroll. Two types of exemptions are provided for in this provision of the legislation. First, government departments are exempted from making compulsory levy payments, although they can do so on a voluntary basis. Second, private enterprises are exempted from the levy payment provisions if their annual payroll does not exceed a ceiling established by the Minister of Finance. This ceiling, which is periodically revised in keeping with overall fiscal policy and adjustments to cater for inflation, is presently set at R500 000 per annum. Consolidated figures for all SETAs of actual and projected revenue trends for the period 2002/03 to 2008/09 are presented in Table 39. The trend is for both number of employers paying and claiming to increase – the figures increased by 34% and 22% respectively from 2002 to 2003. By 2003, 95% of large firms (which comprise around 2% of all firms involved currently) were registered with SETAs, though only 56% of medium-sized firms had registered. For the year ended March 2005, 97% of large firms were paying levies, while 73 % were claiming employer grants. However, SARS estimates that the current payment rate is probably in the region of 70 per cent of eligible employers (that is, excluding those who are exempted), suggesting that about 30 per cent of employers who ought to be making payments are currently not doing so. This figure, according to SARS, is approximately the same as the figure of enterprises who presently do not fulfil their company tax obligations and is therefore not a uniquely Skills Development Levies phenomenon. Assuming that both the ENE and SARS’s contentions are correct, then one can assume a very high compliance with levy-payment obligations by “large firms” and a much lower rate by SMMEs (albeit consistent with the rate of compliance with company tax obligations). These percentages are explained further in the ENE chapter dealing with the Department of Labour vote in the 2006 ENE, which provides the figure of 4364 for “large firms” and 139 866 for “SMMEs” (which is broken down into the figure for small and medium) are quoted. This implies a total number of 144230 enterprises that had made contributions. A few pages later in the same chapter, a figure of 193 000 “employers” is given as the number who have made skills development levy payments to SARS. No explanation for the difference between the two amounts could be discerned from the chapter. One can therefore only speculate that the difference is explained by a third class of enterprises that are neither “large firms” or “SMMEs”; or that one of the aggregate figures is in fact incorrect. Levy transfers to SETAs grew from R2,7 billion in 2002/03 to an estimated R3,9 billion in 2005/06, representing an average annual growth of 13%. This growth slows to about 11,6 per cent over the MTEF period 2006/07 to 2008/09 largely on account of the impact of the decision to raise the ceiling for exemption from levy payment to a payroll of less than R500 000. Overall actual and projected growth, since inception of the SETAs, is therefore projected to be consistently above inflation. Two main variables drive the total revenue realised through levy payments: (1) increasing rate of payment through improved efficiencies in tax collection; and (2) growth in the national aggregate payroll. The above confirms that the objective of increasing the revenue available for skills development is clearly succeeding. However, in terms of the legislative provision that pegs levies at 1 per cent of payroll and given that revenue collection rate is evidently in the region of 70 per cent, then it suggests that total revenue is certainly less than 1 per cent of payroll of eligible enterprises. While there remains scope for growth within the existing limit of 1% of payroll, the scope for significant revenue growth is limited due to the fact that practically all large firms, the major source of levy revenue, are already in the fold. There is also a further source of income which is that of Government Departments. As indicated Government Departments have been exempt from making this payment, but may do so on a voluntary basis. Some Government departments do indeed make payments to SETAs, the most substantial being the contribution by education departments to the ETDP SETA to fund administrative costs at a rate of 10% of 1% of payroll). 13.5 EXPENDITURE Following many reports pointing to a poor expenditure record by SETAs, this problem seems to have improved considerably, with 2004/05 consolidated expenditure standing at about R4,3 billion compared to a revenue of about R4,5 billion. In fact expenditure patterns appear to be on a strong growth path; with a deficit expected for 05/06 and then budgeted for all subsequent years up to 2008/09. The projected deficit grows from R136 million in 2005/06 to R360 million in 2008/09. We have expressed elsewhere in this report that we find the deficit budgeting difficult to understand in terms of current legislative provisions that take great care to prevent such situations from arising without explicit permission from the Minister of Finance. We also reported that we have not been able to find any explicit explanation for the deficit budgeting in the relevant published documentation. If one ignores the above questions related to the deficit, then the expenditure figures do confirm a considerable strengthening in the expenditure performance of SETAs. The consolidated figures for all SETAs of actual and projected expenditure trends for the period 2002/03 to 2008/09 are presented in Table 39. Total consolidated expenditure by SETAs stood R2,09 billion in 2002/03 and grew to an estimated R4,65 billion in 2005/06. The percentage annual growth for the period 2002/03 to 2003/04 and 2003/04 to 2004/5 was 37 per cent and 49 per cent, respectively. These excessively high figures were the direct result of very low spending rates in this initial period of SETA operations: the spending rate for 2002/03 and 2003/04 was 67 % and 80 %, respectively. The annual growth of spending between 2005/06 to 2008/09 is projected to be stable around an average of 9,75% . Following the initial period of low spending rates (2002/03 to 2004/05), the spending rate was estimated to reach 103% for 2005/06, and to exceed 100% for all the years within the MTEF period (104%, 105% and 106%, respectively). This means that SETAs are projected to run into a deficit for every year in the period 2005/06 to 2008/09. This is an extremely unusual situation; given the point made previously that deficit budgeting is rarely tolerated by the National Treasury and is indeed explicitly not allowed in law. A notable factor that has, in all likelihood, contributed to the situation of deficit budgeting may be found in the success of the system in increasing the percentage of employers who claim back levies as provided for in the legislation. The low rate of claims during the initial years of implementation resulted in relatively significant amounts of unclaimed funding finding its way into the Discretionary fund. These funds went a long way in supporting the implementation of the NSDS. It is therefore likely that any effort to sustain the level of output contemplated in the NSDS is what DRAFT – not for circulation 138 has contributed to the need for deficit budgeting. In addition, deficit budgeting may be credible when predicated on the assumption that a 100% implementation of SETA projects (given the various implementation challenges and complexities) is highly unlikely and that a deficit budget is most likely to result in total or very high expenditure rates, but without an actual deficit resulting from the expenditure. 13.6 LEARNERSHIPS A learnership, often referred to as a ‘learnership programme’ or a ‘registered learnership’, is a training course designed to develop skills needed for the workplace. A learnership is always registered by a SETA, and with the DoL. Each learnership has a standardised reference number and must lead to a SAQA qualification. Generally, learnerships are configured to require one year to complete. Although in some cases they span 2, 3 or 4 years. This is a three-way time-bound agreement between an employer, a learner (who may be an employee) and a provider whereby the employer and the provider agree to provide on-the-job and institution-based training, respectively, to one learner. One learnership agreement may cover one learnership, a part of one, or several learnerships, but it can only cover one learner. A learnership agreement must be registered with the relevant SETA. Sometimes an employed learner within a learnership agreement is referred to as an 18(1) learner, and an unemployed learner is referred to as an 18(2) learner (these are paragraphs in the SDA). Certification of learners on successful completion of qualifications flowing from learnership agreements is the responsibility of the relevant SETA, though providers may in some instances provide certification on completion of individual unit standards. By the end of 2003/04, around 70,000 learnership agreements had been concluded – around 40,000 covered unemployed learners, and 30,000 covered employed learners. There was a sharp upward incline in the year-to-year trend evidenced by the fact that 40,000 of the 70,000 learnership agreements were registered during 2003/04. The implementation of these agreements has been funded by a mix of SETA and NSF funds. The NSF budgeted R700m (or 75% of its budget) for learnership agreements in 2004/05. The SETAs with the largest number of learnership agreements registered by 2003/04 were SERVICES (8000), THETA (7000) and TETA and W&RSETA (each with some 4500). SETAs determine how much is to be paid towards each learnership agreement. The funding structure varies from SETA to SETA and is also dependent on the gender, disability and employment status of the learner. Employers can claim 100% of the salary paid to unemployed learners and 70% of the salary paid to employed learners as being tax exempt. Although in theory a company may utilise some of the mandatory grant funding received for learnership training, this seems to be rare, meaning that learnership agreements must be funded from either the discretionary grant funding of the SETAs or from funding allocated from the 20% of the levy funds received by the NSF. The total expenditure on an individual learnership is comprised of a number of component expenses. The range of components, the monetary amounts attached to each of them and the total monetary expenditure on a learnership varies quite considerably across SETAs. Table 40 provides details of monetary values attached to learnerships of various SETAs. Typically the financing of learnerships is comprised of the following components: DRAFT – not for circulation 139 • • • • SETA INSETA FASSET BANKSETA FOODBEV MQA MERSETA NQF 1 and 2 MERSETA NQF 3 - 6 An amount for training costs that goes to the provider Bonuses that are paid to the employer. These bonuses serve as incentives for a range of factors including: increasing the uptake of disabled, historically disadvantaged as well as supporting scarce or critical skills An allowance that goes to the learner, which typically include payment to cover accommodation and travel as well as remuneration for unemployed learners Tax rebate to finance remuneration of unemployed learners and subsidise the remuneration of employed learners Learnership Type and Level 18.1 Currently employed Disabled learner 18.2 Unemployed learner Disabled Black, matriculant or NQF 4 equivalent 18.1 Currently employed – must be PDI to qualify 18.2 Unemployed – must be PDI 18.1 Currently employed – must be PDI to qualify 18.2 Unemployed – must be PDI 18.1 Currently employed 18.2 Unemployed 18.1 and 18.2 NQF levels 2 –8 18.1 Currently employed NQF 1 and 2 Early take on Historically disadvantaged persons Disabled On critical skills list 18.1 at NQF 1 or 2 with all bonuses 18.2 Unemployed NQF 1 and 2 Early take on Historically disadvantaged persons Disabled On critical skills list Employment for 12 months or longer 18.2 at NQF 1 or 2 with all bonuses 18.1 Currently employed NQF 3, 4, 5 or 6 Early take on Historically disadvantaged persons Disabled On critical skills list 18.1 at NQF 3 to 6 with all bonuses DRAFT – not for circulation Towards Training Costs 10 000 Bonus Towards Allowance 4 000 10 000 10 000 5 000 5 000 Total Grant 10 000 14 000 20 000 25 000 25 000 25 000 25 000 15 000 15 000 8 000 15 000 30 000 18 000 18 000 18 000 2 000 2 000 20 000 20 000 4 000 2 000 10 000 22 000 20 000 28 000 20 000 18 000 20 000 2 000 2 000 22 000 22 000 4 000 2 000 2 000 24 000 22 000 22 000 12 000 30 000 21 000 21 000 21 000 2 000 2 000 23 000 23 000 4 000 2 000 10 000 25 000 23 000 31 000 140 SETA CETA Learnership Type and Level 18.2 Unemployed NQF 3, 4, 5 or 6 Early take on Historically disadvantaged persons Disabled On critical skills list Employment for 12 months or longer 18.2 at NQF 3 to 6 with all bonuses 18.1 Currently employed – minimum 49 (R30 000) Pre-assessment and safety clothing Transport to provider (daily) 50 under 50 kms Accommodation at provider if 51 distance prohibitive 18.2 Unemployed – minimum Pre-assessment and safety clothing All 18.2 learners – 1st 30 52 weeks 18.2 learners not selfemployed – 2nd 30 weeks 53 Transport to provider (daily) under 50 kms 54 Accommodation at provider if distance prohibitive 55 Towards Training Costs 24 000 24 000 Bonus Towards Allowance Total Grant 24 000 2 000 2 000 26 000 26 000 4 000 2 000 2 000 28 000 26 000 26 000 10 000 34 000 30 000 2 000 32 000 3 150 35 150 13 500 45 500 30 000 2 000 32 000 7 500 39 500 4 500 44 000 3 150 13 500 47 150 57 500 Figure 40: SETA Funding associated with components of learnership expenditure for a cross-section of SETAs, as at the 2004/05 financial year. Source: Reproduced from unpublished report produced by G. Elliott (2005) In view of the above analysis, it is very difficult to discern any substantive explanation for the huge variation in funding for learnership across SETAs. The nature and likely complexity of the area of training does not appear to explain this difference. This suggests that the amounts appear to be determined administratively and is linked to the financial resources available to the SETAs. The main drivers of funding levels appear therefore to be linked to incentives and availability rather than costs. The learnership framework has encouraged certain programmes at higher education institutions to be offered as learnerships. This represents a positive outcome of the policy. However, certain perversions have become apparent in the process of implementation. Some higher education programmes have simply been “repackaged” to include a employer dimension, while the institution receives the 49 CETA pays grants per credit achieved at a rate of R250 per credit. The amount is split between the employer and provider based on the theory-work experience split in the learnership design. All CETA learnerships have more than 120 credits. For purposes of calculating a baseline, the minimum grant an employer and provider would have to share is 120 * R250 = R30,000.00 50 Daily transport to the provider is paid at a rate of R35 per day if travel is less than 50 kms. Averaged for 18 weeks of theoretical training at a provider = R3 150 51 Standard hostel accommodation rate = R150 per day averaged for 18 weeks of theoretical training at a provider = R13 500 52 CETA pays R250 per week for 30 weeks for unemployed learners 53 CETA pays R150 per week for second half of learnership (30 weeks) for unemployed learners who are not selfemployed, i.e. have not been able to secure a small contract for themselves after the first 30 weeks of the learnership 54 This is calculated on an unemployed learner for the full 60 weeks 55 This is calculated on the full 60 weeks DRAFT – not for circulation 141 learnership grant as well as the public subsidy in terms of the higher education funding formula. There is no evidence that this “double-dipping” is being monitored or that its implications have been evaluated. There are two main concerns arising from this practice: (1) it results in a driving up of unit costs without any commensurate improvement in the quality or rate-of-return associated with the qualification and (2) it results in differential funding for what is, in essence, very similar higher education programmes. There has been some confusion about the various incentives that are in place in terms of learnerships and apprenticeships. While the tax incentive applies to both learnerships and apprenticeships, it is suggested that it is unequal. i.e. because learnerships cover 120 credits (i.e. 1 year) the employer can claim the start and completion tax incentive in one tax year whereas the apprenticeship is over 2-3 years which means the employer claims in year 1 and then 2 years later. Recently there has been some agreement between the Departments of Labour and Treasury about the alignment of these incentives and this is considered a positive development. The relationship between these incentives and other forms of learning programmes may require further exploration. A further point of significance is that, although the tax incentive (rebate) is talked about as R30 000 at start and R30 000 at end, that is not the amount that employers can actually claim. The amount claimed is based on a complex calculation of total number of learners against total workforce which means that applying this to ESDAs who have 3-5 employees and a whole host of learners in Learnerships is a really complicated negotiation with Treasury. While there is an amendment that is set to introduce a new learnership concept, which allows employers to contract a dedicated agency to perform their functions in the learnership agreement and contract of employment, there is the possibility that this will not be effective in the context of the existing tax environment pertaining to skills development. Specifically there is a proposal being made by key structures (such as JIPSA) that workplaces that host learners for a period of a learnership under the auspices of a Employment Services Development Agency (ESDA) should also be able to claim an incentive on a pro-rata basis and this should also be clearly outlined and should be easy for workplaces to claim to allow for SMMEs that participate to benefit from these incentives We have addresses a number of challenges pertaining to learnerships in the preceding discussion. One of the most notable of these is the triangular partnership model that underpins learnerships and the fact that each element of the partnership is individually negotiated and registered by a relevant SETA and the DoL. This model clearly serves to layer the process with substantial transaction costs which are not explicitly accounted for in any costing process. The most important implication of the above, is that the scope for efficiencies in the financing of learnerships is extremely limited and circumscribed by administrative factors. However, it is recognised that the triangular model does certainly satisfy key policy objectives, we believe that there is a compelling need for a comprehensive assessment of these benefits against the high (financial and transaction) costs involved. 13.7 EMPLOYER GRANTS The bulk of the employer grants disbursed by SETAs are accounted for by mandatory grants. The disbursement of these grants to levy-paying enterprises is a key function of the SETAs. The assumption, underpinning the levy-grant system is DRAFT – not for circulation 142 that all eligible employers pay over an amount of money which represents the minimum they ought to be spending on training. They then qualify to claim back 50% of the levies paid by the employer for the financial year. The main purpose of this arrangement is that employers reclaim 50% of levies paid on grounds that they have or will undertake training corresponding to training needs of the sector as outlined in the Sector Skills Plans. The framework for allocating grants by SETAs is set out in the Grant Regulations made in terms of the SDA. Disbursement of mandatory grants must be made at least quarterly and unclaimed mandatory grant funds are transferred to the SETA’s discretionary grant fund. The current practice is that SETAs allocate mandatory grants to employers who submit workplace skills plans or training reports. Disbursements of employer grants showed very strong growth in the period 2002/02 to 2004/05, with an annual growth of 26% and 39%. This is largely explained by the fact that the system was in the process of institutionalisation and employers as well as SETAs were adjusting to the implementation challenges of the system. For the period 2004/05 to 2005/06 growth is estimated to decrease to 17%, while more stable growth of 8%, 11% and 12%, respectively is projected for the MTEF period. 13.8 DISCRETIONARY GRANTS Revenue from Discretionary Grants is principally comprised of 20 per cent of the total levies paid by employers within a financial year. Additional sources of revenue include unclaimed mandatory grants, surpluses from administration funding, interests and penalties, investment interest and contributions from the NSF and Government departments. In terms of the regulations 56 a SETA may determine and allocate discretionary grants for: • • • • • • • • • • Commissioning research in the sector in accordance with the sector plan and guidelines prepared by the DoL. Funding the development of guidelines and the training of sector specialists or skills development facilitators. Funding qualifying employers or accredited organisations in respect of ABET training to learners or workers Funding training providers or employers in respect of learners entering learning programmes to acquire skills identified by a SETA Funding employers providing work experience opportunities in sector relevant programs Funding employers or training providers to train and mentor learners to acquire new venture qualifications Funding institutions of sectoral or occupational excellence Funding institutions that offer the new venture qualification Funding education and training providers or institutions responsible for the implementation of the NQF in support of the NSDS Funding SETA constituency capacity building initiatives and the promotion of skills development in the sector 56 Sector Education and Training Authorities (SETAs) Grant Regulations regarding monies received by a SETA and related matters (GN 713, GG 27801 of 18 July 2005). DRAFT – not for circulation 143 • • • • Funding lead employers contemplated by the Learnership Regulations, 2001 Funding learnership agencies established in terms of section 17(7) of the SDA Funding employers for learnerships registered under a different SETA Funding employers in respect of sector skills priorities According to the figures presented in Table 39, discretionary grant transfers started on a very low base of R77 million in 2002/03, but grew dramatically to R286 million in 2003/04 representing a 270% growth rate. Growth between 2003/04 to 2004/05 was a relatively modest 12%, but was estimated to grow dramatically again (at 54%) in the following year. Growth over the MTEF period is projected at 26%, 16% and 7% respectively. Despite the policy intentions to steer workplace training through the levy-grant system by requiring that the disbursement of mandatory grants be contingent on approved WSPs, virtually no steering happens in practice on account of the fact that the credibility of the WSPs and their responsiveness to the SSP is not assessed in the case of most SETAs. Consequently, much of the stewardship function of SETAs is potentially confined to allocation and utilisation decisions in respect of discretionary grants. But again, in practice, much of the allocation and utilisation of discretionary funds are defined in the NSDS and the operationalisation thereof in the SLAs between individual SETAs and the Department of Labour. The second phase of the National Skills Development Strategy (NSDS) for 20052010 provides clear targets for spending, while payment timeframes and criteria are increasingly being clearly defined in regulations. The NSDS targets are converted into measurable targets and objectives specified in the Service Level Agreements entered into between the SETA and the Department of Labour for a particular financial year. This will certainly clarify the expenditure framework thus improving expenditure rates. However, it tends to focus only on a part of SETA funding and does not have an impact on other expenditure. Further, the focus on targets derived from the NSDS gives rise to two important implications that have import for policy analysis. The first is that SETA discretion over the allocation and utilisation of discretionary funding is increasing circumscribed by the requirements of the NSDS. Second, the negative consequences of this approach to determining funding priorities increases if the NSDS targets are not comprehensive or credible. 