Transcript Local government finances

Provincial Budgets and Expenditure
Review
2001/02 – 2007/08
15 September 2005
1
Prov. Budget and Exp Review (1)
• Unlike previous reviews, focuses only
on provincial finances and performance
– Scope of LG has grown substantially over
the years and warrants a separate review
– Difference in municipal and
provincial/national financial years
– LG to be published immediately after the
LG elections
• In time for use by new political office bearers
2
Prov. Budget and Exp Review (2)
• Provincial budgets, expenditure and service
delivery trends
– Builds on the 2004 Trends in Intergov. Finances
– Covers past and future budgets (2001/02 to
2007/08)
– Provides consolidated information
– Allows comparison between provinces
– Critical document to inform on service delivery
• Released before 1½ months MTBPS
– Assist shaping the 2006 Budget and MinMecs
• Inform policy priorities
• Guide provincial EXCOs in budget preparation
3
Prov. Budget and Exp Review (3)
• Importance for portfolio and select committees
– Coincides with the tabling of annual reports and thus
informs the service delivery debate
• Are targets set in strategic plans achieved?
• Are we getting value for money? Broadened access and
quality of services?
• What are the service delivery challenges? Remedies?
• Do we have data to measure service delivery performance?
– Platform for accounting officers to account
– Foster good governance and transparency
• Report to external stakeholders on government
performance
– Policy analysts, Public, etc
4
Prov. Budget and Exp Review (4)
• 9 chapters in the document
–
–
–
–
–
–
–
–
–
Introduction
Education
Health
Social Development
Housing
Agriculture and Land
Roads and Transport
Personnel
Trends in Provincial Budgets
• Annexure A:
– Extensive financial information
5
Intergovernmental Fiscal System (1)
• 3 spheres of government
– Independent, interrelated and based on
principles of cooperative governance
• All with different functions (exclusive and
concurrent)
• Provinces and municipalities have key service
delivery responsibilities
• Provinces and municipalities implement pro-poor
programmes
• Continued need for provinces and municipalities to
improve their service delivery capacity
6
Intergovernmental Fiscal System (2)
• Key concurrent functions
– School education, health, social welfare
and housing
• Policy formulation and setting of norms and
standards a national competence
• Implementation mainly at provincial level
– Coordination challenges that arise
• Is there alignment between provincial budgets
and national policy priorities?
– The Review highlights how each of these
concurrent functions are structured
• Which sphere is responsible for what
7
Intergovernmental Fiscal System (3)
• Revenue sharing arrangement
– Vertical Division of Revenue
• Between the 3 spheres
• Informed by assigned service delivery
responsibility and revenue raising capacity of
each sphere
• Based on governments policy priorities
– Horizontal Division of Revenue
• Among the 9 provinces
– Division of Revenue Bill
• Reflects the vertical and horizontal DOR
– Culmination of an extensive intergovernmental
consultative process
• Approved by both houses of Parliament/NCOP
8
Intergovernmental Fiscal System (4)
Vertical Division of Revenue
Table 1.1 Main budget expenditure, 2001/02 to 2007/08
2001/02
2002/03
Outcome
2003/04
2004/05
Revised
estimate
47,581
46,808
46,313
48,901
53,125
56,603
59,381
215,324
244,721
282,349
321,212
364,694
399,790
435,513
14.8%
13.7%
15.4%
13.8%
12.9%
9.1%
8.0%
262,905
291,529
328,662
370,113
417,819
456,393
494,894
12.4%
10.9%
12.7%
12.6%
12.9%
9.2%
8.4%
–
–
–
–
2,000
4,000
8,000
87,705
99,091
108,459
121,101
136,262
146,800
157,817
121,099
136,873
161,494
185,354
209,273
229,282
248,236
6,520
8,759
12,396
14,757
17,159
19,708
21,461
215,324
244,722
282,349
321,212
362,694
395,789
427,513
R million
State debt cost
Non-interest expenditure
Percentage increase
Total expenditure
Percentage increase
Contingency reserve
2005/06 2006/07 2007/08
Medium-term estimates
Division of available funds
National departments
Provinces
1
Local government 1
Total
Percentage shares
National departments
40.7%
40.5%
38.4%
37.7%
37.6%
37.1%
36.9%
Provinces
56.2%
55.9%
57.2%
57.7%
57.7%
57.9%
58.1%
3.0%
3.6%
4.4%
4.6%
4.7%
5.0%
5.0%
Local government
1. Includes conditional grants.
9
Intergovernmental Fiscal System (5)
Funding of Provinces
• Provinces determine own budgets guided by
national policy priorities
– National transfers (97 per cent) the largest share of
provincial revenue
• Own revenue (3 per cent)
– Equitable share 65,4 per cent of national transfers
• Unconditional transfer
• Provinces have discretion on how to allocate based on
government priority
• Main source of funding for social services
– Conditional grants 34,6 per cent of national
transfers
• Social assistance grant payments reason for large
conditional grant share
• Health conditional grants second largest share
• Performance and evolution of conditional grants need
thorough review
10
Provincial Budgets and Expenditure Review:
2001/02 – 2007/08
Chapter 9: Trends in Provincial Budgets
11
Chapter Outline
• Introduction
• Provincial Revenue Trends
– National transfers to provinces
• Provincial equitable share
• Conditional grants
– Provincial own revenue
• Provincial Expenditure Trends
– Social services spending
– Non-social services spending
– Personnel expenditure
– Payments for capital assets
• Conclusion
12
Introduction
•
•
•
•
•
•
•
SA’s Intergovernmental System places provinces at the epicentre of
government’s delivering programme
Concurrent functions such as:
– School Education
– Health
– Social Welfare Services
– Housing
Social Services are approximately 82 per cent of total provincial
spending
Non-social services includes:
– Agricultural support to farmers
– Construction & maintenance of provincial roads
– Provincial administrations & governance functions
Delivery of social services continues to be a pillar of government’s
transformation agenda
