PRESENTATION TO THE LABOUR PORTFOLIO COMMITTEE SKILLS DEVELOPMENT ACT / NATIONAL SKILLS DEVELOPMENT STRATEGY 08 AUGUST 2007

Overview of Presentation 1. Historical context 2. Skills Development Act, 1998 Implementation Framework 3. Skills Development Levies Act The National skills development Strategy 2005 – NSDS implementation 1. SETAs, National Skills Fund, Umsobomvu Youth Fund, National Productivity Institute 6. Conclusion: Work in progress

1.Historical context Where do we come from? Century of deprivation for the many Skills development for the few Exclusive “manpower” forecasting & training to mass based Sector Skills Planning and Workplace Skills Planning From anarchy to democracy From economic regression to growth From skills retreat to skills advance From the Pariah of Africa to the Leader of Africa – not by accident but by design !

Objective of the Skills Development Act Benefits to Working People & the unemployed To encourage workers to participate in scarce skills learnerships, Apprenticeships & other critical skills programmes To develop skills of workers to: Improve their quality of life Improve their prospects for work Improve their labour mobility Improve quality of goods and services Promote self employment

To assist Work-seekers to find work Retrenched workers to re-enter labour market Employers to find skilled employees To provide and regulate employment services To improve employment prospects of previously disadvantaged persons and redress the disadvantages through education & training To ensure quality of education and training in and for the workplace Benefits to Working People & the unemployed

Benefits to Employers To improve productivity and competitiveness To increase levels of investment in E & T, training in the labour market, and improve the return on that investment To encourage employers to: Use workplaces as learning environments Provide opportunities for employees to acquire new skills Provide opportunities for new entrants to labour market to gain work experience Employ people who find it difficult to be employed

CURRENT DEBATES/CHALLENGES IN RELATION TO NSDS RESEARCH AND INNOVATION Need to EXPAND our capacity to Innovatee and rresearch SUPPLY SIDE Need to INCREASE the quantity of those with quality further and higher learning Graduates without jobs? Retrenched? Long-term unemployed? School leavers? REDUCE New work opportunities to signal scarce & critical skills needs! DEMAND SIDE Need to INCREASE the number of employers and workers in quality lifelong learning Very few opportunities for many General Education and Graduates GENERAL EDUCATION INCREASE the quality of schooling for all EARLY CHILDHOOD DEVELOPMENT Improve and expand ADULT BASIC EDUCATION AND TRAINING Redress

INNOVATION, RESEARCH AND DEVELOPMENT DEMAND SIDE Immigration of scarce skills SUPPLY SIDE Too few jobs yet some skills very scarce! No-where for unemployed and school- leavers to go Learnerships with incentives for employers to provide work experience ECDABET Up-skill existing public & SMME workforce Scarce skills bursaries 12 3&43&4 5a5a 5b 6 7 FOUNDATION FOR HUMAN DEVELOPMENT 8 HRD linkages

2. Skills Development Act, 1998 Implementation Framework Skill Development Act 1998 Legislative framework providing for objectives, National Skills Authority, SETAs, Learnerships, Skills Programmes etc. Manpower Training Act 1981 Legislative framework governing apprenticeship training (Sections remain in force) Skills Development Levies Act Legislative framework providing for skills levy contribution, collection, administration, financial management etc. South African Qualification Authority Act 1995 Legislative framework providing for accreditation, standards setting, quality assurance of learning Public Finance Management Act Other related legislations Labour relations Act Basic conditions of employment act Employment equity act

Implementation Framework National Skill Development Strategy Policy framework recommended by NSA on National Objectives, Indicators & Targets to be achieved Seta Grant Regulations Regulate the manner in which SETAs must use transferred income to meet sector NSDS targets. Service Level Agreement Regulations Governs relations between DoL and SETAs in meeting NSDS Objectives & Targets Learnership Regulations / Apprenticeships Skills development provision National Skills Funding Windows Provides Identified areas of NSF support to achieve NSDS Objectives NSF Criteria and Guidelines provides procedures to access funding for projects mainly for the poor contributing towards NSDS Objectives & Targets

Advise Minister on: National Skills Development policy and strategy Implementation of strategy Allocation of subsidies from NSF Liaison with SETAs Report to Minister on implementation of strategy Conduct investigations

To develop and implement Sector Skills Plan (SSP) To pay grants according to sector and national priorities To design, register, manage and promote learnerships To perform ETQA functions (SAQA) To liaise with NSA To liaise with Employment Services of the DoL and any education council or board To report to the DG

SD LEVIES ACT, Skills Development Levies Act (Section 8) How is the NSDS Funded SARS Transfer levies collected to NRF Transfer information to DG Labour Maintain employer data per SETA Collect 1% payroll levy from all eligible employers by 07 th of each month SARS Transfer levies collected to NRF Transfer information to DG Labour Maintain employer data per SETA Collect 1% payroll levy from all eligible employers by 07 th of each month National Revenue Fund Maintains record of levies as part of DoL budget Transfer funds to NSF & SETAs based on SARS informa- tion and after approval by DG Labour National Revenue Fund Maintains record of levies as part of DoL budget Transfer funds to NSF & SETAs based on SARS informa- tion and after approval by DG Labour Department of Labour Verifying calculations and authorize transfers to SETAs within 20 days Conclude SLA with SETAs on usage Department of Labour Verifying calculations and authorize transfers to SETAs within 20 days Conclude SLA with SETAs on usage NSF Up to 2% of levies paid to SARS to cover collection costs Up to 2% for NSF Administration SETA Employer 80 % 20 %

SETA /NSF funding allocations LEVERS SETAS NSF 20%LEVIES SETA GRANTS NSF FUNDING WINDOWS 80% LEVIES

