Scrap SETAs and give employers tax breaks - DA urges
The shortage of skilled labour across South African industry has emerged as a significant and increasing problem in recent years. Research into the country's labour market has shown that approximately 44% of unemployed South Africans cannot find a job because they do not have the skills or the qualifications that employers seek. At the same time, it is estimated that there are half a million vacant positions that cannot be filled because people with the right skills cannot be found.
A number of solutions have been put forward on how to address this issue; the Sector Education and Training Authority (SETA) approach has been the principal strategy adopted by the government. However, many problems have emerged over the years.
Many SETAs have been bogged down by massive corruption and few have produced concrete results. Although many billions of rands have been pumped into SETAs over the past seven years (at least R4.6 billion was received by 22 of the 23 SETAs in 2006/07 alone), they have yet to show they are capable of producing people with the skills that our economy needs, or of fulfilling the promises that have been made to the young South Africans who have placed their hopes for the future in these training programmes.
The Democratic Alliance (DA) has grown increasingly alarmed by the problems that South Africans attending SETA courses face. For example, a young student recently wrote to us saying:
"I would like for you to enquire about the learnerships at Department of Labour that were not completed but with which people think were done properly. I was one of the learners and am not happy with the response I have been receiving. It has been two and a half years now and there is still no communication from department of labour. I feel like we have been used to boost the stats of the department and to make it look as if it implements its policies whereas it does not. I have also enquired with the PSETA but they have not responded. This is the story."
Complaints of this nature seem to suggest that SETA managers are not responding with the urgency necessary to develop the skills of our workforce, and are in fact undermining the efforts of young South Africans to improve their lives and create opportunities for themselves.
In response to complaints such as these, the DA has attempted to find out exactly what the facts are regarding the number of learnerships available, the number that have been completed, the number of South Africans who have been successful in finding employment after completing learnerships, and other evidence either of the success or failure of these institutions.
It has become increasingly clear to us over the course of our investigation that often - with a few exceptions - SETAs are simply not delivering. Where it is possible to find information at all, and we have found it extremely difficult to obtain basic performance information that should be easily available, the facts show that many targets are repeatedly being missed.
What has become clear is that SETAs are operating as sausage machines, concerned only with making their learnership uptake figures look good. They give little or no consideration to ensuring that these learners actually acquire skills and find employment, to the point where it is impossible to find information on some of the outcomes targets they are supposed to meet.
It proved to be a difficult task to get the information we needed.
Initially, the DA attempted to obtain the information needed via detailed parliamentary questions. The Labour Minister asserted that all the information was contained in SETA annual reports. After examining these reports, we found that only some of the information that we sought was in fact available from this source.
We wrote to him on the 29th of February 2008 to request the missing information, but we have yet to receive a response. The information that is available in the 2006/07 reports confirms our conviction that SETAs are largely ineffective. The reports reveal an overall underperformance by most of the SETAs as National Skills Development Strategy (NSDS) indicators were regularly and repeatedly not attained.
Firstly, SETAs are supposed to help unemployed people to enter learning programmes and ensure that at least 50% successfully complete their training". In fact:
- Seven SETAs did not report any information on the completion rate while the remainder missed the 50% required target - with five attaining completion rates below 10%. While SETAs often took in a large number of learners, and this is reported as being an over-achievement, in fact many learners did not complete their courses.
- The information systems, electronics & telecommunications technologies SETA attained the highest completion rate of 86.1%.
- The public service SETA was the worst performer, registering no completion in the period under review.
Secondly, according to the National Skills Development Strategy, SETAs are supposed to assist people who are already employed to enter learning programmes and ensure that 50% successfully complete the programme. In fact:
- Of the 23 SETAs only six met this target. Again, while enrolment targets were sometimes exceeded, completion rates fell considerably short.
- Again the information systems, electronics & telecommunications technologies SETA was the best performer with a completion rate of 94.6%.
- Eleven SETAs reported performance below the target, and the reminder had no adequate information on their performance.
Thirdly, another area of focus of the National Skills Development Strategy is to ensure that learners in critical skills programmes gain work experience and at least 70% successfully find placement in employment or self employment. In fact:
- Only one SETA (the Finance, Accounting, management, consulting & other Financial services) met the target.
- Two (the construction and energy SETAs) reported that they had not placed any learner.
- 20 SETAs only specified the number of learners assisted to gain work experience but gave no information on how many were actually placed.
Lastly, SETAs are mandated to train and mentor young people to form new ventures and ensure that 70% of these new ventures are in operation 12 months after completion of the programme.
- Only two SETAs (the Forestry Industries and Food & Beverage) reported meeting this target;
- 3 reported that no new ventures were sustained 12 months after completion;
- One missed the target as only 30.5% ventures were sustained and the rest did not specify how many ventures were formed and were in operation.
These figures suggest that most SETAs show a complete and utter disregard for whether the effort and money spent on their programmes bear tangible fruit.
It is very disturbing to note that while enormous resources have been pumped into SETAs, there is no proper record of critical information of their success held either by the responsible Ministry or the SETAs themselves.
Only the Energy SETA provided adequate information to enable us to assess performance across all National Skills Development Strategy indicators. The DA questions the basis on which the government continues to pour in money into SETAs without knowing what is coming out of them - this kind of scenario makes impact assessment impossible.
It is equally disturbing to note that where information is available, it suggests that results are hopelessly inadequate. The kind of mismanagement that allows targets to be repeatedly missed is totally unacceptable under any circumstances, but particularly given South Africa's high rate of broadly defined unemployment - which is estimated at around 40%; with the unskilled youth taking the brunt of it.
It is clear from our analysis that the SETA system is completely failing to respond to the needs of the market. While, the DA welcomes the Skills Development Amendment Bill's noble intention of consolidating all legislation governing skills development initiatives in the country, we are opposed to the retention of SETAs and their proposed increased role.
A system whereby the authorities responsible for creating and implementing training programmes have no interest in the outcomes is clearly not working. The DA calls for a clean slate in skills development and a scrapping of the SETAs approach. We believe that industry badly needs a training system that is demand-driven; hence we reiterate the need to implement a system of tax rebates for skills development efforts by employers. If adopted, this system would lead to a highly-adaptive and efficient skills development system, as industry is best placed to respond to trends and needs.
Statement issued by Anchen Dreyer MP, Democratic Alliance spokesperson on labour, August 18 2008
