DHET 2021/22 Annual Performance Plan, with Deputy Minister

Meeting report

Opening remarks by the Chairperson

The Chairperson welcomed all Members of the Select Committee, Deputy Minister Buti Manamela and the Department. He said that the purpose of today’s meeting was to receive the Department of Higher Education and Training's (DHET's) presentation on its annual performance plan (APP) and budget for the 2021/2022 financial year. The Minister of Finance had emphasised the need for fiscal consolidation in this economic downturn, and appealed to the Department to achieve its goals even with limited resources. Referring to what was said by the President during the State of the Nation Address (SONA), he stressed the need to defeat the pandemic and achieve economic recovery, implement economic reform, stop corruption, and create jobs.

Deputy Minister’s overview

Deputy Minister Manamela thanked the Committee for the opportunity to present the Departments’ revised five-year strategic plan and APP for the 2021/2022 financial year. The previous financial year had proved to be challenging, and the COVID-19 pandemic a major disruption to the economy, government service delivery, and the entire post school education and training (PSET) system. The national state of disaster lockdown had led to declining admissions and enrolment, and campus closures. The Department had adopted a risk adjusted strategy, informed by the National Command Council (NCC), and had committed efforts to saving student lives and the academic year through science and innovation. The Department had targeted interventions towards curbing the spread of the pandemic at higher learning institutions, like ensuring proper testing stations, uninterrupted access to teaching and learning material, and access to affordable data etc. These efforts had enabled all the institutions and its students to complete the 2020 academic year.

The Department had reviewed the initial commitments of the 2020-2025 strategic plan in preparation for the 2021/ 22 expenditure framework. The lessons learnt from the effects of the COVID-19 pandemic on the economy and the PSET system had to be taken into consideration during the review process. The revised strategic plan being presented today would build on the strides made towards strengthening the PSET system since the beginning of democracy in South Africa. The Department’s interventions were continuously informed by policy directives of the PSET White Paper. The Department was committed to ensuring that the country had a skilled and capable workforce supported in an inclusively fair and equitable, non-racial, non-sexist and democratic manner.

The Department’s strategic plan thrusts included a few amendments to ensure the plan's relevance and efficiency in a changing environment. For instance, the Department had developed a draft skills strategy to support government’s efforts towards an economic and social recovery, and this initiative was at an advanced stage. In line with earlier commitments, the DHET would be undertaking a feasibility study to establish the nature and scope of the two new universities -- one for science and innovation in Ekurhuleni, and the other for crime detection in Hammanskraal. This would inform a developing plan for the higher learning institutions which would commence once funding was secured within the budget vote.

The Deputy Minister admitted that there were still some challenges with the National Student Financial Aid Scheme (NSFAS) but assured the Committee that funding for deserving students would remain a priority in the period covered by the strategic plan. The sustainability and effective administration of NSFAS was key for the success of the student funding system. The Department would ensure that NSFAS continued to deliver on its mandate, even in a financially constrained environment. As such, it was working on a policy review for more sustainable models for financing learning in the PSET system.

Mr Manamela said the Minister was working on repositioning the Department for the provision of well-coordinated infrastructure support in higher learning institutions. It was critical to address previous fragmentation in this area, and limited capacity in planning, delivery, and maintenance of infrastructure. The planning division branch had been instructed to provide overall coordination of PSET infrastructure, and work with all delivery branches of the Department and other relevant stakeholders. The oversight of the planning branch would include student housing infrastructure, the Department, the National Treasury, and the Development Bank of Southern Africa (DBSA). To ensure strategic and technical support, the Minister had appointed a team which would form part of the ministerial committee, in collaboration with above-mentioned four stakeholders. There were several critical outputs to the finalisation of the infrastructure systems -- minimum norms and standards, the development strategy on student accommodation, fast-tracking access to student housing, the finalisation of appropriate models for fast-tracking PSET infrastructure delivery, and monitoring and maintenance.

In terms of funding the PSET system, the Department’s baseline reductions over the 2021 medium-term expenditure framework (MTEF) amounted to R4.9 billion in the 2021/22 financial year, R6.429 billion in 2022/23, and R9.4 billion in 2023/24. These baseline reductions would pose challenges in addressing the economic situation, negatively affecting the Department’s operations.

The Deputy Minster thanked the Committee for its support, and said that the current economic situation had forced the DHET to do a lot with fewer resources. The Department should minimise some of the medium term plan (MTP) systemic targets, because achieving these had grown challenging as they related to the PSET system in areas such as access to PSET opportunities and the  quality of provisioning. With the revision of the strategic plan, the Department looked forward to the engagement and the outcome of this meeting.

DHET Strategic Plan, Annual Performance Plan and Budget

Mr Gwebinkundla Qonde, Director-General (DG), DHET, and his team presented the Department's revised strategic plan for 2020-2025, and its annual performance plan and budget for 2021/22.

