1. PRESENTATION ON STRATEGIC AND ANNUAL PERFORMANCE PLAN 2013/14- JUNE 2013

2. Content of the presentation 2 Background and context Key elements of the SSP & Strategic Plan up to 2016 Overview of 12/13 APP and key achievements 13/14 APP and the new SSETA delivery model Summary of targets in the 2013/14 APP Expression of Interest numbers for 12/13 and 13/14 Conclusion 1 2 3 4 6 7 5

3. Background – 2011 and Administration 3 The Administrator had to build interim capacity within SSETA to attend to financial and administrative matters The SSETA put in place a strategic plan which was aligned to NSDS III and which set out the work required to reposition the SSETA to deliver on its mandate

4. Some context 2011/12 4 A partnership was entered into with an external research organisation to assist the SSETA research team to develop an SSP that would take the sector forward Strategic plan, annual performance plan and budget were submitted in August 2011 based purely on alignment to NSDSIII and the key organisational priorities The SSETA strategic plan was approved only in January 2012 – with two months left to the end of the financial year. All these developments led to huge delays in rolling out programmes for 2011/12, which inevitably had a knock-on effect to the roll out of 2012/13 programmes as well An application was made to DHET to have this submitted in February 2012, which was approved and duly submitted. It is work in progress but is a big improvement

5. 5 SECTOR SKILLS PLAN AND STRATEGIC PLAN TO 2016 SECTOR SKILLS PLAN AND STRATEGIC PLAN TO 2016

6. KEY ELEMENTS OF SSETA SSP 6 Sector redefined Broader services sector: SSETA is part of the wider services sector that includes transport, financial, ICT and other services such as Education and Health Care which together make up 65% of GDP SETA role in developing the sector redefined. The SSETA is working with stakeholders to identify priority scarce and critical skills and then develop projects to develop and deliver programmes to address these needs. The focus is on targeting the funded interventions and on monitoring outcomes and measuring impact Services SETA sector: 16 sub- sectors, including: business services (consulting etc.); property services (estate agents etc.); household and personal services. Environment analysed and growth areas identified Potential growth and employment creation opportunities have been identified in sub-sectors, including consulting, marketing, hair and beauty and funeral services

7. SSETA STRATEGIC PLAN 7 Key strategic themes In each sub-sector identify the needs of large, medium and small enterprises and develop agreed interventions to enable growth and job creation Prioritise scarce skills (occupations where posts cannot be filled by qualified and competent people) and critical skills (gaps in capacity of employed staff) Restructuring the SETA into 6 Chambers serving the needs of 16 sub-sectors or industries – clustering the 70 SIC coded industries allocated to the SSETA

8. 8 STRATEGIC PLAN Steering resources to meet needs Reviewing policies, processes and systems to ensure: greater transparency; consistency in targeting resources to sector needs, including scarce and critical skills Delivery of education and training through focussed projects to enable greater efficiency, effectiveness and accountability Increasing sector and sub-sector knowledge:  Increase in quantity and quality of WSPs and ATRs  Better quality research, through recruiting skilled people, contracting specialist researchers and partnerships  Structuring sub-sector consultation into an annual programme of Chamber work

9. 9 KEY ELEMENTS OF SSETA STRATEGIC PLAN Levers to achieve impact Continuously reviewing past interventions and subjecting them to careful scrutiny to learn lessons. Mistakes will be made, and these will be evaluated to improve in future Making greater use of data, though improved capturing, management, analysis and reporting of data Focussing on the SSETA sector, whilst at the same time acknowledging and championing the need for a wider Services Sector Development Strategy and skills plan A greater focus on throughput, completion and future employment and assessing impact

10. Strategic Goals 10 Effective governance, management, and financial management Effective strategies to support sector and sub-sector development, including small businesses Raising skills levels to support growth and employment Working with government and other SETAs to build a Services Sector that supports inclusive growth including in rural areas Sound sector knowledge informing strategy and plans Quality provision of education and training that meets sector needs Outcomes and impact of SETA strategy measured

11. Programmes to achieve strategic goals 11 1.Governance 3Mandatory Grants 4SETA funded skills development 5Sector skills planning and research 2Administration 6 Sector development interventions 7 Programme monitoring and evaluation

12. 12 OVERVIEW OF SSETA 12/13 APP AND KEY ACHIEVEMENTS AGAINST PRE-DETERMINED OBJECTIVES

13. ProgrammeAimProgress and challengesNext steps Governance Fully functional accounting authority and committees Revised constitution; strong audit committee established; preparatory work done for the new board; awaiting approval for the new board to take over responsibility from the Administrator from 1 July 2013 Approval of new accounting authority members awaited Administratio n Restructurin g to achieve strategy and new delivery model The SSETA was successfully restructured during 2012; most systems and processes are now in place; some gaps and weaknesses remain. The appointment of a COO and a strengthened PMO will address the remaining weaknesses Results of the new delivery model already evidenced by the overwhelming response to the EoI; demand generated is enough to meet 12/13 and 13/14 targets. Progress towards objectives for 31 March 2013

