SETA chairpersons and ministerial appointees to the SETA Boards
I would first like to congratulate you on your appointments as Chairpersons and Ministerial appointees of Sector Education and Training Authorities (SETAs). I also am gratified that you accepted the nomination to serve. It is going to be a daunting and challenging task. But it is also going to be an interesting time for all of us.
The question most of you has been asking, and correctly so, is what is expected of the Chairpersons or members who are appointees of the Minister? Let me start by outlining some of the challenges that led to where we are at today.
SETAs have been in existence for about 11 years now. In the 11 years of their existence they have become known among the general public more for the problems in their governance and management than for what they were established for, which is skills development. When the department and the National Skills Authority (NSA) were consulting on the relicensing of the SETAs, there was a strong call from many quarters to close down the SETAs. Many people felt that SETAs did not make a major contribution to skills development and that large amounts of money were being wasted. Although I did not agree to close down the SETAs for reasons which I will elaborate on, I must confess that the popular perceptions were not without foundation!
We now have 21 SETAs under the skills development system. In practice, I can safely say, we have 21 skills development systems. Every SETA has operated as an independent entity, with its own systems, policies, constitution, model of skills development and training delivery, utilisation of funding, etc. Furthermore, it appears that some SETAs have behaved as if they do not have to abide by the rules and regulations that govern use of public funds in government and public entities.
Governance has been one of the major contributors to the poor performance of the SETAs. Each SETA decided the number of board members and the fees and allowances payable to the board members. In some SETAs, there is no clarity of roles and responsibilities between the board and Executive Council and CEO. There have been chairpersons and other board members who have gone to their SETAs weekly or more often and interfered in the daily operations of the SETA. In others, the board virtually reports to and is accountable to the CEO. Some boards have virtually delegated their functions and signing powers in relation to financial approvals to the CEO. There are CEOs who can unilaterally decide what projects to fund to the tune of half a million rand or more. There is little appreciation of the role of the Executive Authority, and little appreciation that these are in fact public entities.
These challenges have impacted on the delivery of training in the SETAs. In some SETAs the skills development levy has allegedly been seen as a pot of money to enrich the board members and their families and friends. Decisions on the funding of projects, especially the discretionary grant, appear to have been influenced by the interests of board members.
Partly due to the lack of proper accountability, many SETAs have to a large extent drifted away from their core mandate. SETAs sometimes fund activities which should not be funded through the skills development levy and, at the same time, also sometimes fund areas of work which are not related to the skills needed in their sectors.
Much of the training facilitated and funded through the skills development levy, whilst reaching large numbers of people, is often of questionable quality. Almost 70% of the training is in short courses that do not lead to a qualification, even for the unemployed. The cost of this training in many cases appears to be exorbitant.
A source of great concern to me has been that public educational institutions that largely provide full, occupational qualifications have been largely ignored by the SETAs as providers of education and training. These include Further Education and Training (FET) Colleges, other public vocational colleges and universities, including universities of technology. Such public institutions would not only provide credible training, but their use by SETAs would help to strengthen the institutions themselves. This would be done by providing training resources and by facilitating the building of partnerships between the institutions and employers in both the private and public sectors. Instead of being marginalised by the SETAs, these institutions in which large amounts of public money has been invested, should be at the core of our skills development system. The FET colleges, for example, should be central in rebuilding our apprenticeship system and strengthening learnerships. Public colleges and universities could also provide short courses tailored to the needs of employers in addition to their provision of full occupational qualifications.
Today, it is clear that we have literally tens of thousands of young people who have completed N-courses in FET colleges or diplomas in universities of technology but cannot gain their qualifications because they cannot find workplaces in which to do the practical component of their training. Surely SETAs can play an important role in tackling this problem. It doesn’t make sense, for example, for organised business to complain that there is a shortage of, say, engineering personnel while they could collectively remedy the situation by taking on interns for a year of training with the assistance of a SETA. This should be one of the core areas of SETA business given their proximity to workplaces and the importance of practical training for skills development.
One could go on about the problems identified in the SETAs. This is just to give you a flavour of some of the things that have concerned me and the government as a whole. I hope we can work together to find ways to remedy our problems and to turn the SETAs into the effective instruments of skills development that they must become.
What are my expectations from you?
Let me start with the big picture, and our medium to long term goal. We have to create a system of skills development which is simple, accessible and understandable. The system must be integrated coherent and articulate with other institutions in the post school landscape.
Governance and administration
I have already taken steps to address some of the governance issues.
The first is the standardisation of the constitutions of SETAs. All SETAs now operate within a single constitutional framework. There should now be consistent governance standards across the 21 SETAs.
The new model SETA constitution addresses a number of issues, some of which are outlined above. Critical new initiatives in the constitution include:
1. Introducing independent chairpersons;
2. Limiting the number of Board meetings;
3. Reducing the size of Boards to a maximum of 15 members;
4. Requiring participation of the Minister in the approval of Board members;
5. Including two Ministerial appointees to the Board
6. Having a standard remuneration rate for Board and committee members,
7. Holding board members accountable for executing their duties as required,
8. Requiring the Minister in Cabinet to approve the appointment of SETA CEOs, in line with similar practices in relation to other public entities.
Alongside these constitutional changes, we will also need to confront the problem of varying standards of Board fees in SETAs, as well as the varying salaries of CEOs. We want to standardise financial structures and guarantee their establishment in the constitutions of SETAs. This is important to ensure that all SETAs align to best practice, Public Finance Management Act PFMA and National Treasury regulations in setting up financial committees, their mandates and reporting. My department is working on regulations in this regard and together with your support we hope to implement these soon.