Improved & expanded social service delivery linked to strong economy
Budget has become key instrument of co-operative governance
13
Provincial Revenue Trends
•
•
•
•
•
National transfers are the largest source of funding for services
provided by provinces
– Equitable share & conditional grants
The change in the financing mechanism for social security grants
impacts on the analysis in this Review
Provincial share of nationally raised revenue above 96 per cent
Equitable share largest share of national transfers – 64 per cent
– Grows at 4 per cent per year in real terms over the MTEF
– Government continues to prioritize social services funded through
ES
The type and number of Conditional Grants reflect the evolution of the
intergovernmental fiscal system
– Three types: Recurrent, capital and transitional and capacity
building
– As system matures, transitional and capacity building grants will be
phased out
– The increase CG transfers mainly due to social security grants
14
Provincial Revenue Trends
Table 9.1 Provincial revenue and expenditure, 2001/02 to 2007/08
2001/02
2002/03
Outcom e
2003/04
121 398
136 925
161 532
185 136
209 273
228 782
247 736
Equitable share
87 628
94 006
108 694
121 157
134 706
146 757
157 678
Conditional grants
33 770
42 919
52 838
63 979
74 567
82 025
90 058
4 942
5 984
6 613
6 255
5 905
6 139
6 426
Total revenue
126 340
142 909
168 146
191 391
215 177
234 922
254 162
Total expenditure
122 685
145 808
170 669
188 870
213 769
234 057
253 569
3 655
-2 899
-2 524
2 521
1 409
864
593
96,1%
95,8%
96,1%
96,7%
97,3%
97,4%
97,5%
Equitable share
72,2%
68,7%
67,3%
65,4%
64,4%
64,1%
63,6%
Conditional grants
27,8%
31,3%
32,7%
34,6%
35,6%
35,9%
36,4%
3,9%
4,2%
3,9%
3,3%
2,7%
2,6%
2,5%
Total revenue
100,0%
100,0%
Source: National Treasury provincial database
100,0%
100,0%
100,0%
100,0%
100,0%
R m illion
Transfers from national
2004/05
Prelim inary
outcom e
2005/06
2006/07
2007/08
Medium -term estim ates
of which:
Ow n revenue
Surplus(+)/deficit(-)
Share of total provincial revenue
Transfers from national
of which:
Ow n revenue
15
Provincial Revenue Trends
100%
80%
60%
40%
20%
0%
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
Equitable share
Conditional grants
Ow n revenue
16
Provincial Revenue Trends:
Own Revenue
•
2,7 per cent of total revenue in 2005/06 declining marginally to 2,5 per
cent in 2007/08
•
Budgeted at R5,9 billion in 2005/06, R6,1 billion in 2006/07 and R6,4
billion in 2007/08
•
Average annual growth rate of 0,9 per cent between 2004/05 and
2007/08
•
Provinces tend to understate their own revenue forecasts - declines
from the 2004/05 preliminary outcomes of R6,3 billion to R5,9 billion
(5,7 per cent)
•
Own revenue is made up of tax receipts (casino taxes, horse racing
taxes, liquor licences and motor vehicle licences), non-tax receipts,
transfers received, sale of capital assets and other own revenue
collected
•
Motor vehicle licence fees are the biggest source of revenue - 41,6 per
cent 2004/05, and is set to rise further to 48,3 per cent by 2007/08
•
The drop in non-tax revenue is due to sharp decline in interest revenue
17
Provincial Revenue Trends:
Own Revenue
Table 9.2 Provincial own revenue by category, 2001/02 to 2007/08
2001/02
R m illion
Tax receipts
2002/03
Outcom e
2003/04
2004/05
Prelim inary
outcom e
2005/06
2006/07
2007/08
Medium -term estim ates
2 447
2 750
3 306
3 441
3 704
3 922
4 115
Casino taxes
410
516
649
729
753
809
848
Horse racing taxes
154
113
112
89
119
121
132
12
14
16
20
21
27
31
1 871
2 107
2 530
2 604
2 812
2 965
3 104
1 104
1 258
1 751
1 514
1 354
1 419
1 493
Transfers received
15
15
22
42
67
31
22
Sales of capital assets
77
58
222
60
72
69
55
Other
1 300
1 903
1 312
1 198
709
699
741
Total
4 942
5 984
6 613
6 255
5 905
6 139
6 426
Liquor licences
Motor vehicle licences
Non-tax receipts
Percentage of total provincial ow n revenue
Tax receipts
49,5%
46,0%
50,0%
55,0%
62,7%
63,9%
64,0%
Casino taxes
8,3%
8,6%
9,8%
11,6%
12,7%
13,2%
13,2%
Horse racing taxes
3,1%
1,9%
1,7%
1,4%
2,0%
2,0%
2,1%
Liquor licences
0,3%
0,2%
0,2%
0,3%
0,3%
0,4%
0,5%
37,9%
35,2%
38,3%
41,6%
47,6%
48,3%
48,3%
22,3%
21,0%
26,5%
24,2%
22,9%
23,1%
23,2%
Transfers received
0,3%
0,3%
0,3%
0,7%
1,1%
0,5%
0,3%
Sales of capital assets
1,6%
1,0%
3,4%
1,0%
1,2%
1,1%
0,9%
26,3%
31,8%
19,8%
19,2%
12,0%
11,4%
11,5%
Total
100,0%
100,0%
Source: National Treasury provincial database
100,0%
100,0%
100,0%
100,0%
100,0%
Motor vehicle licences
Non-tax receipts
Other
18
Provincial Expenditure Trends
• Between 2001/02 and 2004/05, expenditure has grown from
R122,7 billion to R188,9 billion: a real growth rate of 8,4 per
cent a year
• Budgeted to spend R213,8 billion in 2005/06 (nominal growth
of 13,2 per cent, real growth of 8,6 per cent from 2004/05
outcome)
• Over the MTEF, increase to R253,6 billion in 2007/08 at an
average annual growth of 10,3 per cent or 5,1 per cent faster
than inflation
• Capital spending sustains its upward growth path (9,5 per cent
average annual over the MTEF)
• Social development one of the fastest expenditure growing
items in provinces
• Provincial spending trends vary between provinces
• Provinces must continue to maintain healthy balances
between revenue streams and expenditure
19
Provincial Expenditure Trends
Table 9.3 Provincial expenditure, 2001/02 to 2007/08
2001/02
R m illion
Eastern Cape
2002/03
Outcom e
2003/04
2004/05
Prelim inary
outcom e
2005/06
2006/07
2007/08
Medium -term estim ates
19 596
24 715
29 672
30 975
33 989
37 499
41 098
8 227
9 680
11 437
12 876
14 542
15 712
16 920
Gauteng
20 299
24 475
28 339
30 276
33 445
36 865
39 757
Kw aZulu-Natal
25 095
28 871
34 128
38 849
45 573
49 993
54 466
Limpopo
15 656
18 780
21 673
24 995
27 958
30 317
32 730
Mpumalanga
8 426
9 774
11 542
13 140
15 075
16 510
18 023
Northern Cape
2 968
3 469
4 151
4 457
5 048
5 598
6 028
North West
9 901
11 535
13 364
15 052
17 459
19 173
20 769
12 517
14 509
16 365
18 250
20 680
22 391
23 778
122 685
145 808
170 669
188 870
213 769
234 057
253 569
Eastern Cape
26,1%
20,1%
4,4%
9,7%
10,3%
