The document is a response from the Durban Chamber of Commerce and Industry to the recommendations of a Ministerial Task Team on improving the performance of Sector Education and Training Authorities (SETAs) in South Africa. It provides feedback on 17 recommendations, generally supporting recommendations for tighter oversight of SETAs and funding priorities focused on skills needs of established businesses. However, it opposes recommendations that would increase the role of the National Skills Fund or consolidate the number of SETAs. The response aims to ensure SETAs prioritize skills development for their sectors and addresses issues like inefficient use of funds and late payments to stakeholders.

1. Report by Ministerial Task Team on the Performance of Sector Education and
Training Authorities (SETAs) 2013
A RESPONSE
The Durban Chamber of Commerce and Industry appreciates the work undertaken by the
Ministerial Task Team over a thirteen month period to assess the past performance of the SETAs
and put forward a set of recommendations to improve the performance of the SETAs in future.
Members of the Chamber have not been satisfied with the performance of SETAs, in general, while
recognising that some have been a great deal more effective and efficient than others.
The specific comments given on each of the seventeen recommendations reflect the collective
views of member companies within the Chamber’s membership of 2 806. These members include
multi-national corporations, micro, small and medium business, NGOs, consultants and member-
based business associations, and cut across all sectors represented by the 21 SETAs presently in
operation.
Recommendation 1
The SETAs need a tighter focus, which must be reflected in their vision, mission, governance
structure and strategy. This focus should be on skills development (planning; enabling provision;
allocation of grants and quality assurance) in established businesses and workplaces relating to
sector priorities and the transformation charters for the various sectors.
DCCI’s response
pg. 1

2. As it stands, the mandate of the SETAs is far too broad. This prevents individual SETAs from
adequately serving their designated sector/s. The SETAs’ mandate has been extended to include
people in rural areas and the unemployed. While we cannot ignore the merits of up-skilling these
vulnerable groups, for which the National Skills Fund is able to provide, the SETAs’ priorities must
be to address the particular skills needs of their relevant sector/s. We cannot stress enough that
the SETAs are sector-based service institutions, and are not intended to be extensions of the
Department of Higher Education (DHET) and/or a vehicle for furthering the government’s broader
agenda.
It is also felt that the influence on SETAs of the DHET is too great, leading to a focus on
qualifications which are not always directly appropriate for the workplace. Businesses often
struggle to find programmes which are credit-bearing and, at the same time, address their needs
and those of the employees who have specific tasks to perform. The type of training which takes
place in an organisation must be determined within the organisation, rather than being directed
by the DHET, so that the individual needs of the business will determine the type of training
required by its employees. The role of the SETA is to support its levy-paying employers in this
regard.
Recommendation 2
The NSF must continue to be responsible for funding broader national priorities that are not
covered by the SETAs. Where appropriate the NSF should allocate funds to other government
departments and agencies (NYDA; DPW; etc.) that have a mandate to deliver in terms of these
principles and therefore have the capacity to integrate skills development into broader
programmes. The NSF levy allocation should be increased from 20% to 30%.
The structure and location of the NSF should be revised in order to ensure that it has sufficient
capacity and appropriate accountability to perform its revised mandate.
DCCI’s response
The Chamber agrees that the responsibility for attending to the funding to meet broader national
priorities relating to skills development, particularly among unemployed and young people, lies
with the NSF. However, an increase in the NSF levy allocation is not considered appropriate as the
NSF already fails to disburse the levies it collects successfully. Merely increasing the levy allocation
to the NSF will not improve its operation; the issue lies in the NSF’s inability to disburse funds
according to acceptable priorities and within appropriate controls of the expenditure of public
funds.
pg. 2

