T HE I MPLEMENTATION OF THE SETA G RANT R EGULATIONS AND THEIR I MPACT ON THE P RIVATE P ROVISION OF E DUCATION, T RAINING AND D EVELOPMENT IN S OUTH A FRICA Rick Edmonds APPETD

‘Legislative’ context Constitution of the Republic of South Africa, 1996 Education White Paper 3, 1997 Higher Education Act, 1997 Skills Development Levies Act, 1999 FET Colleges Act, 2006 National Development Plan 2030, 2013 White Paper for Post-School E & T, 2013 Guidelines on the Implementation of the SETA Grant Regulations, 2013 Twenty Year Review, 2014

Preamble Improve the quality of life of all citizens…; Education 29. (3) Everyone has the right to establish … independent educational institutions that - (c) maintain standards … (4) … state subsidies … Constitution

White Paper … private provision plays an important role in expanding access to higher education

Higher Education Act 51 Registration of PHEIs (a) …registered … as a private higher education institution in terms of this Act; FET Colleges Act 28 Registration of private college (b) registered … as a private college in terms of this Act.

Skills Development Levies Act Employers must pay 1% of all their workers’ pay to the skills development levy every month. SETAs get 80% of the money Employers get back some of the money back from SETAs as a refund if they train their workers. The Skills Development Fund gets 20% of the money, which is used for special training, etc.

National Development Plan Overview of the current post-school system Private providers are playing an increasingly important role … A large number … funded through the skills levy HESA proposal … Next Generation of Academics Increase the throughput rate … private and public higher education institutions …

White Paper for Post-School E & T 5. Private Education Provision Private post-school institutions help to meet the rising demand … … funded by … SETA training budgets... Private institutions play a significant role … private FET college sector …; in 2009 it constituted 20.5% … over 20 years, students achieved qualifications …

White Paper for Post-School E & T Minister’s Preface … diverse range of educational institutions and institutional types … cater for the millions … Executive Summary SETA funding of training will come from the discretionary grant. Providers could be public, private or even the employers’ … … outcomes from the changes are yet to be felt

NSFAS Approximately 100,000 students are enrolled at PHEIs and PFETs … NSFAS discriminates against poor students … at private institutions (eg CIDA) Revised Grant Regulations exacerbates this discrimination

‘new’ SETA Grant Regulations 2. General problem statement … grant disbursement … disproportionately involves private education and training provid­ers … 4.1 Mandatory grants … 20% grant for submitting a WSP and ATR … 4.2 Discretionary grants … 80% of funds to be spent on PIVOTAL programmes that address scarce and critical skills

Twenty Year Review, Education and skills unemployed people completing learnerships … per annum … challenges in placing learners in … sustainable employment SETAs to spend more on substantive courses … at public colleges and universities Only 4% of the 2007 intake of FET colleges completed their qualifications in Youth unemployment … was 44% in 2013 … 2.6 million.

Comment Implementation timeline Implications - APPETD Concerns - SEIFSA Problems – Skills Portal Confusion - ASDFSA

Disturbing Implementation Timeline 26 Nov 2012GCIS: DHET to publish Grant Regulations 02 Dec 2012DHET announces New SETA Grant Regs 03 Dec 2012New SETA Grant Regulations gazetted 11 Dec 2012Special SETA CEO'S forum: SETA Grant Regs 10 Jan 2013DHET advised SETAs to align Strategic Plans 13 Jan 2013ETDP SETA new Grants Disbursement Policy 15 Jan 2013SETAS submit draft aligned Strategic Plans 30 Jan 2013SETAS submit Approved Strategic Plans 01 Apr 2013SETA Grant Regs Implementation date

Implications - APPETD Statements & gazettes while interested parties on leave Stakeholders thus unaware of the new regulations 2012: < 1,000 employers submitted WSPs to ETDP SETA 2/3 of levy-paying employers too small to submit WSPs NGOs & exempt employers do not submit WSPs Therefore skills data is negatively impacted & unreliable 80% of discretionary grants now to PIVOTAL programme Unemployed youth access to skills training limited Participation by employers will reduce

Implications – APPETD (contd) Public providers will become main grant beneficiaries Levy-paying private providers will be further impacted Mandatory grant reduced from 50% to 20% Less incentive for levy-paying employers submit WSPs Continued employer commitment to SD will be tested Will result in fewer WSP, ATR and PP submissions Critical data from Plans and Reports more unreliable Private ETD providers will be impacted, some close Further reduce levy payments from employers to SETA

Concerns - SEIFSA Substantial reduction in the mandatory grant to employers Mandatory grants are important incentive for companies to submit WSPs and ATPs Sector consistently demonstrates ongoing support for skills development in line with national policy Counter-effect on the ability of companies to invest in training, given the significant costs associated with skills development

Problems – Skills Portal ICT sector concerned about definition of PIVOTAL … training leading to qualifications or part-qualifications. Time taken to develop innovative IT qualifications via QCTO: by the time the qualification is developed, it will be obsolete. How do small companies implement PIVOTAL programmes? Absence of staff on formal programmes will require a replacement - add 10% cost to the payroll Company can’t pass on the additional cost to the customer.

Confusion - ASDFSA … no longer be possible to claim any refund for short courses and programmes … Many small companies … not able to afford to implement full learnerships and apprenticeships. …skills development is moving away from private providers … Pivotal grant planning and reporting will continue to grow at the expense of … unaccredited short courses and skills programmes and also accredited skills programmes and short courses

Summary Few employers now submit WSPs to ETDP SETA Collected skills data is thus unreliable 80% discretionary grants now to PIVOTAL programmes People needing scarce & critical skills will be hurt Levy-paying private providers will be impacted Mandatory grant reduced from 50% to 20% Result in fewer WSP, ATR and PP submissions Levy payments from employers further reduced Reliability of skills data further compromised

T HANK YOU