9,6%
Free State
17,7%
18,1%
12,6%
12,9%
8,0%
7,7%
Gauteng
20,6%
15,8%
6,8%
10,5%
10,2%
7,8%
Kw aZulu-Natal
15,0%
18,2%
13,8%
17,3%
9,7%
8,9%
Limpopo
20,0%
15,4%
15,3%
11,9%
8,4%
8,0%
Mpumalanga
16,0%
18,1%
13,9%
14,7%
9,5%
9,2%
Northern Cape
16,8%
19,7%
7,4%
13,3%
10,9%
7,7%
North West
16,5%
15,9%
12,6%
16,0%
9,8%
8,3%
Western Cape
15,9%
12,8%
11,5%
13,3%
8,3%
6,2%
17,1%
10,7%
13,2%
9,5%
8,3%
20
Free State
Western Cape
Total
Percentage grow th
Total
18,8%
Source: National Treasury provincial database
Social Services Spending
• Social services spending makes up the bulk of provincial
expenditure – approximately 82 per cent
• This includes Education, Health and Social Development
• Grew by 8,8 per cent in real terms over the period 2001/02 to
2004/05
• Over the MTEF, expected to grow by a further 4,6 per cent in real
terms
• Spending doubles over the seven-year period from R100,4 billion in
2001/02 to R206 billion by 2007/08
• Bulk of social services goes to programmes targeted at poor
persons and households to improve the quality of life for South
Africans
• The more rural, poorer provinces’ share in social services spending
is higher than urban provinces
• Significant changes in the composition of social services are
evident, e.g. Social security grants
21
Social Services Spending
100%
80%
60%
40%
20%
0%
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
Education
Health
Social Development
22
Social Services Spending
Table 9.5 Consolidated provincial expenditure, 2001/02 to 2007/08
2001/02
2002/03
Outcom e
2003/04
2004/05
Prelim inary
outcom e
2005/06
2006/07
2007/08
Medium -term estim ates
R m illion
Education
47 274
53 151
60 255
64 656
70 223
76 538
82 202
Health
29 347
32 794
36 916
40 575
45 905
49 969
53 211
Social development
23 768
32 369
42 106
50 796
59 686
65 488
70 614
100 389
118 314
139 277
156 027
175 814
191 994
206 028
–
–
–
53
953
1 205
1 610
22 297
27 493
31 392
32 790
37 002
40 857
45 931
122 685
145 808
170 669
188 870
213 769
234 057
253 569
Total social services
Contingency reserves
Non-social services
Total
Shares of total provincial expenditure
Social services
81,8%
81,1%
81,6%
82,6%
82,2%
82,0%
81,3%
Education
38,5%
36,5%
35,3%
34,2%
32,8%
32,7%
32,4%
Health
23,9%
22,5%
21,6%
21,5%
21,5%
21,3%
21,0%
Social development
19,4%
22,2%
24,7%
26,9%
27,9%
28,0%
27,8%
18,2%
18,9%
18,4%
17,4%
17,8%
18,0%
18,7%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
Social services
17,9%
17,7%
12,0%
12,7%
9,2%
7,3%
Education
12,4%
13,4%
7,3%
8,6%
9,0%
7,4%
Health
11,7%
12,6%
9,9%
13,1%
8,9%
6,5%
Social development
36,2%
30,1%
20,6%
17,5%
9,7%
7,8%
23,3%
14,2%
4,6%
15,6%
10,8%
13,0%
Total
18,8%
Source: National Treasury provincial database
17,1%
10,7%
13,2%
9,5%
8,3%
Non-social services
Total
Percentage grow th
Non-social services
23
Non-Social Services Spending
•
•
•
•
•
•
•
•
Include, among others, public works, roads and transport, housing and
local government, agriculture, sport and environmental affairs
Approximately 18 per cent of total provincial expenditure
Economic functions delivered are very important for economic growth
and job creation
Grew at an average annual rate of 13,8 per cent between 2001/02 and
2004/05
Slowing down slightly but the strong recovery continues through
2007/08
The strong growth will strengthen programmes such as:
– The new housing strategy
– The comprehensive agricultural support programme (CASP)
– The expanded public works programme
Doubles between 2001/02 and 2007/08 from R22,3 billion to R45,9
billion
Contribution towards stimulating economic growth, creating
employment opportunities and reducing poverty
24
Personnel Expenditure
• Success of containment of personnel costs to acceptable and
sustainable levels - from 55,2 per cent (2001/02) to
46,5 per cent in 2004/05 and to 43,6 per cent by 2007/08
• Provincial education and health departments employ over 658
000 personnel
– Largest contributor is education (R57,5 billion or
59,4 per cent of total provincial personnel spending in
2005/06)
– Education grows by 7,5 per cent from 2004/05 to 2005/06,
7,1 per cent in 2006/07 and 6,8 per cent in 2007/08
– Health is at R25,8 billion or 26,7 per cent in 2005/06
– Slight decline in Health growing by 10,8 per cent in 2005/06,
7,7 per cent in 2006/07 and 5,9 per cent in 2007/08
• Personnel spending growth is still well above inflation
• Over 65 per cent of total provincial personnel spending is
concentrated in four provinces (KZN, EC, GT, LIM)
25
Personnel Expenditure
Table 9.6 Provincial expenditure on compensation of employees, 2001/02 to 2007/08
2001/02
R m illion
Eastern Cape
2002/03
Outcom e
2003/04
2004/05
Prelim inary
outcom e
2005/06
2006/07
2007/08
Medium -term estim ates
11 198
12 210
13 352
14 363
15 123
15 999
16 766
4 763
5 172
5 714
6 212
7 106
7 589
8 003
Gauteng
10 594
11 452
12 640
13 501
14 672
15 549
16 396
Kw aZulu-Natal
13 621
14 864
16 098
17 909
20 170
22 210
24 207
Limpopo
9 482
10 450
11 488
12 516
13 430
14 266
15 225
Mpumalanga
4 450
4 919
5 395
5 897
6 799
7 216
7 533
Northern Cape
1 410
1 542
1 737
1 946
2 205
2 325
2 456
North West
5 701
6 208
6 851
7 210
7 976
8 630
9 222
Western Cape
6 502
6 987
7 511
8 309
9 322
10 078
10 737
Total
67 722
73 804
80 786
Source: National Treasury provincial database
87 861
96 802
103 862
110 545
Free State
26
Payments for Capital Assets
• Includes spending on construction, rehabilitation of buildings,
roads and other immovable assets
• Excludes spending on housing subsidy (capital transfer) –
NERF
• Grew robustly between 2001/02 and 2004/05, at an average
annual rate of 18,6 per cent
• Rising at an average annual rate of 15 per cent from
R11,9 billion in 2005/06 to R13,9 billion in 2006/07 and
R15,3 billion in 2007/08 over the MTEF
• 36 per cent of capital spending is on roads and transport
followed by Health (29,4%) & Education (24,1%)
• Preliminary capital spending outcomes (2004/05) show
R1,8 billion underspending in provinces – present some
challenges
• The infrastructure delivery improvement programme (IDIP)
