Understanding the New Grant Regulations

1. T R A I N I N G Imsimbi Breakfast Seminar 7th November 2013 Understanding the New Grant Regulations unleashing your potential

2. T R A I N I N G Focus on the New Regulations • Emphasis of the Minister is now on the delivery of quality training to achieve a skilled workforce • Shift in Levies from Quality to Quality • Inadvertently consequences • fail to address the needs of industry and commerce; and • The skills needs of individuals.

3. T R A I N I N G Significant Changes • Regulate the portion of levies which SETA’s can use for administration • Reduce the mandatory grants from 50% to 20% of levy. • Increased Discretionary Grants from 20% to 50% of levy • Maximum Surplus Funds of 5%

4. T R A I N I N G Significant Changes • Increased requirement for information contained in the Workplace Skills Plan • Sign-off by labour representatives • Create a framework within which expanded use is made of public education and training providers for the provision of skills development programmes

5. T R A I N I N G The Need for a Grants Policy The purpose of the regulations: • Develop specific policies and procedures • Firstly, they provide a mandate • Secondly, act in a transparent and fair manner • Thirdly, how the SETA will allocate resources

6. T R A I N I N G Understanding Mandatory and Discretionary Grants including Pivotal Grants Mandatory Grants: • provide data to their relevant SETA • Geared towards • Critical Skills • Important Skills Discretionary Grants: • Implementation of Sector Skills Plan • No employer entitlement

7. T R A I N I N G Pivotal Programmes and Discretionary Grants • Pivotal programmes are derived from the SETA’s Sector Skills Plan • Priority occupations where supply challenges exist. • Critical skills required in the sector

8. T R A I N I N G Crafting a SETA Policy • SETA grant policies must align themselves to not only the grant regulations but must as their objective ensure that both mandatory and discretionary grant applications are evaluated and approved in compliance with their policy in relation to: • The Skills Development Act No. 97 of 1998 • The Skills Development Levies Act of 1999 and their regulations.

9. T R A I N I N G Key aspects of the merSETA policy Mandatory Grants: • Eligibility • Values • Deviations • Payments

10. T R A I N I N G Key aspects of the merSETA policy Discretionary Grants: • Administration • Eligibility • Important considerations

11. T R A I N I N G Allocation of Levies Discretionary Grants: • 49.5% of total levies paid by the employer • At least 80% allocated to pivotal programmes • A maximum of 20% allocated to non pivotal programmes • Surplus funds, unclaimed mandatory grants, and interest and penalties to be transferred to discretionary funding

12. T R A I N I N G Pivotal Programmes Programmes identified by the merSETA • Apprenticeships • Learnerships • Skills Programmes leading to a qualification • Work integrated learning • Workplace experience • Bursaries • R.P.L. • Public FET Graduates • Graduate Development (U.o.T and University Graduates)

13. T R A I N I N G Grant Allocation – Pivotal Programmes The allocation of 80% pivotal programmes will be split: • 70% to those companies submitting a WSP / ATR • 30% to those non levy paying companies and other entities. • Where an organisation is spending more than 3% of their payroll on training the merSETA would consider allocating additional funding (beyond 49.5% Maximum)

14. 10.5% Administration ?% Surplus merSETA 80% Grants 69.5% 20% Mandatory 100% S.D.L. 49.5% Pivotal N.S.F. 20% 7.5% Projects Admin T R A I N I N G Grant Allocation

15. T R A I N I N G Pivotal programmes • Apprenticeships • Learnerships • Skills Programmes leading to a qualification • Work integrated learning • Workplace experience • Bursaries • R.P.L. • Public FET Graduates • Graduate Development (U.o.T and University Graduates)

16. T R A I N I N G Allocation of Pivotal The allocation of 80% pivotal programmes: • 70% to those companies submitting a WSP / ATR • 30% to those non levy paying companies and other entities. • Where an organisation is spending more than 3% of their payroll on training the merSETA would consider allocating additional funding (beyond 49.5% Maximum)

17. T R A I N I N G Maximising Grants Recoveries

18. T R A I N I N G Maximising Grants Recoveries

19. T R A I N I N G Category of Employer • Established • 60% of the total funds will be allocated • Developmental • 30% of the total funds will be allocated • New Business Category • 10% of the total funds will be allocated

20. T R A I N I N G Discretionary Grant Deliverables and Payments • First Tranche: 10% of the MoA value • Second Tranche: 30% of the value for individual learning intervention as per Annexure A of the MoA • Third Tranche: 30% of the value of the individual learning intervention as per Annexure A of the MoA • Fourth Tranche: 30% of the value of the individual learning intervention as per Annexure A of the MoA

21. T R A I N I N G Non Pivotal Programmes • identify special projects with special rules • Lecturer development • Small and Micro enterprise development • Rural development programmes • Stakeholder support and capacity building • Co-operatives, CBOs, NGOs and CBCs • People with disabilities • Green Skills Development and alignment • Foundational Learning Competence • HIV & AIDS accredited Peer Educator Programme funding

22. T R A I N I N G The Future: Moving Forward With the New Grant Regulation • Public training institutions will not be able to address all the skills needed for workplace performance. • Public institutions do not have the expertise needed to cover the wide range of specialised skills that are needed by stakeholders. • Make provision for funding programmes delivered by reputable private providers that have the necessary expertise in specialised fields. There are sufficient quality assurance mechanisms in place to identify sub standard private providers. • The Regulations may reduce employer participation in skills development even more so with the new BBB EE codes requiring 6% spend on training and the placement of learners post training with a further split between those on apprenticeships and learnerships.

23. T R A I N I N G The Future: Moving Forward With the New Grant Regulation • The reduction in the mandatory grant will substantially reduce the incentive of small and even medium-sized employers to submit Workplace Skills Plans • Most skills employers require for workplace performance are not developed through discretionary grant programmes. • Engage your SETA • Understand their grant policies and what discretionary grant have been identified

24. T R A I N I N G Added Influences • Medium Term Expenditure Framework • Minister of Finance applies expenditure ceilings • FET Infrastructure Development • DHET issues communication regarding compulsory FET infrastructure support from 21 SETA’s (R1 billion) preferably once of payment before 30th April 2014

25. T R A I N I N G Added Influences • National Student Financial Aid Scheme • Shortfall of R2.6 billion • SETA’s requested to allocate funding for those students studying in their sector • R60,000 per student / R20m in current year

26. T R A I N I N G Imsimbi Breakfast Seminar 7th November 2013 Thank You Questions ? unleashing your potential