PRESENTATION TO THE LABOUR PORTFOLIO COMMITTEE

1. PRESENTATION TO THELABOUR PORTFOLIO COMMITTEE SKILLS DEVELOPMENT ACT / NATIONAL SKILLS DEVELOPMENT STRATEGY 08 AUGUST 2007

2. 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

3. 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 !

4. 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

5. 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

6. 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

7. CURRENT DEBATES/CHALLENGES IN RELATION TO NSDS RESEARCH AND INNOVATION Need to EXPAND our capacity to Innovatee andrresearch 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

8. INNOVATION, RESEARCH AND DEVELOPMENT 7 SUPPLY SIDE Too few jobs yet some skills very scarce! 5a Scarce skills bursaries Immigration of scarce skills 5b DEMAND SIDE 8 HRD linkages Up-skill existing public & SMME workforce No-where for unemployed and school-leavers to go 3 &4 6 Learnerships with incentives for employers to provide work experience FOUNDATION FOR HUMAN DEVELOPMENT 1 2 ECD ABET

9. 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

10. 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

11. 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

12. 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 SETA FUNCTIONS

13. 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%

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

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

16. Skills Levy Allocations

17. 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

18. NSDS 2005 - 2010

20. 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

21. NSDS is a component of the SA National Human Resources Development Strategy GROWING THE FUTURE National capacity for Innovation, Research and Development 4 5 3 2 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 1 BUILDING THE BASE “Improving the foundations for human development”

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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-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

28. 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

29. NSF FUNDING WINDOWS NSDS 2005-2010

30. 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

31. 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

32. 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.

33. THANK YOU SAM MOROTOBA DDG: ESDS & HRD