13.9 ADMINISTRATION EXPENDITURE In terms of regulations, SETA administration costs are to be limited to 12,5 per cent of tax revenue (that is, of the proportion of levies transferred to SETAs) or 10 per cent of the levies paid by an employer to SARS within a particular financial year. Various amounts for administration costs are stipulated in the legislation. These include the administration costs of SETAs, the allowance made for SARS to retain 2% of revenue to finance its costs of administering the collections and the funding that the NSF is allocated to finance its administration costs. All of these amounts collectively represent the cost of financing the institutional arrangements established to administer the skills development system. DRAFT – not for circulation 144 The predetermination of amounts assist in ensuring that the proportion of skills development revenue that goes into the financing of the institutional arrangements is kept low relative to that made available for training. Compliance with the 12,5% limit for administration costs is audited by the AG and most SETAs (with the exemption of the MAPPP SETA) kept within the limit. In the absence of any detailed analysis of adequacy and efficiency, it is not possible to make any further analysis of the implications of the 12,5% provision. However, an analysis of the compensation of employees does reveal some potentially important information that could impact on an assessment of the efficiency of administration. A large proportion of SETA expenditure takes the form of disbursements to employers which presently (because WSPs are generally not appraised by SETAs) requires very little mediation from the SETAs. The main determinants of the volume and complexity of work in the SETAs relates to the ETQA functions and expenditure of the non-disbursement funding. We have therefore computed the “consolidated compensation of employees” for all SETAs as a percentage of “Goods and Services” as some kind of indicator of the relationship between institutional costs and direct investment in the generation of outputs. Table 39 shows that “compensation of employees” as a percentage of “Goods and Services” appears to be on the high side; averaging 29,25% for the period 2003/03 to 2005/06 and then projected to rise steeply to 42,33% over the MTEF. The strong rise in the percentage over the MTEF seems to be tracking a large increase in the volume of transfers and subsidies and a very slight increase in expenditure on “goods and services”. This may suggest that compensation costs are being set as a ratio of overall expenditure, instead of linking it to the actual expenditure that results in increased work volumes and complexity. However, it must be acknowledged that the transfer of the ETQA functions to SETAs represented a significant expansion of mandate. This review shows that most SETAs have not yet mounted a credible institutional response, in terms of increased capacity and systems, to this expanded mandate. It is likely that the projected increase in the percentages, referred to earlier, reflects conscious decisions to establish the requisite capacity. It would certainly be worth following up this matter by ensuring that all projected increases in personnel expenditure are directed toward those areas for which credible internal capacity need to be developed as a matter of urgency. 13.10 NSF The SDA provides for the NSF to be funded through a 20 per cent top-slice of the skills development levies collected by SARS. The National Skills Authority was established through the SDA. Its function is largely to be a central coordinating and support body in relation to the SETAs. The spending priorities of the NSF are determined by the Minister of Labour and are framed by the NSDS and advice from the National Skills Authority (NSA). In terms of the NSDS, funding is directed toward projects that respond to national priorities. Nine dedicated funding windows, each of which caters for a unique group of beneficiaries, have been created for the purpose of channelling this funding. The notable and largest among these is the social development funding window which committed R1,8 million to the SETAs community level projects and for unemployed learners. DRAFT – not for circulation 145 A summary of actual and projected consolidated NSF revenue and expenditure for the period 2002/2003 to 2008/2009 is presented in Table 42. NSF revenue through the 20 per cent top-slice of skills development levies has grown from R648 million in 2002/03 to an estimated R987 million in 2005/006. The average growth in the period stands at 15,3%. Growth over the MTEF period 2006/07 to 2008/09 this source of revenue is projected to grow at an average annual rate of 11,3 per cent, reaching an amount of R1,36 billion in 2008/09. NSF transfers and subsidies paid out stood at R444 million, R498 million and R813 million for 2002/03, 2003/04 and 2004/05 respectively, representing a 12 per cent growth between 2002/03 and 2003/04 and a very strong growth of 63% between 2003/04 and 2004/05. The latter rapid increase in growth was probably largely due to the low expenditure rates in previous years on account of start-up challenges. Growth between 2004/05 and 2005/06 was estimated at 16% while transfers and subsidies over the MTEF period 2006/2007 to 2008/2009 is projected to stabilise at an average of 8,3%. The NSF represents the principal instrument for achieving the equity objectives of the Skills Development Act, through targeting its funding toward training that correspond to national priorities and toward beneficiaries (such as the unemployed) who are generally not in a position to be covered by workplace training. In terms of the fiscal framework codified in the Skills Development Levies Act, this revenue is generated through a tax on enterprises (not including those that are specifically exempted from paying skills development levies). In this regard, the tax can be regarded as progressive on account of the pro-poor distribution of the revenue. The funding stream from the NSF available to SETAs accounts for a significant proportion of funding through which they give expression to their steering function. A large proportion of NSF funding is directed toward leanerships. In view of the strategic importance of the NSF, it is disturbing that the AG reported that the utilisation of NSF funding appears to present a number of problems which threaten the quality of this spending. The size and strategic importance of NSF funding makes the identification and mitigation of attendant risks a very high priority. There appears to be no clear guidelines on project requirements; projects approval; accounting and treatment of surpluses. These problems are eluding proper scrutiny mainly because there has been a strong emphasis on the monitoring of spending rates, coupled with strong sanction in instances of under-spending. Any system where spending rates on its own become a prominent and sole indicator tends to encourage perversions if quality of spending is not simultaneously monitored. Audited outcome Audited outcome Audited outcome Estimated MTEF MTEF MTEF 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 647663 755402 17 175310 945079 25 140196 986800 4 116408 1120000 13 105666 1230000 10 88799 1360000 11 81949 930712 16 1085275 17 1103208 2 1225666 11 1318799 8 1441949 9 INCOME Tax Revenue % year-on-year growth Other Revenue 155181 Total Revenue 802844 EXPENDITURE DRAFT – not for circulation 146 Goods & services % year-on-year growth Transfers and subsidies % year-on-year growth 86213 209031 142 369528 77 418570 13 437805 5 458611 5 477613 4 443906 498165 12 812982 63 941840 16 996007 6 1080224 8 1197785 11 Total Expenditure 530119 707351 1182650 1360439 1433822 1538848 1675413 Suplus/Deficit 272725 223361 -97375 -257231 -208156 -220049 -233464 Figure 41: A summary of actual and projected consolidated NSF revenue and expenditure from the period 2002/2003 – 2008/2009 13.11 THE FUNCTIONING OF THE TRAINING MARKETS The Skills Development Financing policies are predicated on a mixed public and private sector provider model. The main purpose of this model is to improve efficiencies and responsiveness of training through greater competition. Consequently, the policies are aimed at enhancing the emergence of an effectively functioning training market. This market also performs the significant function of setting prices for training that are optimally cost-effective (with due regard given to relevance, quality and efficiency). Various institutional mechanisms are provided for in the policies to ensure that equity objectives are catered for in the functioning of this market. This is essentially achieved through various incentive and steering options that can be applied to determine what training is undertaken and for whom. The training market is South Africa is very new, in the sense that the onset of the SDA introduced a set of market conditions that were unprecedented prior to its enactment. One notable change relates to the extremely rapid growth of funding available for training in the market. Markets take time to mature and the rate of responsiveness to sudden increases in demand (of the type experienced in South Africa) is never quick in any national market; but would be even more challenging in country of South Africa’s level of economic development and history of training provision. The absence of a highly developed market, prior to the onset of the SDA, applied to the number and capacities of private as well as public providers. The public sector training institutions were far from optimal in their functioning. And the complexity of factors that contributed to the state of weakened effectiveness continues, to this day, to compromise the effectiveness of these institutions and their contribution to improving the functioning of the market. We are therefore faced with a situation where the SDA and SDLA gave rise to a sudden and very high injection of funding into the market; creating an exponential rise in demand. The weaknesses in the supply side gave rise to a situation where “too much money was chasing too few goods”. This situation has provided a powerful impetus for the proliferation of providers with dubious quality. We have contended elsewhere in this report that the institutional mechanisms established for quality assurance of these providers are woefully unable to cope with the sheer number of providers that have proliferated. In addition to the weaknesses on the supply side, there are also specific weaknesses on the demand side that undermines the effective functioning of the market. Preeminent among these weaknesses is the less than optimal overall capacity on the DRAFT – not for circulation 147 demand side to clearly define learning needs and to procure training provision in response to these needs. There is a paucity of information available in the sector to conduct a credible assessment of efficiencies and cost-effectiveness of training in the sector. Prices are largely administratively determined; which is particularly the case with learnerships. The complexity of rules and procedures that arise from the National Qualifications Framework are intended to ensure relevance, enhance quality and guarantee portability. These are extremely important objectives and have strong resonance with the Skills Development Policy goals. However, current practice in the skills development sector has tended toward inordinate emphasis on rules and procedures at the expense of other considerations. A number of providers have been spawned in the market who emphasise their compliance with rules and procedures (such as boldly displaying the ubiquitous slogan: “SAQA accredited”) over the quality issues. The weakness of the public sector providers have further militated against the effective functioning of the training market. The overwhelming impression of expenditure trends suggest that much of the training provision outside of the workplace is driven by a myriad of very small, short-term tenders. This approach results in an extremely high level of transaction costs and dramatically reduces opportunities for economies of scale. In view of the above, there is no doubt that the training market is not functioning optimally and that the skills development financing policies have not resulted in improved functioning of this market. It is also clear that the unit costs of training overall are in all likelihood quite significantly inflated as a result of the sub-optimal functioning of this market. This matter requires careful attention and suggests that both the demand side (the amount of money available for training and identification of training needs) as well as supply side need purposeful attention and stewardship if the skills development policy goals are to be realised. 13.12 EMERGING ISSUES The key implications of the preceding analysis on the financial dimension of the review are summarised below. The paucity of financial data in the SETAs and the Skills Development System is a matter of very serious concern that warrants urgent attention. Any effort at evaluating the efficacy of policies as well as ongoing monitoring and accountability, that is imperative for the system, is not presently possible due to the lack of information. Given the scope of this review, it was only possible to conduct an initial analysis of the financial dimension of SETAs collectively. It is however very important that a comprehensive financial review be conducted to establish a credible basis for improving the effectiveness of financing policies in the training sector. It has become clear in this review that we do not have an effective and comprehensive national information system for the skills development system. The present systems are incompletely populated and accessing comprehensive information for substantive review has not proven to be possible. Information from providers is randomly provided and the completeness of learner information raises very serious concerns about the integrity of the system, including the important aspects of accreditation and certification. The risks associated with the present situation are extremely high and demands urgent remediation. DRAFT – not for circulation 148 Expenditure rates have improved considerably over the years since the establishment of the SETAs. This growth has been driven by improvements in the rate of employer grant disbursement, but only after the requirement for SETAs to appraise WSPs for compliance to sector priorities was removed. This action was necessary to remove the blockages and delays that were retarding the smooth flow of employer grants. However, its removal has fundamentally altered a key assumption in the levy-grant system, which is to use levy payments and claiming as a mechanism for steering workplace training and for ensuring that it corresponds to sector priorities. This matter needs to be carefully considered, but its reinstitution can only be effected on clear demonstration that the system has sufficient capacity to undertake these tasks without compromising the efficient flow of funding. There is very clear evidence that the extent of public investment in training has increased considerably as a direct consequence of the ear-marked tax introduced through the SDLA. It is, however, much less clear whether investment in training by employers has increased as was intended in the policy. A paucity of information in this regard makes this kind of assessment very difficult. Employers are not obliged to report on training investment undertaken outside of those funded through employer grants. This is a matter that may require attention in the policy analysis and development processes. Significant progress has been achieved by SETAs and the Skills Development system. But important challenges have emerged from this review with regard to: the level of development of SETAs; the numerous challenges that persist in respect of implementation, effectiveness and efficiency; the shortcomings in the functioning of the training market; the underdeveloped capacity and functioning of the monitoring and evaluations systems; the lack of effective management information systems; the effectiveness of quality assurance mechanisms in the system all combine to suggest that the SETAs and the Skills Development system are still at a critical stage of institutionalisation. The findings of this review suggest that the SETAs are on a positive trajectory. Future success will be contingent on a recognition that institution building is a complex and demanding process that requires purposeful and sustained investment. In view of this, we believe that the system is unlikely to have the capacity to absorb any sudden increases in financial flows above those presently projected. Any sudden increase may disrupt the current positive trend in stabilising the SETAs and in building the capabilities required to effectively meet the objectives of increasing the investment in training and quality of outcomes. DRAFT – not for circulation 149 DRAFT – not for circulation 150 SECTION FIVE: EFFICACY AND RELEVANCE OF OUTPUTS This section of the report focuses on the effectiveness of the SETAs in carrying out certain key functions impacting directly on the supply of skills into the economy and on the profile of those who hold the skills. This section is split into three sub-sections. The first gives a brief overview of the NSDS targets per SETA, and of achievement against these targets. This sub-section provides a review of the overall SETA performance against the targets contained within the NSDS and reflects on issues raised by performance. An analysis per SETA is contained in Appendix M. The second sub-section reviews individual SETA performance against scarce skills interventions and equity achievements. The issue of scarce skills and the extent to which – in the South African situation - they hamper or support economic growth has become a matter of some contention in the country. What is clear from international experience is that real shortages of skills in key strategic areas of the economy can prove debilitating. For this reason performance regarding scarce skills has been chosen as a key indicator of SETA effectiveness. In providing this analysis, the team recognises that it is fairly early in the process of scarce skills identification to be making judgments against outcomes of interventions as yet. This would suggest that rating a SETA on learners completing qualifications against scarce skills is not entirely a fair indicator. For this reason, learner registration against scarce skills has been used as the key indicator. In addition to the time elapsed factor is the fact that registrations are far easier to accomplish than completions and the variable factors are far fewer than with completions. For this reason, it seems fair to evaluate a SETA against its own internal consistency; i.e. what it stated was needed in the sector versus where it chose to invest its resources. A further reason why it is felt to be a justifiable indicator is that while the scarce skills templates have only been introduced more recently, it seems reasonable to assume that the occupations highlighted within these templates represent areas of need, which should then have been indicated, albeit in a different template. Attached to each scarce skills analysis is an equity achievement analysis. Equity has been a major driver of the NSDS since its inception, and it seems both reasonable and fair to use the attainment of equity targets as a measure of performance. This also assists to review the extent in which SETAs have been able to address these two objectives in a mutually reinforcing manner. For both scarce skills and equity, each SETA has been reviewed against the best set of data available at the time of completion of this report. Where an area of review does not appear in a SETA section, this is due to data not being submitted by the SETA or the data that was submitted was incomplete. The source of data is attributed on each of the tables and an explanation as to how this data was accessed was provided in the methodology. The summary terms very good, good, poor and very poor have been used to describe performance in the above areas. The final sub-section reviews emerging issues from this analysis. DRAFT – not for circulation 151 14 AN OVERVIEW OF NSDS TARGETS AND ACHIEVEMENT The NSDS sets 5-year targets and SETAs report against these targets on an annual basis. Therefore, the targets cannot be reviewed against the overarching target, but rather in terms of the target that the individual SETA has set for the reporting period. It may be premature to indicate whether it appears that the overall target will be realised at this stage, although in a few cases some preliminary comments are made. Objective 1: Prioritising and communicating critical skills for sustainable growth, development and equity Indicator 1.1: Skills development supports national & sectoral growth, development and equity priorities 10 SETAs (44%) did not set a target against this indicator. Of the 13 SETAs that did set a target, 10 report this as being the submission of the SSP (and/or updates) by the stated deadline. It is unclear how the achievement of the target will contribute to the achievement of the indicator, as there is no quality element built into the target. Of the remaining 3 SETAs, the PSETA’s target is that “skills development supports national growth and development strategies”, which is too broad to be useful, and the SASSETA states that 200 SDFs will be trained – it is also unclear how this will contribute to the achievement of the indicator. Only the ETDP SETA has a target that contributes directly to the achievement of the indicator: “research conducted on scarce and critical skills. Relevant information is available to sector SDFs and constituencies.” In relation to achievement of the set targets, all 10 SETAs that gave submission of the SSP on time as their target achieved this target. The PSETA did not comment on achievement, as their target is a 5-year target, the SASSETA trained 60 of the projected 200 SDFs and the ETDP SETA stated that they have provided ‘preliminary information’ on scarce and critical skills. In general, there was poor setting of targets in this area, and although there is a high achievement rate, this is considered to be meaningless against the indicator. Indicator 1.2: Information on critical skills is widely available to learners. Impact of information dissemination researched, measured and communicated in terms of rising entry, completion and placement of learners. 4 SETAs did not set a target against this indicator. Of the remaining SETAs, 15 set targets relating to the training of SDFs and/or Sector Specialists and/or CGS. Again, it is unclear how the achievement of these targets contributes directly to the achievement of the indicator. 9 SETAs set targets (sometimes in conjunction with the training of SDFs) relating to the dissemination of information on critical skills. While this target partly contributes to the achievement of the indicator, it does not speak to the impact evaluation aspect of the indicator. The PSETA provided the most useful target: “Critical skills identified as entry, intermediate and advanced levels. Information priority skills made widely available to learners .The impact of the information is measured.” DRAFT – not for circulation 152 In terms of the targets given, 6 853 SDFs/Sector Specialists/CGCs were identified for training. In total, 9 362 people received training, a significant overachievement of the target – 9 of the 15 SETAs achieved or exceeded their target, and one SETA (MQA) reported training in this area despite not having set targets for training. Of the 9 SETAs that set targets relating to the dissemination of information, only 3 reported achieving this target. The most useful achievement in this area is probably the publishing of the ‘careers guide’ by the CTFL SETA. The PSETA did not report against achievement of their target. These results suggest that more work needs to be done by SETAs in disseminating information, and measuring the impact of this dissemination against the criteria given in the indicator. Objective 2: Promoting and accelerating quality training for all on the workplace Indicator 2.1: 80% of large firms and at least 60% of medium firms employment equity targets are supported by skills development. Impact on overall equity profile assessed None of the targets spoke to the achievement of this indicator. Instead, they focused on receipt of grants (9 SETAs), submission of WSPs (10 SETAs), and provision of unspecified support (3 SETAs). The PSETA did not set a target in this area. All SETAs broke down their targets into large and medium enterprises. In relation to achievement of the targets set, the results were as follows: % of Target Achieved Medium Achievement % of Target Achieved 2879 1863 65% 108% 1312 1049 80% 94% 341 440 129% Large Target Large Achievement Grants 1908 1656 87% WSPs Submitted 1022 1108 Support Provided 235 220 Medium Target Figure 31: Achievements against NSDS Target 2.1: Grants, WSP, Support for Large/Medium Firms In total, 16 of the 22 SETAs achieved or exceeded their stated targets As stated above, it is unclear how any of the targets contribute to that achievement of the indicator. However, even as a target relating to submission of WSPs and distribution of grants, the targets are problematic. There is only a numerical setting of targets, with no indication of what percentage of the sector is represented by those figures (of the 23 SETAs only one set provided percentages). There was no attempt to assess the impact of skills development on the equity profile by any of the SETA. Indicator 2.2: Skills development in at least 40% of small levy paying firms supported and the impact of the support measured Note that the implementation of the levy threshold in August 2005 reduced the total number of small levy paying companies. DRAFT – not for circulation 153 While all SETAs (except for the PSETA where the indicator does not apply) set targets in relation to support, none set targets in relation to measuring the impact of this support. In addition, only the SASSETA explicitly stated that the target number given was 40% of the total number of small firms in the sector. (Note that SASSETA also differentiated between small levy paying firms and the total number of small companies in the sector – the figures provided for the latter have been excluded from the calculation below as they fall outside of the indicator.) No information is given on the type of support provided, and only the ETDP SETA set targets in relation to the number of WSPs and ATRs submitted, and only they, the HWSETA and TETA reported on the number of small firms that received grants. In total, and across all SETAs except for the PSETA, it was anticipated that 23 921 small enterprises would receive support. 