14. ProgrammeAimProgress and challengesNext steps Mandatory Grants To increase employer participation The target was 3300 WSPs of which just over 3000 were received in 2012. The challenge now is to increase these in June 2013 including PIVOTAL plans in line with the SETA Grant Regulations Increased engagement with sub- sectors expected to result in increased submission of WSPs. Discretionary Funded programmes To improve effectiveness In November 2011 the SSETA embarked on a tender process which resulted in 6900 of the target of 26000 learners being enrolled. The experience of this tender process resulted in a realisation that this is not the best approach. The 2013 EoI process, and special projects will help deliver the outstanding training The huge response to the 2013 EoI process by the sub-sectors means that there is enough demand to meet both the 12/13 and 13/14 targets. Progress towards objectives for 31 March 2013

15. ProgrammeAimProgress and challengesNext steps Sector Skills Planning and Research Thoroughly researched SSP to inform plans A partnership was entered into with an external research organisation and the SSETA research team was supported to develop a new SSP. The SSP has been approved and provides a good basis for plans. It is work in progress. A contract is about to be signed to develop a supply and demand forecasting tool for the sector. Further research will go into various baseline studies as well as understanding the 7 dynamics (people in occupations nationally, provincially, by age, gender, disability status, race, qualifications as well as occupations scarce/critical skills) in the sector. Sector Development Provider accreditation and learner certification backlogs addressed Some 600 provider accreditations have been processed. Over 12000 learner achievements have been uploaded and certificates awarded. The backlog is almost cleared. The problem remains of a large number of learners in SSETA funded programmes (artisans etc) not being certificated. A remedial project is identifying all such learners and programmes are being put in place to address their needs. On-going attention will be paid to learner certification backlogs and a remediation project is under way to fast-track the compliance completion of the artisans as well as “unfunded” learners challenge that the SSETA is facing. Qualifications and programmes developed to address sector needs 10 qualifications have been identified for review and development; a programme is in place to review learnerships and develop skills programmes to address scarce and critical skills needs. Consolidation of the various lists of scarce/critical skills lists from the sector is receiving attention, with a view to developing a credible sector-wide list of scarce/critical skills. Progress towards objectives for 31 March 2013

16. ProgrammeAimProgress and challengesNext steps Sector Development FET college collaboration 12 FET colleges have been identified and MOUs signed; an office has been opened in Upington as part of the partnership with Northern Cape colleges; programmes are being funded in six rural districts through colleges; 250 learners are already enrolled through this partnership; a partnership has been forged with the successful Blackburn College in the UK and assistance is being provided to three FET colleges. A partnership with HAMK in Finland is assisting with entrepreneurial training Building capacity in the FET sector in areas of governance, administration, financial and project management, facilities, programme design and lectures training; most of the colleges are in rural areas, giving the SETA a platform to deliver programmes in areas where they were not available before; funding provided includes bursaries, accommodation and other support for rural learners enrolled in FET colleges. Disability Partnership agreements with Disabled People South Africa have been concluded; Sector disability advisory forum established to advise Seta on disability matters. Graduates with disability internships programme is in place with 100 learners in Limpopo already enrolled in 2012, further 200 learners in NW and EC are being enrolled in 2013. FET, Rural and Disability projects are cross- cutting. Disability projects have a rural bias and visa versa. Further 600 people with disability will be placed in the remaining provinces to complete the target of 900 before the end of 2013. Rural development Six districts have been identified in Eastern Cape, Free State, Limpopo and KZN. Long term agreements have been reached to fund various programmes to meet local needs Cross-cutting rural development projects that involve municipalities, local business, NGOs, FET colleges etc. Progress towards objectives for 31 March 2013

17. Progra mme AimProgress and challengesNext steps Monitori ng and Evaluatio n An effective organisation al performance managemen t system and a sound monitoring and reporting system established The performance of the SSETA during NSDSII could not be assessed because of inadequate data. However an analysis of spending was done and some forensic audits were conducted. Lessons were learned that informed the new delivery model. A monitoring and reporting system is in place that now enables the SSETA to report accurately on programme implementation. Impact studies, on-going monitoring, evaluation and reporting are being institutionalised. A service provider is being contracted to develop a comprehensive Management Information System Progress towards objectives for 31 March 2013

