The halving of the skills training grant is going to have a massive impact on small businesses and, given the mood of retrenchments playing out in the mining sector at the moment, this decision could even affect larger companies as the effects of retrenchments take hold.
Sean Jones, a director of Artisan Training Institute (ATI), says that many companies are still feeling the effects of the lingering global recession and, with this 50% cut in the skills grant, “training plans might just be slashed, or put on hold”.
He has raised further concern that the drive to channel funding into the FETs as opposed to SETAs will result in wide-spread mediocrity in the training of apprentice learners.
The reduction of the skills training levy – which cuts the grant from 40% to 20% – is to come into effect from 1 April 2013.
“This announcement is certainly ill-timed,” he says. “Even if the 50% cut does not affect larger companies that much, you can be sure it will have a material impact on smaller companies.
“The 50% cut in the subsidy will cut too deep and many will have no choice but to reduce their commitment to training. In many cases, training initiatives will cease entirely.”
Jones adds that the plan to pass the 20% on to the Sector Education and Training Authorities (SETAs) is “poorly conceived” as the SETAs have for some time “been rebuked about their overall efficiency levels”.
In addition, he says, “there is a growing problem with the quality of training in South Africa. Cutting the grant will further compound the poor quality of training as marginal industries look to train with low cost training providers and FETs that, on the whole, are unable to produce quality outcomes with their apprentice learners.
“This will have a knock-on effect on safety as people chase numbers instead of quality.”