29 771 or 124%, actually received support. However, only 14 of the 22 SETAs achieved or exceeded their stated targets. Some SETAs exceeded their targets by around 200%, demonstrating that either information on the SMME sector is weak, or SETAs have a limited capacity to plan for support in this sector. Indicator 2.3: 80% of government departments spend at least 1% of personnel budget on training and impact of training on service delivery measured and reported This indicator only applies to 17 of the 23 SETAs. The other SETAs report this indicator as not being applicable. Of these 17, only 3 set targets against this indicator. The ETDP SETA and the LGSETA set targets relating to the submission of WSPs and ATRs, and not the percentage spend on training or the measurement of the impact of training on service delivery. The PSETA’s target spoke to the achievement of employment equity targets and measurable service delivery (improvement) supported by skills development. They also include a target relating to the achievement, by all national and provincial departments, of the Investors in People standard. This target is helpful in and of itself. However, it does not speak directly to the indicator and, in fact, relates to other indicators. This points to the absence of a consistent measure of achieving the different indicators and objectives. The ETDP’s target was the receipt and analysis of WSPs and ATRs from 10 Departments of Education and in fact 8 WSPs and 5 ATRs were received and analysed. DPLG submitted their WSP to the PSETA, with a copy to LGSETA and also drafted a MoU with LGSETA. The PSETA did not report on the achievement of this target. Indicator 2.4: At least 500 enterprises achieve a national standard of good practice in skills development approved by Minister of Labour The national standard of good practice in skills development has not yet been approved and for this reason many of the SETAs did not identify a target against this indicator. Only the LGSETA and the TETA set targets for this indicator. The LGSETA planned to address the issue with one enterprise, but did not achieve this. TETA set a target of 20 enterprises for the period 2005 – 2007, and reported that contracts have been signed with 7 companies in relation to the Investors in People standard. However, as noted above, the PSETA has a target pertaining to Investors In People that could have been reported against this target, as it was the standard that was being applied in NSDS I. DRAFT – not for circulation 154 Indicator 2.5: Annually increasing number of small BEE firms and BEE cooperatives supported by skills development. Progress measured through an annual survey of BEE firms & BEE co-operatives within the sector from the second year onwards. Impact of support measured. Only 4 SETAs set targets for 2005/06, and of these 4, only the TETA set a numeric target. The BANKSETA set a target relating to research, which they reported as having been completed and indicated that they now have the information available to start planning interventions. The MERSETA also planned to conduct a survey, but stated in the report that this “was not applicable in the year under review”. The LGSETA reported that a research project undertaken as part of the SSP review established the BEE baseline in the sector. The TETA set a target of 30 companies for the period 2005 – 2007, and reported that the intervention was in process. Indicator 2.6: There is an annually increasing number of people who benefit from incentivised training for employment or re-employment in new investments and expansion initiatives. Training equity targets achieved. Of number trained, 100% to be SA citizens Only the LGSETA set a target against this indicator for 2005/06. The target set was 600 people and they reported that 1 100 municipal technical staff received training. However, it is unclear whether this training was of the type specified above, and whether or not all beneficiaries were South Africans. Indicator 2.7: At least 700,000 workers have achieved at least ABET level 4 Only the HWSETA and the SERVICES SETA did not set targets for this indicator. The BANKSETA set a target in relation to research into ABET need, which was achieved. However, some of the other SETAs appear to have set targets for ABET learners more generally and not just for the achievement of ABET Level 4: Achieved ABET L4 Planned 14,802 Registered for ABET L4 Actual 1,205 Planned 1,050 Actual General ABET Learners Planned 2,926 25,104 Actual 23,583 Figure 32: Achievement against NSDS Target 2.7: ABET The total planned to achieve ABET L4 in the period was only 2% of the NSDS indicator of 700,000, and the total number who actually achieved L4 was 0.17% of the target contained in the indicator. Even taking into account throughput from those registered, the numbers are way off the indicator target. Only the FOODBEV SETA and the INSETA were able to exceed their targets for the number of workers who achieved ABET L4. There were serious discrepancies between the number planned to receive training and the number that actually received training in the CETA, the ETDP SETA, the THETA and the WRSETA. The inability of SETAs to meet the targets set out against this indicator suggests that this indicator may need to be reviewed. This point was made by a number of the interviewees, who raised concerns about their ability to meet this target within their existing resource envelope. They suggest that if they were to meet the targets identified for their sector, they would not be able to support any other initiative. Thus while it is, as indicated previously, premature to state whether the indicator will be realised, it does suggest that there needs to be a review of this indicator. DRAFT – not for circulation 155 Indicator 2.8: At least 125,000 workers assisted to enter and at least 50% successfully complete programmes, including learnerships and apprenticeships, leading to basic entry, intermediate and high level scarce skills. Impact of assistance measured All SETAs provided numerical targets, and some split these into number enrolled versus number successfully completed. No SETA provided targets in relation to scarce skills, or in relation to impact measurement. Only the PSETA did not report on achievement. Number Enrolled Planned Number Completed Actual 78,699 160,045 Planned Actual 8,819 34,085 Figure 33: Achievement against NSDS Target 2.8: Worker Entry Onto and Completion of Programmes While the number of workers enrolled on learning programmes significantly exceeds the NSDS target of 125,000, it should be noted that 89,000 of these are from the BANKSETA alone, and these statistics were taken from WSPs. It appears likely that the numbers reported are the total numbers of employees receiving training in the sector, and not necessarily related to scarce skill acquisition. This is further evidenced in the analysis of scarce skills reported on further in the next section. It may be that some SETAs are misinterpreting the type of data that is required here and there is a need to clarify what is expected against this indicator. Objective 3: Promoting employability and sustainable livelihoods through skills development Indicator 3.1: At least 450 000 unemployed people are trained. Training quality assured. No less than 25% of people trained undergo accredited training. Of those trained at least 70% should be placed in employment, self employment or social development programmes including (EPWP), or should be engaged in further studies. Placement categories each to be defined, measured, reported and sustainability assessed Only the ETDP SETA and the PSETA set targets against this indicator, and only the ETDP SETA reported an achievement. Again, this is likely to reflect confusion as to what the distinction between certain of the indicators are, as all SETAs reported against indicator 4.1. The ETDP SETA planned to enter 2,500 unemployed people into programmes, and they reported that 2,389 people entered learnerships. No reports were provided on placement. Indicator 3.2: At least 2 000 non-levy paying enterprises, Non-governmental Organisations (NGOs), Community Based Organisations (CBOs) and community - based co-operatives supported by skills development. Impact of support on sustainability measured with a targeted 75% success rate. All SETAs with the exception of the PSETA and ISETT set targets for the number of organisations to be supported (the CTFL SETA gave a target of 256 learners to be supported, but it did not provide any support). No targets were provided for measuring the impact of support on sustainability. In terms of the targets, assistance DRAFT – not for circulation 156 was planned for 574 organisations, and assistance was actually provided to 1,456 organisations. 14 SETAs met or exceeded their targets, with some exceeding target by a large number, leading to questions about planning and forecasting abilities within the SETAs. No reports were received in relation to the impact of the support provided. Indicator 3.3: At least 100 000 unemployed people have participated in ABET level programmes of which at least 70% have achieved ABET Level 4 No SETA set targets or reported against this indicator. However, many of the SETAs indicate that they provide ABET within the learnership provision. This suggests again that the issue may relate to the absence of ABET provision to the unemployed but equally, this may reflect the fact that this item is not catered for in the current reporting template and SETAs do not disaggregate the learning so as to enable them to report against this indicator at present. Objective 4: Assisting designated groups, including new entrants to participate in accredited work - integrated learning & work-based programmes to acquire critical skills to enter the labour market & self-employment Indicator 4.1: At least 125 000 unemployed people assisted to enter and at least 50% successfully complete programmes, including learnerships and apprenticeships, leading to basic entry, intermediate and high level scarce skills. Impact of assistance measured All SETAs provided numeric targets for this indicator, although not all SETAs distinguished between the numbers enrolled versus the number completed. (Note that the CETA speaks of a number of learners ‘reached’ in their report on achievement – it is unclear what this means, but the number has been included in the ‘actual enrolled’ number provided below.) No targets were provided for the measurement of impact. Number Enrolled Planned Number Completed Actual 32,720 41,822 Planned Actual 4,424 5,432 Figure 34: Achievement against NSDS Target 4.1: Unemployed Entry Onto and Completion of Programmes This indicates that the actual numbers exceeded the planned numbers. However again these numbers are not reported against scarce skills which means that while the targeted numbers may be achieved these may not mean that the indicator is being realised. No report was provided by the PSETA, and all but 5 SETAs met or exceeded their targets. Indicator 4.2: At least 100% of learners in critical skills programmes covered by sector agreements from Further Education and Training (FET) and Higher Education and Training (HET) institutions assisted to gain work experience locally or abroad, of whom at least 70% find placement in employment or selfemployment 6 SETAs did not provide targets against this indicator. The BANKSETA provides information on the number of bursaries that it offers, but does not specify whether this also involves work experience. Only the AGRISETA specifies whether the work experience is offered to learners in ‘critical skills programmes’, or just generally. DRAFT – not for circulation 157 Only FIETA, ISETT and SASSETA specified whether people were subsequently provided with employment. In relation to the provision of work experience, across all SETAs it was planned to provide workplace experience grants to 6 701 people. These grants were only provided to 2 706 people. There was no data provided on the percentage of learners in critical skills programmes who received work experience. FIETA planned to find placement for 14 people, and did not achieve any placements. ISETT planned to find placements for 100 people, and placed 100 people. SASSETA did not provide a target for placements, but reported that they place 13 out of 45 people provided with workplace experience. Again, SETAs will require assistance in interpreting this indicator and there will need to be an analysis as to what will be required to enable SETAs to provide the relevant data vis-à-vis placement. Indicator 4.3: 10 000 young people trained and mentored to form sustainable new ventures and at least 70% of new ventures in operation 12 months after completion of programme 3 SETAs did not set any targets for this indicator. The remaining SETAs set numerical targets relating to the number of people trained, with the exception of the ETDP SETA, which had the development of a strategy as a target. 5 SETAs set targets relating to the establishment and sustainability of new ventures. It was anticipated that 4 223 young people would receive training and mentoring. (Of these, 2 500 were from the PSETA, which has set targets from 2005 – 2010). 1037, or 10% of the NSDS target have reportedly received training. Only 5 of the SETAs exceeded their targets in relation to the provision of this training. 8 SETAs who had planned interventions did not report whether they had provided any training at all. 174 ventures were scheduled to be in operation 12 months after completion of the training. However, this was achieved for only 14 ventures, all within the FIETA. It should be noted, however, that it is unlikely that a target of this nature can be achieved over one year. Objective 5: Improving the quality and relevance of provision Indicator 5.1: Each SETA recognises and supports at least 5 Institutes of Sectoral or Occupational Excellence (ISOE) within public or private institutions and through the Public Private Partnerships (PPPs) where appropriate, spread as widely as possible geographically for the development of people to attain identified critical occupational skills, whose excellence is measured in the number of learners successfully placed in the sector and employer satisfaction ratings of their training 4 SETAs did not provide targets against this indicator. Only 3 SETAs identified 5 or more ISOEs with which to engage. In total, it was anticipated that 42 institutes would be assisted. No information was provided as to the level and type of assistance that would be provided. In terms of the reports, 106 institutes were assisted, but 53 of these were in the FASSET. 7 SETAs did not engage with any ISOEs, although the CTFL did host a number of workshops. DRAFT – not for circulation 158 Indicator 5.2: Each province has at least two provider institutions accredited to manage the delivery of the new venture creation qualification. 70% of new ventures still operating after 12 months will be used as a measure of the institutions success. 8 SETAs did not set any targets against this indicator. The remaining SETAs set numerical targets in relation to the number of provider institutions that they would accredit. There was no indication of targets relating to measures of success for the accredited institutions. It was planned that 51 institutions would be accredited, although 18 of these were with the PSETA (2 per province). 40 institutions were actually accredited, with 14 of these being with the CETA. MERSETA stated that they had signed service level agreements with 2 ISOEs – it is unclear whether these institutes provide training in the new venture creation qualification. There is no indication of the provincial spread of the accredited institutions. Indicator 5.3: There are measurable improvements in the quality of the services delivered by skills development institutions and those institutions responsible for the implementation of the National Qualifications Framework (NQF) in support of the NSDS Only the ETDP SETA provided detailed ETQA targets: 64 providers accredited; 120 providers supported with development programmes; 150 learning programmes evaluated; and, 500 primary focus assessors registered. They exceeded all of these targets: 79 providers accredited in total, with 46% achieving full accreditation and 54% provisional accreditation; 236 providers supported with development programmes; 236 programmes evaluated and 1 063 assessors registered. The LGSETA reported that 7 sectoral based qualifications were developed and funded in collaboration with SAQA, but this does not directly talk to the indicator. A number of other SETAs noted that a measurement methodology with outcomes, targets and criteria is to be developed in conjunctions with SAQA and SETA ETQAs. It would be helpful if more clarity was provided as to how SETAs should set targets against this indicator. Further, the relationship between this indicator and the objective of quality provision should be articulated if this indicator is to be completely meaningful. Indicator 5.4: There is an NSA constituency based assessment of an improvement in stakeholder capacity and commitment to the National Skills Development Strategy Only 3 SETAs set targets against this indicator. The MERSETA indicated that capacity building would be held for all committees once a year. The PSETA stated that they would increase capacity building, involvement and support of all stakeholder constituencies, and the TETA planned an assessment of the Board’s capacity. The MERSETA held a corporate governance workshop for EXCO members, and conducted an assessment of members of the Authority. The TETA Board assessment was conducted and two capacity building sessions were also held. The PSETA did not report. 3 SETAs noted that a measurement methodology with outcomes, targets and criteria is to be developed in conjunction with the NSA. DRAFT – not for circulation 159 However, some interviewees reported that they had supported capacity building activities for their governance structures, suggesting that there may need to be further guidance provided on setting targets may be required here. 15 EFFECTIVENESS IN ADDRESSING SCARCE SKILLS Each SETA is reviewed against the best set of data available at the time of completion of this report. As stated, where the data does not appear in a SETA section, it is due to data being available to the team. Where there was no data available, this has been represented as NR (not reported), which allows for the possibility that some training may have taken place but the data against this training was not provided to the team. Again it is important to point out the extensive steps that were taken to acquire the data. It should also be stated that the majority of SETAs attempted to provide whatever data was required, which is seen as important indicator of a genuine desire to be accountable to the public. Only the exceptions provided no data at all. Where this was the case, the team still used their public documents to try and extract data wherever possible, as well as SAQA data where possible. Thus, the SETAs where there is no data reported indicates that data was not available from any of these sources. Further, the methodology chapter outlines some important issues to be noted with regards to the data discussed in this section. When reviewing the analysis of each of the SETAs in terms of the priorities outlined in the SSP, the extent that qualifications delivered matched identified scarce skills and that equity targets were realised it is important to reiterate that the planning chapter highlighted the concern that the scarce skill categories and numbers may not in fact always be consistent with need. There are examples, which will be highlighted, which suggest that SETAs have developed their scarce skills lists in terms of what they are able to provide, rather that actual need. There are also some scarce skill figures which must be open to some scepticism on a number of grounds: In many cases the large numbers of occupations in which skills are so scarce as to constitute sectoral and national impediments to growth seem unlikely; Many of the lists cover occupations which overlap with other SETAs, and it is unclear whether there is overlap in scarcity counting; and, It is unlikely that so many categories of occupations, which must be, or verge on being, unskilled, constitute a scarce skill (for example labourers that appear in a large number of scarce skills lists. This suggests that even whilst this study has made an attempt to weight the ratings to determine whether SETAs are performing in terms of the achievement of scarce skill and equity targets against planning processes, two further activities are required before this rating can really be credible. There needs to be a due diligence to establish whether the activities that the SETA indicates that they undertook as part of the skills planning process in fact were in fact undertaken. Secondly, there is a need to establish whether the scarce skills identified in these SSPs resonate with other forecasting processes that have been undertaken in the relevant sector (it is noted that the DoL is attempting to explore this aspect in the research it has commissioned with the HSRC). DRAFT – not for circulation 160 Thus while each SETA is discussed in some detail below the disclaimers provided above need to be considered when reviewing these tables, as well as in the review of the more specific data provided in Attachment 1: 15.1.1 15.1.1.1 AGRISETA Priorities identified in the SSP AGRISETA in its SSP listed the following areas as priorities for skills development. It might be noted that while these 19 areas may be priorities, they cover a scope too wide to allow for focus or concentration of effort and resources: Development of general human capacity as basis for sectoral growth Ability and willingness to learn (employees and staff of both commercial and emerging enterprises) Increased educational levels as platform for further capacity building and lifelong learning and development initiatives Management and agri business skills to increase profitability and viability and address agri BBBEE targets: Specifically target land reform beneficiaries and emerging farmers and enterprises Upgrade Extension Officers to services above target groups Increase efficiency of commercial enterprises Target BEE candidates for development Develop readiness, ability and capacity of sector to realise global market opportunities: Meet international food safety standards Develop export readiness and capacity Markets and marketing knowledge and skills Direct FET and HET providers to produce relevant researchers, technicians and technologists Guide and direct the Provider Sector to offer relevant programmes (focused on scarce and critical skills) and of the required quality: Specific focus on skills needs of ASGISA projects and programmes Address identified scarce skills of DoA and the agri sector at large – JIPSA priorities Through Centres of Excellence render specialised, high quality training Address production skills needs of especially emerging farmers Address technical and maintenance skills needs of especially secondary subsector This analysis culminated in a list of 26 Scarce Skill Occupational Categories for the period 2006 to 1020 registering a total scarcity of 724 485. Over 600 000 of these are seem to be against skills pegged between NQF 1 and 4, with almost 400 000 at levels 1-3. Given the length of SSP focus lists as well as that of scarce skills, it is difficult to make any comment on the match between the former and the latter. In addition, no information was reported against registrations or completion of learning against actual occupations making any form of analysis beyond a review of the plan impossible. 