Wednesday, 14 August 2013

Ground Breaking New Funding Policy from DHET for Artisan Development

A ground breaking new funding policy for artisan development was launched at Olifantsfontein in Midrand on 11 July 2013. Not only will the policy remove one of the three primary blockages to boosting our artisan skills base as a country, it could also pave the way for streamlining the funding and administration of all our SETA based learning initiatives.
"It is not often that organized labour and employers agree on a policy but it seems that when it comes to artisan development there is definitely one voice."
Deputy Minister Manana at the launch of the "Policy for a Generic National Artisan Learner Grant Funding and Administration System" on 11 July 2013

Government, business and labour want more artisans, so what's the hold-up?

 

Artisan training is an expensive and time-consuming exercise. It takes anywhere from 2 - 4 years to train an artisan, and it costs between R200,000 to R650,000 depending on the trade. The figure of R300,000 was used as the basis for the development of this new policy.

This makes it hard for small and medium sized employers to train artisans in large numbers, but even large employers can go badly wrong if they take on a large group of artisans and run into funding or administration problems.

Deputy Minister Manana concluding the launch of the policy

Government on the other hand has identified artisan development as a key strategy to boost the manufacturing and engineering components of our economy (which are needed to grow exports), and to support job creation by absorbing school leavers and unemployed people into well-paying jobs. So government needs to get employers to scale up their current artisan training efforts to go well beyond "training for their own need" in order to increase the pool of available artisans for the big Strategic Integrated Projects (SIPs).

This is one of the reasons that artisan development is one of the key priorities of the HRD Council. In June last year the Council identified funding and learner administration blockages as one of three key constraints to artisan development (artisan data and artisan RPL are the other two constraints).

For example, until the launch of this new funding policy,  there were 14 different sets of grant criteria for employers across the 21 SETAs, and the National Skills Fund (NSF) also had its own criteria.

If you were successful at getting a grant, you couldn't easily plan ahead, knowing what amount your grant was going to be, as each SETA offered differing amounts. Then even if you did plan ahead successfully and get a grant, you faced the certain uncertainty of knowing that everything would change in the next financial year and you may not be able to complete (or repeat) your artisan training -  because with each new financial year SETAs would adapt their grants to available funding and changes in their strategy.
"We as a country and as individual citizens have become completely confused with the multi sector approach to artisan development and as a result have lost huge knowledge of how a real national artisan system works. This policy helps us to get that national system back in place."
Deputy Minister Manana 11 July 2013 


Ayesha Itzkin, CEO of the Chemical Industries Education & Training Authority (CHIETA) at the launch

Given these difficulties in planning and administering apprentices, its no surprise that only the largest employers showed an appetite for artisan development, and it was still difficult to get them to "train beyond need" to create some surplus for the rest of the country.

So in response the Dept Higher Education and Training launched the Policy for a Generic National Artisan Learner Grant Funding and Administration System on 11 July 2013.

The new policy means that qualifying employers will be able to access R139,350 per new learner artisan (spread over the duration of the learning programme, usually 2 - 3 years). Its a lot of money, but still well below the full cost of  most artisan learning programmes: employers also have to factor in the cost of machinery and supervision, as apprentices must have access to relevant equipment and must be mentored by an experienced artisan for the duration of their apprenticeship.

For employers, a big benefit is the fact that they can depend on, predict and plan their artisan development with this R139,350 figure in mind, rather than having to adapt each year to fluctuations in SETA grant availability.

With over R 3,6 trillion in major infrastructure projects in progress or under consideration, it is critical that this money filters down throughout the economy as widely as possible, and that is only possible if local skills and expertise are available - specifically artisans. Our Strategic Integrated Projects can create hard infrastructure and also "soft infrastructure" - a skilled and experienced artisan workforce for our manufacturing, mining and logistics sectors, and also for supporting the creation of infrastructure in neighbouring SADC and African countries.

How will the funding work? 


This is a summary of some of the key elements of the policy, see the links at the end of this post to download the policy and supporting documents.

Rewards for effectiveness

  • Employers who take up the total amount of learners allocated to them will be rewarded by getting the opportunity to take on additional learners (at the expense of employers who did not fulfil their quota!)
  • Government is currently planning to increase the number of new learners entering artisan learning programmes by at least 1,000 extra learners per year 

Flexibility

  •  The National Skills Fund will still be able to fund artisan development directly with employers if necessary (for example to achieve a specific national goal that may be cross-sectoral), but the amount will be the same.

