Skills Development For A Growing Economy: DHET briefing

Economic Development

14 February 2017
Chairperson: Ms E Coleman (ANC)
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Meeting Summary

The DHET briefed the Committee on its programmes for skills development in SA. The majority of funding disbursed is awarded to the 26 universities in the country, followed by the 50 Technical and Vocational Education and Training (TVET) colleges and 9 Community Education and Training (CET) colleges. The CET colleges are a fairly new initiative by DHET to provide an effective and efficient adult education system. Within its limited resources, DHET also provides funding for initiatives that focus on developing scarce and critical skills through the National Skills Fund (NSF). Unemployment remains prevalent in SA. Statistics report that of those of working age in South Africa, 19.7 million are youth (ages 15 and 34 years) and 16.2 million are adults (ages 35 to 64 years). The majority (55%) of South Africa’s potential workforce consist of our youth. Only 13% (2.6 million) of youth are in the PSET (Post-School Education and Training) system, whilst 29% (5.7 million) are actively looking for employment. Of the 5.7 million unemployed youth, 4.8 million (93%) either have an education level of matric only (33%) or below matric (60%), with few having tertiary education.

The total budget of R56.2 billion for the DHET allocates R30.3 billion to universities, R8.4 billion to TVET colleges and R1.8 billion to CET colleges. Investment towards skills development by the National Skills Fund (NSF) increased since 2014/15 in R3.2 billion to R4.458 billion. Larger NSF allocations went towards skills development while secondly providing for infrastructure funding for scarce and critical skills. As a result 62 617 learners were funded for training (R2.319 billion) in 2014/15, and 63 903 learners in 2015/16 (R2.720 billion). The total number of beneficiaries for the 2014/15 year was 62 617 (46% males, 54% females), and 63 903 (43% males, 57% females) in 2015/16. The NSF bursary scheme administered through the National Student Financial Aid Scheme (NSFAS) allocated R929 million awarded to 14 600 students in 2014/15, and R 1,1 billion to 17 713 students in 2015/16. The post graduate bursary scheme administered through the National Research Foundation (NRF) allocated R197 million which was awarded to 2 107 students in 2014/15, and R254 million awarded to 2 652 students in 2015/16. Funding has also been awarded to Transnet, Eskom, SA Express and other institutions for skills development for artisans. Examples were provided of infrastructure funding for scarce and critical skills such as R424.116 million to the University of Pretoria for the development of veterinary health sciences and the expansion of the faculty of health sciences as well as R300 million towards the establishment of the South African International Maritime Institute (SAIMI) at the Nelson Mandela Metropolitan University (NMMU) to establish maritime research, education and training facilities to realise the growth potential of the maritime economy.

The NSF reserves were significantly affected by the ‘no fee increase’ in response to the FeesMustFall campaign. By December 2016 the reserves were about R11 billion, and the effect of the no fee increase amounted to R5.2 billion, as well as commitments that needed to be honoured by the NSF amounting to R5.6 billion. The balance of the reserves is R52 million. The Minister of Higher Education and the Minister of Finance met at the beginning of the year to discuss the effect of the ‘no fee increase’ in universities in the current fiscal year. It came to light that after careful considerations, DHET cannot afford the ‘no fee increase’ in this fiscal year with its budget; hence, the use of the NSF reserves.  

Members asked if DHET is investigating apprenticeship programmes in other countries; how long it takes for graduates in TVET colleges to receive their certificates; if the figure of 5.7 million unemployed youth is growing or declining in comparison to previous years; what DHET is doing to stop wastage (R4.5 billion) on the training of artisans programme; provisions that DHET has in place to circumvent infrastructure challenges on the ground as well as providing workshops and infrastructure to adequately equip lecturers; the cause for unemployment despite the internships and bursaries made available to students;  the role of DHET to ensure that students placed in internships or apprenticeships are absorbed by those companies and offered full time employment upon the completion of the programmes.
 

Meeting report

Skills Development: briefing by Department of Higher Education and Training (DHET)
Mr Eubert Mashabane, National Skills Fund: Director of Strategic Projects, took the Committee through the statistics for post-school education and training (PSET) institutions which consist of 26 public universities, 50 public Technical and Vocational Education and Training (TVET) colleges, 9 Community Education and Training (CET) colleges (which encompass public adult learning centres), registered private colleges and private higher education institutions. Statistics show that the 26 universities in the country carry 969 154 students, whilst the TVET colleges carry 789 535 and CET colleges in 2014 reported to cater for 275 268 students.