aims to make infrastructure delivery more efficient and effective
27
Payments for Capital Assets
Table 9.7 Provincial payments for capital assets1, 2001/02 to 2007/08
2001/02
2002/03
Outcom e
2003/04
2004/05
Prelim inary
outcom e
2005/06
2006/07
2007/08
Medium -term estim ates
R m illion
Eastern Cape
359
840
1 699
1 444
1 621
2 303
2 790
Free State
382
422
522
480
544
583
663
Gauteng
1 183
1 640
1 754
1 831
1 455
1 897
1 907
Kw aZulu-Natal
1 937
1 846
2 319
2 318
3 020
3 215
3 515
Limpopo
389
650
875
1 286
1 493
1 361
1 436
Mpumalanga
518
639
695
756
1 075
1 189
1 494
Northern Cape
175
250
200
213
281
455
546
North West
388
587
610
683
968
1 139
1 266
Western Cape
731
823
942
1 093
1 444
1 804
1 729
6 063
7 697
9 617
10 103
11 900
13 947
15 347
Total
Percentage of total expenditure
Eastern Cape
1,8%
3,4%
5,7%
4,7%
4,8%
6,1%
6,8%
Free State
4,6%
4,4%
4,6%
3,7%
3,7%
3,7%
3,9%
Gauteng
5,8%
6,7%
6,2%
6,0%
4,4%
5,1%
4,8%
Kw aZulu-Natal
7,7%
6,4%
6,8%
6,0%
6,6%
6,4%
6,5%
Limpopo
2,5%
3,5%
4,0%
5,1%
5,3%
4,5%
4,4%
Mpumalanga
6,2%
6,5%
6,0%
5,8%
7,1%
7,2%
8,3%
Northern Cape
5,9%
7,2%
4,8%
4,8%
5,6%
8,1%
9,1%
North West
3,9%
5,1%
4,6%
4,5%
5,5%
5,9%
6,1%
Western Cape
5,8%
5,7%
5,8%
6,0%
7,0%
8,1%
7,3%
5,6%
5,3%
5,6%
6,0%
6,1%
Total
4,9%
5,3%
1. Excludes capital transfers.
Source: National Treasury provincial database
28
Conclusion
• Provincial spending continues to grow in real terms
• Social Development fastest growing item over the last three years
and continue to rise rapidly over the MTEF
• Growth (SD) has no impact on other spending – robust growth in
education, health and infrastructure
• Strong growth in capital expenditure – nearly triples over sevenyear period
– Positive contribution to economic growth and employment
creation
– However, underspending in 2004/05 indicates capacity
constraints that inhibit certain sectors from delivering
infrastructure in line with the resources available
– The infrastructure delivery improvement programme (IDIP) aims
to make infrastructure delivery more efficient and effective
• Detail analysis is presented in preceding chapters for school
education, health, social development, agriculture, housing and
roads and transport and personnel
29
Provincial Budgets and Expenditure Review:
2001/02 – 2007/08
Chapter 2: Education
30
Education
Chapter Outline
• Overview of Education Landscape
• Review of key provincial expenditure trends
(2001/02 to 2004/05) and budgeted
expenditure (2005/06 to 2007/08)
• Brief review of selected public school
education outputs and quality
31
Education Landscape
• Three bands:
General education and training (grades R
to 9)
Further education and training (NQF levels 2 to
4 – including grades 10 to 12 and FET Colleges)
Higher education
• Concurrent function:
Provincial: Funding/Provisioning and Delivery
of GET and FET
National: - Policy/Monitor/Support to provinces
- Sole responsibility for Higher
Education
32
Education Landscape
(Provincial Education)
Biggest component: Public Ordinary Schools
(84,4% of 2004/05 education spending)
Number of Learners,Educators and Schools in Public Ordinary Schools
by Province: 2002
Numbers
Province
Eastern Cape
Free State
Gauteng
KwaZulu-Natal
Limpopo
Mpumalanga
Northern Cape
North West
Western Cape
Total
Learners
Educators
Ratio
Schools
Learner:
Educator
Leaner:
School
2 064 927
693 213
1 482 253
2 680 993
1 816 200
903 789
194 062
887 649
915 270
64 974
21 947
44 651
71 624
55 155
24 870
6 334
29 451
25 225
6 150
2 281
1 915
5 560
4 561
1 856
459
2 247
1 460
32
32
33
37
33
36
31
30
36
336
304
774
482
398
487
423
395
627
11 638 356
344 231
26 489
34
439
33
Education Landscape
(Provincial Education)
Second biggest component: FET Colleges
Full-time equivalent (FTE) and head count students and institutions in the
public further education and training sector by province
Pre April 2002
Province
Eastern Cape
Free State
Gauteng
KwaZulu-Natal
Limpopo
Mpumalanga
Northern Cape
North West
Western Cape
Total
Full-time
equivalent
2003
Head Counts
Former
Technical
Colleges
New
FET Colleges
13 489
9 792
47 161
22 744
13 100
7 655
3 129
9 382
17 461
34 854
24 291
135 227
65 073
37 072
24 067
8 581
31 057
45 922
26
11
33
24
14
10
6
11
17
8
4
8
9
7
3
2
3
6
143 913
406 144
152
50
34
Prov. Expenditure Trends
Table 2.4 Provincial education expenditure1, 2001/02 to 2007/08
2001/02
2002/03
2003/04
Outcome
2004/05
Preliminary
outcome
R million
2005/06
2006/07
2007/08
Medium-term estimates
Eastern Cape
7,948
9,268
10,308
10,717
11,251
12,687
13,879
Free State
3,201
3,551
4,087
4,348
4,872
5,202
5,521
Gauteng
7,314
8,129
9,539
9,834
10,360
11,269
11,776
KwaZulu-Natal
9,288
10,432
12,022
13,001
14,506
15,984
17,457
Limpopo
6,740
7,450
8,264
9,611
9,869
10,697
11,430
Mpumalanga
3,363
3,922
4,529
4,869
5,737
6,126
6,616
Northern Cape
1,031
1,181
1,305
1,396
1,534
1,606
1,700
North West
3,996
4,416
4,896
5,179
5,833
6,198
6,580
4,393
4,802
5,305
5,701
6,260
6,769
7,243
47,274
53,151
60,255
64,656
70,223
76,538
82,202
2
Western Cape
Total
Percentage of total provincial spending
Eastern Cape
40.6%
37.5%
34.7%
34.6%
33.1%
33.8%
33.8%
Free State
38.9%
36.7%
35.7%
33.8%
33.5%
33.1%
32.6%
Gauteng
36.0%
33.2%
33.7%
32.5%
31.0%
30.6%
29.6%
KwaZulu-Natal
37.0%
36.1%
35.2%
33.5%
31.8%
32.0%
32.1%
Limpopo
43.0%
39.7%
38.1%
38.5%
35.3%
35.3%
34.9%
Mpumalanga
39.9%
40.1%
39.2%
37.1%
38.1%
37.1%
36.7%
Northern Cape
34.7%
34.0%
31.4%
31.3%
30.4%
28.7%
28.2%
North West
40.4%
38.3%
36.6%
34.4%
33.4%
32.3%
31.7%
Western Cape
35.1%
33.1%
32.4%
31.2%
30.3%
30.2%
30.5%
32.8%
35
32.7%
32.4%
Total
38.5%
36.5%
35.3%
34.2%
Provincial Expenditure Trends
Table 2.5 Provincial education expenditure by economic classification,
2001/02 to 2007/08
2001/02
2002/03
2003/04
Outcome
Preliminary
outcome
R million
Current payments
2004/05
2005/06
2006/07
2007/08
Medium-term estimates
44,946
49,799
55,296
59,065
63,786
69,305
74,402
41,577
45,524
49,591
53,441
57,460
61,536
65,708
Goods and services
3,349
4,271
5,702
5,619
6,319
7,761
8,687
Transfers and subsidies
1,363
1,804
2,694
3,044
3,564
3,750
3,892
965
1,548
2,265
2,547
2,873
3,483
3,908
47,274
53,151
60,255
64,656
70,223
76,538
82,202
of which:
Compensation of
employees