Better skills planning and data

  • Every year by 31 October the government will be able to calculate a Total Available National Artisan Development Budget based on budgets submitted by all SETAs and the National Skills Fund
  • Every year by 30 November there will be a single national database of approved artisan learner workplaces which will be helpful for a number of reasons:
    • It can be used in planning "spatially based" training initiatives (e.g. how many workplaces in Limpopo meet the criteria for hosting artisans, and how many artisans can they host) 
    • It will capture the demand for apprentices by approved workplaces, which tells skills planners what the total national capacity is for the year ahead 

Consistency

  • Employers operating across one or more of the 21 sectors of the economy will no longer have to jump through sector-specific requirements for hosting apprentices - there will be one national set of workplace approval criteria applicable to all employers (expected to be published around end September 2013 - please revisit this post for updates which will be noted in red text )
    • The quality assurance of this process is delegated to the NAMB (National Artisan Moderating Body) by the QCTO (Quality Council for Trades & Occupations)
    • Currently the NAMB will quality assure this process through the SETAs
  • Payment of the R139,350 will be made in 4 tranches of R34,837.50 each, after key milestones have been met by the employer and validated by the SETA. The specific milestones and criteria can be viewed in the policy document and are summarised below

Efficiency

  • Previously the NSF and SETAs would sometimes co-fund artisan training and this could make the process more bureaucratic and expensive, as there would be two sets of project management  and reporting costs

How will you apply?


There is a five-step annual process for employers which is summarised below. For details see the policy document.
    1. Budgets - completed by 31 October
      1. Each SETA and the NSF  establishes the total rand value budget for artisan development for the next financial year 
      2. This budget is submitted to DHET for consolidation to establish the Total Available National Artisan Development (NAD)Budget
    2. Workplaces - completed by 30 November
      1. SETAs issue a call for grant applications from qualifying employers for funding of new artisan learners starting from April the following year 
      2. These applications can be for all trades as listed in the Government Gazette 35625
      3. SETAs submit a summary of applications received to DHET for consolidation onto a single national database of approved artisan learner needs and workplaces for use in planning
    3. New Learner Grant - completed by 31 January
      1. The new learner grant is announced by 31 January, and will increase each year to cover inflation and also to incentivise what is hopefully at least 1,000 new artisan learners each year
      2. While the grant is fixed for the year ahead, the number of learners that can be supported with the grant will change from year to year, depending on the total availability of funding
    4. Allocations - completed by 28 February 
      1. SETAs now allocate grants to employers based on available funding and relevant SETA Board criteria - this list is submitted to DHET
      2. DHET can now review the list of planned artisan training for the year ahead and may change allocations in line with national needs and priorities
      3. Once the SETA receives approval or changes for their allocations they can communicate with employers and move to step 5
    5. Disbursements - completed on verification of employer implementation by SETA
      1. The payments are made in four tranches at 25% per tranche
      2. Detailed criteria exist for implementation at each milestone (see the the policy document for details) basically summarised as:
        1. 25% on contractual commitment with implementation plans by employer 
        2. 25% on registration of learner with a SETA
        3. 25% on achieving half-way point (to be defined and published for each trade)
        4. 25% on recommendation for certification

Where can I get more information?

Here is a list of documents you can download to get more information on the launch and the policy:
  1. The full policy document can be read here
  2. A summary of the policy document can be read here in the form of the official media statement
  3. The list of official trades (Gazette 35625) can be accessed here (includes official definition of a trade)
  4. The address by Deputy Minister Manana at the launch of the policy can be read here (contains good historical background for the policy)
  5. The National Artisan Moderating Body (NAMB) is the lead delivery partner within DHET for all artisan related matters and can be contacted on 011 206 1000
  6. The DHET Media Liaison team: Ms. Manana Makhanya, 072 285 8662 or  Mr. Lwando Mahlasela, 082 440 5305

Is this new funding framework the future for all SETA based initiatives?

While government has not linked the new artisan funding framework to other training initiatives, the efficiencies, the quality of data and decision making allowed by the framework, and the potential for cross-sectoral synergies, will certainly catch the attention of policy makers and HRD Council members who are looking to get more value from the SETA system, at less cost.

A similar thrust towards cross-sectoral synergy is visible in the recent launch of the Occupational Teams for the Strategic Integrated Projects, where DHET is trying to bring focus and collaboration to the massive task of timing and co-ordinating employers, providers and occupational bodies to meet the 20 year time-frame SIPs. This event will be the focus of our next blog posting.