3. Recommendation 3
The National Skills Authority (NSA) should be dis-established as it duplicates the mandate of other
bodies.
DCCI’s response
The DCCI strongly opposes this recommendation and believes that the NSA should be established
as an independent body of experts who assess priorities and needs and direct the NSF in the
disbursement of its funds.
Recommendation 4
Change the function and amount of the mandatory grant. This would ensure that workplaces have
the systems to submit accurate and comprehensive information relating to all training that is
taking place in the workplace, current levels of skills, experience and qualifications of employees in
the workplace, as well as skills priorities for the short- as well as medium-term.
DCCI’s response
The mechanisms for reporting already discourage businesses from documenting the skills
development in which they engage. Thus, these mechanisms should be deliberately simplified so
as to encourage a closer spirit of co-operation between SETAs and levy-payers.
The reduction of the mandatory grant, from the original 50%, to 20% is deplored and will further
discourage businesses from participating in the institutional process.
Recommendation 5
Strengthen steering through tighter use of an increased discretionary grant. It should be targeted
at substantive training for employed people in different sectors as well as unemployed people
entering those sectors in-line with agreed upon sector priorities.
DCCI’s response
The discretionary grant should be utilised solely for the needs of the specific sector as determined
in the sector skills plan.
pg. 3

4. Recommendation 6
The SETAs should receive a reduced allocation of 70% of levies monies from SARS, with an
increased allocation of 30% to the NSF. The SETAs should disburse the monies received directly to
employers.
DCCI’s response
Opposition to the increase in a percentage of the levy income being paid to the NSF has already
been recorded.
On the question of the disbursement of monies directly to employers, the Chamber gives its
support. It is acknowledged that various intermediaries, such as project managers of learnership
projects have been ‘unjustly enriched’, and in such situations it would be better for the monies to
be paid directly to employers. The time at which the payment is made is critical, however.
Payment after the conclusion of the training and the achievement of qualification on the part of
the learner, places enormous strain on a small business. It is suggested, therefore, that attention
be given to a payment regimen in which a portion of the money is paid at an earlier stage.
Where a number of small employers are involved in similar training initiatives, the SETA would
need to play a more co-ordinating role, especially in the identification of suitable training
providers.
Recommendation 7
Maintain the current amount of the levy.
DCCI’s response
This recommendation is supported. Employers acknowledge that the shortage of skills is a national
challenge, so they have a responsibility to pay the levy. Objections have lain less in the quantum
of the levy payable than in the oft-inappropriate use of the revenue generated and the reality that
huge sums have had less-than-satisfactory success in addressing the national and workplace
needs.
Recommendation 8
The public sector should be brought in-line with the private sector for comprehensive skills
development purposes. Every public sector employer in the provincial, national and local levels of
government must be compelled to budget and pay a skills development levy in a manner pre-
determined by a national policy directive for the public sector.
pg. 4

5. DCCI’s response
We support this recommendation, but with the proviso stated below. The public sector has grown
exponentially in recent years, so there is no reason why it should be exempt from compliance,
especially considering that service delivery suffers from a shortage of skills in government
departments at all levels. The Chamber recommends that government departments/ institutions
pay just the 70% of the levy payable to the appropriate SETAs. It is considered inappropriate that
the government should contribute to its own National Skills Fund.
Recommendation 9
There needs to be a national central mechanism/body through which skills demands in the short,
medium and long term are analysed.
DCCI’s response
The Chamber believes that this is the role that should be played by the National Skills Authority,
provided that it is constituted as proposed in the response to recommendation 3 above. While the
need for statistics of a superior quality is clear, the bureaucratic burden of the SETAs should not be
increased. Organisations such as StatsSA and universities should be engaged to support the NSA
in this role.
Recommendation 10
Supply needs to be conceptualised and analysed. The DHET, working with the SETAs, would map-
out supply against demand and establish where there is insufficient capacity to deliver this supply
and determine strategies to address this.
DCCI’s response
It is nearly impossible to accurately predict the supply and demand of skills. The best effort would
be to highlight trends in skills supply and demand. This should be an NSA responsibility, in
collaboration with individual SETAs in any analysis of specific sectors.
Recommendation 11
Once the mandate of the SETAs is finalised, there should be a review of the implications of this for
the SETAs. Such a review must seek to streamline and reduce the number of SETAs over the
pg. 5