National Development Plan targets include 1.62 million for Higher Education, 2.5 million for TVET colleges, 1 million for CET colleges and 30 000 for artisans. Statistics for those of working age show that for Q1 in 2015 in South Africa, 19.7 million are youth (ages 15 and 34 years) and 16.2 million are adults (ages 35 to 64 years). Therefore, the majority (55%) of South Africa’s potential workforce consist of our youth. However, only 13% (2.6 million) of youth are in the PSET system, whilst 29% (5.7 million) are actively looking for employment. Of the 5.7 million unemployed youth, 4.8 million (93%) either have an education level of matric only (33%) or below matric (60%), with few having tertiary education. This means, that the majority (93%) of the unemployed may be able to acquire skills through the CET system (including skills programmes) and TVET system (including occupational programmes).

The funding allocation for the Higher Education sector has a total budgeted amount of R56.2 billion which consists of university funding (R30.3 billion), TVET colleges (R8.4 billion) and CET (R1.8 billion). Of the R56.6 billion, some of the funding is allocated by the National Skills Fund. It is important to note that there is a significant shortage of funding to cater for some of the challenges that the sector experiences. The Nationals Skills Fund spends more of the money in the universities, because funding is demanded more in that context.

In bridging the competency gaps for TVET colleges and education levels, Statistics South Africa’s Labour Force Survey for Quarter 1 in 2016 confirms that those with less than a matric constituted the highest percentage of unemployed youth. Higher education graduates constitute a small percentage of those unemployed. There are ongoing and compelling arguments for TVETs to improve the basic learning competencies of new enrolments without matric, in order to be successful. TVETs are required therefore to bridge deficits in students’ basic education in order to be successful in the vocational education and training programmes at NQF level 4. To deal with the inefficiencies of longer throughput periods a Foundational Learning Programme (FLP) is under development to provide an adequate pipeline of students for mid-level occupations, especially those requiring maths and science.

The sector also experiences some challenges in curriculum and lecturer competencies which is mainly due to insufficient funding which then leads to lack of adequate infrastructure, including fully equipped workshops, lack of maintenance of existing infrastructure, lack of qualified and competent lecturers, and lack of upgrading the qualifications and competencies of current lecturers.

The National Skills Development Strategy (NSDS) 3 programmes include artisan development, bursaries, work integrated learning or internships, skills development programmes, small businesses and building career and vocational guidance. In an apprenticeship survey conducted in 2010, it was found that 73% of the participants reported their situation to be employed or working with 56% find permanent employment, 40% less stable contract or temporary jobs and 4% are in unstable casual employment. In a tracer study conducted by the Swiss-South African Cooperation Initiative (SSACI) in 2016, it was found that 79% of newly qualified artisans find employment. The study indicated that 58% find permanent employment, with 23% in less stable contract or temporary jobs. Furthermore, 56.5% find jobs easily of fairly easily. A learnership survey conducted in 2010 found that 82% of the participants reported their situation to be employed or working directly after completion of the learnership; 13% indicated that they were still studying further, with 4% reporting unemployment. The study further indicated that 90% find permanent employment; with very few in unstable casual employment. The study noted that 52% were employed at the same workplace where they received their experiential training.

The role of the National Skills Fund (NSF) in the National Skills Development Strategy as a catalytic fund enables government to drive key skills strategies as well as meet the training needs of the unemployed, non levy-paying cooperatives, NGOs, community structures and vulnerable groups. The NSF responds to national skills priorities, and targets gaps and resource shortages. As a catalytic fund, the NSF responds to the development of scarce and critical skills through interventions in two areas: 1) education and training of learners for scarce and critical skills and 2) targeted expansion and improvement of the PSET system to respond better in the development of scarce and critical skills.

1) Investment in skills development by the NSF has increased since 2014/15 from R3.2 billion to R4.458 billion in 2015/16. The bigger pieces of the pie went to education and training for learners: 62 617 learners funded for training (R2.319 billion) in 2014/15, and 63 903 learners funded in 2015/16 (R2.720 billion). The total number of beneficiaries for 2014/15 was 62 617 (46% males, 54% females), and 63 903 (43% males, 57% females) in 2015/16. The NSF bursary scheme administered through NSFAS allocated about R929 million to 14 600 students in 2014/15, and R 1,1 billion awarded to 17 713 students in 2015/16. The post graduate bursary scheme administered by the National Research Foundation allocated about R197 million to 2 107 students in 2014/15 and R254 million to 2 652 students in 2015/16.