Frequently asked questions

  • What trades or occupations does this apply to?
  • When does the new funding system kick-in?
    • From 1 April 2013, although it will only be enforced from 1 April 2014 to enable SETAs and the NSF to plan and budget according to the new requirements. Some SETAs will be following the new funding framework during 2013 if they can meet the funding and planning requirements early.
  • I am a small business and I can't afford to train artisans, or I don't need the workplace approval criteria. How do I get access to the artisans I need for my business?
    • The new policy allows the DHET (through the NSF) to prioritise funding for  artisan development at State Owned Enterprises, such as Eskom, and government departments, such as the SANDF, which in the past were major contributors to the overall talent pool of artisans in the country
      • The State Owned Enterprises have stiff artisan development targets under the National Skills Accord and the National Development Plan continues this emphasis
      • "Training beyond internal need" is a strategy that increases the artisan talent pool and supports small businesses which cannot afford to train their own artisans or are unable to meet the stringent criteria for artisan development
  • What about grants for specific unique trades, or for specific categories of learners - they don't fit within this "one size fits all" approach
    • SETA Boards (and the NSF) will still be able to define their own specific criteria for grants, for example, they may choose to prioritise rural employers or BBBEE employers as beneficiaries, but the amount of the grant remains constant
    • Exceptions and exemptions will be funded via special projects and separate SETA or NSF grants that are approved and implemented separately. Examples of potential exceptions include:
      • Grants for people undergoing Recognition of Prior Learning to become artisans
      • Grants for learners coming from rural areas
      • Grants for people with disabilities
      • Grants for accommodation of artisan learners 
      • Grants for infrastructure for artisan development 
      • Grants to increase employer or provider capacity for artisan development
      • Grants for some occupations that have cost significantly more or substantially less than the average total cost of R300,000 per trade that this policy is based on. 
        • These include but may not be limited to chefs, goldsmiths, diamond and gemstone setters, butchers, and bakers. 
  • Its a great policy but how will we make sure it actually happens?
    • SETAs are responsible for their implementation of this policy in their annual service level agreements with the Director-General of the DHET
    • The Auditor General will also include implementation of this policy as part of its annual compliance and performance audit processes for SETAs and the NSF
  • Is the implementation of this policy dependent on (and therefore vulnerable to delays with) any other pending legislation?
    • The Learning Programme Regulations are awaiting ministerial sign-off and will create a single, consistent learning programme agreement for all artisan development programmes, whether they are apprenticeship- or learnership-based
    • The Trade Test Regulations will be finalised before April 2014 and will legislate the first ever single national trade testing system for all listed trades in South Africa
    • Chapter 6A of the Skills Development Act is the current primary legislative framework for Artisan Development and this will need to be amended during the 2014 Parliamentary process to add in SETA and NSF compliance to a “single guaranteed funding model for all artisan trades applicable to all sectors including single, simple artisan learner administration and grant disbursement system.”
    • A legal challenge by BUSA to the new SETA Grant Regulations may impact the total amount of funding available for artisan funding, but will not effect the fixed value of the grant (R139,350) nor the other aspects of this policy

Who are the people behind the development of the policy?


Many individuals and stakeholder groupings played a role in developing the policy. It was a broad consultative process led by the Artisan and Technician Development Technical Task Team of the Human Resorce Development Council chaired and coordinated by Dr Florus Prinsloo.

You can read about the process and people in Deputy Minister Manana's launch speech (pages 3 - 4). In the speech, the following people are mentioned specifically, and here we quote directly from the speech (pages 4 - 5):
  • Dr Raymond Patel that chairs the SETA CEO Forum Sub Committee on Artisan and Technician Development that is hosted by merSETA
  • Ms Lindelwa Ximiya that chairs the Government SETA CEO Forum Sub Committee on Artisan and Technician Development that is hosted by PSETA
  • Mr Benedict Mogadime that chairs the State Owned Committee on Artisan and Technician Development that is hosted by Department of Public Enterprises
  • Mr David Mabusela that chairs the Artisan Recognition of prior Learning or ARPL Steering Committee that is hosted at INDLELA
  • Mr Ken Duncan that is coordinating the work of the Dual System Apprenticeship Pilot Project that is hosted by the Swiss-South Africas Co-operation Initiative or SSACI; and
  • Dr Florus Prinsloo who currently leads the two technical forums but will soon be handing them over to other emerging leaders which DHET is developing:
    • The National Artisan Moderation Forum that develops assessment, moderation  and recognition of prior learning instruments for trades, and
    • The Knowledge Management and Research Forum that includes all research and artisan data collection processes. This forum has two partners being the Human Sciences Research Council and the National Artisan Development Support Centre where the central database of all artisan data is being developed.   

Dr Florus Prinsloo providing an overview of the emerging artisan development system


Please improve this FAQ by posting more questions in the comment box at the bottom of the page.

Photo credits: Sebela Machaa (DHET)

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