Payments for capital assets
Total
2001/02 – 2004/05
2004/05 – 2007/08
9.5%
8.0%
8.7%
7.1%
Goods and services
18.8%
15.6%
Transfers and subsidies
30.7%
8.5%
Payments for capital assets
38.2%
15.3%
Total
11.0%
8.3%
Percentage change (average annual)
Current payments
of which:
Compensation of employees
Source: National Treasury provincial database
36
Composition: Prov education spending
Composition of Provincial Education Spending (2004/05)
5% 4%
9%
Compensation of employees
Goods and services
Transfers and subsidies
Payments for capital assets
82%
37
Provincial Expenditure Trends
Table 2.6 Provincial education expenditure by programme, 2001/02 to 2007/08
2001/02
2002/03
2003/04
Outcome
Preliminary
outcome
R million
Administration
2004/05
2005/06
2006/07
2007/08
Medium-term estimates
3,229
3,846
4,377
4,460
4,841
5,642
5,965
39,987
44,915
50,650
54,540
58,960
63,778
68,694
Primary schools
22,052
24,217
28,081
29,625
32,109
34,492
37,356
Secondary schools
17,011
19,394
20,922
23,099
24,793
26,997
28,863
924
1,303
1,647
1,816
2,058
2,289
2,474
187
228
266
286
321
347
373
Public special school
education
1,356
1,419
1,566
1,831
1,886
2,092
2,220
Further education and training
1,153
1,085
1,171
1,308
1,574
1,640
1,734
Adult basic education and
training
379
442
537
530
620
778
814
Early childhood development
263
307
377
409
511
576
639
Auxiliary and associated services
720
909
1,312
1,292
1,510
1,685
1,763
47,274
53,151
60,255
64,656
70,223
76,538
82,202
Public ordinary school education
of which:
Other subprogrammes
Independent school subsidies
Total expenditure
38
Provincial Education Programmes
Education Spending by Programme (Excluding Public
Schools)
8.0%
Administration
Percentage
7.0%
6.0%
Independent school
subsidies
5.0%
Public special school
education
4.0%
3.0%
Further education and
training
2.0%
1.0%
Adult basic education and
training
0.0%
1
Programmes
Early childhood
development
39
Provincial Expenditure Trends
(National School Nutrition Programme)
From 1 April 2004, the education sector has been responsible for the
implementation of the national school nutrition programme
NUMBER OF BENEFICIARIES
R’000
TARGETED
2004/05
REACHED
2004/05
TARGETED
2005/06
BUDGET ALLOCATED
GROWTH
RATE
2004/05
2005/06
GROWTH
RATE
Eastern Cape
Free State
Gauteng
KwaZulu-Natal
Limpopo
Mpumalanga
Northern Cape
North West
Western Cape
948 574
164 852
325 036
1 255 950
912 800
491 362
111 284
300 678
149 035
934 912
234 534
356 268
1 187 118
1 157 193
492 687
119 925
338 440
156 509
999 364
246 857
337 859
1 251 140
1 002 609
492 687
122 200
336 464
156 617
5,1%
33,2%
3,8%
-0,4%
9,0%
0,3%
8,9%
10,6%
4,8%
177 259
49 100
75 730
181 420
153 125
64 079
22 469
72 401
36 617
194 288
53 817
83 006
198 849
167 836
70 235
24 628
79 357
40 135
8,8%
8,8%
8,8%
8,8%
8,8%
8,8%
8,8%
8,8%
8,8%
Total
4 659 571
4 977 586
4 945 797
5,8%
832 200
912 151
8,8%
40
Education performance (1)
• Relative to inputs, outputs and quality of
education remain a concern
• Trends in matriculation results suggests improved
quality and reduced inefficiencies:
– Between 1999 and 2003 numbers writing exam
declined from 511 474 to 440 267 - increasing to
467 985 in 2004
• (actual numbers passing the exam increased from 249 831 in
1999 to 330 717 in 2004)
– Matriculation pass rate improved from below 50% in
1997 to 73,2% in 2003. Slight drop to 70,7% in 2004.
– Growing trends in passes in maths and science
41
Education performance (2)
University Endorsement per Province
30.0%
Percentage
25.0%
20.0%
2000
15.0%
2004
10.0%
5.0%
0.0%
Total
Western
Cape
North West
Northern
Cape
Mpumalanga
Limpopo
KwaZuluNatal
Gauteng
Free State
Eastern
Cape
Province
Except for North West, increase in number of endorsements.
Sharp increases in LIM, FS and NC
42
Education performance (3)
Mathematics pass rates (2004)
100%
90%
80%
70%
% Who wrote and failed
60%
50%
Learners passing LG (%)
40%
Learners passing HG (%)
30%
Learners passing SG (%)
20%
10%
0%
Total
Western Cape
North West
Northern Cape
Mpumalanga
Limpopo
KwaZulu-Natal
Gauteng
Free State
Eastern Cape
43
Education performance (4)
Physical Science Pass Rates (2004)
100%
90%
80%
70%
60%
% who wrote and failed
Learners passing LG (%)
50%
40%
30%
20%
Learners passing HG (%)
Learners passing SG (%)
10%
0%
Total
Western
Cape
North West
Northern
Cape
Mpumalanga
Limpopo
KwaZuluNatal
Gauteng
Free State
Eastern
Cape
44
Education performance (5)
Key issues for discussion
• Are matric results the only yardstick for
performance?
– Recent standardised international tests show South
Africa as a weak performer
– 2001/02 Systemic evaluation (Grade 3) showed poor
numeracy and literacy skills of learners
• Can progress be measured? Data problems?
– Quality and availability of data a great concern
• Key challenges remain
- need to improve the quality of education
- need to achieve better outcomes
45
Provincial Budgets and Expenditure Review:
2001/02 – 2007/08
Chapter 3: Health
46
Summary
This Chapter:
• Provides an overview of health funding in the
public sector context.
• Reviews key policy & sectoral developments.
• Examines overall expenditure trends.
• Focuses on expenditure & service delivery trends
in key service delivery areas.
• Focuses briefly on aspects of personnel in the
sector.
47
Key trends
• Real budget growth exceeds 4% per annum
• Improving equity
• Primary health care, emergency ambulance and HIV
and AIDS programme funding growing strongly
• Capital and NPNC expenditure significant real
growth
• Under-spending on capital and conditional grants
• Professional personnel increased by 2605 after
scarce skills and rural allowance
• Weaknesses in sectoral non-financial information
48
The Public Sector Context: Total Health Funding
in South Africa
Table 1: Funding flows for health services, 2004/05
Financing interm ediary
Public
Private
Donors and NGOs
Total
R m illion
47,500
Percentage
41.5%
% GDP
3.4%
66,038
57.7%
4.7%
947
0.8%
0.1%
114,485
100.0%
8.2%
Source: National Treasury provincial database and research
 There are large differentials between private and public
spending.
 Nearly 60% of health funding goes towards funding private
health care, while only the wealthiest 15% are insured.