NSF funding for the artisan development programme provided R296.868 million allocation to Transnet. Included in the figure is the R175.114 million that was awarded in 2012 to train 1 000 artisans over 3 years, as well as an additional amount of R121.784 million targeting an additional 400 apprenticeships in August 2016. To date DHET (through the NSF) supported Transnet to procure the relevant equipment and upgrade the infrastructure to accommodate the additional 1 000 apprenticeships. The partnership with Transnet has begun to yield fruitful results with more than a hundred qualified artisans exiting the programme. Currently there are 820 apprenticeships still in the system.

In February 2015, R173.75 million from the NSF was allocated towards Eskom to train 1 250 artisans over 3 years. The learners are being trained towards becoming electricians, welders, boilermakers, fitter and turners and electro mechanics. There are currently 1 250 learners in the system. In March 2015, R23.797 million from the NSF was allocated to South African Airways to train 136 artisans for 3 years. The learners are being trained in the following trade types: Aircraft Radio, Aircraft Electrical, Aircraft Instruments, Aircraft Painter, Aircraft Turner Machinist and Aircraft Welder. In July 2014, R42.561 million was allocated to Denel to train 124 artisans for 3 years, with a further allocation of R15.458 million in April 2015 to train an additional 73 artisans. Currently 180 learners are in the system. The learners are being trained towards becoming Aircraft Avionician, Aircraft Mechanic, Aircraft Structural Worker, Electrician, Fitter and Turner, Machine Tool Millwright, Tool and Jig Maker. In August 2016, R119.201 million was allocated to PRASA to train 585 learners for 3 years. The learners will be trained towards becoming: Technicians: power electronic technicians, electrical light current technicians, etc. In August 2016, R25.834 million was allocated to NECSA to train 136 learners for 3 years. The learners will be trained towards becoming Electricians, Instrument Mechanics, Welders, Boiler Makers, Fitters, Fitter and Turners and Mechanics. In August 2016, R1.275 million was allocated to SA Express to train 15 learners as Aircraft Technicians over 18 months. In 2012, R200.335 million was allocated to the DTI Tooling Initiative to train 1 610 artisans over 3 years. The learners are being trained towards becoming Toolmakers, Mould makers, Die makers, Machinists, Machine Operators. There are currently 1 250 learners in the system.

2) Infrastructure funding for scarce and critical skills of R113.116 million was allocated to the University of Pretoria to expand the veterinary sciences facilities, as well as R311 million to expand the faculty of health sciences. R212.89 million was allocated to work-integrated learning facilities for engineering students at the University of Johannesburg. Work was completed in 2015/16. R6.5 million has been allocated to refurbishing a laboratory at the University of Cape Town. The NSF allocated R105.578 million to developing the renewable energy training facilities at the Cape Peninsula University of Technology, known as the South African Renewable Energy Training Centre. This initiative is the first of its kind in the country and seeks to respond to the country’s adopted strategy to promote renewable energy production to supplement the current fossil fuel energy production. As a national priority the NSF allocated R300 million towards the establishment of the South African International Maritime Institute (SAIMI) at NMMU to establish maritime research, education and training facilities to realise the growth potential of the maritime economy and roll out an extensive maritime national cadetship programme. This is in response to the recent focus of the country on developing a vibrant blue or oceans economy. On 1 February 2016, the first intake of 26 cadets was officially welcomed.

The NSF reserves were intensely affected by the no fee increase in response to the FeesMustFall campaign. As at December 2016 the reserves were R11 billion, and the effect kicked in in the current year amounting to R5.2 billion as well as commitments that needed to be honoured by the NSF in response to the campaign which amounted to R5.6 billion, leaving the reserve balance of R52 million. Minister of Higher Education, Dr Blade Nzimande and Minister of Finance, Mr Pravin Gordhan, met in early 2017 to discuss the effect of the ‘fee increase’ in universities in the current fiscal year. It came to light that after careful considerations, DHET cannot afford the ‘no fee increase’ in this fiscal year; hence, the use of the NSF reserves.

Discussion
Mr P Atkinson (DA) stated that Germany runs the most successful apprenticeship programmes in the world and their education system is set up to emphasise the importance of apprenticeships. He asked if DHET is investigating successful apprenticeship programmes overseas to implement them in this country.