15.1.1.2 Qualifications achieved against identified scarce skills This analysis was not possible in terms of the data available. DRAFT – not for circulation 161 15.1.1.3 Equity Achievements Training against equity targets gives no data for black learners; indicates good performance against gender and poor progress against disability. The latter may to some extent be explained by the nature of much of the work in the sector. AGRISETA: Learner Equity Profile 90% 85% 80% 70% 60% 54% 50% 46.37% Target Achievements 40% 30% 20% 10% 4% 1.18% 0% % Black % Female % Disabled Figure 46: AGRISETA Learner Equity Profile 15.1.2 15.1.2.1 BANKSETA Priorities identified in the SSP The BANKSETA in its SSP analysed a need to focus skills development in the following areas: • • • • • • Information technology Management and leadership Customer interface Specialist finance Legislation compliance Re-skilling or up-skilling employees to meet the competencies required of a highly skilled context. This analysis culminated in a list of 15 Scarce Skill Occupational Categories for the period 2007 to 2008 registering a total scarcity of 987. All of these scarce skills are at higher education levels on the NQF (5-8) indicating that interventions should be focused largely on bursaries. This is in line with the analysis of upgrading employees in a high-end skill market. Most registrations for training did indeed take place in the higher education band and against predicted scarce skills. Of these, the majority were in management occupations whilst at least 6 areas of predicted scarce skill showed no training. In total 2202 learners are recorded as having achieved qualifications over the 6-year period reviewed. Of these 84% were against scarce skills. This would reflect a very good performance. DRAFT – not for circulation 162 15.1.2.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills. BANKSETA 16.69% % Scarce Skills % Not Scare Skills 83.51% 15.1.3 Equity Achievements Training against equity targets indicates poor achievement against race and very poor achievement against disability targets. Gender targets, however, reflect overachievement. The latter may be a reflection on traditional gender employment patterns in the banks. BANKSETA: Learner Equity Profile 90% 85% 81.27% 80% 70% 60% 54% 50% 45.80% Target Achievements 40% 30% 20% 10% 4% 0% % Black % Female % Disabled Figure 47: BANKSETA Learner Equity Profile 15.1.4 15.1.4.1 CETA Priorities identified in the SSP CETA in its SSP analysed a need to focus skills development in the following areas: Attracting the best school leavers to build the professions Unlocking sustainable skills formation and the development of the professions. Improving academic and research capabilities. Addressing inadequate management systems and capacity, particularly of public sector Supporting the Construction Transformation Charter DRAFT – not for circulation 163 Improving procurement practices This analysis culminated in a list of 46 Scarce Skill Occupational Categories for the period 2006 to 2010 registering a total scarcity of 33450. These skills occupy various education levels on the NQF ranging from 2 up to 8. Actual training, over a five-year period, reflects that of 7416 registrations for qualifications only 1595 were against scarce skills. This is 22%. This reflects a very poor performance. Of the 46 occupations listed, 34 reflect no registration of learners. Of the total scarce skills listed 13 700 or 40% were listed as being in the higher education band. Less than 400 registrations actually took place in this NQF band. 15.1.4.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills. CETA 21.51% % Scarce Skills % Not Scarce Skills 78.49% 15.1.4.3 Equity Achievements CETA did not report on equity achievement against targets. 15.1.5 15.1.5.1 CHIETA Priorities identified in the SSP CHIETA in its SSP analysed a need to focus skills development in the following areas: Areas of active investment promotion Initiatives to encourage enrolment of students into high-level research degrees Addressing the lack of significantly large numbers of successful and thriving entrepreneur-driven Small Micro and Medium Enterprises (SMME) Supporting industry alignment with Higher Education Institutions This analysis culminated in a list of 74 Scarce Skill Occupational Categories for the period 2005 to 2010 registering a total scarcity of 11277. These scarce skills range across all of the education levels on the NQF. DRAFT – not for circulation 164 Of the 7755 learners achieving qualifications, 6034 or 78% were against areas designated as scarce skills. This reflects a very good performance. In addition to this, the majority of learners registered in qualifications appear to complete them. However, 53 of the 74 scarce skill occupations showed no registrations at all. Although there is a seemingly high pass rate when looking at learnerships and qualifications, the NSDS Targets and Achievements reported by the CHIETA reveal that the number of workers who enter learning programs versus those who actually complete them is low. People who enter ABET 4 learning programs versus those who complete programs is 1601 versus 122, suggesting that completion rates drop significantly at lower levels on the NQF. 15.1.5.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills CHIETA 22.19% % Scarce Skills % Not Scarce Skills 77.81% 15.1.5.3 Equity Achievements Training against equity targets indicates very good achievement against race targets, good achievements against gender targets and good performance against disability targets. CHIETA: Learner Equity Profile 90% 85% 84.63% 80% 70% 60% 54% 50% Target Achievements 40% 34.52% 30% 20% 10% 4% 2.49% 0% % Black % Female % Disabled Figure 48: CHIETA Learner Equity Profile DRAFT – not for circulation 165 15.1.6 15.1.6.1 CTFL SETA Priorities identified in the SSP The CTFL SETA in its SSP analysed a need to focus skills development in the following areas: Technical needs, including operation of machinery (multi-skilling), maintenance of machinery, developing and using technology, improving product development Production needs, including improving quality, implementing continuous improvement processes skills, working with teams Business\management needs, including managing the business strategically, planning and managing resource utilisation, developing marketing and sales skills, developing entrepreneurial flair Other (including social skills requirements) such as confronting aids, improving literacy and numeracy, understanding the pipeline and complying with legislation. This analysis culminated in a list of 7 Scarce Skill Occupational Categories for a period of 1 year. All of these scarce skills are between NQF levels 4 - 6. No figures were submitted for need against these occupations. In total 382 learners are recorded as having completed training in scarce skill occupations over the 1 year period reviewed whereas total training for the period is 4283 learners. Training against scarce skills represents 9%. This must reflect as very poor performance. The only training done relating to scarce skills was that supported by bursaries. All learnerships that were run were run at a level lower than that required for scarce skills (NQF 2). 15.1.6.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills CTFL 8.92% % Scarce Skills % Not Scarce Skills 91.08% DRAFT – not for circulation 166 15.1.6.3 Equity Achievements No data were submitted for equity achievements. 15.1.7 15.1.7.1 ESETA Priorities identified in the SSP The ESETA in its SSP analysed a need to focus skills development in the following areas: Technical Management Finance Information & communication technologies This analysis culminated in a list of 11 Scarce Skill Occupational Categories for the period 2007 to 2008 registering a total scarcity of 238. All of these scarce skills are against NQF levels 5-6 or higher education. Registrations for qualifications against scarce skills is 11,84% comprising a very poor performance. It is interesting to note that the only artisan listed as scarce is electrician. All learnerships managed are at NQF level 2-4 and thus appear to be below the scarce skills list. Thus the training that is reported relating to scarce skills all comes from the apprenticeships 57. 15.1.7.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills ESETA 27.13% % Scarce Skills % Not Scarce Skills 72.87% 57 It is noted that there may be some electrical Learnerships that lead to artisan status as there has been some alignment in this sector, however this is not reported and so has not been included in the scarce skills table. Even taking this into account this will not significantly impact on the percentage indicated here. DRAFT – not for circulation 167 15.1.7.3 Equity Achievements Training against equity targets indicates overachievement against race targets. Very poor results are recorded for gender as well as disability achievements. ESETA: Learner Equity Profile 100% 90% 85% 86.55% 80% 70% 60% 54% Target 50% Achievements 40% 30% 20% 12.88% 10% 4% 0% 0% % Black % Female % Disabled Figure 49: ESETA Learner Equity Profile 15.1.8 15.1.8.1 ETDP SETA Priorities identified in the SSP The ETDPSETA in its SSP analysed a need to focus skills development in the following areas: Supporting teaching, assessment, curriculum and managerial skills attached to – o early childhood development o schooling o further education and training o higher education and training o work-based education and training Supporting the growth of education and training SMEs This analysis culminated in a list of 28 Scarce Skill Occupational Categories for the period 2006 to 2010 registering a total scarcity of 90918. These scarce skills are at education levels on the NQF (1-8) with the majority being at (4-8) or higher education. Many of the occupations listed are not specifically education or training occupations. The data provided is limited to certain programmes and it therefore likely that this has skewed the analysis. 100% of the courses reported as registered relates to 2 of the Scarce Skill Occupational Categories. The other 25 occupations do not have any DRAFT – not for circulation 168 learners registered against them either signifying that perhaps they are not after all scarce skills or that the SETA has not reported all its data (which seems likely as the learnership data is not provided against programmes and these may be in certain of the scarce skill occupational categories. In total 5982 learners are recorded as having achieved qualifications over the 1 year period reviewed. All of the qualifications awarded (endorsed) were at an NQF level 4/5 representing a high enough level to address the scarce skills need identified by the SETA; giving a 100% training in the scarce skills occupations over a 1 year period. This implies very good performance. Further, there are also programmes that have been run against unit standards such as assessor training that is not included in the scarce skills needs training. 15.1.8.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills ETDP 0% % Scarce Skill % Not Scarce Skills 100% 15.1.8.3 Equity Achievements Training against equity targets indicates poor achievement against race and very poor against disability targets but overachievement against gender targets. The latter may be a reflection on traditional gender employment patterns in the profession. ETDP: Learner Equity Profile 90% 85% 80% 70% 58% 60% 54% 50% Target Achievements 39% 40% 30% 20% 10% 4% 0% % Black % Female % Disabled Figure 35: ETDP SETA Learner Equity Profile DRAFT – not for circulation 169 15.1.9 15.1.9.1 FASSET Priorities identified in the SSP The FASSET in its SSP analysed a need to focus skills development in the following areas: Developing professionals, technicians and associated professionals Supporting employment equity Supporting the supply of accountants to the market Supporting initiatives that lead to the development of new employment opportunities Promoting a national standard of good practice This analysis culminated in a list of 14 Scarce Skill Occupational Categories registering a total scarcity of 1671. Most of these were in the higher education band with only a scarcity of 40 being reported in occupations exclusively within the FET band. Only 2 of the occupations appear to be exclusively in the domain of FASSET with the others appearing to be more generic occupations fitting elsewhere. Again, it seems unlikely that a number of the listed occupations are in fact scarce skills. For example, clerks and general level assistants are included here. Most registrations for training against qualifications took place in the higher education band. Of these, the majority were in management occupations whilst at least 12 areas of predicted scarce skill showed no training. In total 1197 learners are recorded as having achieved qualifications over the 5-year period reviewed. Of these 100% were against scarce skills reflecting an excellent performance. In total 4308 learners are registered for learnerships, and 2502 have completed in 05/06. Qualifications recorded are those whereby only FASSET is the ETQA. FASSET also funds social development projects of which 560 learners benefit. These figures are not taken into account in the picture provided. 15.1.9.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills FASSET 0.78% % Scarce Skills % Not Scarce Skills 99.63% DRAFT – not for circulation 170 15.1.9.3 Equity Achievements Training against equity targets indicates poor achievement against race and very poor against disability targets. On the other hand excellent achievement against gender targets is recorded. Again, this may be to do with traditional employment practices in the sector and also reflect the level of where the scarce skills training is taking place. The social development projects also need to be considered when developing an overall equity picture. FASSET: Learner Equity Profile 90% 85% 80% 70% 60% 54% 50% 47% Target Achievements 40% 35% 30% 20% 10% 4% 0% 0% % Black % Female % Disabled Figure 51: FASSET Learner Equity Profile 15.1.10 15.1.10.1 FIETA Priorities identified in the SSPs FIETA in its SSP analysed a need to focus skills development in the following areas: ABET Supervisory Management Skills Planning, developing, implementing and monitoring skills Information Technology skills Assessing, mentoring and coaching skills SDF skills Entrepreneurial skills This analysis culminated in a list of 49 Scarce Skill Occupational Categories for the period 2001 to 2004. Total registrations for training over this period were 48308 of which none were in the scarce skills area. In other words, no training registration took place in any of the 49 occupations. This clearly reflects a very poor performance. Even taking this into account, the list itself must be held in some scepticism, since among scarce occupations it lists occupations where it is unlikely that there are scarce skills, such as forestry workers and storemen. DRAFT – not for circulation 171 15.1.10.2 Qualifications achieved against identified scarce skills This analysis was not possible in terms of the data available. 15.1.10.3 Equity Achievements Training against race equity targets indicates over-achievement. Training against gender targets indicates poor achievement, while training against disability targets indicates no achievement at all. FIETA: Learner Equity Profile 120% 98% 100% 85% 80% Target 60% Achievements 54% 40% 26% 20% 4% 0% % Black % Female % Disabled Figure 52: FIETA Learner Equity Profile 15.1.11 15.1.11.1 FOODBEV SETA Priorities identified in the SSP FOODBEV SETA in its SSP analysed a need to focus skills development in the following area: Increasing the supply of industry specific, technical occupations (including employees at management level) This analysis culminated in a list of 18 Scarce Skill Occupational Categories required between 2007 and 2010, registering a total scarcity in 2007 proved to total 3332 learners. These range from levels 1-8 on the NQF. The realism of this list seems in some doubt for a number of reasons: NQF levels are not recognised correctly; for example, farm managers at NQF 1 level. Managers cannot be at level 1. Farm, forestry and garden workers are listed as a scarce skill, while the number given as need between now and 2010 is 168 The figure for hospitality workers is for the occupation of watrons and a need is declared for only 40 by 2010 Under Engineering, ICT and Science Technicians, there is a need of 2 ICT and telecommunications technicians by 2010 Both of the latter categories fall outside of the ambit of the SETA DRAFT – not for circulation 172 Of a total of 3266 learners registered for qualifications, 98% were against scarce skills. This suggests very good performance. 11 out of 18 areas of predicted scarce skill showed no training. The majority of training occurring at NQF level 3; in the factory process workers Manufacturing and Assembly occupational group. In total 896 learners are recorded as having achieved qualifications after the 5 year training period. Of these 100% were against scarce skills. 15.1.11.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills FOODBEV 1.33% % Scarce Skills % Not Scarce Skills 98.67% 15.1.11.3 Equity Achievements Equity achievements reflect an overachievement against race and excellent achievement against gender, but a very poor achievement against disability. FOODBEVSETA: Learner equity Profile 100% 91.36% 90% 85% 80% 70% 60% 54% 53.83% Target 50% Achievements 40% 30% 20% 10% 4% 0.01% 0% % Black % Female % Disabled Figure 53 FOODBEV Learner Equity Profile DRAFT – not for circulation 173 15.1.12 15.1.12.1 HWSETA Priorities identified in the SSP HWSETA SETA in its SSP analysed a need to focus skills development in the following area: Supporting the Departments of Health and Social Development and their provincial counterparts in providing human resources for the public health and social welfare systems Generally supporting the education and training across the sector Building the supply of black managers Supporting Government roll out of state access to communities This analysis culminated in a list of 36 Scarce Skill Occupational Categories for the period 2005 to 2009 registering a total scarcity that reaches above 150 000. The lowest of these skills is at an education level of 4 on the NQF while the highest is at level 7. This places need firmly within the higher education band. There are some questions with regard to the list such as the listing of fundraisers as a scarce health and welfare skill and the listing of ABET as an occupation. Actual training over a one-year period reflects that of 3507 registrations for qualifications, 2565 were against scarce skills. This amounts to 73% and reflects a good to very good performance. However, 30 of the 36 scarce skill occupations reflect no registration for learning against them. 15.1.12.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills HWSETA 26.86% % Scarce Skills % Not Scarce Skills 73.14% 15.1.12.3 Equity Achievements Training against equity targets indicates an overachievement against race targets, a very large over achievement in gender related targets and poor disability target achievements. The gender achievements may reflect traditional employment patterns in the sector. DRAFT – not for circulation 174 HWSETA: Learner Equity Profile 100% 90% 85% 88.70% 87.11% 80% 70% 60% 54% Target 50% Achieved 40% 30% 20% 10% 4% 1.62% 0% % Black % Female % Disabled Figure 54: Learner Equity Profile 15.1.13 15.1.13.1 INSETA Priority Skills Identified in the SSP INSETA in its SSP analysed a need to focus skills development in the following areas: Meeting sector replacement demand Supporting sector professionalisation and higher skills levels are required Meeting equity goals in the managerial and professional categories in support of the Financial Sector Charter. This analysis culminated in a list of 29 Scarce Skill Occupational Categories for the period 2006 to 2007, registering a total scarcity of 4110. These range from NQF levels 3 to 8. The INSETA reports that there are a total of 784 learners that are recorded as being registered. In separate data provided by SAQA, it was stated that a total 36 learners are registered on the NLRD as having achieved qualifications. SAQA reports that they have no data available on enrolment and so the accuracy of this data cannot be commented on or compared. No learners are reported as having achieved qualifications in areas designated as scarce skills occupations. In other words, for the 29 occupations there were no registrations for learning. This indicates very poor performance in this area. 15.1.13.2 Qualifications achieved against identified scarce skills This analysis was not possible in terms of the data available. DRAFT – not for circulation 175 15.1.13.3 Equity Achievements Training against equity targets indicates excellent achievement on race but zero achievement in both gender and disability targets. This reflects very poor performance. INSETA: Learner Equity Profile 90% 85% 79.20% 80% 70% 60% 54% 50% Target Achievments 40% 30% 20% 10% 4% 0 0 0% % Black % Female % Disabled Figure 55: INSETA Learner Equity Profile 15.1.14 15.1.14.1 ISETT SETA Priority Skills Identified in the SSP ISETT SETA in its SSP analysed a need to focus skills development in the following area: ‘Soft Skills’ identified including ICT Management and Sales skills. ICT management skills include project management, and sales skills includes business development and entrepreneurship skills High need for technical support and testing skills as well as a high need for applications development skills This analysis culminated in a list of 30 Scarce Skill Occupational Categories for the period 2006 to 2007 registering a total scarcity of 21097. These skills range across all levels of the NQF from 1-8. The list is, however, open to some question. NQF levels are not correctly reflected with trainers (1-8), managers (1-8) and electronics engineers (1-7) being some examples. The SETA has provided no reporting data on registrations or completions against specific programmes and only reports that as from March 2003 6219 learners completed their studies and 90 were not successful. Of those who completed, the SETA reports that 1155 are permanently placed or self-employed, while 2224 are studying further. 15.1.14.2 Qualifications achieved against identified scarce skills This analysis was not possible in terms of the data available. DRAFT – not for circulation 176 15.1.14.3 Equity Achievements The SETA reported no equity data and no comment can thus be made on equity achievement 15.1.15 15.1.15.1 LGSETA Scarce Skills Achievements Against Planning LGSETA in its SSP analysed a need to focus skills development in the following areas: Leadership, management and supervisory development ‘Platform’ qualifications (similar to what are referred to in other contexts as ‘ gateway’ qualifications) covering core competencies required for local government career paths Municipal transformation and Institutional development Municipal Financial Viability and Management Basic Service delivery and infrastructure: engineering (both civil and electrical), engineers, technologists, technicians and artisans, municipal health (including sanitation and waste) and emergency services Good governance: Councillor induction and development Local Economic Development This analysis culminated in a list of 18 Scarce Skill Occupational Categories for the period 2006 to 2007, registering a total scarcity of 20480. While the scarce skills span the NQF, the majority are listed in higher education (NQF 5-6). This list does, however, contain skills programmes, which by definition cover critical rather than scarce skills, although this SAQA data suggests that learners who completed these programmes attained qualifications. For this reason, these learners are counted as a contribution towards scarce skill occupations. Of 3789 learners registered over the five-year period 58, 2292 or 60% are against scarce skills. This reflects a good performance. 14 of the 18 scarce skills areas reflect no learners registered against them. Of 3789 learners achieving qualifications 689 or 58% of the learners achieved qualifications in areas designated as scarce skill areas. 58 All learnership data contributing to these figures are from SAQA records. DRAFT – not for circulation 177 15.1.15.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills LGWSETA 39.51% % Scarce Skills % Not Scarce Skills 60.49% 15.1.15.3 Equity Achievements The SETA reported no equity data and no comment can thus be made on equity achievement. 15.1.16 15.1.16.1 MAPPP SETA Priority Skills Identified in the SSP MAPPP SETA in its SSP analysed a need to focus skills development in the following areas: Ensuring a sufficient number of new entrants to the labour market. Addressing skills gaps and preventing them from occurring. Promoting career progression. Increasing the number of women and people with disabilities in the sector. Overcoming the institutional factors that limit the supply of skills to the sector. This analysis culminated in a list of 16 Scarce Skill Occupational Categories for a period of four years registering a total scarcity of 5372. These skills range between levels of 1-7 on the NQF. MAPPP SETA provided no data on any categories of registration or completion against scarce skills. Nor is it reported as having provided any data to SAQA. 15.1.16.2 Qualifications achieved against identified scarce skills This analysis was not possible in terms of the data available. 