 Only 40% of health funding goes towards the majority of the
population
49
Public sector health funding as a % of GDP
Country
Public health
expenditure as
percentage of
GDP
Total health
expenditure as
percentage of GDP
Cuba
6.1%
6.8%
Argentina
Namibia
5.1%
9.5%
4.6%
6.7%
Poland
4.4%
6.1%
Botswana
4.4%
6.6%
Russia
3.7%
5.4%
South Africa
3.6%
8.6%
Columbia
3.6%
5.5%
Turkey
3.6%
5.0%
Brazil
3.2%
7.6%
Chile
3.1%
7.0%
Algeria
Iran
3.1%
4.1%
2.7%
6.3%
Mexico
2.7%
6.1%
Venezuela
2.7%
4.7%
South Korea
2.7%
6.0%
Thailand
2.1%
3.7%
Egypt
1.9%
3.9%
Philippines
1.5%
3.3%
Malaysia
1.5%
2.5%
Source: Adapted from WHO Global Health Report
50
Public Health Sector Funding in Middle Income Countries
• South Africa’s total health expenditure as a
proportion of GDP is relatively high
• Public sector funding at 3.4% of GDP compares
favourably
• Influenced by large private health sector, escalating
wage costs and the growing burden associated with
HIV / Aids
51
Health funding flows 2004/05
R million
Provincial departments of Health and
40,343
Works
Percentage
92.8%
Local government health services
(including provincial transfers)
2,100
4.8%
National Department of Health
1,047
2.4%
43,490
100.0%
Total public sector
52
Provincial health expenditure,
2001/02 to 2007/08
Table 3.5 Provincial health expenditure, 2001/02 to 2007/081
2001/02
2002/03
Outcome
2003/04
2004/05
Preliminary
2005/06
2006/07
2007/08
Medium-term estimates
outcome
R million
Eastern Cape
3,808
4,374
5,090
5,173
6,088
6,618
7,218
Free State
1,927
2,165
2,503
2,797
3,076
3,315
3,522
Gauteng
6,792
7,625
8,129
8,597
9,258
9,900
10,355
KwaZulu-Natal
6,913
7,392
8,042
8,950
10,379
11,467
12,347
Limpopo
2,596
3,062
3,627
4,196
5,046
5,299
5,552
Mpumalanga
1,425
1,652
1,953
2,263
2,481
2,878
3,055
509
599
817
832
942
1,161
1,241
North West
1,675
1,973
2,207
2,595
2,894
3,198
3,433
Western Cape
3,703
3,951
4,547
5,172
5,743
6,134
6,488
29,347
32,794
36,916
40,575
45,905
49,969
53,211
Northern Cape
Total
Percentage growth
(average annual)
2001/02 –
2004/05
2004/05 –
2005/06
2004/05 –
2007/08
2001/02 –
2007/08
Eastern Cape
10.7%
17.7%
11.7%
11.2%
Free State
13.2%
10.0%
8.0%
10.6%
Gauteng
8.2%
7.7%
6.4%
7.3%
KwaZulu-Natal
9.0%
16.0%
11.3%
10.2%
Limpopo
17.3%
20.3%
9.8%
13.5%
Mpumalanga
16.7%
9.6%
10.5%
13.6%
Northern Cape
17.8%
13.2%
14.2%
16.0%
North West
15.7%
11.5%
9.8%
12.7%
Western Cape
11.8%
11.0%
7.8%
9.8%
Total
11.4%
13.1%
9.5%
10.4%
1. Adjusted for the primary school nutrition programme shift to the Department of Education.
Source: National Treasury provincial database
53
Provincial health expenditure,
2001/02 to 2007/08
• Between 2001/02 –2004/05 growth exceeded 15%
annually in Northern Cape, Mpumalanga, North West
& Limpopo, implying that basic health services were
significantly strengthened.
• The medium term sees growth in all provinces, with
growth above 11% in KZN, Eastern Cape & Northern
Cape.
• KZN now has the largest provincial health budget.
• The 20.3% per capita increase in Limpopo’s budgets
in 2005/06 helps to close the spending gap.
54
Primary health care per capita spending trends
2003/04
2004/05
Pr oje cte d
2005/06
Budge t
Incr e as e
Eastern Cape
171
197
217
10.4%
Free State
196
218
230
5.7%
Gauteng
166
170
182
7.0%
Kw aZulu-Natal
150
183
201
9.8%
Limpopo
136
170
187
10.1%
Mpumalanga
115
118
152
28.8%
Northern Cape
200
231
298
28.9%
North West
192
196
238
21.5%
Western Cape
215
225
274
21.5%
Total
165
184
207
12.8%
Source: National Treasury provincial datab ase and demographic projections
 Substantive increase in PHC from 2001/02 (R121) to 2005/06 (R207) reflects
national policy of improving access and support lower levels of care.
 Significant expenditure growth, though large disparities still exist.
 Department of Health has set PHC utilisation target at 3.85 visits per year for
uninsured persons.
55
Provincial emergency medical services
expenditure, 2001/02 to 2007/08
2001/02
2002/03
Outcom e
2003/04
2004/05
Prelim inary
outcom e
2005/06
2006/07
2007/08
Medium -term estim ates
Average
annual
grow th
2001/02 1,194,312 1,491,732 1,556,013 1,639,318
13.4%
R thousand
Emergency
772,693 898,666 1,186,660
transport
Planned patient
19,934
8,465
98,808
145,218
187,584
227,715
248,665
transport
Total
792,627 907,131 1,285,468
1,339,530 1,679,316 1,783,728 1,887,983
1. Ambulances and non-emergency patient transport.
Source: National Treasury provincial database
52.3%
15.6%
 Funding for EMS grows strongly to R1.7billion in 2005/06.
 Unit costs vary significantly among provinces due to problems in
information systems, population density, distances and variations
in staffing models.
56
Provincial HIV and Aids expenditure, 2001/02 to
2007/08
2001/02
2002/03
Outcom e
2003/04
2004/05
Prelim inary
outcom e
2005/06
2006/07
2007/08
Medium -term estim ates
R m illion
Conditional grant
37
288
402
770
1,135
1,567
1,646
Average
annual
grow th
2000/01
88.1%
Other
43
-5
216
411
609
650
825
63.8%
Total
80
283
618
Source: National Treasury provincial database
1,181
1,744
2,218
2,471
77.2%
 Provinces have budgeted R1.7 billion in 2005/06 for specific interventions.
 AIDS treatment programmes have been initiated in all 53 health districts, 42 367
people on treatment by December 2004
 Widespread rollout of voluntary counseling and testing (427 sites in 2002 to
3369 in 2004) and Mother-child prevention programmes. Male condoms
distributed increased from 150 million in 1998 to 360 million in 2004
57
Revitalisation hospitals close to completion
2004/05
Eastern Cape
Lebow akgomo
Mpumalanga
Piet Retief
Northern Cape
Colesberg
Calvinia
Sw artruggens
Western Cape
2006/07
Mary Theresa
Limpopo
North West
2005/06
Jane Furse
Dilokong
George
Vredenberg
Source: National Department of Health
Worcester
(Eben Donges)
 Need higher quality project business & implementation plans.
 Strengthening national programme unit & provincial departments
through the infrastructure development improvement programme.
58
Trends in scarce health professionals
Decem ber
2001
Doctors
February
2003
April 2004
February
2005
Change
Percentage
February
change
2003 to
February
2005
-130
-1.2%
11,170
11,265
11,595
11,135
7,363
7,694
8,146
8,008
314
4.1%
3,807
3,571
3,449
3,127
-444
-12.4%
41,063
40,846
42,263
43,060
2,214
5.4%
Radiographer
2,058
2,078
2,043
2,076
-2
-0.1%
Pharmacists
1,239
1,256
1,336
1,607
351
27.9%
Dental practitioners
625
568
626
585
17
3.0%
Physiotherapists
455
667
725
728
61
9.1%
Occupational therapist
399
574
611
606
32
5.6%
Dieticians
250
378
404
435
57
15.1%
Speech therapist
118
215
240
255
40
18.6%
Dental specialists
44
63
33
28
-35
-55.6%
57,421
57,910
59,876
60,515
2,605
4.5%
Medical practitioners
Medical specialists
and registrars
Professional nurse
Total
Source: Vulindlela
59
Personnel per 100 000 population
Medical officer
EC
14.6
FS
19.0
GT
24.7
KZN
21.8
LIM
13.0
MPU
18.3
NC
35.7
NW
12.1
WC
31.6
Medical specialist
and registrar
Doctor total
2.0
13.5
17.3
5.3
1.4
0.6
2.2
0.9
23.1
16.6
32.5
42.0
27.1
14.4
18.9
37.9
13.0
54.7
Professional nurse
107.5
148.3
105.4
106.6
110.8
93.2
141.3
89.9
105.9
Radiographer
4.1
7.8
7.8
4.4
2.2
2.8
6.5
2.6
10.1
Pharmacist
3.4
4.4
3.7
4.2
2.8
3.9
5.4
3.1
7.3
Dental practitioner
0.9
2.0
2.3
0.6
1.1
1.7
2.2
1.4
2.7
Physiotherapist
0.8
2.4
2.0
2.2
1.3
1.9
2.2
1.3
2.9
Occupational
therapist
0.5
2.6
1.8
1.1
1.7
2.2
2.2
1.0
2.4
Dietician
0.6
1.7
1.4
0.6
1.0
1.5
1.9
1.2
1.3
151.3
234.7
209.3
174.6
150.5
146.0
239.2
127.0
242.8
Total
60
Trends in scarce health professionals
• Professional personnel numbers rose (2605
employees), suggesting improving stability
• Increases noted in pharmacists (27.9%), dieticians
(15.1%), speech therapists (18.6%) &
physiotherapists (9.1%).
