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Have government-endorsed skills development initiatives really worked?South Africa’s unemployment rate rose by 0.9 percentage points quarter-on-quarter to 25.2% or 4.31 million in the first quarter of 2010. The finance and construction industries have shed the most quarter-on-quarter jobs, while the trade and manufacturing sectors have shed the most jobs year-on-year.
The role of the Setas
The government, faced with the jobless challenge of this magnitude, is responding with both immediate counter-cyclical measures and is working on policy measures to improve the structural capacity of the economy to create decent work.
There is a role that the sector education and training authorities (Setas) can play in both these areas, since skills development and training will be a key means of addressing these two imperatives, said Minister of Economic Development Ebrahim Patel.
The fundamental departure point of the government’s approach is that employment should not be the outcome of other policies, but the overarching goal of economic policies. In other words, all their economic instruments must be used to achieve the goal of decent employment. In each of these areas, skills formation and skills enhancement is critical.
The advanced manufacturing processes that are vital to 21st century factories will rest on world-class skills.
The quality of a tourist’s experience of South Africa will depend on the service provided by well-trained workers.
The success of rural development and improved agricultural performance will require better business skills by small farmers as well as improved knowledge of new agricultural techniques.
Patel said that a pro-employment growth path must be underpinned by a high and rising skills base, and this requires a greater coherence between formal schooling, vocational training and workplace learning.
The Setas, said Patel, can play a role in the support programme for distressed sectors, and the skills components of the Expanded Public Works Programmes, ensuring South Africa has the skills mix required for the R787-billion public investment programme and the so-called training layoff scheme.
Training layoff scheme
The training layoff scheme is intended as an alternative to retrenchment. It entails enrolling workers on training programmes for a period of up to three months.
The principle behind the scheme is to use the period of industrial slack to train and re-skill workers. The scheme will be available to workers earning up to R180 000 a year.
The key design element of the scheme is that it is available to workers as an alternative to retrenchment.
During the period on the scheme, the employment relationship with the company is retained, and a training allowance will be paid to workers of 50% of basic wages up to R6 239 per month.
Participating employers will carry the cost of a basic social package to ensure that death, disability and funeral benefits are not suspended during this period.
The training layoff scheme applies to the entire economy and thus all Setas in the private sector will be required to be involved in the scheme.
Special board meetings and the response by retail
Initially, that involvement will be in the sector design of training courses, preparing the logistics for a rapid-response capacity once applications for assistance are made.
It also will address the actual application for funding and resources and monitoring and accounting to the National Skills Fund.
Special board meetings of Setas have been convened and a number of Setas have advised they will take part in the training layoff scheme.
Patel said that the Wholesale and Retail Seta decided to set aside R120 million for this initiative and to allocate a portion of the money for training within its supply chain, namely in the manufacturing sector. The purpose thereof will be to enhance skills within supplier factories to the retail sector.
Rescue packages
Patel said that apart from the layoff scheme, training will be an important component of rescue packages for distressed sectors.
The Department of Trade and Industry is working on finalising packages in a number of sectors, including the auto sector, clothing and textiles as well as capital equipment, transport equipment and fabricated metal products linked to South Africa’s infrastructure development programme.
The government has invited Setas to enter into a partnership with it in these sectors to identify the new skills requirements of a competitive sector.
The Setas also must help to lay the basis for the manufacturing industry to emerge as a strong component of the economy, said Patel.
The performances of the Setas
Corrie Smit, chief executive officer of the Health and Welfare Seta, said that the HWSETA has fulfilled its skills development mandate. As a Seta for the two broadest sectors in South Africa – health and social development – it has facilitated the participation of all the employers in both sectors across the public and private spheres in the levy-grant system.
It also has created the mechanism for hundreds of non-governmental organisations to begin facilitating training for their own permanent employees.
One of the most amazing achievements over the past 10 years has been how the health sector, where 79% of the levies are collected from, has cross-subsidised the social sector.
This truly reflects the spirit of “nation building”, which is the intention of the Skills Development Act, Smit told BBQ.
In 2008 to 2009, HWSETA introduced a Mega Expression of Interest to disburse surplus funds available. It committed approximately R200m in this financial year.
In the last two years, it has seriously addressed the funding needs of persons with disabilities through its special funding opportunity.
HWSETA has trained 447 learners on a skills programme worth 69 credits, in partnership with 19 further education and training colleges and the Small Enterprise Development Agency.
Almost 60% of these small businesses were still in operation 18 months after commencing the skills programme.
Minister compliments ISETT Seta
The Information Systems Electronics and Telecommunications Technologies Education and Training Authority (ISETT Seta) has performed admirably over the past 10 years. It was one of the best performing Setas in terms of the Department of Labour’s performance criteria in the previous financial year and has contributed positively to the implementation of the National Skills Development Strategy (NSDS) II.
