PRESENTATION TO THELABOUR PORTFOLIO

COMMITTEE

SKILLS DEVELOPMENT ACT / NATIONAL SKILLS

DEVELOPMENT STRATEGY

08 AUGUST 2007

Overview of PresentationOverview of Presentation

1. Historical context2. Skills Development Act, 1998

Implementation Framework3. Skills Development Levies Act 19994. The National skills development Strategy

2005 – 20105. NSDS implementation

1. SETAs, National Skills Fund, Umsobomvu Youth Fund, National Productivity Institute

6. Conclusion: Work in progress

1. 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 !

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 INNOVATIONNeed to EXPAND our capacity to Innovatee and rresearch

SUPPLY SIDENeed to INCREASE the

quantity of those with quality further and higher

learning

Graduates without jobs?

Retrenched?

Long-term unemployed?

School leavers?

REDUCENew work opportunities to signal scarce &

critical skills needs!

DEMAND SIDENeed 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

ECD ABET

Up-skill existing public & SMME workforce

Scarce skills

bursaries

1 2

3 &4

5a

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 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

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

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, 19993. 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 07th 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 07th of each month

National Revenue Fund•Maintains record of levies as part of DoL budget •Transfer funds toNSF & 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 toNSF & 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

NSFUp to 2% of levies paid to

SARS to cover collection costsUp to 2% for NSF Administration

SETASETA

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)

21.916.8

5.1

0

5

10

15

20

25

R Billion

NSDS

SETAs

NSF

Skills Levy Allocations

NSF/SARS20%

SETA Admin10%

Mandatory Grants

50%

Discretionary Grants

20%

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

NSDS 2005 - 2010

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 SIDEImproving the supply of high-quality skills

DEMAND SIDEIncreasing

employer participation in

lifelong learning

HRD STRATEGY

Enhancing the linkages between the other four

sstrategic objectives

1

3

4

5

2

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 2005 2006 / 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 targetsBBBEE (Procurement)Geographic spread (e.g. urban/rural split)Legal and corporate governance compliance by implementing agenciesFunding excludes financing of capital expenditure and operating costsSA Citizenship

No NSF Funding Window NSDS Indicators/Mandates

1 Social Development Initiatives (Incl EPWP)

Indicator 3.1

2 Adult Basic Education & Training (ABET)

Indicator 3.3

3 Critical Skills Support Indicators 1.2 & 4.1

4 Provisioning Support Indicators 2.4 & 5.3 (SDA Amendment Act)

5 Industry Support Programme Indicator 2.3 & Job Summit Agreement

6 Informal Sector Support Indicators 3.2; 4.3 & 5.2

7 Constituency Capacity Building & Advocacy

Indicator 5.4

8 Special Projects NSDS Principles

9 Discretionary Projects & Innovation SDA

NSF FUNDING WINDOWS NSDS 2005-2010

How the NSDS supports ASGISA & Sector growth ector growth

strategiesstrategies

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 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

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 MOROTOBADDG: ESDS & HRD