15.1.16.3 Equity Achievements The SETA provided no data for equity reporting and it is thus not possible to make any comment on equity performance. DRAFT – not for circulation 178 15.1.17 MERSETA SETA 15.1.17.1 Scarce Skills Achievements Against Planning MERSETA in its SSP analysed a need to focus skills development in the following areas: Scarce skills in the sector relating to advancing technology, production processes and new-generation machinery Mechanical, electrical, industrial and specialist engineers. Black engineers Multi-skilled and specialist technicians Supervisors and quality control personnel skills Specialised managers Higher education enrolments This analysis culminated in a list of 48 Scarce Skill Occupational Categories for a period of one year registering a total scarcity of 6574. These skills range between levels 1-7 on the NQF. Of the 48 scarce skill areas, 22 of them showed no registrations of learners. Of the 44570 total registered training, 27546 were in scarce skill occupation. This represents 62% or a good performance. The total number of learners completing training over a 5-year period was 26172. Of these, 19328 were training in scarce skills occupation. 59 Total learnership enrolments were 15154 and completions were 5768 (38% pass rate). 15.1.17.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills MERSETA 26.15% % Scarce Skills % Not Scarce Skills 73.85% 59 Note that the scarce skills list is taken from the SSP 2005 – 2010 31 October 2005 version. Data used is from periods 1 January 2001 to 6 November 2006. It includes: Section 13 and Section 28, ATRAMI, CBMT and Learnerships. Registered figures include all learners enrolled (current and previous) and completed includes all those learners that completed within the time period. In addition, the scarce skill occupations that were not included in the SSP Oct 2005 and were in the updated version were included, but needs numbers were not available DRAFT – not for circulation 179 15.1.17.3 Equity Achievements Race equity targets over-achieved while gender achievement reflects the top end of poor verging on good performance. Disability targets were not met but reached 50% of target, which is a good performance and one of the highest achieved by any SETA. MERSETA: Learner Equity Profile 100% 94.22% 90% 85% 80% 70% 60% 54% Target 50% Achievements 40% 30% 26.51% 20% 10% 4% 2% 0% % Black % Female % Disabled Figure 56: MERSETA Scarce Skills Achievements Against Needs 15.1.18 15.1.18.1 MQA Priority Skills Identified in the SSP MQA in its SSP analysed a need to focus skills development in the following areas: Supporting the transformation of the Sector Improving Health and safety Developing the current workforce & new entrants to the labour market Stimulating new enterprise development in the Sector Facilitating the transition from employment in the MMS to employment elsewhere in the economy This analysis culminated in a list of 51 managerial and 17 clerical and administrative Scarce Skill Occupational Categories 60 registering a total scarcity of 12809. Managerial scarce skills range between NQF levels 3-7, while clerical and administrative scarce skills are at lower levels; 1-5. It seems unlikely that al 51 listed categories reflect scarce skills in the sector: general clerks for example are unlikely to be scarce skills in the South African labour market. Actual training over a five-year period reflects that of 4922 registrations for qualifications, only 1111 were against scarce skills (23%). This comprises a very poor performance. Of the 68 occupations listed as scarce, registrations of learners took place against only 16 categories. Of 1140 achieving qualifications, 673 or 59% were against areas designated as scarce skills. 60 Learnership Data from Scarce & Critical skills analysis: Dated August 2004 --- is captured in the Scarce Skills list while the Total figures have updated numbers incorporating the new registrations and completions from 05-06 Graduate Development Program and Bursaries are current 05 - 06 from AR DRAFT – not for circulation 180 15.1.18.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills MQA 22.57% % Scarce Skills % Not Scarce Skills 77.43% 15.1.18.3 Equity Achievements The SETA provided no data for equity reporting and it is thus not possible to make any comment on equity performance. 15.1.19 15.1.19.1 PSETA Priority Skills Identified in the SSP PSETA in its SSP analysed a need to focus skills development in the following areas: Ensure a continuing supply in the professional occupational categories required by Government Improving the racial profile of senior management Assisting departments to develop support strategies for SMEs which work in partnership with Government Assisting employees affected by restructuring to become entrepreneurs This analysis culminated a list of 13 occupations classified as scarce skills. Of the 13 occupations listed as scarce, 11 have no learners registered against them. 3050 learners registered for training over a 1-year period. Of these learners, 516 or 17% were registered against scarce skills. This reflects a very poor performance. The SETA submitted no data on completions. DRAFT – not for circulation 181 15.1.19.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills PSETA 16.92% % Scarce Skills % Not Scarce Skills 83.08% 15.1.19.3 Equity Achievements Training against equity targets indicates very good achievement against race. No data was provided by the SETA against gender or disability targets. PSETA: Learner Equity Profile 90% 85% 80% 70% 67.82% 60% 54% 50% Target Achievements 40% 30% 20% 10% 4% 0 0 0% % Black % Female % Disabled Figure 57: PSETA Learner Equity Profile 15.1.20 15.1.20.1 SASSETA Priority Skills Identified in the SSP SASSETA in its SSP analysed a need to focus skills development on a wide range of areas covering its constituent sub-sectors: Policing Private security Legal, justice Correctional service Defence Intelligence This analysis culminated in a list of 8 Scarce Skill Occupational Categories, registering a total scarcity of 1265. These scarce skills range across the whole NQF. No numbers are given for occupations. 5 areas of predicted scarce skill showed no training. DRAFT – not for circulation 182 In total, 1312 learners are recorded as having registered against scarce skills qualifications over the 5-year period reviewed. Of these, 96% were against scarce skills, reflecting a very good to excellent performance. 95 learners achieved qualifications over the 5-year period reflecting a 100% match with scarce skills. This should reflect as a very good performance but it is unlikely that a throughput rate of on average 14 learners a year can be described as anything other than disappointing. 15.1.20.2 Qualifications achieved against identified scarce skills This analysis was not possible in terms of the data available. 15.1.20.3 Equity Achievements No data was submitted by the SETA for training against race or equity. Training against gender targets reflects a good performance. SASSETA: Learner Equity Profile 90% 85% 80% 70% 60% 54% 50% Target Achievements 40% 29.13% 30% 20% 10% 4% 0% % Black % Female % Disabled Figure 58: SASSETA Learner Equity Profile 15.1.21 15.1.21.1 SERVICES SETA Priority Skills Identified in the SSP SERVICES SETA in its SSP analysed a need to focus on skills development in the following areas: Leaner interventions Expanding SME and CPD initiatives Sector research Learnerships Consolidation of associations and broadening of scope Marketing and advocacy Private public partnerships Quality assurance and partnerships with providers Literacy interventions Wellness assistance DRAFT – not for circulation 183 Transformation RPL This analysis culminated in a list of 14 Scarce Skill Occupational Categories, registering a total scarcity of 56 665. These range across the whole NQF from 1-8. No data on registrations or on completions were provided by the SETA. 15.1.21.2 Qualifications achieved against identified scarce skills This analysis was not possible in terms of the data available. 15.1.21.3 Equity Achievements SERVICES SETA did not report on equity achievement against targets. 15.1.22 15.1.22.1 TETA Priority Skills Identified in the SSP TETA SETA in its SSP analysed a need to focus skills development in the following areas: Prioritising and communicating critical skills for sustainable growth, development and equity. Prioritising and communicating critical skills for sustainable growth, development and equity. Promoting and accelerating quality training for all in the workplace. Promoting employability and sustainable livelihoods through skills development. Assisting designated groups, including new entrants to participate in accredited work, integrated learning and work-based programmes to acquire critical skills to enter the labour market and self-employment. Improving the quality and relevance of provision This analysis culminated in a list of 118 Scarce Skill Occupational Categories, registering a total scarcity of 5663. These scarce skills range from NQF 1 to NQF 6. This list must be viewed with some scepticism, however. Apart from its obvious length, it lists the following somewhat unlikely scarce occupations: Seafood farmers of which there is a need for 10 over the coming year Vehicle painters, 25 Fishing hands, 100 Handy persons, 29 The SETA did not report on either registrations or completions against scarce skills. It is thus impossible to make any skills-related comment regarding the 4490 learners registering for, and the 316 learners completing, qualifications over a 5-year period. It is possible to state that a total of 316 learners completed qualifications over a 5year period (80 per year). DRAFT – not for circulation 184 15.1.22.2 Qualifications achieved against identified scarce skills This analysis was not possible in terms of the data available. 15.1.22.3 Equity Achievement The SETA submitted no equity data for the 5-year period. 15.1.23 THETA 15.1.23.1 Priority Skills Identified in the SSP THETA in its SSP analysed a need to focus skills development in the following areas: Supporting the 2010 World Cup Supporting the Tourism Organising Plan Increasing ABET Supporting SMEs to grow tourism Increasing the supply of specialists in support of sub-sector growth This analysis culminated in a list of 24 Scarce Skill Occupational Categories for the period 2007 to 2008 registering a total scarcity of 134301. This list must, however be viewed with some scepticism. It contains the following occupations, which seem unlikely to satisfy the genuine definition of scarce, and in some cases cannot be considered an occupation: o o o o o Waitresses and ward hostesses ABET which is not an occupation Table dealers Car rental agents and account clerks Volunteers of which there is a shortage of 100 000 No data were provided by the SETA for registrations against scarce skills. In total 3159 learners are recorded as having achieved qualifications over a 5 year period. Of these 2744 were against scarce skills (87%), which reflect a very good performance. 15.1.23.2 Qualifications achieved against identified scarce skills Where blue represents the percentage of qualifications achieved against the identified scarce skills THETA 13.14% % Scarce Skills % Not Scarce Skills 86.86% DRAFT – not for circulation 185 15.1.23.3 Equity Achievement The SETA submitted no data on equity achievements and consequently no comment can be made. 15.1.24 15.1.24.1 WRSETA Priority Skills Identified in the SSP WRSETA in its SSP analysed a need to focus skills development in the following areas: Supporting growth by ensuring occupations in expanding market areas Developing managers, administrators, service workers, sales workers, craft workers, and plant and machine operators. Increasing basic literacy and numeracy in the sector This analysis culminated in a list of 15 Scarce Skill Occupational Categories over a period of 5 years registering a total scarcity of 40000. These range from NQF 3 to 6 and much of the scarcity listed is against the higher education band. The SETA reported no data for registered or completed learners against scarce skills. 15.1.24.2 Qualifications achieved against identified scarce skills This analysis was not possible in terms of the data available. 15.1.24.3 Equity Achievements Training against equity targets indicates over-achievement against race and gender targets reflecting excellent performance in these areas. Disability achievement, however, is very poor. WRSETA: Learner Equity Profile 90% 85% 85.69% 80% 70% 60% 54% 55.15% 50% Target Achievements 40% 30% 20% 10% 4% 0.27% 0% % Black % Female % Disabled Figure 59: WRSETA Learner Equity Profile DRAFT – not for circulation 186 15.1.25 Overarching analysis The summary provides an overarching analysis of the qualifications delivered against scarce skills identified bv the SETA in the following terms: very good, good to fair, poor and very poor. As stated, registrations have been used as the indicator against which to conduct the review. The reasons for this were provided in the introduction to this section. It should be noted that SETAs are rated in terms of the percentage training against qualifications that were supported by the SETA that are in scarce skill occupational areas. The tables below provide a summary of the ratings provided in terms of extent that each of the SETAs was able to address scarce skills (although it should be noted that this is self-referencing as there is no external verification process to determine whether these are credible scarce skills), and then in terms of the extent that the SETA addressed equity targets (again this is in terms of SETA targets rather than the actual population of the sector which clearly impacts on the ability of the SETA to realise certain targets). These are then provided in a weighted table which takes into account the credibility of the planning processes as outlined in the Chapter 10 which explored the veracity of the planning methodologies Review of outputs Seta Rating Rating (%) AGRISETA - BANK SETA 4 100 CETA 1 25 CHIETA 4 100 CTFL 1 25 ESETA 1 25 ETDP SETA 4 100 FASSET 4 100 FIETA 1 25 FOODBEV 4 100 HWSETA 3.5 87.5 INSETA 1 25 ISETT - LGSETA 3 MAPPP - MERSETA 3 75 MQA 1 25 PSETA 1 25 SASSETA 3 75 SERVICES - TETA - THETA 4 WRSETA - 75 100 Figure 60: Summary of Ratings for Qualifications provided against Scarce Skills DRAFT – not for circulation 187 Rating SETA Race Gender Disability Total Percentage achieved 2 3 2 63 4 1 58 4 3 3 83 ESETA 4 1 1 50 ETDP SETA 2 4 1 58 FASSET 2 4 1 58 FIETA 4 2 1 58 FOODBEV 4 4 1 75 HWSETA 4 4 2 83 INSETA 4 1 1 50 4 2.5 3 79 AGRISETA BANK SETA CETA CHIETA CTFL ISETT LGSETA MAPPP MERSETA MQA PSETA 3 75 SASSETA 3 75 SERVICES TETA THETA WRSETA 4 4 1 75 Figure 62: Summary of Ratings for Achievements Against Equity The figure below provides an indication of the sources used for the data pertaining to learner equity profiles as indicated above and the sections that follow below. Seta Source Source AGRISETA Training records BANKSETA Training records Skills Programmes & Learnership Skills Programmes & Learnership CETA CHIETA NR NSDS CTFL ESETA NSF Project closure report NSDS ETDP AR 05/06 FASSET NSDS FIETA FOODBEV AR 05/06 NSDS HWSETA INSETA AR 05/06 SSP Update 07/08 31 Aug 06 ISSET LGSETA MAPP MERSETA NR NR NR NSDS 05/06 DRAFT – not for circulation Enrolled/ Completed Enrolled Enrolled Period 1 April 2005 – 31 December 2005 Current as at Nov 2006 Training Programmes NSF Learnerships Completed 05/06 Enrolments 05/06 Training Programmes All learning programmes Training Programmes Learnerships Training Programmes Learnerships Learnerships Completed 05/06 Completed 05/06 Completed 05/06 Enrolled Completed 05/06 05/06 Enrolled Registered 05/06 2005 Completed 05/06 for quarter ending March 06 Training programmes 188 MQA PSETA SASSETA SERVICESSETA TETA THETA WRSETA DNA AR 05/06 Apprenticeship data collected from Seta NR AR 05/06 NR SSP Update November 2006 Learnerships Apprenticeships Registered Registered 05/06 To date Training Programmes Completed 05/06 Training programmes Completed 05/06 Figure 63: Data Sources for Equity Tables 15.1.25.1 Planning Rating The ratings for the SSPs are based on 3 factors, namely, an SSP Review, Output Achievements, and BBBEE Target Achievement. The SSP Review comprises of 10 different issues that are analysed per SETA. Each issue is then given an internal weighting of importance within SSP Review. Externally, that is when compared along side the outputs and BBBEE achievements, the SSP review is giving a weighting of 3. Outputs and BBBEE achievements are both given a weighting of 1 each. Ratings for the SSP Review, Output Achievements and BBBEE Target Achievements were as follows: 4: very good 3: good 2: poor 1: very poor The ratings shown for the SSP Review have the internal weighting incorporated, thus the ratings per issue differ. The weighting applied per issue is indicated below each issue description. The weightings are based on a 4 point scale. The overall scorecard ratings were based on the SETAs achieving an average of A: 70 and above B: 60 – 69 C: 50 – 59 D: 40 – 49 E: Below 40 Seta Review of Planning Process Qualifications provided against scarce skills BBBEE Score for Planning AGRISETA 59 - 63 B BANK SETA 74 100 58 A CETA 66 25 - C CHIETA 64 100 83 A CTFL 88 25 - A ESETA 42 25 50 D ETDP SETA 69 100 58 A FASSET 75 100 58 A FIETA 52 25 58 D DRAFT – not for circulation 189 FOODBEV 66 100 75 A HWSETA 61 87.5 83 A INSETA 69 25 50 C ISETT 62 - - B LGSETA 51 75 - C MAPPP 29 - - E MERSETA 50 75 79 B MQA 84 25 - B C PSETA 63 25 75 SASSETA 51 75 75 B SERVICES 56 - - C TETA 63 - - B THETA 53 100 - WRSETA 63 75 Figure 64: Weighted table to determine planning rating B B 15.2 EMERGING ISSUES The data above largely speak for themselves and this last section will attempt simply to review apparent patterns in making some concluding observations. 15.2.1 Targets There is, in many cases, a clear disjuncture between NSDS targets, sector skills priorities and actual registrations for learning. This partly relates back to the problem raised in the planning section that NSDS targets are set in a top-down and somewhat numerically driven manner, with insufficient regard for sector structure or skills priorities linked to economic growth. These targets are, in addition, heavily ‘numbers driven’ and measure largely system output or processes rather than system impact. Alongside these targets are the quantified scarce skills needs, which are in danger of constituting a new set of numerical targets. Much of the work above has attempted to show that the current process of escalating bad numerical data up the system to achieve a shopping list of occupations with a number against each is an unprofitable exercise. More sophisticated system targeting might go a long way towards improving performance. 15.2.2 Scarce Skills Effectiveness As a concept, the notion of scarce skills is essential to focusing the skills system. The current use of the concept, however, produces some of the rather unfocused lists, as outlined in this chapter. The collectivisation of individual enterprise’s reported inability to attract or retain employees – be they farmhands, waiters or ICT professionals – does not constitute a sectoral or national skills shortage. Here the notions of relative and absolute scarcity should probably be revisited. Further, the scarce skills lists need to be overlaid with an analysis that considers labour market modelling models. SETA planning against scarce skills remains patchy as was illustrated by the diagrams contained in individual SETA reviews where this data was available. The above may be attributable to several factors: DRAFT – not for circulation 190 The most unlikely explanation is that scarce skills in the sector have changed dramatically over the last year or so and that a sizeable number of registrations for learning over the last five years were against occupations no longer experiencing a skills shortage. This would account for a mismatch between registrations and the current scarce skills list. Another explanation is that the list, collected in some cases in questionable ways, simply does not reflect real scarce skills in the sector. That being the case, a mismatch between the list and actual registrations would be a very healthy occurrence. While the lists undoubtedly reflect much too wide a range of occupations, it is unlikely that within this width, some real scarce skills are not included. Total mismatch or very low match between registrations cannot be a good sign. Another possibility strongly suggested by evidence in the system is that the SETA’s obligations to achieve NSDS targets in the service level agreements draw their focus away from scarce skills where NSDS and scarce skills targets do not gel. It is also possible that attempts to match registrations to scarce skills run into a resource problem and that there is not enough funding to cover all priorities. By definition, however, all skills, even if scarce cannot hold the same priority. There is evidence in the system of an inability at Government level, SETA level and enterprise level to imaginatively prioritise resources for skills development. An attempt to do everything for everyone is doomed. It is interesting to note that the Deputy President’s initiative is called the joint initiative on priority skills acquisition. Priority skills are perhaps a more useful planning concept or at least an additional stage in planning beyond scarce skills. It is conceivable that SETAs, in their attempts to meet numerical targets, are simply opting for the easiest training to manage without regard for its strategic importance to the sector. It is important to highlight that while in some cases the diagrams suggest very high level of effectiveness in terms of training against scarce skills, in some cases it may be that in certain cases the large number of occupations listed as scarce, as well as a possible listing of those skills as scarce in which training can take place has meant that the SETAs can perform against scarce skills even without addressing scarce skills. Another issue that needs to be highlighted in this section is the concern that the majority of interventions that appear to be addressing scarce skills are either bursary programmes or apprenticeships. This suggests that the interventions that are making an impact on scarce skills are all mechanisms that preceded the SDA. While this does not suggest that the other programmes do not add value, their relationship to these other programmes needs to be clarified if they are to contribute to the achievement of priority skills. 15.2.3 Equity Effectiveness As can be seen from the individual reviews above, there is variable but generally good progress towards meeting race and gender targets. With regard to race there seems to be little that would satisfactorily explain a failure to meet targets, since DRAFT – not for circulation 191 these are, after all, training targets and not sector composition targets. However, it may be that in some of the occupations the possible target group for training is already skewed in terms of race making it more difficult to meet race targets. This would highlight the imperative of programmes aimed at equity supporting access to these programmes, rather than in many cases focusing solely on lower level training in which there are few opportunities for either learning or access to the labour market. Poor gender performance may also, in some sectors or occupations, be a legacy of traditional employment profiles and may take some concerted programmes to overcome. Conversely, in certain sectors, such as health and welfare, gender targets were surpassed and once again, this may reflect the gender composition of the sector. Without exception, SETAs under-performed with regard to the disability targets that were set. The highest level reached against a target of 4% was 2% and most were dismally below this. It would appear from this data that people with disabilities remain largely excluded from South Africa’s national skills development system. Overall Equity Achievements 90% 85% 80% 75.96% 70% 60% 54% 50% 44.91% Target Achievements 40% 30% 20% 10% 4% 0.89% 0% % Black % Female % Disabled Figure 65: Overall Equity Achievements There is, however, another worrying aspect of equity effectiveness. SETAs are not required to report their equity achievements against occupational categories or against NQF levels. It is thus possible that certain equity targets may be met through the expedience of the easiest training for the target group. Worst case examples might include meeting much of the race target with ABET training, or gender target with low level clerical training in a sector where these are neither scarce nor massively employable skills. This would, in effect, be training for unemployment, as learners would very soon find themselves bumping into a glass ceiling of zero demand. It is recommended that SETAs be required to report their equity targets against the major 8 occupational categories and against NQF levels. 