Projected Skills Levies to be collected to end of March 2010 (excluding government departments) R Billion NSDS SETAs NSF

Skills Levy Allocations

4. NSDS Vision (Growth, Development and Equity) Mission (institutions + incentives aligned to national driving strategies) Principles inclusive of equity targets 5 Objectives and 20 success indicators What critical skills are needed? Objective 1 Who should be trained? Objectives 2, 3 and 4 First economy (focus on current workers) Second economy – some bridges (focus on the poor) Explicit focus on bridging (focus on new entrants to labour market) Who should provide the training? Objective 5 Where should the projected R22 billion be directed Grants from SETAs with a focus on first economy, current workers, but contribution to new entrants) – about R17,6 bn Grants from National Skills Fund – Funding Windows – R4.4 bn

NSDS

NSDS Objectives Objective 1 Prioritising & communicating critical skills for sustainable growth, development and equity Objective 2 Promoting & accelerating quality training for all in the workplace Objective 3 Promoting employability & sustainable livelihoods through skills development Objective 4 Assisting designated groups, including new entrant to participate in accredited work, integrated learning & work-based programmes to acquire critical skills to enter the labour market & self-employment Objective 5 Improving the quality & relevance of provision

NSDS is a component of the SA National Human Resources Development Strategy GROWING THE FUTURE National capacity for Innovation, Research and Development BUILDING THE BASE “Improving the foundations for human development” SUPPLY SIDE Improving the supply of high- quality skills DEMAND SIDE Increasing employer participation in lifelong learning HRD STRATEGY Enhancing the linkages between the other four sstrategic objectives

5. NSDS implementation DoL / Seta Service Level Agreement Framework Cascades five year national objectives and targets to sectors Provide framework for each sector to negotiate and sign off on annual sector objectives and targets Establish and implement monitoring & measurement system Framework for annual performance assessment Basis for pro-active SETA support process and implementation of corrective actions quarterly

Seta Mandatory Grants Framework (50%) Companies >50 Employees Submit annual workplace skills plan (WSP) Companies <50 Employees Submit a grant application determined by SETA Companies that have achieved a National Standard of good practice in Skills Development Clear, specific annual cut off dates for applications 2005 / 2006 = 30 September / 2007 onwards = 30 June each year Unclaimed mandatory funds swept into Discretionary Funds immediately after cut off dates

Seta Discretionary Grants Framework (20%+ Other Income ) Sector skills research and planning Critical skills information dissemination Support non levy paying companies, NGOS, CBOs, Cooperatives Support learners with ABET Support learners in learning programmes linked to scarce skills

Seta Discretionary Grants Framework (20%+ Other Income) continued Support learners to gain workplace experience Train and mentor youth to from new ventures Support institutes of sectoral or occupational excellence Support new venture creation projects or learning institutes Support providers or institutions that are implementing the NQF in support of NSDS

Seta Discretionary Grants Framework (20%+ Other Income) continued Support ESDAs on learnerships Support Employment & Skills Development Lead Employers on learnerships (ESDLEs) Support learnerships and apprenticeships Support other sector priority skills development initiatives

Main source of income for NSF is 20% of skills levies collected Minister of Labour decides on allocations from NSF on advise from NSA Director-General:Labour is the accounting officer of the NSF NSF funds projects identified in the National Skills Development Strategy (NSDS) as National Priorities or Other projects related to the achievement of the purpose of the Skills Development Act as the DG determines National Skills Fund – implementation framework

NSF Funding windows cross-cutting criteria  NSDS Equity targets  BBBEE (Procurement)  Geographic spread (e.g. urban/rural split)  Legal and corporate governance compliance by implementing agencies  Funding excludes financing of capital expenditure and operating costs  SA Citizenship

NoNSF Funding WindowNSDS Indicators/Mandates 1Social Development Initiatives (Incl EPWP) Indicator 3.1 2Adult Basic Education & Training (ABET)Indicator 3.3 3Critical Skills SupportIndicators 1.2 & 4.1 4Provisioning SupportIndicators 2.4 & 5.3 (SDA Amendment Act) 5Industry Support ProgrammeIndicator 2.3 & Job Summit Agreement 6Informal Sector SupportIndicators 3.2; 4.3 & 5.2 7Constituency Capacity Building & Advocacy Indicator 5.4 8Special ProjectsNSDS Principles 9Discretionary Projects & InnovationSDA NSF FUNDING WINDOWS NSDS

ector growth strategies How the NSDS supports ASGISA & Sector growth strategies Sector Growth Strategy Including industry policy, sme development and public sector initiatives linked to sector Sector Skills Strategy Supports sector growth strategy and is responsive to Workplace Skills Strategies Workplace Skills Plans Supports workplace growth strategy and is responsive to Sector Skills priorities

6. Conclusion: Work in progress National Skills Development Conference 17 – 18 October st & 2 nd Economy interventions - Scarce & Critical Skills - NSDS Funding Framework - Mid-term assessment of the National Skills Development Strategy NSDS Review of the SETA landscape

Work in Progress: Amendment to the Skills Development Act to insert provisions in relation to: Manpower Training Act 1981, provisions that remain in force -Incorporation of relevant MTA provisions in the SDA -Alignment of apprenticeship conditions of employment with the LRA & BCEA and learnerships -Introduce new provisions to enable the development and maintenance of artisan standards, moderation of decentralized private Trade Test Centres. Establishment of the Quality Council for Trades and Occupations to ensure quality in work based learning Accounting framework of the National Skills Fund Extending National Skills Authority term of office from 3 yrs to 5 yrs to align with NSDS and SETA lifespan.

THANK YOU SAM MOROTOBA DDG: ESDS & HRD