Mr I Pikinini (ANC) referred to students that do not finish their programmes. It is worrisome because it is government money that is being wasted and there needs to be checks to ascertain where the problem lies. Secondly, the Strategic Integrated Projects (SIPs) programme was established some time ago and time is now becoming a major factor, so DHET needs to assist more in providing the needed skills. He stated that the impact of the CET programme needs to be measured, as well as the effectiveness of CETs. Lastly, most of the programmes are designed by DTI which is good. However, the country has mineral resources but there is silence about developing critical skills in that context and currently there is no programme for that, whilst these resources keep on being shipped and processed abroad. There is no R&D and strategy to develop the necessary skills locally for that field.

Mr M Mabika (NFP) asked for clarity on how the colleges operate in terms of the training they provide. If they are adult education schools it is more confusing because most adult education is meant for literacy so how does that contribute to skills development. On the 5.7 million unemployed youth, he asked if the number is growing or declining. Some comparison figures should be provided for clarity.

Mr S Tleane (ANC) stated that DHET is putting in a lot of effort in developing skills in the country, but what is the role of the private sector in the initiatives highlighted by DHET today. The private sector needs to play a significant role as these skills are going to be consumed by it. In addition, what is the private sector doing in its partnership with the government? Noting the three or more million young people that do not have matriculation, he asked if a partnership is in place between DHET and the Department of Basic Education to introduce a system where children learn certain skills from a primary level as a foundation mechanism. He said there is a lack of appropriate infrastructure on the ground and in some instances lecturers are not properly trained or not sufficiently equipped and there are not enough workshops. Is there a programme in place to make provision for proper infrastructure to circumvent the problem? Lastly, what is DHET doing to stop the wastage (R4.5 billion) in the training of artisans programme. Perhaps more support structure needs to be brought on board to ensure that such a wastage does not persist, or introduce some sort of penalty for those who do not complete the programmes.

Ms C Matsimbi (ANC) stated that with so many programmes in place such as apprenticeships, bursaries and many others, unemployment is still high in SA, so what is the cause of that? What is the role of DHET to ensure that students that are placed in internships or apprenticeships in companies are absorbed by those companies and offered full time employment upon completion. With regard to the Skills Education Training Authorities (SETA) reserves, she asked why there was such large reserves – are the SETAs receiving more than they are spending or receiving more than they should. On the NSF as a catalytic fund for unemployed young people, is the fund assisting and is it able to respond to the current innovations and trends in the country? She asked what is the monitoring strategy for non government organisations (NGOs) entrusted with providing skills development, to ensure that their programmes are effective to avoid wastage.

Mr M Cele (ANC) asked DHET how long it takes for those who have completed programmes to receive their certificates in the TVET colleges.

The Chairperson suggested that there are too many institutions and organisations under DHET and advised on the possibility of DHET find some sort of strategic consolidation for those that provide similar skills. This is because more money is spent on administration and formation of these structures which could perhaps be contributing significantly towards education and training. On the challenge of having to match education and training with market demands, it might not be possible to match but rather it should be possible to distribute according to the needs. She asked if that may not be the reason for the derailment of certain projects around the country due to the scarcity of skills. She asked if the impact of the SETAs is felt on the ground and can it be quantified and examples provided to ascertain the difference the SETA are making on the ground. On the fourth industrial revolution, is the planning in the country on par with global plans and moving at global pace?

Mr Moshabane replied that DHET agrees that artisan training at the moment does not work as well as it should in comparison with other countries. One of things brought into the picture is the dual system – to train artisans almost at the same time they are in the TVET college (3 days in class and 2 in practice). The challenge is that there are not sufficient work places; some may be there but far from the learning institutions. The Minister has met with with some of the industry players particularly in the motor industry to circumvent the shortage of 10 000 mechanics. There are private sector initiatives but they are very far and few between; there are partnerships with some private sector companies. The learners who enrol at TVET colleges also come with a lot of gaps in their education, such as science and mathematics – but bridging course programmes have been put in place to circumvent that. Oftentimes companies say that some of the students who come out of the TVET colleges, they end up putting them into their own training programmes to rid them of some of the deficiencies they have.

Mr Moshabane commented that wastage has to do with the deficiencies, where you find that the programme does not offer a holistic education approach or skills development

Ms Aruna Singh, DHET Acting Chief Director for TVET Programme and Qualifications, replied that DHET works very closely with the Swiss-South African Cooperation Initiative (SSACI) in a project to improve graduates in jewellery skills development and prepare them for work as well as keeping up the currency of the skill. By 2019 every lecturer will have to go to the workplace for a cycle of two years to keep up with the skills requirements, so the project is meant for both students and the lecturers. The significance of the project also involves bridging the maths and science gap in the foundation learning competency programme, because maths and science are required prerequisites.