15.2.4 Reporting It is very clear from even the briefest perusal of this report that reporting across the skills system is shockingly desultory. From the Department of Labour through to SAQA to the SETAs, and even down into enterprises, there are failures in the reporting system. Key players, in many cases, simply do not fulfil their reporting obligations. Many enterprises fall into this category with regard to WSPs. Certain DRAFT – not for circulation 192 SETAs also fall into this category, failing to fulfil both their statutory and their system reporting obligations A number of factors may explain this system weakness: First and foremost is the pervasive reality that there are very few to no consequences for failing to fulfil an obligation to report. This report reviews such failures and the lack of consequence in many places; Reporting systems are not well conceptualised for their purpose and do not collect adequate data. For example, the gap in equity reporting is highlighted in the paragraphs above; Routine administration of data collection and management are not well managed. The NLRD has been in operation for some years, yet has such substantial gaps as to render some of it functions meaningless; The burden of reporting has not been taken into account in the design of systems and thus compliance is low or dysfunctional. Perhaps the most notable example of this is the minutely detailed workplace skills plans and annual training reports required of enterprises; The inability of key players in the system to manage knowledge may ‘blowback’ into dysfunctional data collecting methods and forward into inadequate reporting; and The concern, as highlighted elsewhere, that reporting is against outputs and there is little attempt to reconcile these with the achievement of indicators and more critically of the objectives of the SDA. Recommendations are made elsewhere in this report regarding ways in which to improve on reporting. 16 COMPANY PERCEPTIONS OF THE EFFECTIVENESS OF SKILLS DEVELOPMENT INITIATIVES While the previous section focused on whether SETAs supported programmes in areas that they had identified as scarce, as well as against equity targets, this section considers how company leaders (senior executives) and HR managers perceive the relevance of skills development initiatives. This sub-section briefly explores company responses to these issues. It should be noted that questions posed to company leaders and HR managers in this regard referred very broadly to skills development. The research questions did not attempt to elicit responses on SETA-specific skills development initiatives. Nonetheless, the questions assumed that high levels of SETA effectiveness in this regard would reflect in responses pertaining to skills development in general, since SETAs are the primary custodians of skills development in South Africa. RECRUITMENT AND SELECTION As one measure of the effectiveness of skills development initiatives, company HR Managers were asked to indicate whether or not their company experienced challenges with the recruitment of individuals, as per the company’s requirements. As indicated in the figure below, a full 88% of companies participating in the research DRAFT – not for circulation 193 process reported that they had difficulties recruiting qualified and competent individuals. Does your company have any difficulties recruiting qualifies & competent individuals as per the company's requirements 100% 88% 80% 60% 40% 12% 20% 0% Yes No Figure 66: Perceptions of Company Recruitment Difficulties Many of the above respondents outlined very specific skills areas in which they experienced recruitment difficulties. At least 6 of the 17 respondents reported difficulties recruiting engineers and artisans. Have skills development activities taking place assisted with recruitment & selection? 60% 50% 50% 50% Yes No 40% 30% 20% 10% 0% Figure 67: Have Skills Development Initiatives Assisted with Recruitment and Selection HR Managers were also asked to indicate whether or not skills development initiatives are seen to have assisted with recruitment and selection. In this instance, half of the respondents reported they believed this to be the case and half did not. Only a few respondents provided explanations for these views. Two of the respondents who reported that skills development did assist with recruitment reported that they conducted their own internal training and continuing professional development in order to enhance recruitment processes. A small number of other companies reported that skills shortages were very specific, and that high staff turnover through staff “poaching” was a problem. DRAFT – not for circulation 194 EMPLOYMENT EQUITY HR Managers were asked to indicate whether or not skills development initiatives in South Africa were assisting with employment equity issues. Here, a full 88% of the respondents reported that skills development had contributed to employment equity. Has skills development assisted with employment equity? 100% 88% 80% 60% 40% 20% 13% 0% Yes No Figure 68: Has Skills Development Assisted with Employment Equity Whilst some respondents reported that employment equity profiles improved due to the recruitment of external individuals, most organisations commented that improvements in equity profiles were as a result of skills development initiatives aimed at training existing employees. As one respondent commented, “our Employment Equity initiatives have identified a number of ‘fast track’ individuals in the group who have been placed on development programmes. These have enabled their promotion. More generally, other employees are able to apply for promotion as a result of the skills development programmes they have been on”. PRODUCTIVITY HR Managers were asked to indicate whether or not they believed that employees who had received skills training were contributing to the improved productivity of the company. The figure below indicates 32% of respondents reported no or only some improved productivity, whilst 50% reported improved productivity and 19% reported significantly improved productivity. DRAFT – not for circulation 195 Would you say that any of your employees who have received skills training are contributing to improved productivity of the company? 60% 50% 40% 30% 20% 10% 0% 50% 13% 19% 19% 0% None of our No improved staff have productivity received skills training Some improved productivity Improved productivity Significantly improved productivity Figure 69: Has Skills Development Assisted with Employment Equity Those companies that reported no or little improved productivity all indicated that the gains would not be immediate and that it would take more time for skills development to impact on productivity. As one respondent commented, “reward is not immediate. With increased application over time, productivity will be improved”. As per figure 70 below, 64% of respondents reported that they felt general nontechnical skills of staff had improved due to the implementation of skills development initiatives. Only 7% reported no improvement in general non-technical skills and 29% reported some improvement. Would you say that any of your employees who have received skills training have better non - technical skills? 70% 60% 50% 40% 30% 20% 10% 0% 64% 29% 0% 7% 0% None of our No improved Some Improved Significantly staff have general skills improved general skills improved received skills general skills general skills training Figure 70: Has Skills Development Assisted with Employment Equity OVERALL IMPACT OF SKILLS DEVELOPMENT AND SETA CONTRIBUTIONS HR Managers and company leaders were requested to indicate their overall perceptions of the impact of skills development initiatives on their companies. As indicated in Figure 71 below, 16% of company leaders reported perceptions of no impact due to skills development initiatives. 42% of company leaders and 29% of HR managers reported some impact, whilst 35% of leaders and 59% of HR managers reported clear impact. Only a small percentage of leaders and HR managers reported significant impact. In terms of the discrepancies across these reported DRAFT – not for circulation 196 views, most notably for perceptions of skills development as having impacted, HR managers are likely to provide more “coal face” perceptions in this regard, as their roles and responsibilities require high interface at this level. On the other hand, however, there is a need to be a caution here, as HR managers may also have training as part of their key performance areas, and so very positive results may be positive self-referencing. Overall what impact do you think that skills development startegies in South Africa are having on your company? 80% 59% 60% 42% 40% 20% 0% 29% 35% 16% 7% 0% No impact Some impact but minimal Business Leaders Impact 12% Significant impact Business HR Managers Figure 71: Company Perceptions of Overall Impact of Skills Development Strategies Comments on the poor or limited impact of skills development included the following: There is too much emphasis on bureaucracy to the detriment of focussing on real skills issues. There has been a complete breakdown in the development of technical skills with the introduction of learnerships. This has resulted in the current skills crisis. I think the system has contributed in many ways to the deterioration in skills development – Company HR Manager The new skills strategy has actually had a negative impact on the company. This was especially so in the early years of the strategy with a lot of uncertainty around the old ways of training. Now our industry has woken up to the fact that there is a skills shortage, which has coincided with a period of economic boom. This has exacerbated the skills demand. – Company Leader Those company respondents who remarked on the positive impacts of skills development commented as follows: Probably the most significant development in the last 5 – 6 years has been the development of a range of industry based qualifications which provide an opportunity for those at lower levels in the organisation (mainly operators) to obtain a new set of skills and a formal qualification to which many did not have access in the past. These qualifications have been driven mainly through the learnerships and that initiative alone has had a positive impact in the company – Company HR Manager The skills strategy has shifted the way in which we do training which is now more focused. The process in terms of getting people competent is taking place in a more structured way. The training is more outcomes based, specific and aligned to learning paths. We are now spending money on the must haves rather than the nice to have type of training. This approach is accelerating the learning curve of employees – Company Leader DRAFT – not for circulation 197 Do you think that the SETA's have contributed to an improvement in the overall quality of skills development initiatives? 60% 50% 40% 30% 20% 10% 0% 50% 38% 38% 24% 21% 13% 13% 5% No contribution A partial contribution Business Leaders A good contribution A very good contribution Business HR Managers Figure 362: Company Perceptions of SETA Contributions to Skills Development As per the figure above, HR managers and company leaders were also asked to indicate their perceptions of whether or not SETAs had contributed to improvements in the overall quality of skills development initiatives. As indicated in figure 72, responses from company leaders and HR managers indicate either a partial contribution or a good contribution, although at least 27% of business leaders and 13% of HR managers reported no contribution. Comments from respondents who reported “no contribution: included: We don’t perceive the SETA as having added any quality dimension to our skills development. They perform an administrative processing function for receiving and redistributing levies – Company HR Manager If anything the SETA has had the opposite effect. The whole industries training memory has just been wiped out. The training materials that are being produced, cost millions and are problematic while quality control, especially with the accreditation of service providers is also of concern – Company Leader Comments from respondents providing a “partial contribution” response included: SETAs have been forced to become obsessed with conforming to various reporting requirements and adherence to corporate governance rules. Hence, instead of delivering and allocating funds for projects, SETAs have moved into a mindset of caution and concern around the PMFA. This is understandable but at time, SETAs make it impossible to access money – Company Leader There has been some improvement but the pace has been slow, having allowed for some teething problems. What is of concern, however, is the lack of SETA responsiveness to the needs of companies – Company Leader SETAs have added value to the skills process but not to the rate that we would have liked – Company Leader. Those respondents who provided a positive response commented as follows: DRAFT – not for circulation 198 SETAs are assisting in driving standards and most companies will begin to strive towards higher quality of training – Company Leader Certainly in our case they have [positively contributed]. There has been a lot of criticism around SETAs, but a world without them would be problematic. We need to encourage them to do better – Company Leader. Finally, HR managers and company leaders were asked to indicate whether or not they perceived SETAs to have contributed to addressing scarce and critical skills requirements in their respective sectors. Do you think that SETA is assisting to adress scare & critical skills requirements in your sector? 70% 60% 50% 40% 30% 20% 10% 0% 64% 59% 47% 42% 27%29%26% 21% 24% 26% 15% 5% 14% 0% 0% 0% Not assisting at all Business Leaders Somewhat Assisting Business HR Managers SETA CEO's Significant assisting SETA Chairs Figure 73: Perceptions of SETA Contributions to Addressing Scarce and Critical Skills As indicated in figure 73 above, data from business in this instance is also compared to data obtained from the perceptions of SETA CEOs and Chairs. The first observation to be made is that a full 59% of business leaders viewed SETAs as not assisting at all in terms of addressing scarce and critical skills at all, compared with 24% of HR managers, 5% of SETA CEOs and no SETA Chairs. This indicates a marked contrast in SETA self-perceptions and business perceptions and appraisals of SETA performance in this regard. Comments from business respondents included the following: We as a company are addressing our own scarce and critical skills. From our perspective the allocation of funding from the SETA is not going to address scarce and critical skills. The intention of the strategy is good but there is a disconnect between the industry and the SETA. The SETA has its own agenda and sees it as not necessary to address employer concerns – Company Leader I do not think that SETAs have the mechanisms to assess what are the real scarce and critical skills needs in our sector. This is partly a result of the fact that the SETAs have no understanding of what is happening on the ground. The SETA relies on information supplied by the companies. As the biggest player in our SETA, it has no real way of validating what information we supply or examining whether we are addressing scarce skills needs in our sector – Company Leader DRAFT – not for circulation 199 Whilst the Seta needs to pay more attention to industry needs, the industry is itself at fault because it does not report correctly on information in the WSP’s and does not identify its own scarce and critical skills needs – Company Leader The theme of SETAs not understanding the specific needs of the sector, and therefore being unable to successfully identify scarce and critical skills, was frequently repeated in responses from other business leaders. As further indicated in the figure, only 15% of company leaders believed that SETAs were assisting to address scarce and critical skills, compared with 47% of HR managers, 42% of SETA CEOs and a full 64% of SETA Chairs. Again, this highlights the discrepancy in perception across SETA and business sectors, especially at the level of business leaders and, at a SETA level, Chairs. Comments from respondents included: We focus all our training on those scarce and critical skills that our research has identified in our sector. And our sector has been researched., so we know exactly what the scarce and critical skills are and I don’t spend a cent unless I can link it directly to a scarce and a critical skill – SETA CEO All our programs where we offer grants whether it’s learnerships or any other types of intervention they must be falling within the category of scarce skills. So whether it's bursaries, graduate development programs, learners on learnerships so we have broadly identified the scarce skills. It’s the research, the new fresh research which has been approved in our Board now and that is the basis. And we use that to go back to the industry because we are focused, so that’s how we address the scarce and critical skills – SETA CEO Every year our Seta holds a strategic planning workshop, which determines the way forward and set priorities. We as an industry are very involved. Employers have taken ownership of the Seta and hence some of our priority areas are being addressed. This is not to say that all scarce skills are being addressed but we are moving towards doing so. The challenge is to get the SETAs moving in the direction of the needs of employers – Company Leader Being one of the top SETAs, we have ensured that there has been an analysis of the sector and we have allocated a budget in direct proportion to the skills needs. We are very focused on ensuring the seta is focused on what needs to happen in addressing scarce and critical skills – Company Leader The above findings begin to suggest the need for significantly higher levels of consultation between the SETAs and constituents in order to identify and agree upon scarce and critical skills priorities. Findings pertaining to the questionable validity of scarce skills lists in this chapter speak further to the need to establish a viable process of determining scarce and critical skills priorities that takes on board industry concerns and requirements in a significantly more comprehensive manner. This report has also consistently raised questions about the extent to which current WSP and ART reporting systems encourage forthright reporting also relate to considerations with regards to the above. If mechanisms can be sought to address perverse reporting incentives, SETA data on scarce and critical skills may feasibly begin to impact at a business level. DRAFT – not for circulation 200 SECTION SIX: RECOMMENDATIONS 17 HIGH LEVEL AND STRATEGIC RECOMMENDATIONS 17.1 THE NEED FOR PRIORITISATION OF OBJECTIVES Critically, this study flagged 61 the issue of the competing expectations with which stakeholders entered, and continued to engage with, the skills development policy debate. Crudely, this could be represented by (i) an urgent need expressed by the labour movement for individual access to employment and promotion opportunities by ensuring that skills development supports redress and equity; (ii) the imperative highlighted by employers for skills development to support increased levels of productivity; and (iii) the importance, advocated by educationalists, for the development of generic competencies that support recognition of prior learning, portability of qualifications and continual learning. While, these objectives are not mutually exclusive, the effort to accommodate them all has produced a very long list of objectives assigned to the system through the Skills Development Act: • • • • • • • To develop the skills of the South African workforceto improve the quality of life of workers, their prospects of work and labour mobility; to improve productivity in the workplace and the competitiveness of employers; to promote self-employment; and to improve the delivery of social services; To increase the levels of investment in education and training in the labour market and to improve the return on that investment; To encourage employersto use the workplace as an active learning environment; to provide employees with the opportunity to acquire new skills; to provide opportunities for new entrants to the labour market to gain work experience; and to employ persons who find it difficult to be employed; to encourage workers to participate in learnerships and other training programs; to improve the employment prospects of persons previously disadvantaged by unfair discrimination and to redress those disadvantages through training and education; To ensure the quality of education and training in and for the workplace; To assistwork seekers to find work; retrenched workers to re-enter the labour market; and employers to find qualified employees. The existence of such an extensive list of objectives and their relationship to each other, have resulted in a number of unintended outcomes in the process of implementation. In particular, two unintended outcomes appear to be extremely significant and are discussed below. 61 Particularly Section Two: the Skills Development Statutory and Policy Framework DRAFT – not for circulation 201 The first significant unintended outcome arises from the large scope and number of objectives. In policy terms, the long list of objectives represents a huge, and arguably, unrealistically complex mandate (in scope and technical difficulty) for an emerging system that is struggling to be institutionalised. These challenges are rendered even more serious when one accounts for the level of capacity available in a developing country such as South Africa. It should be noted here that the experience of highly industrialised countries with regard to similar models of skills development but, which some may argue, with somewhat smaller scope, suggests that implementation was anything but easy and demanded highly developed levels of capacity. The second significant unintended outcome relates to the fact that all the objectives are given equal priority in the National Skills Development Strategy and our analysis suggests 62 that, in specific instances, in the course of implementing the Skills Development Strategy, some of these objectives operate as competing objectives. The following two examples, drawn from the analysis presented earlier, illustrates this point: • There is an emerging tension between implementing the targets identified through the SSP versus those targets contained in the SLA, which have been mediated by the priorities outlined in the NSDS. This tension emerges in the analysis of the scarce skills training, where it can be seen that many of the SETAs are not adequately addressing scarce skills through providing training at the level in which there is an identified scarce skills, instead SETAs have placed emphasis on ensuring that large numbers of individuals access programmes in accordance with the requirements of the NSDS. This translates into increased access for individuals for programmes on levels 1 and 2 on the NQF. This directly links to costing, as for SETAs to reach their numerical targets, it is almost impossible resource-wise to plan for programmes of a longer duration than a year - a requirement if learners are to move from lower levels on the NQF to higher levels, which represent the levels in which there is an identified scarcity of skills. This uncomfortable prioritisation process links to the multiple objectives, but also to the manner in which these objectives are translated into a myriad of indicators that further emphasise the different priorities of stakeholders. NSDS Objective 1’s indicators emphasise the need for skills development to support increased productivity and competitiveness of employers, and the role of skills development in terms of promoting quality of life and labour mobility. The continued tension pertaining to this point emerges in JIPSA discussions, where role players articulate an urgent need for SETAs to support programmes that are consistent with ASGISA priorities. Many of the SETAs indicate that it is difficult for them to respond to these requirements, because of commitments that have been agreed upon which speak to the NSDS and are contained in the Service Level Agreements. • Another example drawing from the research is the imperative placed on ETQAs to ensure the quality of training in the workplace, whilst at the same time focusing on policy requirements to increase the number of SMME providers. ETQAs indicate that they are unable to fully meet their quality assurance requirements because of the growing number and geographic spread of providers, and the related need for high levels of provider support, given the number of emerging providers. Both of these examples highlight the manner in which different stakeholder expectations have been integrated into the NSDS, and the way in which this impacts 62 Primarily from the evidence presented