18. 18 2013/14 APP AND THE NEW SSETA SERVICE DELIVERY MODEL

19. Background – Repositioning the SSETA 19 The need to effect restructuring of the SETA and putting in place required institutional mechanism led to the administration to be subsequently extended in April 2013 for another 3 months until the 30 June 2013 During this period, an intensive review of the operations, structures, policies of the SETA was undertaken, resulting in huge changes. These included the appointment of a team of Executive Managers and a CEO as well as: Development of new policies and procedures that are aligned to the new delivery model Building internal capacity to deliver on functions that were outsourced to intermediaries in the old model SETA now has the task of delivering on the backlog of targets dating back to 11/12 and 12/13 parallel to the targets set for the 13/14 financial year Designing a new structure and model able to deliver on the mandate of the SETA as required by NSDSIII Putting in place the institutional arrangements to enable the new model of delivery

20. Changed Delivery Model 20 Previous model  The SETA put out calls for proposals  Lead providers/ employers/ labour brokers put in tenders  Successful bidders were awarded contracts for a certain number of learners  The contractor “placed” learners in “host” employers, recruited learners and sub- contracted training providers  The contractor reported on learner numbers enrolled and completing  The SSETA develops project plans to address sub-sector and cross-cutting sectoral needs  Targets are agreed for each project and set out in the APP, with budgets  An Expression of Interest (EoI) process is advertised and services sector employers apply for grants and/or access to SSETA programmes  The SSETA approves grants and enters into agreements with employers and providers to deliver programmes New model

21. The change has not been easy 21 Internally  A paradigm shift was needed to enable managers to adapt and plan for the new way of working. Some left the SSETA at the start of 2013 as result  Capacity that was outsourced for many years needed to be established. There is no experience of programme implementation  There was a skills gap which required new people to be brought in Internally  A paradigm shift was needed to enable managers to adapt and plan for the new way of working. Some left the SSETA at the start of 2013 as result  Capacity that was outsourced for many years needed to be established. There is no experience of programme implementation  There was a skills gap which required new people to be brought in There has been resistance to the changes both internally in the SSETA and externally amongst stakeholders Externally  Those who build their business model on the SSETA outsourced model have fought to keep the old ways of doing things  In tenders and EoIs labour brokers and training providers continue to see the SSETA as an ATM or business opportunity  Employers welcome the changes but are waiting to see the changes. Many still write of their levies as a tax and do not want to work with the SETA Externally  Those who build their business model on the SSETA outsourced model have fought to keep the old ways of doing things  In tenders and EoIs labour brokers and training providers continue to see the SSETA as an ATM or business opportunity  Employers welcome the changes but are waiting to see the changes. Many still write of their levies as a tax and do not want to work with the SETA

22. Artisans Remediation – A legacy 22 An evaluation of the Apprenticeship/Trade programmes revealed that there were SSETA funded programmes involving a significant number of apprentices who did not complete their training, and hence have not received their trade certificates During the period 2007 to 2010 the SSETA paid out R1.6 billion in contracts to 150 companies. Of the R1.6 billion R800 million went to 20 intermediaries No proper workplaces to ensure proper workplace integrated learning took place. Host sites were not suitable for the appropriate on the job learning and training Trade test centres were found to be non-compliant and there were learners already trained and trade tested. The recommendation in those cases was that the affected learners need to be re-tested before they can be certified Forensic audits uncovered extensive abuse: learners not paid; learnerships where no work experience was achieved; payment for work not done etc Poor monitoring practices by the previous management resulted in use of providers whose accreditation status was subsequently found to be non-compliant due to

23. Artisans Remediation – A legacy The intermediaries then sub-contracted employers and providers, many of whom were amongst the 20 receiving R800m. They contracted each other A key indictment of the system that is solely focused on achievement of numerical targets has to be the SSETA’s artisans backlog legacy Of the 5000 artisans trained in this way some 2000 remain without their trade test. This is now a crisis that the SSETA has to address as a remedial project Some R400m was spent on Business Admin and New Venture Creation learnerships where unemployed people were trained/RPL’d but no businesses could be found that were established or supported Skills development providers who are non-compliant with the accreditation requirements to deliver the training. Training received was not acceptable. The only evident economic development derived was the expansion of businesses acting as intermediaries Poor monitoring practices by the previous management resulted in use of providers whose accreditation status was subsequently found to be non-compliant due to 23

24. Artisans Remediation – A legacy A project aimed at addressing the certificates backlog was subsequently set up in January 2013 with the help of DHET and Indlela. So far 1090 apprentices that do not qualify, but were on the system as part of those waiting for certification were identified. Through this remediation programme, A total of 8497 files has been allocated and alphabetized per service provider per trade. A total 1181 certificates has been printed and signed and sent to learners and providers since March 2012 till April 2013. A comprehensive remediation project is under consideration, which will delve deeper into this problem and enable the backlog to be addressed. 24