The APP reflects the specific outputs of the Department for 2021/22. Among the new priority areas which the Department had added were support for the economic reconstruction and recovery plan (ERRP), managing the impact of the COVID-19 pandemic at the institutional level, and the funding of eligible students through NSFAS.

Due to the budget cuts, a number of targets were revised by the Department. Technical and Vocational Education and Training (TVET) college enrolments were reduced from 710 000 to 620 000; Community Education and Training (CET) college enrolments were reduced from 555 194 to 388 782, the new Generation of Academics Programme (nGAP) posts filled at universities were reduced from 100 to 85; pre-vocational learning programme enrolments were reduced from 7 000 to 4 000; and the placement of TVET lecturers in industry or in exchange programmes was reduced from 33% to 18%. There were therefore new outcome indicators and targets.

He described the six programmes under the key outputs for the APP, and said the District Development Model (DDM) included provision to build, refurbish and expand TVET colleges in KwaZulu-Natal (KZN), Mpumalanga and the Eastern Cape. (See presentation)

Ms Pretty Makukule, Chief Financial Officer (CFO), DHET, presented the financial information, and outlined the Department's budget trends. Over the MTEF, the PSET budget had an annual increase of 1.4%, while the Department’s baseline reductions amounted to R4.969 billion in 2021/22, R6.429 billion in 2022/23, and R9.422 billion in 2023/24. These baseline reductions had been imposed to address the economic situation in the country, but would negatively affect the Department’s operations.

The revised budget allocation projections over the MTEF were R115 billion in 2021/22; R120 billion in 2022/23, and R122 billion in 2023/24.The largest budget cuts in the vote over the MTEF were:

• NSFAS -- R6.884 billion;
• Universities -- R7.701 billion, of which R5 billion was on university subsidies and R2.4 billion on university infrastructure;
• TVET Colleges -- R1.426 billion, of which R947 million was on TVET infrastructure and R400 million on TVET college subsidies; and
• Compensation of employees -- R4.634 billion.

The Department had had to reprioritise funding within its own budget to address the projected budget shortfalls. For the NSFAS shortfall, the Department reprioritised R3 billion from voted funds, and had identified R3.3 billion from National Skills Fund (NSF) to form part of the bursary programme.

(See presentation for further details.)

Discussion

The Chairperson thanked the Department for their presentation, and said that it was good to hear their intentions for a better financial approach to achieve their set goals. He referred to Agenda 2063 -- eradicating all forms of gender-based violence (GBV) and discrimination against girls and women -- and asked what the DHET was doing to ensure this was ended in the universities. Was there a budget set aside to ensure that females were given priority when it came to NSFAS and other government services students must receive?

Ms S Luthuli (EFF, KZN) said that at the end of the third quarter, there was under-expenditure for programmes four and six, and potentially over-expenditure for programme three. What were the reasons for these expenditure trends? Funds had to be reprioritised to accommodate the NSFAS shortfall -- how did this affect the budget for other key programmes? Programme one had an increase of 25.3%, so what was the Department planning on doing to accommodate this budget increase?

Ms D Christians (DA, Northern Cape) said that Cabinet had approved a reduction of R24.6 billion in the baseline budget, of which R6.8 billion was removed from NSFAS loans and bursaries, R5 billion from university subsidies; and R947 million from TVET college infrastructure. Her main concern was the budget reduction in all these core functions of the educational system. This reduction, as well as the impact of the COVID- 19 pandemic, would place poor income and middle-class families in jeopardy. Presently, the higher education institutions were already battling with tuition and residential payments, and historical debt was estimated to be at R14 billion.

She wanted to know whether the NSFAS laptop distribution from last year had been finalised. Adding to what the Chairperson had said about GBV, she said that female students were not safe in the TVET colleges' accommodation. Lastly, the University of Cape Town (UCT) recently had a big fire -- how had the Department supported UCT, and had this assistance been adequate for the library and the students affected by the fire?

Regarding laptop distribution, the Chairperson had said that in one of the briefings, the Minister had referred to an established relationship with the Council for Scientific and Industrial Research (CSIR), such as supplying laptops for students, the loading of information, and network connectivity issues etc. What was the progress of this ‘agreement’?

Ms N Ndongeni (ANC, Eastern Cape) said that the budget for PSET remained inadequate and unsustainable, and the key TVET and CET programmes had been negatively affected. The Department should review its funding model to ensure sustainable funding for TVET college infrastructure and the NSFAS model. She advised the Department to focus their budget allocation more on TVET, because it would encourage students to opt for TVET college programmes, which were more beneficial for the economy.

Ms S Lehihi (EFF, North West) asked whether the Department had plans to build new TVET colleges in urban areas.

DHET’s response

Ms Makukule said the Department had allocated R60 million over the MTEF period towards the Higher Health entity in various higher learning institutions. In the previous year it had supplied additional funding to ensure support for GBV and psycho-social support in the CET sector. They had allocated R7 million per annum for a directorate-led unit to fight against GBV in the higher education sector. The institutions receiving subsidies from the Department also had their own initiatives to support GBV programmes.

