There are many reforms the Government of National Unity (GNU) must implement to fulfil its core goals of boosting growth and jobs.
One of the most important could easily be overlooked. South Africa has a dire shortage of technical and vocational skills, which the ruling African National Congress (ANC) has signally failed to resolve.
Good ideas are, however, to be found in the 2017 report of Judge Arthur Heher’s commission of inquiry into the funding of tertiary education. Combined with a key additional reform, these changes could generate the technical skills “revolution” the ANC has promised but not delivered.
Part of the problem is that universities have greater prestige than Technical Vocational Education and Training (TVET) colleges. Often, however, universities bring few benefits to students. Throughput rates are generally poor, while there is little workplace demand for many of the skills they help to generate. By contrast, sound technical and vocational skills are in high demand and short supply.
The government regards technical and vocational training as the more important. This is why it wants the TVET student population to grow to 2.5 million by 2030 and the university one to peak at 1.6 million that year. However, current enrolment figures are at odds with these ambitions.
University students number around 1 million a year: almost double TVET figure of 520,000 a year. The TVET student body must increase five-fold in six years to reach the 2.5 million mark. This is unlikely to occur – especially given the challenges that TVETs face.
Prior to 1994, apprentices were trained in trade-specific skills and spent nine months of the year in work placements, mostly at state-owned enterprises (SOEs). Only the remaining three months were reserved for short “N” courses provided by technical colleges.
Amalgamated
After the ANC came to power, technical colleges were amalgamated into 50 Further Education and Training (FET) colleges, later renamed TVETs. These FET/TVET colleges introduced comprehensive full-time courses in place of the three-month “N” ones. However, most TVET teaching staff were poorly prepared for this shift, as they lacked both subject and pedagogical skills.
Full-time study was now required, so work placements fell away. This undermined the development of practical skills, while curricula were generally poorly suited to employer needs. In addition, many TVET students had low levels of literacy and numeracy on which to build. Throughput rates were dismal and TVET graduates often battled to find jobs.
In 2009 the government reintroduced the former “N” courses in response to industry demand. However, wider problems remain. Curricula must be modernised and attuned to the needs of the economy. Lecturers must be equipped with sound content knowledge and good teaching skills. Student must be literate and numerate from the start, which requires better schooling. The importance of the TVET sector and the skills it provides must be clearly communicated and better understood.
The funding formula for TVET colleges needs changing too. As the Heher commission pointed out in 2017, the tertiary system is “currently skewed towards university education and will not self-correct”. Yet stronger technical and vocational skills are vital in maintaining “the size and level of development of the economy”.
“Attractive institutions of choice”
Said the commission: “A massive focus on TVET colleges is required to develop the system, change perceptions and culture and make TVET colleges attractive institutions of choice.” The funding formula would also have to be geared towards this end. Since the government could not afford “free” tertiary education for all, it was TVET training that should become “fee-free”.
The state should pay 100% of TVET tuition and provide stipends for needy students too, so as to “cover the full cost of study”. By contrast, undergraduate university students should be financed via “income-contingent loans”, which students would obtain from commercial banks with the help of government guarantees. These loans would cover the costs of their studies, but would have to be repaid once their earnings reached specified levels.
This shift would help overcome the problems besetting TVETs, many of which stemmed from underfunding. Said the commission: “There is already a severe funding crisis [at TVETs], which is impacting on capacity, quality, throughput, staff ratios, infrastructure maintenance, and research”, among other needs. Some of the challenges confronting TVET colleges “could be solved through efficiency changes, but many required additional funding”.
Though the Heher commission had been appointed by President Jacob Zuma, he gave its recommendations short shrift. Instead, he took the country by surprise by announcing, in December 2017, the introduction of “free” education at both universities and TVET colleges for students whose families had annual incomes of R350,000 or less.
Government assistance, President Zuma went on, would no longer be provided as a loan to be repaid at some point. Instead, it would become a 100% grant. This was exactly what the commission had warned against, saying the fiscus could not afford it.
Under the new system, state funding for TVET students now includes accommodation or travel costs, but the amounts provided are lower than for university students. This reinforces perceptions that TVET qualifications are less valuable than university diplomas or degrees.
If South Africa is to generate the technical and vocational skills it badly needs, a better funding formula must be found, as the Heher commission proposed. To help reduce public debt and shift demand away from universities already struggling with massification, university students should fund their studies via income-contingent loans, while fee-free training should be confined to TVETs.
Offering substantial value
Scarce tax revenues should then be used to finance well-crafted TVET courses offering substantial value to students and society. However, a different payment mechanism is needed to increase competition and efficiency. State funding should thus be made available to students via tax-funded TVET vouchers.
Under the current system, state grants flow directly to public TVET colleges each year irrespective of how well or badly they perform. To reward and stimulate efficiency, TVET revenue should instead be divided among TVET students via tax-funded vouchers, redeemable solely for TVET courses.
These tax-funded vouchers would follow students to the TVET colleges of their choice, which would use them to pay lecturers and for other essential needs. TVET colleges would have to compete with one another to attract and retain the custom of students. This competition would give them powerful incentives to improve their efficiency and hold down their costs.
The voucher system would also encourage the growth of private technical colleges. South Africa already has some 350 private colleges, but they lack state funding and have only 86,000 students.
Extend to all colleges
By contrast, a TVET voucher system would extend to all colleges, both public and private. This would encourage more private colleges intent on delivering to higher standards at lower costs.
ANC ideology has long encouraged South Africans to believe that the government must not only fund education and training but also deliver it. But centralized, top-down state delivery empowers bureaucrats, lengthens red tape, and stifles innovation. The GNU should shift to a different approach: one in which the state still funds but all technical colleges compete on a level playing field to deliver the most value for money.
Read Dr Jeffery’s new paper on ‘Generating Jobs and Skills for Growth and Prosperity’, part of the IRR’s Blueprint for Growth series, here.
[Image: ALan Jiménez from Pixabay]
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