• While number of doctors did not increase,
redistribution noted among provinces, following rural
allowance strategy.
• While progress is noted, the lack of skilled personnel
in rural areas remains a problem.
• Access to personnel varies considerably across
provinces.
61
Conclusion
 2005 / 2006 budget showed 8.6% real growth.
 Key emphasis on strengthening primary health care
and implementing the district health system,
expanding programmes to counter HIV / AIDS, and
revitalising health infrastructure. Ambulance budget
& goods and services (NPNC) continue to improve.
 Greater attention to hospital budgets, Modernisation
of Tertiary services and improving staffing levels
required in future budgets
 Publishing and disseminating health information
needs to be improved.
62
Provincial Budgets and Expenditure Review:
2001/02 – 2007/08
Chapter 4: Social Development
63
What does Social Development
Chapter Address?
• Key developments in social development sector
• Provincial social development expenditure
• Expenditure by economic classification and by
programme
• Preliminary outcome for 2004/05
• Conditional grant funding
• Personnel expenditure and numbers
• Social assistance transfers
• Social assistance compensation of employees
• Social welfare services, developmental support
services and populations trends
• Conclusion
64
Key developments in Social
Development Sector
Pages 48 and 49 address:
• Social Assistance Function shift from provinces to national
government
– Social Assistance Act, 2004
• Establishment of South African Social Security Agency
– South African Social Security Agency Act,2004
• Reforming of social welfare services, administration and financing
– Child Justice Bill, 2002
– Children’s Bill, 2003
– Older Person’s Bill, 2003
65
Provincial social development
expenditure trends
Table 4.1 shows from page 49
– Overall expenditure more than doubled
over 3years from R23,8 billion in 2001/02
to R51 billion in 2004/05
– An annual growth of 28,8 per cent or nearly
21 per cent in real terms
– Growth in expenditure mainly driven by
increasing beneficiary numbers in child
support and disability grants
– All provinces experience very high growth
rates from 21,3 per cent in Western Cape
and 33,3 per cent in Free State
66
Provincial social development
expenditure trends (cont.)
expenditure in social development is expected to
moderate between 2004/05 and 2007/08 due to:
– Phasing of extension of child support grants to 14 years to
be completed by end of 2005/06
– Disability grants almost at full coverage
– Improvements within the administration, especially key
initiatives to address weaknesses in disability grant
processes and procedures
– Expenditure is however, expected to exceed R70 billion by
2007/08
– Provides a strong growth of nearly 12 per cent per year or
6.4 per cent in real terms
– Rapid growth in provincial social development expenditure –
rose to 26.9 per cent of overall provincial budgets in 2004/05
– Set to increase to nearly 28 per cent in 2007/08
67
Expenditure by economic
classification
•
Expenditure by economic classification consists of (pages 50-51 and
Table 4.2):
–
–
–
–
•
•
Compensation of employees
Other current payments
Transfers and subsidies (mostly social assistance transfers)
Payment of capital assets
Highest proportion of social development expenditure on social
assistance grants which increases from 86.5 per cent (2001/02) to
88.5 per cent (2004/05) with slight decline to 87.6 per cent (2007/08)
Compensation of employees is expected to grow at 17.5 per cent a
year
– Driven by improved capacity for services and re-grading of social workers
salaries
– Also increase in both personnel numbers and average remuneration (also
see Table 4.6)
•
•
Other current expenditure grows by 13.2 per cent a year
Non-grant transfers and subsidies (not-for- profit organisations) set to
grow by 14.3 per cent
68
Table 4.2 Provincial social development expenditure by economic classification,
2001/02 to 2007/08
2001/02
R m illion
Compensation of
employees
Other current payments
Transf ers and subsidies
2002/03
Outcom e
2003/04
2004/05
Prelim inary
outcom e
2005/06
2006/07
2007/08
Medium -term estim ates
991
1 175
1 379
1 541
2 150
2 330
2 500
1 170
1 665
2 295
2 763
3 461
3 795
4 003
21 521
29 390
38 292
46 284
53 776
59 050
63 848
20 567
28 190
37 010
52 023
57 070
61 830
86
138
141
44 931
208
298
314
262
23 768
32 369
42 106
50 796
59 686
65 488
70 614
4,2%
3,6%
3,3%
3,0%
3,6%
3,6%
3,5%
4,9%
5,1%
5,4%
5,4%
5,8%
5,8%
5,7%
90,5%
90,8%
90,9%
91,1%
90,1%
90,2%
90,4%
88,5%
87,2%
87,1%
87,6%
0,4%
0,5%
0,5%
0,4%
of which:
Social security
Payments f or capital
assets
Total
Percentage share
Compensation of
employees
Other current payments
Transf ers and subsidies
of which:
86,5%
87,1%
87,9%
Social security
Payments f or capital
0,4%
0,4%
0,3%
assets
Total
100,0%
100,0%
100,0%
Percentage grow th (average annual)
2001/02 – 2004/05
100,0%
100,0%
100,0%
100,0%
2004/05 – 2007/08
Compensation of employees
15,9%
17,5%
Other current payments
Transf ers and subsidies
33,2%
13,2%
29,1%
11,3%
Payments f or capital assets
34,4%
8,0%
Total
Source: National Treasury provincial database
28,8%
11,6%
69
Expenditure by Programme
•
Social development programmes consist of (page 51 to 52 and Table 4.3):
–
–
–
–
–
•
•
•
•
•
•
•
Administration
Social assistance
Social welfare services
Development and support services
Population development trends
Greater expenditure on social assistance transfers than any other programme
Generally higher growth in expenditure on administrative capacity than on
welfare services growing from R1,6 billion (2001/02) to R2,1 billion in 2004/05
Much of growth in expenditure on social welfare services is for salaries of social
workers
Average annual growth in administration at nearly 30 per cent
37 per cent growth in development and support reflects the conditional grant
funding introduced for food relief programme in 2003/04
Social welfare services programme grew at about 2.4 per cent in real terms or 9
per cent in nominal terms (around R2 billion in 2004/05)
Growth further accelerates in social welfare services to nearly 12 per cent per
year and in population development and support services to 28.1 per cent
between 2004/05 to 2007/08
70
Preliminary Outcome for 2004/05
• Preliminary outcome on page 52 and Table 4.4.
