The Hijacking of the Skills Levy and the legacies of both Mandela and Mbeki.

On assuming the Presidency in 1994, Nelson Mandela, appointed Tito Mboweni to his cabinet as Minister of Labour. Under Professor Mboweni’s auspices between 1994 and 1998 the National Skills Authority (NSA) was created as an advisory body on Skills Development to the Ministry of Labour.

A significant group of Stakeholders including Organised Business and Labour, Training Providers and representatives from Civil Society crafted two sets of legislation namely the Skills Development Act and the Skills Development Funding Act which had the effect of sheparding SETA’s into existence. The point has to be emphasised that all aspects of this legislative framework were negotiated between and agreed to by Organised Business and Labour as the principal stakeholders. The Business Communities agreement to pay a Skills Levy and participate in the structures proposed was predicated on the offer and acceptance of a structured and formal relationship with Labour for the purposes of ownership, governance and oversight over the implementation structures which would be known as SETA’s.

A great deal of European Union money, in excess of 300 Million Euro, went into the exercise which included the establishment of the South African Qualifications Authority (SAQA) and the National Qualifications Framework. The reason for such a magnanimous gesture was stated to be the vision the EU had of South Africa as the Skills Development Laboratory for Europe. Indeed the European Qualifications Framework was modeled on lessons learned from the introduction of the NQF in South Africa.  The principle vehicle for the success of the South African venture was continuously noted to be the remarkable and truly unique Social Partnership which had been created in the process between Business, Labour and Government in South Africa and the consensus which we had managed to achieve in the process leading to the promulgation of that legislative framework.

This was Professor Tito Mboweni’s legacy. He was succeeded in 1998 by Minister Membathisi Madladlana, who served from 1998 to 2010 as Minister of Labour. He continued the work started by Minister Mboweni. Under his auspices the SETA’s were sheparded into existence and  operated for a decade in-terms of the enabling framework, under his watch.

While SETA’s from the start attracted criticism, principally from those on the periphery who either chose not to become involved in the implementation of the Skills Revolution or had little positive contribution to offer, they have continued to operate for 3 life-cycles over a 15 year period. For the first two of those three cycles SETA’s were governed by Organised Business and Labour nominee’s from the Industries covered by the sectoral scope of the respective SETA’s. Their rules and processes were devised by the Stakeholders themselves and implemented by officials employed collectively by the Stakeholders.

From 2011 however things changed. The entire Seta landscape was shifted from the Ministry of Labour to the Higher Education and Training Ministry. A new Minister was installed in that new Ministry and under his watch wholesale changes were implemented with no consultation with the primary constituencies and stakeholders in the SETA’s namely Organised Business whose members actually pay the Skills Levies and Labour. Despite numerous successful legal challenges against the unilateral actions of Blade Nzimande, The law was ultimately upended which saw Stakeholders, Organised Business and Labour nominee’s replaced by Department of Higher Education and Technology nominee’s who often had little or no relationship to the Sector they were nominated to and indeed any credibility within those sectors.

What happened to SETA’s from 2011 was a wholesale hijacking of everything both President Mandela and President Mbeki stood for.  Their legacies of sound, participative and collective Government by all Social Partners was systematically crushed by a new President and his DHET Chief who obviously had set their sights on the Billions collected by-way of the Skills Development Levies paid by registered Businesses in South Africa.

The problem is that while the intention may have been to slowly start diverting funding away from those who were legislatively entitled to it i.e. the Business Community under the guise of spending it on National rather than Sectoral priorities, this diversion did not wholly satisfy the new regime. Try as they might, with the legislative changes implemented since 2011, the Ministry of Higher Education and Training found it impossible to justify keeping the Stakeholders out of the Governance process.  Organised Business still managed to exert it’s influence in each SETA slowing down the sweeping of funds into the National Skills Fund which has always been at the personal disposal of the Minister of Higher and Education but has never been functionally deployed back into the sectors and industries where this money emanated from.

Cut to the proposed changes to the Seta Landscape proposed for 2016 and one can only resolve that the final stage of the wholesale hijacking of both Seta’s and the funding for those Seta’s will have been achieved.

Instead of relegating Stakeholders to a marginalized status on Seta Boards and Councils and keeping them away from decision-making authority, this Minster has decided to change the status of Seta’s to that of “advisory boards” to the Ministry instead. Thus stripping stakeholders of any meaningful authority whatsoever.

The principle ignominy of this latest fait-a-compli however is that the majority of the funding previously available to functional SETA Accounting Authorities, and in this regard I refer to those Boards and Councils established in 2000 and which remained functional until 2011, has now been diverted to the National Skills Fund which falls directly under the Minister of Higher Education and Training, Blade Nzimande.  It bears noting that the National Skills Fund has never worked properly or effectively. It has always had unspent surpluses in it which have mysteriously disappeared year-on-year. It is notable that despite commenting every year on this, neither the Auditor General nor SCOPA has consistently failed to take any remedial action whatsoever.

Seta’s therefore have been taken completely out of the loop in devising, authorizing, disseminating and quality assuring what happens to the principle component of the Skills Levies collected from registered businesses in South Africa. That task has now been placed directly in the hands of the DHET Ministry.

Surely the question which needs to be addressed is whether there is any reason, any longer for Business to carry on paying a Skills Levy at all given that the role of Organised Business has now been relegated to that of “advisory” as best and non-existent at worst?