She told Ms Luthuli that funds had been reprioritised for the NSFAS shortfall. R3.3 billion was a contribution from the National Skills Fund, R3 billion from voted funds, and R2.5 billion from the universities. This budget reduction had an impact on TVET colleges and universities, as the Department had had to halt many plans to build, and may not be able to introduce new infrastructure programmes this year due to budget constraints.

The budget increase observed in programme one was because slide 45 of the presentation had made a comparison with the adjusted budget allocation for the previous year, and compared it with the original budget allocation. The Department should have added a column in the presentation where they also compared the original budget allocation last year to the original budget allocation this year, because that way the increase was only 3.6%, which was little. In September 2020, the Department had realised a potentially huge under-spending for programme one, and had made the necessary adjustments. Most budget reprioritisations to key programmes were made from programme one. The Department had experienced recruitment delays because of the lockdown, which accounted for under-spending and under-compensation of employees in programme one.

She added that the additional funding given over the MTEF period was the budget reprioritisation made from programme one, which was given to the South African Qualification Authority (SAQA), CET colleges (over R120 million), and to reduce the NSFAS shortfall.

With reference to programmes four and six under-expenditure, the Chairperson suggested that Ms Luthuli write down her question with specific details, and the Department would respond accordingly thereafter.

Dr Thandi Lewin, Chief Director (CD): Institutional Governance and Management Support, DHET, agreed with the Committee's concerns over the adverse effects of the budget reprioritisation to support the NSFAS shortfall. She reported that the infrastructure budget cuts last year had brought some projects to halt, and that some projects this year -- such as new funding for information technology (IT) infrastructure -- would have to be postponed. The primary focus of the budget reprioritisation was to protect the core operational budgets of the institutions. As such, the Department had tried to restrict the reductions to areas where they could either postpone projects, or earmark grounds.

Regarding the policy review process, the Department had gone to Cabinet in March and had requested to return by the end of June with proposals on how to continue sustainable student funding through NSFAS. Some projects related to medium-term projections would be attended to immediately, while other projects would continue in the longer period, such as funding of the missing middle/post-graduate students. The Department was, however, concerned about the growing budget for student funding and the requirements for sustaining this budget for the whole PSET system, and its effect on universities, TVET and CET colleges, and skills development.

The Deputy Minister had visited UCT two weeks ago to see the damage caused by the fire. Higher Health had provided support, particularly when students were evacuated from their residences for a short period, and some students had had to be re-housed. The big devastation was the damage caused to the library and its special collections. The university was establishing where there was digitised material, and which materials had been lost. The university was insured to cover the cost of the damage, but the Department would continue to engage them for support. The Department had observed that UCT had acted instantly to ensure the safety of their staff members and students. There was, however, a brief disruption to the academic calendar, but the university had managed to resume a week after the fire. It was also able to mobilise extraordinary support from the private sector and non-governmental organisations (NGOs), like the ‘Gift of the Givers’. The Department was in discussion with the university on the long-term effects of this fire, and how best to assist them.

Dr Lewin said that not all the institutions were using the NSFAS process for acquiring laptops. Last year, for instance, many students received their laptops through the institutions delivering devices to them, whilst some institutions took different routes, like delivering hard copies to their students. NSFAS had ordered 170 00 laptops, some of which had arrived last week and were being distributed. NSFAS had experienced a delay because of the international demand for laptop components and delayed manufacturing from some providers. However, it had concluded its tender agreement last year and had appointed service providers. She estimated that most of the laptops would be distributed towards the middle of this year, and told the Committee that the Department would provide them with an update of this.

Regarding the CSIR, her understanding was that they would assist with a review of the connectivity around the country so that the Department had a sense of which areas had good or bad network connectivity.

Mr Sam Zungu, Deputy Director General (DDG):TVET College branch, DHET, reiterated that the Department was concerned about the budget reduction for TVET college infrastructure. He said it was committed to increasing the number of college campuses available, and finding other modes of delivery for the curricula, like e-learning platforms.

He told Ms Lehihi that the Department had received several requests to build new TVET colleges, but the requests were dealt with on a needs-based analysis. Presently, the focus was aligned with the preamble to the CET Act, which was to prioritise previously disadvantaged areas. He stressed that TVET colleges were of importance, as they provided the skills required to grow the economy.

Mr Qonde asked the Committee to send through any further questions in writing, and the Department would address them accordingly.

Closing remarks

The Chairperson thanked the Deputy Minister for holding the fort in the meeting and giving direction to the Department.

Deputy Minister Manamela thanked the Committee for their questions and inputs, and said that the presentation indicated that the Department was faced with major challenges internally, and by the national fiscus, hence the revised plans and targets. He confirmed that he had gone personally to UCT, and the Minister would be going there later in the week. The Department’s intention was to interact continuously with the university to understand what kind of support they would need, and said that the Department was happy with the university’s responsiveness under the circumstances.

Committee minutes

The minutes for the Committee's meetings on 9 and 17 March, and 7 May 2021, were adopted.

The meeting was adjourned.