We are also looking at ensuring that there is standard practice across audit committees as well as other committees of SETAs. If we want to build a single skills development system, do we, for example, need to have a separate audit committee for each of the 21 SETAs? This is something we will be considering in the near future.
The SETAs and the Department of Higher Education and Training
The mandate and scope of the Department of Higher Education and Training (DHET) covers the entire post school landscape. It covers educational provision for all those who have left school as well as for those who have never been to school but require education opportunities. It includes formal further and higher education and training in colleges and universities, skills upgrading and/or reskilling for adults in the labour market as well as education and training opportunities for the unemployed. We are building a post-school landscape that integrates education and training and ensures articulation and success. The role of the SETAs, is critical in this regard.
It is due to the recognition of the importance these institutions can play in achieving our mandate that I chose to relicense them with minor changes when announcing the landscape of SETAs in November 2010. As alluded to when I was making the announcement, the relicensing does not mean business as usual, nor was it a stamp of approval of the existing state of affairs in the SETAs. It is for that reason that with that decision to relicense, I had to begin to make some radical changes. The work that followed the relicensing took the best part of a year and included extensive consultation. I also took into account work that was done over a number of years by the Presidency and by National Economic Development and Labour Council (NEDLAC). Of course, I also considered the necessity of integrating the SETAs and the National Skills Fund into government’s overall conception of the role of the DHET.
In our consultations there was widespread support for the changes I have now made, and as we speak today, only a few individuals continue to attempt to undermine this process.
Making SETAs effective instruments of skills development and transformation
Skills development must be a crucial element of any economic development strategy. Although education and training do not, on their own, create jobs, it is essential for a country to have a skilled workforce for investment in most modern economic activities to be successful. An educated citizenry will better prepare us to compete with other nations, allow more people to participate effectively in the economic life of the country and lead even to a richer social, political and cultural life for all. There is a strong correlation between levels of education and income levels and it is inconceivable in this day and age that we can defeat the poverty that plagues our people without educating and skilling them. This is something which has been recognised by all economically successful countries.
It is also something that South Africa has recognised and which we have endeavoured to tackle in a unique way. The skills levy system was introduced for the specific purpose of ensuring that we had the resources available to ensure the development of the skills to drive our economy. The SETAs and the National Skills Fund are the fundamental instruments for allocating these resources in the most effective way. Those responsible for education and training in most other countries would love to have such a resource base at their disposal. We have it and we must use it effectively. This is the reason that I rejected the calls of those who wanted to abolish the SETAs. They are vital institutions in developing a truly effective skills development system. If our SETAs do not operate effectively or if they fall victim to corruption, calls for scrapping them will grow stronger. We must ensure that this does not happen and we must not let this opportunity that we have to pass us by.
The National Skills Development Strategy (NSDS) III attempts to direct the skills development resources towards achieving most of the challenges identified with the funding of training and aligning training with the strategic aims of the government as a whole. The strategy needs to be driven and championed by the SETAs themselves. As chairpersons and members of the SETA boards, you have a significant role to play in this regard. You should ensure that your SETA’s funding activities lead to the achievement of the NSDS III goals as well as the transformation agenda.
You should ensure that the quality of Sector Skills Plans is improved and that your plans are made with the larger picture of your sector in mind and not just be an amalgamation of the skill plans of the various individual enterprises. SETAs need to know their sectors extremely well and become the primary experts on their labour markets. This requires research and constant monitoring of labour market developments
We need to improve the monitoring and evaluation of the money spent on training, at least at the basic level. SETAs must improve oversight over the area of workplace skills plans (WSPs) and annual training reports (ATRs) from companies and assess the quality of training by providers and workplaces. It is of little use to process mandatory grant payments on receipt of WSPs and ATRs, without assessing whether the quality and distribution of training opportunities included therein results in benefits to the workers and drives our transformation agenda.
SETA’s training agendas should always ensure that equity issues are foregrounded. So, for example if we fund the training of accountancy articled clerks, we need to ensure that we use this funding to start to change the demographics of a profession where it is still overwhelmingly white and male and where Africans are poorly represented. This principle should be followed across all training areas. Also, training cannot only be available to those who are likely to succeed and are advantaged and leave out others because they require extra effort and support. We must ensures that we open opportunities for all who are able and willing to be trained and ensure that we drive this agenda through funding.
Measuring performance
As we are all aware, every Minister has signed a performance agreement with the President. Most employees do same with their employers. I will also be signing a performance agreement with the SETAs. I will expect each SETA to achieve the sector based outputs as set out in these performance agreements.
We are strengthening the department’s capacity so that it is able to effectively play its oversight role and, most importantly, give adequate support to the entire SETA system.
We are also improving the performance management system to encourage, foster and promote the continuous improvement of SETAs. We want to ensure the work of SETAs is focused on the most pressing priorities in supporting the decent work agenda, growth and development.
Conclusion
In conclusion, I would appeal to you to be careful that neither the Boards nor the executive arms of your SETAs trade in their authority by becoming vulnerable to illicit benefits business opportunities. In other words, stay on guard against corruption.
I will be exercising my responsibilities over the SETAs as the Executive Authority. As I have started with the changes that are being implemented now to ensure that we transform these institutions, I will similarly not sit back and watch while things get out of hand. I will not hesitate to act in instances where there are inefficiencies or corruption. Furthermore, my department will exercise its support and oversight role. I would like all of us to work towards the common goal of improving skills development in this country, and I am confident that we can achieve this if we are all committed to working together. We should continually find better ways to communicate and work together.
I have appointed you because I have confidence in you and I am positive you will make a difference. We need to build this skills development system and ensure that we create institutions with a good reputation and that make a difference. For the future of our country and our people, we dare not fail.
Thank you
Source: Department of Higher Education and Training