in Sections Three, Four and Five DRAFT – not for circulation 202 on the ability of SETAs to navigate these different needs and successfully achieve the identified objectives. While all the objectives are clearly compelling in the context of South Africa’s transformation project and are not objectively mutually exclusive, in the context of actual conditions some of the objectives tend to operate in conflict to each other. The effect of this phenomenon is quite significant, as the efficacy of the system to deliver on key objectives becomes severely constrained. In the context where objectives tend to operate in conflict and where there are no clear policies that discriminate between these objectives in terms of their importance, any system would tend to favour those objectives that performance reviews and incentives tend to favour. It is therefore extremely important for the system to distinguish between what are considered to be the primary objectives of the skills development system and what may be regarding as secondary objectives. In this way, all the monitoring and financing policies need to align in pursuit of these objectives. The explicit challenge to the system would then be to develop a cogent strategy that is focused how the primary objective will be met, and how the secondary objectives can be met in manner that both realises their policy imperative and supports the achievement of the primary objective. This suggests the need to develop indicators against the secondary objectives, which result in accurate signalling and credible monitoring of implementation in a manner that does not reduce the efficacy with which primary objectives are achieved. At the same time, it should be ensured that secondary objectives are addressed in a meaningful way; without severe perversions or gaming (expedient pursuit of targets that are deemed to carry maximum public relations value). For example, for equity to be meaningfully achieved, it is critical that previously disadvantaged individuals’ access programmes that enable them to pursue learning and career opportunities. Perversions or gaming in this example would manifest by implementing mass programmes at lower levels that do not enable learners to access opportunities. The result of these programmes will simply be to reduce the envelope of resources available to address skills requirements in the sector. But the perversion would be that such a SETA would be assessed to be “highly effective”, confirming the woeful inadequacy of the indicator applied. To reiterate the analysis presented earlier this report; assuming that the primary objective of the system is ‘quality skills provision for growth’, then it can be clearly seen that if we do not meet the objective of quality provision, there is little point in celebrating the achievement of the accreditation of large numbers of SMME providers that cannot offer quality education and training. In a more complex example, as stated previously, the indicators that focus on equity and those that emphasise growth are currently manifesting in a competing set of actions. However, if ‘quality skills provision for growth’ is the primary objective, then it is critical that the efforts undertaken consider what the growth needs of the sector are. This should be done in a manner that supports equity, both because of the political (and moral) imperative for redress, but also because if the South African labour market is not transformed in a more equitable manner, then this will, in turn, impact negatively on growth in the longer term. Thus, the equity targets should be located in a strategy that moves individuals from lower levels on the NQF, to levels and programmes that are consistent with areas in which there are opportunities – or, phrased differently, to programmes that address scarce skill needs. This will have resource implications, and therefore requires a focus on addressing equity in a DRAFT – not for circulation 203 manner that supports growth so as to assist the decision making process that is required for relevant policy decisions. In summary, this analysis highlights the need to identify the primary objective, and to then ensure that - in the manner in which both the primary and secondary objectives are implemented - the secondary objective does not diminish the efficacy of the implementation of the primary objective. 17.2 CLARIFYING THE SETA MANDATE This study has conducted an assessment of the SETAs’ collective success in fulfilling the objectives of the Skills Development Act. However, the review of the outputs achieved by SETAs against the objectives set out in the National Skills Development Strategy highlights that scope of functions undertaken by the SETAs has increased in significant ways since their inception; and they appear now to have taken responsibility for the achievement of all the objectives outlined in the Skills Development Act (SDA), including those that were previously assigned to other institutions. Some examples of these additional responsibilities include the following: training career guidance counsellors; recruiting learners directly into learnerships, as well as ensuring that learners are placed in the workplace; and promoting SMME creation. The last-mentioned example, related to SMME promotion, provides a clear illustration of scope “creepage”. The SDA states that the intention of the Skills Development Strategy is to promote self-employment, but does not articulate a specific role for the SETAs for this component of the strategy. However, in practice, SETAs are held accountable for small business development in respect of a range of targets. And while some of these targets are consistent with their statutory scope, others are clearly not. For example, in terms of the SDA SETAs are required to ensure that small businesses access the grant, and that small businesses are able to participate in, and benefit from, the skills development strategy. However, SETAs are currently also directly supporting the establishment of small businesses as a placement strategy and, as indicated previously, a large part of the quality assurance work is focused on creating SMME providers. This additional responsibility respresents a significant increase in scope, and concomitantly requires a substantial additional demand in institutional capacity. Two important concerns arise in response to the above: (i) some of the additional responsibilities that the SETAs have picked up form part of the mandate of other institutions within the Department of Labour – such as the employment services, Umsobomvu Youth Fund - and those institutions that are located elsewhere in government such as DTI. It is important and more preferable that these institutions be held to account for these activities, rather than simply extending the scope of the SETAs; and (ii) that there is a need to consider the scope of each SETA within the boundaries of viability. It may be too ambitious, for example, to require that the SETAs play all the responsibilities that currently accrue to them in practice. It may be preferable to focus on increasing the strength of the SETAs to undertake a limited set of key responsibilities and with greater efficacy, than increasing their scope or even developing unrealistic expectations for the manner in which the activities can be carried out within the limits of existing capacity. DRAFT – not for circulation 204 Fukuyama 63 provides a useful model for analysing this question further: In his analysis of different states and their respective strengths and scopes, Fukuyama highlights the importance of distinguishing between strength and scope. A key problem that recurs in certain discourses on the state is to conflate notions of strength with that of increased scope and, in that way, contributing to state failures on account that scope has been delineated far too widely to be feasible. Fukuyama contends that a key public policy objective of state building is to ensure that strength is increased, even if this necessitates a reduction in scope. This argument can be graphically illustrated by the following graph: Figure 75: Fukuyama’s Strength and Scope Model Increasing Strength Quadrant I Quadrant IV Quadrant II Quadrant III Increasing Scope In terms of this model, the ideal location would be within quadrants I or II – that is, to have a high level of strength with a scope that is somewhere between what is . Fukuyama describes the continuum along the X axis thus: “…stretches from necessary and important to merely desirable to optional, and in certain cases where there is an increase in scope (with diminished strength) to counter-productive or even destructive.” In applying this analytical framework to institutions or systems, it would imply that an increase in scope, without strength, would eventually give rise to a situation where the institution reaches a point where the increase in scope is counterproductive; that is, where “lots of things are done badly”. Fukuyama’s model was adapted for this study and applied to an assessment of the functions of the SETAs in terms of the where on the continuum the responsibility is currently located and where we believe it should feasibly be located given current capacity if the function is to be performed optimally. This assessment is provided in the following section which outlines the teams recommendations for improving the effectiveness of the institutions within the current institutional arrangements. It is clear from the study that the SETAs collectively bear a mandate that is very high in scope, but without the commensurate capacity to undertake the various functions arising from this scope. In terms of Fukuyama’s model, they therefore fall within Quadrant III of Figure 1, above; representing the least desirable situation to be in. 63 Fukuyama, Francis: State Building: Governance and World Order in the Twenty-First Century, 2005 DRAFT – not for circulation 205 The negative consequences identified by Fukuyama and described above are therefore likely to arise with strong probability. Some of the most intractable problems being experienced across SETAs, as described in the full report, are not doubt linked, to some degree, to this phenomenon. We believe that the question of scope is one of the most important issues that the skills development system is currently faced with. There needs to be a careful consideration of what elements of the scope is essential in the current period and which the system will be able to cope with given current capacity and the stage of institutionalisation of the system. 18 RECOMMENDATIONS RELATED TO IMPROVING THE EFFECTIVENESS OF THE CURRENT INSTITUTIONAL ARRANGEMENTS 18.1 GOVERNANCE As indicated in the main body of the report, the institutional arrangements that have been established to operationalise South Africa’s skills development policies are indeed very complex. The system of governance, and the related legislation and policy that are designed to promote accountability and effectiveness, are predicated on a high level of devolution. This approach is intended to simplify decision-making and, in so doing, enhance effectiveness. But devolution inevitably increases the risk of financial mismanagement and the system seeks to mitigate these risks through various institutional mechanisms. The pre-eminent institutional mechanism, in this regard, is the system of internal audit and policies and procedures for Supply Chain Management and risk management. The research findings show, on the one hand, when we compare the Audit outcomes of SETAs with those of National Departments and Public Entities, the SETAs compare very well to National Departments and Public Entities with regard to audit outcomes. Indeed, there was a greater proportion of SETAs that achieved clean reports in both years compared to the other categories. These findings may run counter to general perceptions, as most people are more likely to expect SETAs are much worse in a comparison of this nature. On the other hand, this study has highlighted the concern that a significant number of SETAs have not been able to implement some of the crucial institutional mechanisms. Particularly worrying is the fact that a number of SETAs have not been able to establish a credible internal audit capability and that there are a number of SETAs that are consistently failing in their governance functions. The report noted that the Skills Development Amendment Act creates the space for the Minister of Labour, as the executive authority, to act decisively where required. This is an issue that requires greater attention and will be addressed in the recommendations. Finally, this study acknowledges the complexity of the compliance requirements and this report makes a number of recommendations, which are intended to strengthen the institutional governance arrangements of the SETAs. . 18.1.1 Improving Accountability To assist in addressing these challenges, it is extremely important for an explicit stance to be taken in relation to under-performing and culpable SETAs. This review DRAFT – not for circulation 206 highlights where there are consistent concerns relating the performance of certain SETAs and highlights those SETAs with which there have been consistent concerns raised in the report of the Auditor General. In these cases it is recommended that there is a need for a credible forensic audit that reports to the executing authority (unfettered by management and the board) to be undertaken to investigate the extent of the lapse in financial management and whether any culpability exists. This action will also serve to emphatically clear any misconceived perceptions of financial impropriety. If culpability is uncovered in the process, it would be important that the provisions of the law are invoked to protect the integrity of the SETA governance system.This is seen as critical to signal a seriousness, so as to ensure effectiveness and accountability within the system. It is also extremely important to take such action to uphold the obligation to ensure proper stewardship of public finances, and to ensure effectiveness of the skills development system. This is seen as particularly important, as our review does suggest that there may be situation prevailing whereby the serious shortcomings that are confined to a limited number of SETAs are shaping public opinion of all SETAs. Apart from this being unfair, it tends to compromise the integrity of the skills development system. Further, the Department of Labour is best placed to play a much-needed role in standardising various aspect related to systems and the constitutions of SETAs. This will go a long way in improving the effectiveness of the systems of accountability and stewardship. 18.1.2 Improving Institutional Governance This review has highlighted the importance of tripartism, and interviewees have consistently raised the issue of the SETA boards failing to realise a coherent identity, but rather operating as a bargaining council. It is suggested that to support the effective functioning of the boards, it will be of immense value if the government presence can be greatly strengthened (in seniority of representation and, in some cases that they have higher numbers currently allowed for in the constitutions). One of the most significant challenges in the present governance policy provisions is the fact that the complex and serious nature of board members’ responsibilities do not reconcile well with the part-time nature of their tenure and casual nature of practice. This phenomenon does not apply, in the same way, to boards in the private sector where responsibilities tend to accrue to executive directors (board members) who happen to be full-time. We recommend that this matter receive urgent attention, as the status quo is certainly untenable in the long-term. Linked to this, there is a need to carefully formulate, and then implement, criteria for board membership. These formulations need to give due regard to the kinds of attributes that are required to ensure optimal effectiveness of the board in discharging its critical role in the skills development system. Further, there is a need to consider more carefully the induction and training of board members, which needs to be urgently addressed. However, the option of crash courses have proven to have very little value in addressing the challenges discussed in this report. It is perhaps best to start by formulating a detailed capacity development strategy before embarking on any training. It is extremely important that the formulation of such a strategy be driven by people who have no link to training provision in this area, in order to avoid possible perversions or suspicion of perversions. DRAFT – not for circulation 207 18.1.3 Improving Corporate Functions In view of the importance of this capability, a senior official of the National Treasury interviewed for this review proffered a suggestion the option of establishing internal audit capability that can be shared by a few SETAs. This will allow for economies of scale, and assist in solving the recruitment problems in this area of scarce skill. This is an idea that may be worth pursuing. It is also suggested that the concept of a company secretary, who is a very high-level and skilled person, be appointed to service the board, though expert advice on compliance to corporate governance provisions should be considered in the case of SETAs. However, such a person is not the same as someone who simply services the logistical and minute-taking requirements of the board. It likely that the recruitment of suitably qualified persons (for example, CIS) will not be easy, in this case the option of a shared facility between a few SETAs may be viable as an alternative. It may be advisable for the Department of Labour to play a proactive and explicitly developmental role in promoting capacity for good governance in SETAs through appointing a person who could resource the corporate governance capacity development needs of SETAs. 18.2 CORE FUNCTIONS As indicated, Fukuyama’s model was adapted for this study and applied to an assessment of the functions of the SETAs in terms of the where on the continuum the responsibility is currently located and where we believe it should feasibly be located given current capacity if the function is to be performed optimally. This assessment was conducted for each of the major responsibilities allocated to the SETAs and was aimed at identifying the most feasible scope for a particular responsibility based on the limits to their capacity (even with interventions to improve capacity). Note that this section therefore does not even include those functions that the SETAs are performing that do not fall within their scope as identified in the SDA. DRAFT – not for circulation 208 Responsibility Minimalist Scope related to responsibility Activist (high) scope related to responsibility Review of current Capacity Feasible option based on current capacity Develop a sector skills plan within the framework of the national skills development strategy; Signal broad trends emerging from a national analysis of broad economic trends Detailed forecasting which allows for a modeling exercise which translates knowledge of skills needs and a functioning training system This is an area that (in the main as there are a few good examples) there appears to be very limited strength and capacity: SETAs do not have sufficient data pertaining to current skills in the sector. Nor is there data as to training taking place. There appears to be minimal capacity to model different scenarios and instead, there are lists of occupations which in many cases do not appear to be a credible representation of scarce skills. SETAs should focus on the development of SSPs that focuses on broad labour market signalling of skills requirements rather than on detailed planning. The SSPs should have an increased focus on strategic plans to support training in scarce and critical skill occupations. This suggests that while the policy objective may lean towards detailed modelling processes (albeit not manpower planning), it is more realistic to consider the possibility of SETAs focusing on providing signals, which suggest occupational trends that are emerging as important (defined by growth and scarcity) in the context of broad economic trends and improved data about existing skills and training. The SETAs should focus on the identification of the need for Learnerships (as part of SSP process), should advocate for workplaces and should ensure that LS are registered with DoL. The SETAs are unevenly Identifying and managing the Learnerships registering (including selection of learners). Learnerships with the They have shown an increased DoL: registering capacity to identify and register learnership learnerships, there are agreements AND increased activities to support developing national There should be a central process to the development of curricula. curricula with ensure that these LS are part of an However, the learnerships are associated learning articulated learning pathway located not, in the main, either materials & within a clear curriculum framework addressing scarce skills, or assessment (and aligned with apprenticeships enabling learners to access instruments, manage where relevant) This is consistent scarce skill programmes. There LS and recruit with the NQF policy has also not been a consistent learners & ensuring recommendations for curricula to be application of assessment and that there are integrated with qualification moderation practices. sufficient number of development. workplaces Figure 76: Fukuyama’s Strength and Scope Model applied in the assessment of SETAs’ capacity to undertake their current mandates and options for re-defining the scope of mandates to improve feasibility Establish and promote learnerships through: Identifying the need for a learnership; developing and registering learnerships; Identifying workplaces for practical work experience; supporting the development of learning materials; improving the facilitation of learning; and assisting in the conclusion of learnership agreements and registering learnership agreements. Identifying and registering learnerships with the DoL, registering learnership agreements and encouraging employers to host learnerships DRAFT – not for circulation 209 Responsibility Minimalist Scope related to responsibility Activist (high) scope related to responsibility Review of current Capacity Feasible option based on current capacity Collect and disburse the skills development levies in its sector; approving workplace skills plans; and allocating grants in the prescribed manner to employers, education and training providers and workers. Administer the processing of WSPs and allocate mandatory grants. Review WSPs against the priorities identified in the SSPs, and allocate monies in terms of these priorities. SETAs have shown increased capacity to administer the grants successfully, and there has been a significant improvement in the number of enterprises that receive their grant back. SETAs should continue to be required to pay the mandatory grant on the basis of the submission of a consolidated WSP/ATR report. Allocate discretionary grants in terms of national criteria. Utilise the monies in the DG grant to steer additional training in priority areas that support access and progression to employer workers. Further, with the DG and the NSF allocations, support increased access of unemployed into the labour market as well as further learning opportunities. However, the SETAs in the main have not shown the capacity to review and approve WSPs against sectoral priorities, and there is a reported tendency for workplaces to plan for training that they can easily provide so as to avoid penalties when reporting. Thus there is a limited picture of needs or training provided by the WSPs or ATRs. Further, weaknesses in the SSP process make it unlikely that the SETAs will be able to check or steer the skills system against priorities, even if they had the capacity to undertake these reviews. In addition, SETAs do not appear to have developed the capacity to efficiently facilitate the allocation of DG and NSF monies. This seems particularly the case as the models for disbursement that have been selected appear to have exceptionally high transactional costs, such as the selection of learners in some cases, the need to administer each individual learner agreement, as well as the large number of service providers. Again, the absence of a credible SSP makes steering of training complex. DRAFT – not for circulation To support this it is proposed that a consolidated template is developed which encourages workplaces to provide a comprehensive picture about existing skills in the workforce, new entrants and the nature and costs of training taking place in the workplace. This would be consistent with the EE reports and could support future planning. It would also assist to determine whether the objective in the NSDS pertaining to increased training and investment is being realised. In the longer term the capacity of the SETAs to use the mandatory grant to steer the system could be reviewed. With regards to the DG Grant and the NSF Grant allocations, ways to reduce the transactional costs should be sought, and the need to ensure that these programmes are consistent with the SSP priorities is critical – including the possibility of programmes that run for an extended period. 