25. SUMMARY OF BUDGET AND 13/14 APP TARGETS 25

26. 2013/14 – Overview Of Budget RevenueR’000 Levies1 027 406 Skills Development Penalties 17 208 Investment47 322 Prior Year Surplus 415 583 Total Revenue 1 507 519 Expenditure Employer Grants Paid 256 852 Administrator Expenditure 127 142 Discretionary Projects 1 123 526 Total Expenditure1 507 519

27. SUMMARY OF 2013/14 APP/SLA TARGETS 27 Learning interventionTargetBudget Learnerships Employed 5 252R 93m Learnerships Unemployed 6 500R 252m Artisans 1 920R 75 m Internships FET (part of qualification) 2 450R 143m Internships FET (NCV graduates) 7 330R 56m Internships HE (part of qualification) 100R 3.6m Internships HE (graduates) 2 695R 97m Bursaries Employed 1 885R 76m Bursaries Unemployed 260R 13m Adult Education and Training 600R 3.6m Recognition of Prior Learning 200R 2.9m Skills Programmes Employed 4 000R 91m Skills Programmes Unemployed 2 000R 39m Total Learners35 192R 945m

28. SUMMARY OF PROJECT TARGETS 2013/14 28 ProjectTargetProjectTargets Hiring Services1135Real Estate3425 Household, domestic, cleaning and gardening services 2830Management Development (Universities) 500 Marketing and Communications 590NGOs, CBOs, NPOs500 Call centres1115FET college project5645 Postal services1160Disability382 Collective services440Cooperatives1000 Management and business services 2860Rural Development1730 Hair and Beauty2720Strategic Infrastructure Projects 6450 Funeral services890Unallocated1820 The above targets are not in the SLA but are the targets that the SSETA is setting per project s so as to address the all sub-sectors and cross-cutting needs in the sector.

29. 29 EXPRESSION OF INTEREST FIGURES

30. The SSETA has made use of an electronic Expression of Interest (EOI) in order to accurately define and understand the demand in the Services Sector and initiate the process applications for funding of learning interventions. It is an electronic application process, through which member are able to apply for a SSETA funded learning interventions for both employed and unemployed people seeking work in the sector, as well as specialist support programmes for Small and Micro Enterprises (SME’s). EOI’s require member organisations to provide basic information to assess whether the entity is eligible to apply. If eligible the entity will be invited to complete detailed applications for their required skills development needs. The intention is to process the applications speedily and enable programmes to be implemented during 2013/14. SSETA Expression of Interest

31. Time lines 31 April 2012 – March 2013 Quick win projects started: FET colleges; Universities; rural areas; planning policy review April 2012 – March 2013 Quick win projects started: FET colleges; Universities; rural areas; planning policy review January – March 2013: Finalisation of project plans; Expression of Interest and applications; putting in place systems and processes for new model April to June 2013 Evaluation of R2.8 billion in grant applications received through the EoI process; appointment of project staff April to June 2013 Evaluation of R2.8 billion in grant applications received through the EoI process; appointment of project staff July – Dec 2013 Roll-out of 2012/13 funded programmes; New EoI process for PIVOTAL 2013/14 funded programmes July – Dec 2013 Roll-out of 2012/13 funded programmes; New EoI process for PIVOTAL 2013/14 funded programmes Jan – March 2014 Roll-out of learnerships and other programmes; EoI process for 2014/15 funded programmes Jan – March 2014 Roll-out of learnerships and other programmes; EoI process for 2014/15 funded programmes April - June 2014 Aim to roll out programmes funded from the 2014/15 budget; April - June 2014 Aim to roll out programmes funded from the 2014/15 budget;

32. EOI Numbers 2012/13 32

33. Although the SSETA received a high number of EoIs, higher than the targeted number, some sub-sectors are not well represented. The SSETA is therefore working on packaging a special project for delivering training for the following targeted industries: Domestic Services Gardening Services Hiring Services Hair and Beauty Funeral services Some sub-sectors expressed a low interest (applications) in internships, and in response, the SSETA signed MOU agreements with various organised business structures (chambers of commerce, Afrikaanse handelsinstituut, etc.). These bodies have been approached through special projects for absorbing learners in various internship programmes (FET, HE) Concluding Remarks… 33 The EoI process made it possible to determine over-supply and under-supply, well before any commitments were made.

34. The SA Post Office, Bargaining Councils, Project Management Associations (cutting across sectors) will be approached for a special project for improving skills and service delivery through various learning interventions (employed, unemployed learnerships, internships, bursaries, FAE, RPL, Skills Programme). The Administrator has engaged the large member companies for various strategic discussions, they will also be targeted for special projects in order to address those key areas of training that have not been fully addressed through the applications in the EOI process. In these conversations, apart from seeking to appropriately respond to employer needs, we have been aggressively raising the challenge of putting in place effective senior management and leadership training, across the sector. Concluding Remarks… 34