Further Education and Training Colleges Act, 2006 (Act No. 16 of 2006)National Norms and Standards for Funding Further Education and Training Colleges (NSF-FET Colleges)B. A framework for the public funding of technical and vocational further education and training |
Positioning public funding of technical and vocational FET at FET Colleges
| 12) | Technical and vocational further education and training is clearly a joint responsibility of government and the private sector. It is important that public and private funding of this activity should complement each other. Two major public areas of responsibility stand out. One is the promotion of widespread and appropriate technical and vocational further education and training programmes for the historically disadvantaged, who are usually not in a position to purchase these services privately. Another is the development of skills in industries, including niche industries offering special opportunities for the country, where the private sector is not investing adequately in the necessary human resources development. |
| 13) | The goal of prioritising the historically disadvantaged in the public funding system is to be balanced with an approach, similar to the approach followed in the FET schooling system that promotes broadly inclusive public institutions that are representative of society in general. This balance is required in the interests of nation-building. To achieve this, the funding formula has three keys components. The first is the government subsidy for which covers 80% of the programme costs. The second is placing a cap on college level fees, thus limiting the portion of programme cost which may be charged to 20% of the programme cost. The third is the establishment of a national bursary system to ensure that students who are academically capable but poor are assisted to pay college fees. |
| 14) | Research indicates that private funding of technical and vocational further education and training outside of the school system in South Africa is high, probably higher than public funding. At the same time, private spending directed at on-the-job training has declined substantially during the last ten years. It is imperative that public funding should be positioned in such a way that it complements private funding in the achievement of the country's development goals. Specifically, this involves a few key imperatives: |
| a) | The current practice in public FET Colleges of offering public services whilst also selling services to the private sector should continue, and is in fact encouraged by this policy as a way of making these institutions more responsive and innovative. This echoes the position of White Paper 4. However, this policy also lays down certain guidelines and restrictions in this regard. In particular, it is important for there to be a clear accounting division between publicly funded and privately funded services in colleges in order to avoid a situation in which public funding is used to cross-subsidise privately offered services. This can put the quality of the public service at risk, and results in prices for private services that are below the market value, because they do not capture the full cost of the service. |
| b) | Some public resources should be dedicated towards the monitoring and regulation of private FET Colleges. This can provide government with important information that is needed in the planning of public funding in public FET Colleges. In addition the regulation of private FET College is an important public service that can combat illegal and unethical practices in the training market. Provision for this has been made in Chapter 6 of the FET Colleges Act, 2006. |
| c) | Whilst the Further Education and Training Colleges Act, 2006 does not envisage public funds flowing to private FET Colleges, it is important for government to consider this as one potential way of advancing the development goals of the country. Many countries with strong and vibrant public college sectors earmark a limited portion of public funding for private education institutions in order to fill training gaps and encourage healthy competition in the sector. This policy, in particular the formula funding of programmes (described from paragraph 27), could be adapted in order to allow for the public funding of private FET Colleges. For this purpose separate conditions for the granting of subsidies to private FET Colleges will be developed and published by the Minister. |
| d) | South Africa has a well-developed legal framework for public-private partnerships (PPPs). Options such as PPPs in terms of which private College utilises public facilities to offer training that is needed by the economy should be explored as part of the PED-college planning process referred to in paragraph 93 onwards. |
| 15) | In the interests of quality FET services in the public sector, and in order to minimise inefficient utilisation of funds, it is important that the new funding system should be sensitive to the outputs achieved by public colleges. There are two ways in which the new system deals with the matter of efficiency and outputs. Firstly, the system allows PEDs to expand enrolment in colleges that prove to be efficient, and to decrease enrolment in inefficient colleges. This is made possible through the PED-college planning process. Secondly, the system includes an output bonus, which should be considered a performance incentive that eligible colleges can utilise to improve their facilities, conduct further research, or for some similar developmental activity. The output-related aspects of the system are obviously dependent on the credible measurement of college performance, both in terms of successful completions (or the throughput rate) and in terms of the labour market performance of graduates. |