6. medium-to long-term. Subject to the finalisation of a review, a moratorium needs to be put in
place regarding changes to the SETA landscape as it currently stands.
DCCI’s response
The Chamber does not support the further consolidation of SETAs; ‘bigger’ is not always ‘better’.
Some of the larger SETAs (Services SETA and the WRSETA) are much more inefficient than their
smaller counterparts. The consolidation of the SETAs will reduce their capability to service their
sectors sufficiently.
Recommendation 12
There needs to be a diverse mix of programmes that meet long-, medium-, and short-term
priorities. There is a need to focus on occupational programmes that develop the academic skills
required in the medium to long term. Short courses which are not accredited should be allowed
(and offered by both public and private providers), but funded by employers.
DCCI’s response
The Chamber believes that in many instances technical skills are the main priority in the
workplace. Life and coping skills should not be neglected, however, while provision should be
made for people with technical skills to augment these by further education in academic spheres.
In general, the skills requirements of businesses are determined by the individual needs of each
business and skills requirements are not standardised across businesses, even those in the same
sector.
The Chamber believes that the advantages of the Recognition of Prior Learning have not been
explored satisfactorily and urges much more attention from SETAs to increase the opportunities
for experienced, but unqualified, workers to improve their positions.
Recommendation 13
The nature of the instruments used for reporting, as well as the number of, the relationship
between, and the timing of the instruments, need to be revised in order to ensure that they
differentiate between the long-, medium-, and short-term, that they are logically sequenced, and
that duplication is removed.
DCCI’s response
pg. 6

7. The Chamber opposes this recommendation. Reporting instruments must be simplified, especially
for small businesses that are less capable of planning their training far in advance.
Recommendation 14
For SETAs to accomplish their directives, it is necessary that staff, and in particular board members,
improve and build their skills. New standardised training and induction programmes should be
created and attendance should be mandatory for all SETA board members.
DCCI’s response
The Chamber wholly supports the up-skilling of SETA staff and board members. The individual
skills needs of their staff should be assessed preparatory to the undertaking of a professional job
analysis and the development of detailed job specifications and objectives. With regard to the
skills of board members, it is recommended, that in addition to effective orientation and training,
board members should be selected on the basis of their possessing appropriate skills and
experience to conduct their duties. Board members must also be issued clear job objectives and
specifications. If necessary, the extra funding required for this exercise should be found in the NSF
so as not to reduce the amount that SETAs are able to disburse to employers.
Recommendation 15
There is a need to assess the intentions of a new, single SETA constitution against the structure
mandated to avoid conflict and contradiction.
DCCI’s response
The Chamber stresses that the ‘one size fits all’ approach is not appropriate. Conflict and
contradiction are not always negative, and they may in fact lead to a more balanced view. The
constitution of a SETA must allow for the needs of the whole sector/s and this might imply
differences from other SETAs in respect of structural arrangements.
Recommendation 16
DHET in conjunction with National Treasury should have a much closer monitoring of SETA’s
procurement practices.
pg. 7

8. All correspondence to be addressed to: P.O. Box 1506, Durban, 4000, KwaZulu-Natal, South Africa.
Tel: 27 031 335 1000, Fax: 27 031 332 1288
Chamber House, 190 Stalwart Simelane Street, Durban, 4001
e-mail:chamber@durbanchamber.co.za
Website:www.durbanchamber.co.za
DCCI’s response
The Chamber supports this recommendation insofar as the monitoring of SETAs by the National
Treasury is concerned. The rigours of the PFMA are challenging and, unfortunately result in
supply chain and procurement blockages. In depth training of responsible officials would mitigate
an undesirable situation where SETAs spend more time ensuring that they are complying, than
they do in service delivery.
Recommendation 17
There remains a need to streamline the current multi-layered stakeholders in the SETA landscape.
Such an intervention may result in streamlined SETA accountability mechanisms and development
of clear oversight responsibilities.
DCCI’s response
The Chamber believes that further streamlining is unnecessary and, indeed, may prejudice the
interests of some sectors in those SETAs which serve different types of businesses.
Additional Comment in Conclusion
The SETAs are often characterised by a lack of sound financial management. Many businesses have
commented that the payment track record of the SETAs is spectacularly poor as stakeholders and
service providers often have to wait months for payment to be made. The Chamber suggests the
introduction of a maximum period for payment of between 30 to 60 days. Should the SETA not
make the payment within this period, the stakeholder or service provider should be entitled to
some type of recourse.
A.J. LAYMAN
Chief Executive Officer 16 September 2013
pg. 8