210 Responsibility Minimalist Scope related to responsibility Activist (high) scope related to responsibility Review of current Capacity Feasible option based on current capacity Fulfil the functions of an ETQA Accredit providers against basic administrative requirements and ensure that learner enrolments and results are captured Ensure that there are front-end and back-end quality assurance processes which facilitate: effective standard generating, and support providers with: curriculum development (including assessment instruments), quality institutional and workplace learning, as well as credibly moderated assessment. This research study has discussed the challenges that SETA ETQAs face in terms of maintaining consistent quality in performing their functions in the face of an everincreasing pool of providers and workplaces spread across the country. It is noted that resource constraints are made even more severe in the context of providing significant levels of support to small and emerging providers. SETAs should focus on workplaces as this is clearly within their remit – that is can the workplace support the learning in terms of equipment and supervision. Monitoring education and training in the sector 18.2.1 To provide learner data for learners that have participated in SETA supported programmes in terms of agreed upon fields and a detailed financial analysis in terms of activities that have taken place against agreed upon objectives A comprehensive reporting arrangements that ensures increased accountability in terms of clear effectiveness and efficiency indicators that demonstrates how the achievement of the primary and secondary objectives are being supported. The role that SETAs should play in the quality assurance of the provider institutional components and the monitoring of providers should be considered within the context of the changes being proposed within the NQF policy review process. Further, the report highlights the difficulties that the SETAs have in monitoring providers in terms of throughput and pass rates of learners. Further, the reliance on front-end quality assurance (programme evaluation per provider) as well as the fact that in the main providers have their own internal assessment instruments (rather than an external assessment) and processes create a great strain on the SETA. Across the system there appears to be very limited capacity to capture and verify data (although these are some exceptions to this). The data sets are incomplete and do not allow for an analysis of achievements against the objectives. Further, while the report highlights that SETAs in the main have performed well in terms of their audited statements there is still a lack of capacity to report expenditure against programmes and activities. SETAs should be required to capture and report on data in terms of: number of learners broken down into race, gender and disability. This information should be recorded against programme name, type, level and costs as well as funding sources. SETAs should also report on other programme activities against objectives. To facilitate this there is a need for clear definitions & a template that is used across SETAs. These reports should be made available on a SETA by SETA basis to ensure that there is public accountability. Planning This section provides core recommendations pertaining to the revision of indicators within the NSDS in order for them to be more meaningful for the purpose of planning and consistent with the Skills Development Act (SDA). In addition, recommendations related to enhancing the SSP process and how planning can be supported by improved data from workplaces, are also offered. DRAFT – not for circulation 211 National Skills Development Strategy This recommendation relates to the high level strategic recommendation which focuses on the imperative to determine primary objectives and secondary objectives, with clear quality indicators that support the achievement of these objectives. This suggests that the key recommendation in the short-term is that there is a need to fine-tune the existing NSDS whilst not losing sight of the extensive stakeholder process that was run to develop the NSDS. This would focus on developing indicators which the SETAs could be reasonable evaluated against, and establishing the indicates (some the same and some different) which other institutions will be evaluated against in terms of the a achievement of the NSDS. While this process takes places, it essential that the negotiation of NSDS sector targets with SETAs which form part of the SLA process accounts adequately for the sector requirements as outlined in the SSPs pertaining to each SETA. This implies a significant departure from the current practice, which findings in this report suggest amounts to a rather mechanical distribution of the aggregate national figure among SETAs which does not always take into account the sectoral priorities and the resources that will be required to support provision against these priorities. Sector Skills Plans The limitations of SSPs have been extensively documented in other studies and emerge with corresponding emphasis from this study. In view of this and given the serious capacity shortcomings of the SETAs with regard to data capture and management and economic modelling, it is recommended that it is clearly most prudent to adopt a minimalist approach to sector skills planning. Such a minimalist approach might be comprised of the following elements: (IV) The institutionalisation of a clear and standard definition of “scarce skills” across all SETAs; (V) Formalising support by the DoL’s planning division to all SETAs in the application of broad forecasting methodologies. This should be aimed at exploiting economies of scale and account for the overlaps across SETA sectors. This will also assist to provide a framework that will contribute to planning for scarce skill categories that cut across different sectors; which is a challenge in the current planning frameworks. (VI) SETAs should then be required to focus their efforts on the important task of SETA-wide consultations that focus on skill shortages in their respective sectors. The importance of this is highlighted in the finding that only 15% of company leaders believed that SETAs were assisting to address scarce and critical skills SETAs should also use data collected in their sector (based on recommendations below). Based on this improved data and consultative processes, the SETAs should be required to develop broad forecasts of skills requirements and then craft 5 year strategies for supporting skills development in support of sector growth. Within these strategies, 3 year plans, projects and budgets should be developed. It is not anticipated that sectors will be able to provide numbers against occupations that are anything more than indicative, or even illustrative of potential scale of need. Thus the focus will be on what can be achieved (targets) to address these scarce skills in a manner that takes into account the secondary objectives that are to be realised. DRAFT – not for circulation 212 Improving Enterprise Information One aspect of improving data available for SSPs, relates to the imperative to address the paucity of data relating to training taking place at the workplace which has been consistently raised in this study. Both the findings from the review of the plans and the levy/grant sections highlight the perverse incentives that have come into play with regards to reporting training output against plans. The section on finance also highlights the point that there is little evidence that the SETAs (in the main) have the capacity to steer the system using the mandatory grant. For this reason, it is suggested that the emphasis of the WSPs and ATRs change, and employers should simply report on one template: the profile of their current workforce and the training (including the costs associated with this training) that they have undertaken during the previous year. Based on this submission, the Mandatory Grant should then be paid, which would minimise the tendency to only submit plans for what employers think they are expected to provide for the allocation of Mandatory Grants, and reports that are reduced to training against those plans rather than on providing a full picture of training that has taken place. This recommendation is seen as critical in enabling SETAs and the system to develop a picture as to what training has taken place in their sector and to allow for an analysis as to whether there is an increase in training both in numbers that benefit as well as levels of investment. In pursuance of these revisions to reporting requirements, the reporting template should ideally include data that focuses on: composition of the workforce against the Organising Framework of Occupations (OFO); the recruitment and loss of employees against OFOs; the increase or decrease in enterprise positions against OFOs; and training conducted against OFOs and NQF levels, including training expenditure. 18.2.2 Learnerships There are a number of issues that have been raised pertaining to the design and implementation of learnerships. While the study has raised a number concerns about the quality of provision, this was not the focus of this study, instead, the emphasis is on the manner in which SETAs can more effectively manage these functions. A number of issues arise as important in this regard: • • • The relationship between the SSP process and the qualification generation and learnership development processes should be made explicit. This would assist to reduce the inefficiencies caused by the large number of qualifications that have been developed, and learnerships that have been registered which are not used at all in the system. It would also assist to ensure that those areas in which need is identified forms the focus of these activities, and that this is done in a manner that supports alignment between qualifications and positive labour market outcomes The acknowledgement of the dynamic nature of the labour market and the inherent challenges related to planning, makes it imperative for the system to support quality programmes that focus on selecting for, and developing ‘human capital characteristics of economically active individuals’ such as attitude and values, educational qualifications, certificated skills, work experience, language proficiency. Such an approach, is likely to enhance labour market outcomes associated with training, regardless of occupation, sector and specified job vacancies. This underscores the importance of being more explicit about the learning assumptions associated with each qualification. Critically, we strongly believe that SETAs should not be selecting learners; rather they should apply their experience DRAFT – not for circulation 213 • • in providing greater guidance about selection matters. Improved selection is seen as crucial in terms of the large inefficiencies that are created both by national recruitment processes as well as by learners changing learnerships half way through a learnership, which contributes to low throughput rates; That there is a need to ensure that there is alignment of trade qualifications with learnership qualifications, where relevant, and the SETAs (and the DoL) need to ensure that it is clearly communicated that both of these routes will be accommodated within the system. This will require that the Department of Labour consistently reinforces this important policy provision; and, That the learnerships must be seen as one among a range of learning interventions that are possible and provided for in the SSP plan. The specific role of the SETA with regards to these different interventions needs to be critically evaluation so as to establish whether the high transaction costs are being justified by the outcomes attained. For example, given the evidence that the majority of programmes addressing scarce skills are supported through bursaries for courses offered in Higher Education Institutions, it is important to assess impacts on Government policy and financing of the NSFAS. However, this option has not been explored, and the specific capacity of the SETAs or the NSFAS to support learning at higher education needs to be reviewed to understand the complementary roles that these two structures could play. It is apparent from the study, that the role of SETAs in supporting learning in higher education is not grounded in an explicit policy that is aligned with the broader framework of public funding of higher education (including state subsidies and NSFAS). 18.2.3 Quality Assurance The quality assurance of provision is an issue attention in current policy debates. The study has have arisen linked to the large number of ETQAs, assurance that have been adopted across ETQAs, the accreditation system that has been adopted. that has received considerable highlighted the complexities that the varied approaches to quality and the onerous requirements of Many in the course of this study have expressed doubt about whether SETA ETQAs should remain a SETA responsibility, on grounds that the resources required for accreditation and related processes may be “crowding out” what is perceived as “core business” of SETAs. There is incontrovertible evidence that SETAs are not succeeding in performing their ETQA functions credibly. This is a serious threat to the skills development system, which is predicated on the assumption that the functions assigned to the ETQAs are effectively carried out. It is unwise and untenable to continue as if this vital cog of the skills development system is functioning effectively. This matter warrants urgent and purposeful action. The two key recommendations that are made in this report pertaining to quality assurance are therefore: • • It is essential that the systemic issues relating to quality assurance are understood and resolved; failing which, the likelihood of the problems simply transferring to another institution would be very strong. This includes a considered analysis as to which quality requirements are possible within the existing capacity of skills development institutions – for example, whether it is possible to quality assure large numbers of internal assessments or if there is a need to establish effective external assessment mechanism minimally at the point of qualification. This study also recommends that in determining which quality assurance functions the SETA should retain there is a need to consider the broader activities DRAFT – not for circulation 214 of the SETA so as to establish which quality assurance activities compliment these and which are extraneous to the core functions of the SETA. An example of this is that of the quality assurance of workplace provision which seems integral to the role of a SETA, and may not be as effectively addressed by a structure that is removed from the sector. 18.2.4 Finance This report highlights the challenges in the SETA environment, and the strides that will need to be taken to enhance the institutional capacities of the SETAs; it has also illustrated the areas in which there has been progress made. In view of the existing SETA landscape, the teams recommendations pertaining to finance are predicated on the view that the system is unlikely to have the capacity to absorb any sudden increases in financial flows above those presently projected. Any sudden increase may disrupt the current positive trend in stabilising the SETAs and in building the capabilities required to effectively meet the objectives of increasing the investment in training and quality of outcomes. Role of the Mandatory Grant Expenditure rates have improved considerably over the years since the establishment of the SETAs. This growth has been driven by improvements in the rate of employer grant disbursement, but only after the requirement for SETAs to appraise WSPs for compliance to sector priorities was removed. This action was necessary to remove the blockages and delays that were retarding the smooth flow of employer grants. However, its removal has fundamentally altered a key assumption in the levy-grant system, which is to use levy payments and claiming as a mechanism for steering workplace training and for ensuring that it corresponds to sector priorities. This matter needs to be carefully considered, but its reinstitution can only be effected following a clear demonstration that the system has sufficient capacity to undertake these tasks without compromising the efficient flow of funding. It is important to ensure that no further impediments or increases in transaction costs are brought to bear on successful workplace training that is currently underway. Discretionary and NSF Grants There is a need to ensure that DG can support training priorities emerging from the SSPs and that these support a range of programmes. This includes the possibility that the programmes run over more than one year enabling individuals to realise either an Employable Skills Unit or an occupational qualification required by the sector. Monitoring expenditure and investment in training There is very clear evidence that the extent of public investment in training has increased considerably as a direct consequence of the ear-marked tax introduced through the SDLA. It is however much less clear whether investment in training by employers has increased as was intended in the policy. A paucity of information in this regard makes this kind of assessment very difficult. Employers are not obliged to report on training investment undertaken outside of those funded through employer grants. This is a matter that requires attention in the policy analysis and development processes, and possibilities to address this absence of data are highlighted in the recommendation pertaining to improving the mechanism for enterprise information outlined in the planning recommendations as well as in the section below. Linked to the above, the report highlights the absence of detailed financial information provided in any consistent manner by the SETAs. It is recommended that DRAFT – not for circulation 215 the requirement for financial information to be captured in a manner that allows for comprehensive financial analyses, thus establishing a credible basis for improving the effectiveness of financing policies in the training sector be introduced. 18.3 MONITORING SETAS This review underlines that need for credible monitoring mechanisms to be institutionalised, based on a set of credible and comprehensive indicators that are grounded in a rigorous clarification of the primary and secondary objectives for skills development. This is consistent with the conceptual approach outlined in this chapter, which highlights the need to take into account the imperative to balance a focus on outputs, with a clear focus on the objectives of the system. This study highlights the concern that the SETAs are currently required to report against each indicator in terms of output targets that it has set. This results in data that is difficult, or even impossible to reconcile. So, for example, the number of unemployed learners undertaking programmes in scarce skill areas are difficult to analyse (with the exception of a few of the SETAs), as the number of unemployed learners is reported under NSDS targets, but the learner enrolment and achievement data does not provide a profile of the learner. The same issue emerges in terms of race, gender and disability. Further, in many cases the outputs reported on bear little resemblance to the indicator, and even less to the objective; making it difficult to determine whether the information being reported is contributing to the objectives of the SDA. Information from providers is randomly provided and the completeness of learner information raises very serious concerns about the integrity of the system, including the important aspects of accreditation and certification. To complicate matters further, the numbers submitted and captured on the NLRD do not reflect the training that is taking place in the economic sector, but rather focus on training that is within a particular ETQAs primary focus. This reporting frame makes it more difficult to establish what training is taking place within the purview of a particular SETA’s sector. This study has also highlighted that there is a chronic paucity of data from the workplace with regard to training not funded through SETA grants, making it impossible to monitor whether the overall skills development strategy is impacting on the type of training that is taking place in the workplace and the scale of investment that is being made by employers and whether this is indeed increasing. Finally, the paucity of financial data in the SETAs and the Skills Development System is a matter of very serious concern that warrants urgent attention. The present systems are incompletely populated and accessing comprehensive information for substantive review has not been possible in this study. The risks associated with the present situation are extremely high and demands urgent remediation. A response to the above issues, including some of the recommendations raised in the recommendations pertaining to the improvement of the functions of the SETA, includes some of the following: • A focus on a set of ‘dash board indicators’ that focuses on: effectiveness (the measure of the correlation between outputs and training objectives) and internal Efficiency (as a measure of the relationship between the inputs (measured in money terms) and the outputs) with a strong emphasis on achieving External Efficiency (relevance), that is the extent of the match DRAFT – not for circulation 216 • • • • • between the outputs and objectives of the training system, on the one hand, and the economic & social requirements, on the other hand. The introduction of a standardised single template which allows SETAs to report on learners against all the relevant fields (this requires learner data in terms of race, gender and disability against programme name, type, level and cost as well as an indication of where the funding from the programme is from; As recommended above, the amendment of the WSP and ATR to allow for a single template in which workplaces will provide information about existing skills in the sector, new entrants as well as all training supported at the different levels on the NQF. This data should be analysed so as to allow for a comprehensive picture of training taking place in workplaces in the sector; The inclusion of an additional field in the NLRD for data on the economic sector the learner is from, which will assist to make it possible to verify data received from SETAs (this will then include information on programmes based on the workplace reporting template, specifically programmes funded through the SETA as well as programmes that may be supported through other mechanisms such as the NSF; and, As recommended previously, the requirement that the SETAs provide a detailed financial breakdown which allows for an analysis of costs and expenditures against programme activities. Over and above the AG process, there is a need for a due diligence process to be undertaken with regards to the performance reviews of SETAs. This would (i) establish whether the steps that the SETA indicates that they followed as part of the skills planning process were in fact undertaken, and (ii) whether the learner records can be verified. There is also a need to establish whether the scarce skills identified in these SSPs resonate with other forecasting processes in the relevant sector (it is noted that the DoL is attempting to explore this aspect in the research it has commissioned with the HSRC). 19 CONCLUSION Significant progress has been achieved by SETAs and the Skills Development system. But important challenges have emerged from this review with regard to: the level of development of SETAs; the numerous challenges that persist in respect of implementation, effectiveness and efficiency; the shortcomings in the functioning of the training market; the underdeveloped capacity and functioning of the monitoring and evaluations systems; the lack of effective management information systems; the effectiveness of quality assurance mechanisms in the system all combine to suggest that the SETAs and the Skills Development system are still at a critical stage of institutionalisation. The findings of this review suggest that the SETAs are on a positive trajectory. Future success will be contingent on a recognition that institution building is a complex and demanding process that requires purposeful and sustained investment. This suggests that changes in the SETA landscape require careful consideration with an emphasis on instituting changes that build on the current system and that continue to propel the system forward. These changes need to be implemented in a manner that recognises the system issues that have been highlighted by this report as well as the possibilities for improving institutions in the short to medium term. DRAFT – not for circulation 217