| 16) | Whilst there are good reasons to regard public schools falling under the South African Schools Act as institutionally and educationally distinct from FET Colleges, there are also good reasons to allow a degree of mixing in terms of funding and in terms of the curriculum. in this policy, this is dealt with as a fee-for-service income and is included in the 20% guideline of student capacity for programmes that are not listed in the national register of approved FET College programmes. |
Role of the public FET Colleges
| 17) | This policy considers public FET Colleges to be critical for the delivery of cost-effective public services that make a real difference to skills development, labour market readiness amongst our youth and the growth of the economy. At the same time, the funding system described here establishes new roles and responsibilities for the college councils and college management. What is strongly emphasised in this policy is a collaborative planning approach involving the college stakeholders, govemment and employer and employee organisations from the private sector. To a large degree, public funding of public FET Colleges is envisaged as the procurement of specific training services by government, linked to a clear and annual PED-college planning cycle that considers local, provincial and national demands, as well as the adequacy of the physical and human capital of colleges to deliver the specific services. |
| 18) | Public FET Colleges should continue to be responsible for the structuring of their college fees, including college fees charged for publicly funded programmes. This arrangement allows managers in colleges to be responsive to local cost pressures and pressures relating to the ability of students to pay fees. However, this policy assumes that it is important for the structuring of college fees, particularly fees charged for publicly funded programmes, to be subject to certain guidelines and restrictions aimed at advancing equity and efficiency in the delivery of public services. |
| 19) | White Paper 4 does not preclude the possibility of FET Colleges offering Higher Education programmes, though it opposes excessive mission drift in colleges away from the FET sector The White Paper further states that HE programmes should be funded through the relevant HE funding policies, and not this policy. This policy, therefore, applies to FET services only. In this policy, all income received for HE training services in colleges is considered part of the fee-for-service income described in paragraph 78 onwards. |
Research, monitoring and planning
| 20) | Public expenditure on research, monitoring and systems development is important for the success of the new funding system. The following clearly require ongoing funding. |
| a) | Research focussing on the effectiveness of public expenditure in the sector |
In this respect, comparisons across programmes being offered, across public colleges, across provinces and between the public and private sectors are important. Both the DoE and PEDs need to engage in this research. There should be a strong emphasis on the generation of time series data that can indicate whether the effectiveness of the system is improving. Tracer studies that gauge the success rates of graduates in the labour market should be undertaken. Paragraphs 87 -89 below deal with the important matter of the costing of FET College programmes.
| b) | Monitoring of the sector, and the development of monitoring systems that can improve the relevance and reliability of data. |
| c) | The development and maintenance of national and provincial plans for enrolments, spending and college outputs |
This work depends strongly on there being good research and effective monitoring systems. The DoE's role in determining national strategies for the volume and type of training to be offered, at an aggregate level, in FET Colleges across the country is crucial.
| d) | The development of information systems, including financial accounting systems |
Given the need for nationally standardised systems, and the cost of developing these systems, this responsibility should rest with the DoE at the national level. This policy has implications for the information systems that are required in the sector.
| 21) | At the national level, the functions described in paragraph 20 are principally the responsibility of the Department of Education. At the provincial level, responsibility rests with the Provincial Education Departments. The National Skills Authority, established in terms of the Skills Development Act, 1998, will continue to play an important role in aligning DoE and DoL strategies with respect to the funding of FET. Moreover, the National Board for Further Education and Training (NBFET) is an important role-player in taking the new funding system forward, and proposing enhancements in the future. |
Policy development in the sector
| 22) | This funding policy is expected to evolve as other related policies evolve, and as new best practices emerge. Polices and frameworks that can be expected to shape this policy very directly in the future are the FET College curriculum, the learnership system maintained by the Department of Labour, and the policies governing the Sector Education and Training Authorities (SETAs). |