Recently, the Minister of Higher Education and Training Dr Blade Nzimande complimented this Seta for remaining steadfast in living up to its key mandate to contribute to the NSDS objectives.
It has posted good performance results: To date, 15 000 learners have been trained through learnerships and graduate internships programmes, with a 75% placement rate.
Significant contribution to GDP
CEO of the Safety and Security Seta (SASSETA) Zongezile Baloyi told BBQ that this Seta played a significant role in the delivery of skills development programmes for its sector.
“Over the past five years, we have been at the forefront of developing and driving the safety and security skill plan that allowed us to respond to the skills requirements of the entire sector.”
In terms of its private security learning programmes, SASSETA provides a significant contribution to South Africa’s gross domestic product, and it is estimated that the Seta currently provides more than 350 000 employment opportunities, added Baloyi.
An unqualified audit
Amanda Masilo, CEO of the Mining Qualifications Authority (MQA), or Mining and Minerals Seta, says it has fulfilled its mandate of administering and facilitating skills development within this sector.
On average, more than 1 500 unemployed and employed learners are trained annually on learnerships, whereas approximately 3 000 learners are trained per year on Adult Basic Education and Training.
”We have made sure that efforts were placed on delivering against targets set by both the mining charter and NSDS I and II, and have even over-achieved in some areas,” Masilo told BBQ.
Each year, the MQA has received an unqualified audit report from the Auditor General Compliance, with good corporate governance being regarded as a cornerstone of its success.
With the application of sound financial management practices, it has ensured that it remains well below the 10% statutory allocation of the administrative budget annually.
A Seta trendsetter
Cheryl James, CEO of the Seta for Finance, Accounting, Management Consulting and other Financial Services (Fasset), told BBQ that this Seta was recognised by the Department of Labour at the National Skills Conference as the country’s top performing Seta.
A trendsetter within the Seta fraternity, Fasset was the first to be registered by the Department of Labour, the first to register learnerships, the first to offer lifelong learning, and the first to gain national skills funding for projects from school level to postgraduate level.
By the end of Fasset’s 10th year of operation, some 18 836 learners already had completed their learnerships.
Fasset’s Development Projects continue to play an important role in opening up the sector to black, Indian and Coloured learners.
By year two, 10 projects had been approved and an amount of just over R13.5m had been allocated.
By year 10, R310m in funding had been allocated, some 62 projects had been funded and more than 11 000 learners had benefited.
A national teacher development summit
Nombulelo Nxesi, CEO of the Education Training and Development Seta (ETDP), said this Seta was rated among the best overall performing Setas in South Africa over the past 10 years.
In 2007/2008, 2008/9 and 2009/2010, it received an Excellence in Leadership and Management award from a worldwide research organisation.
Annually, the ETDP Seta supports an average of 10 000 individuals in the acceleration of skills.
In July 2009, it hosted a National Teacher Development Summit. “It was able to forge a way forward in terms of the type of individual teacher we want to develop in South Africa and the holistic education system needed to ensure learners achieve academically at school,” Nxesi told BBQ.
Setas under fire
In March 2000, 25 Setas were set up as part of the Skills Development Act, with the purpose of accelerating skills in all South African sectors. Those numbers were streamlined and reduced to 23 in 2005.
The results, in terms of skills developed since their inception in 2000, have been mixed, said Patel. “A number of opposition parties in parliament as well as public commentators regularly raise criticism of the Seta model and the performance of Setas.
“Some Setas clearly have underperformed, and financial irregularities in individual Setas have reflected poorly on Setas as a whole.”
“Little has been done to properly measure the efficiency of training delivery to ensure that the significant sums of money that Setas receive and disburse have resulted in effective training for the largest number of workers and work-seekers,” he added.
“Governance by social partners is uneven, with the strongest boards typically found in sectors with strong, well-organised business associations and trade unions.”
”As government, while we strongly support the Seta model, we do need to consider the criticism that is made and work with Setas to address these,” said Patel.
The road ahead
In May 2010, Nzimande announced the restructuring of the Seta landscape. It will entail the recertification of 15 Setas with minor changes, as well as the amalgamation of several Setas to secure greater efficiency, which will result in the establishment of six new Setas. There also will be a reduction from 23 to 21 Setas.
The government clearly has not been exhilarated about the performance of the Setas. Nzimande said his department is reviewing the governance mechanisms for Setas and intended to take legislative steps to improve their functioning. “We are looking into patterns of mismanagement and non-performance in the Setas and will release details within weeks about action to be taken.”
He added that the National Development Act permits the minister to direct the director-general to appoint an administrator to take over the administration of a Seta or to perform the functions of a Seta if, inter alia, the Seta fails to perform its functions. It is one of the options open to Nzimande to deal with non-performers.
Fanie Heyns
