PRESENTATION TO THE LABOUR PORTFOLIO COMMITTEE

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PRESENTATION TO THELABOUR PORTFOLIO COMMITTEE

• SKILLS DEVELOPMENT ACT / NATIONAL SKILLS
  DEVELOPMENT STRATEGY
• 08 AUGUST 2007

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Overview of Presentation

• Historical context
• Skills Development Act, 1998 Implementation
  Framework
• Skills Development Levies Act 1999
• The National skills development Strategy 2005
  2010
• NSDS implementation
• SETAs, National Skills Fund, Umsobomvu Youth
  Fund, National Productivity Institute
• Conclusion Work in progress

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Historical contextWhere 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 !

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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

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Benefits to Working People the unemployed

• 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

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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

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CURRENT DEBATES/CHALLENGES IN RELATION TO NSDS
RESEARCH AND INNOVATION Need to EXPAND our
capacity to Innovatee and rresearch
New work opportunities to signal scarce
critical skills needs!
SUPPLY SIDE Need to INCREASE the quantity of
those with quality further and higher learning
REDUCE
Graduates without jobs?
Retrenched? Long-term unemployed?
DEMAND SIDE Need to INCREASE the number of
employers and workers in quality lifelong
learning
School leavers?
Very few opportunities for many General Education
and Graduates
EARLY CHILDHOOD DEVELOPMENT Improve and expand
ADULT BASIC EDUCATION AND TRAINING Redress
GENERAL EDUCATION INCREASE the quality of
schooling for all
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INNOVATION, RESEARCH AND DEVELOPMENT
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SUPPLY SIDE
Too few jobs yet some skills very scarce!
Immigration of scarce skills
Scarce skills bursaries
5a
5b
DEMAND SIDE
8 HRD linkages
Up-skill existing public SMME workforce
No-where for unemployed and school-leavers to go
3 4
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Learnerships with incentives for employers to
provide work experience
FOUNDATION FOR HUMAN DEVELOPMENT
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ECD
ABET
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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 12-32 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

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Implementation Framework

• National Skill Development Strategy 2005 - 2010
• 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

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NSA FUNCTIONS

• 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

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SETA FUNCTIONS
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3. Skills Development Levies Act (Section 8)
How is the NSDS Funded
SD LEVIES ACT, 1999

• 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 07th 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

• Department of Labour
• Verifying calculations and authorize
• transfers to SETAs within 20 days
• Conclude SLA with SETAs on usage

Employer
NSF Up to 2 of levies paid to SARS to cover
collection costs Up to 2 for NSF Administration
SETA
80
20
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SETA /NSF funding allocations

SETA GRANTS
SETAS
80 LEVIES
LEVERS
NSF FUNDING WINDOWS
NSF
20LEVIES
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Projected Skills Levies to be collected to end of
March 2010 (excluding government departments)
R Billion
NSDS
SETAs
NSF
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Skills Levy Allocations
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4. NSDS 2005 - 2010

• 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

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NSDS 2005 - 2010
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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

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NSDS is a component of the SA National Human
Resources Development Strategy
GROWING THE FUTURE National capacity for
Innovation, Research and Development
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5
3
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HRD STRATEGY Enhancing the linkages between the
other four sstrategic objectives
DEMAND SIDE Increasing employer participation in
lifelong learning
SUPPLY SIDE Improving the supply of high-quality
skills
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BUILDING THE BASE Improving the foundations for
human development
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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

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Seta Mandatory Grants Framework (50)

• Companies gt50 Employees
• Submit annual workplace skills plan (WSP)
• Companies lt50 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 2005
• 2006 / 2007 onwards 30 June each year
• Unclaimed mandatory funds swept into
  Discretionary Funds immediately after cut off
  dates

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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

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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

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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

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National Skills Fund implementation framework

• 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-GeneralLabour 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

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• 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

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NSF FUNDING WINDOWS NSDS 2005-2010

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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
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6. Conclusion Work in progress

• National Skills Development Conference 17 18
  October 2007
• 1st 2nd Economy interventions
• Scarce Critical Skills
• NSDS Funding Framework
• Mid-term assessment of the National Skills
  Development Strategy 2005 - 2010
• NSDS 2010 - 2015
• Review of the SETA landscape

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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.

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THANK YOU SAM MOROTOBA DDG ESDS HRD