Historically, TVET lecturers were people from the industry who were available to lecture the courses without the provision of any training for them. DHET is planning on introducing a programme in six universities across the country that will focus on capacity building for TVET lecturers.

Ms Singh said CETs are still fairly new, the DHET branch was established in 2016 to focus on adults in the post education system. Retrospectively, adult education centres could be anything from one teacher who is teaching at the back of a room somewhere to a fairly sophisticated NGO. So the idea was to cluster many of these channels into a college with the intention to re-model the old provision of adult education, not only literacy but focus on a holistic approach to adult education. What makes them different from TVET colleges is that they cater for anybody over 24 years of age who has not completed matric or basic education. Once the adult has completed the CET programme, they can decide whether they want to continue until matric or complete their matric or senior level in a TVET college. On the CET level, the matric programme for those who want to do matric is still under development so for now they will have to complete it through a TVET college. For adults that have never been employed, the idea of the programme is to ensure that those adults are equipped with the education and the skill to be employable or engage in the economy on some level such as establishing a small business. 

On the 5.7 million unemployment figure, Mr Moshabane stated that Statistics SA will publish the Quarterly Labour Force Survey today and provide the latest unemployment figure. Given the state of the economy, that number is most likely to have increased. It is important to note that of that 5.7 million, the majority are people who have not completed matric. There will be a lot of fluctuations around that 5.7 million due to seasonal employment and other various factors. About 50% of those who come from TVET colleges do transitional employment, but those who have degrees are in a better position to get employment than TVET graduates even though the state of the economy is not very good. DHET drives a radical programme for internships to ensure that most interns are better able to get permanent employment from the internship programmes, whilst government is willing to incentivise the companies for a year.

DHET is currently training a group of young people in Italy in jewellery making or manufacturing and processing skills development, so that when government initiates industrialisation strategies in the country there is already some skill that the country obtained from abroad to process the manufacturing of the resources. The programme is quite small though, which is important to note and fairly new. He said that the DHET delegation does not have any details on them about what the Phakisa programme entails for developing skills in mining and mineral resources processing and manufacturing.

Mr Victor Mathonsi, DHET Director: Special Projects, said one aspect of the White Paper on Post-School Education and Training is the establishment of partnerships for labour force absorption. In addition, building those partnerships to ensure long term employment for graduates and provide intensive skills programmes for young people. For SETAs, the most important thing is the impact of all the undertakings and partnerships; there are quite a number of partnerships that are being facilitated by DHET with the private sector and other bodies to ensure that graduates doing internships in the private sector are absorbed and offered full time employment.

Dr Hersheela Narsee, DHET Acting Chief Director for Planning, Monitoring and Research, said DHET had initiated a major research programme, the Labour Market Intelligence Partnership, which has been presented to the economic cluster. It reports on skills supply and demand – what skills are available in the country and what the demand is. This will also look at the skills mismatch that exists in the South African labour market. Surprisingly, a few engineer graduates are now being employed by banks. DHET is still trying to understand the relationship between the world of work and the level of education and skills. This will help universities and TVET colleges decide on the programmes they should offer to produce for the labour market contributing towards the reduction of skills scarcity and unemployment, as well as where DHET should direct the most funding.

With regards to SA’s skills competitiveness, there is a World Skills Competition currently happening in Durban and SA is amongst the countries that are competing. There are 122 competitors, where people are showcasing their skills in their various trades. This gives some indication of how competitive SA is in terms of skills, and where it stands in relation to other countries. In addition, SA’s ranking in innovation has increased as reported by the World Economic Forum in its Global Competitiveness Report. This also means that SA’s readiness for the Fourth Industrial Revolution is quite good, because the country is good at innovation. DHET will be in talks with the Department of Science and Technology to provide some funding for intensive and in depth research in the science and technology fields. The NRF is already providing funding to universities to enhance and continue research in science, technology and robotics.

Ms Singh replied on the provision of certificates timeframe, saying outstanding certificates are done in batches. The last batches from 2014 to 2016 stand at under 10 000 outstanding certificates in TVET colleges, which is a huge reduction in comparison to historical figures. Students should be getting their certificates within six months of completion of an 18 months training programme. Sometimes it depends on how soon the student was able to finish the programme after the course work, and those that have completed their qualifications should get their certificates within 6 weeks.

The Chairperson commented that the delay in providing certificates is a problem because students need the certificates when applying for jobs.

The meeting was adjourned.
 

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