• Adjustment of approximately R3,3 billion to provincial
budgets on 2004/05 budgets
• Adjustments to address unexpected growth in
disability grants
• Resulted in moderate over expenditure of R135
million
• Over expenditure in KZN and Eastern Cape
• Over expenditure mainly due to:
– Growing numbers in beneficiaries
– High average grant payments related to delays in
processing of grants
– Costs of back pay to beneficiaries
71
Conditional Grants Funding
•
•
Before 2004/05 the bulk of social development expenditure was funded by
the equitable share allocations
Conditional grants in social development are:
– Food Relief
– Home and Community Based Care (HIV and Aids)
– Extension of the Child Support Grants (until 2004/05)
•
From 2005/06 the bulk of social development expenditure funded by
conditional grants (see Table 4.5)
– Social assistance Transfers – R52 billion (2005/06); R57billion (2006/07) and
R61,8 (2007/08)
– Social Assistance Administration – R3,3 billion (2005/06); R3,5 billion (2006/07)
and R3,7 billion (2007/08)
– Integrated social development services grant – R338 million (2005/06);
R411million (2006/07) and R432 million (2007/08)
– HIV and Aids - R138 million (2005/06); R139 million (2006/07) and R143 million
(2007/08)
•
Consolidated in conditional grants expenditure at R55,9 billion (2005/06);
R61,2 billion (2006/07) and R66,1 (2007/08)
72
Personnel expenditure and numbers
• Personnel expenditure and numbers are
covered on page 53 to 54 and in Table 4.6
– Personnel expenditure grew at an annual average
rate of 15.9 per cent
– Over the period from 2004/05 to 2007/08 personnel
expenditure is projected to grow by an annual
average of 17.5 per cent
– Rapid growth in personnel expenditure driven by:
• strong growth in personnel numbers
• Increases in average remuneration
• Re-grading of social workers
73
Social assistance transfers
• Social assistance transfers expenditure – covered in
pages 55 to 62 and in Tables 4.7 to 4.16
– Values of grants covered in Table 4.7
– Social grants expenditure by grant type and by province in
Table 4.8
– Social assistance expenditure as a % of total social
development expenditure – Table 4.9
– Social grants as a percentage of GDP in Table 4.10
– Social grants beneficiary numbers by grant type and
provinces – Table 4.11
– Pensions to older persons (SOAP and WV) – Table 4.12
– Disability grant numbers and expenditure – Table 4.13
– Care dependency grant numbers and expenditure – Table
4.14
– Child support grant numbers and expenditure in Table 4.15
– Foster care expenditure and numbers – Table 4.16
74
Social Assistance Transfer
(cont.)
• Social assistance transfers covered in the
pages show:
– Social grants represents about 90 per cent of total
social development expenditure
– Beneficiary numbers grew from 3,6 million in April
2001 to 9,4 million in April 2005
– Growth reflected over this period:
•
•
•
•
•
Old Age at 2.8 per cent
Disability at 20.1 per cent
Foster care at 31.4 per cent
Care dependency at 31.3 per cent
Child support grants at 55,1 per cent
75
Table 4.8 Social grants expenditure by type of grant and province, 2001/02 to 2007/08
2001/02
R m illion
Old age
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
% grow th
(average
annual)
12 954
15 285
17 146
18 504
19 996
21 443
23 105
6,4%
23
27
34
36
29
25
22
2,9%
4 585
7 201
10 329
12 570
14 438
15 510
16 932
17,8%
Grant-in-aid
1
1
2
20
–
–
–
Foster care
364
787
1 142
1 563
2 044
2 376
2 712
28,0%
Care dependency
226
309
639
760
938
1 040
1 147
22,5%
2 400
4 558
7 690
11 431
14 483
16 575
17 805
29,3%
20 553
28 168
36 982
44 885
51 927
56 969
61 724
14,2%
Eastern Cape
4 215
5 819
7 553
9 006
9 928
11 030
11 930
13,0%
Free State
1 239
1 788
2 379
3 049
3 719
4 096
4 440
17,0%
Gauteng
2 336
3 206
4 454
5 411
6 442
7 209
7 825
15,6%
Kw aZulu-Natal
4 441
6 082
8 165
10 275
11 964
12 989
13 982
15,2%
Limpopo
2 727
3 933
4 899
5 802
6 807
7 367
7 966
14,0%
Mpumalanga
1 366
1 787
2 421
2 981
3 525
3 827
4 156
14,5%
572
755
936
1 065
1 227
1 344
1 456
11,5%
North West
1 760
2 258
3 064
3 795
4 320
4 865
5 337
13,7%
Western Cape
1 897
2 540
3 111
3 500
3 995
4 244
4 631
11,2%
Total
20 553
28 168
36 982
44 885
51 927
56 969
Historical numbers adjusted for the phasing out of the state maintenance grant.
Source: Socpen system
61 724
14,2%
War veterans
Disability
Child support
Total
–
Province
Northern Cape
76
Compensation of employees
in social assistance
programme
• See also page 62 and Table 4.17
– Doubling of expenditure on compensation
of employees within this programme
– Expenditure on compensation of
employees indicates
• Strengthening of provincial capacity
• Appointment of permanent staff
• Utilization of contract staff
77
Social welfare services and other
programmes
•
See pages 63 to 65 and Tables 4.18 and 4.19
– Social welfare services expenditure
– Number and level of social workers
•
•
Social welfare expenditure Table reflects expenditure by
subprogramme and by province
Subprogrammes in this programme are:
–
–
–
–
–
–
•
•
•
Administration
Treatment and Prevention of substance Abuse
Care of the Aged
Crime prevention, rehabilitation and victim empowerment
Services to the Disabled
Child and youth care and protection
Most other social development services provided by social workers
and probation officers
Growth in social welfare services shows a progressive shift towards
welfare and development support expenditure
Major share of expenditure in development support programmes – HIV
and Aids and poverty alleviation programmes
78
Conclusion
• Recent years massive expansion in provincial social
development budgets
• Real poverty orientated budget, especially to provide income
transfers to poor and vulnerable individuals and households
• However, exponential growth in social development
expenditure has put severe pressures on other provincial
expenditure responsibilities
• Far reaching initiatives within social development sector:
– Centralization of social assistance function
– Establishment of social security agency
– Designing and finalization of the social welfare service delivery
model
79
Provincial Budgets and Expenditure Review:
2001/02 – 2007/08
Chapter 5: Housing
80
Institutional arrangements
• Housing is a concurrent function
– National determines
• Policy and strategy and sets delivery goals
• Monitor and evaluate performance
– Provinces
• Promote, coordinate and implement housing policy
• Approve subsidies and projects
• Provide support to municipalities who act as developers
– LG
•
•
•
•
•
Are mainly developers
Provide bulk engineering services
Land and town planners, approval of building plans
Community infrastructure
Can execute the housing mandate only if accredited
81
Delivery progress
• Funds for housing has increased
– from R3,3 bn in 2001 to R4,4 bn in 2004/05
– budgeted to grow to R6,9 bn in 2007/08
• R32,4 billion spent on housing delivery since
1994/5
– Construction of 1,79 million new houses
• Transfer of 549 597 government-owned
houses to residents
• Property assets worth over R37 billion have
been transferred to poor households since
1994
82
Delivery: Type of subsidy by province
Table 5.4 Housing subsidies by province and category of subsidy, 1994 to 2004
Project- Individual Consolilinked
dation
Institutional
Eastern Cape
208,526
27,653
9,357
Informal
land
rights
(rural)
5,710
1,050
Free State
105,770
14,120
8,127
1,300
Gauteng
738,475
52,639
91,911
Kw aZulu-Natal
243,314
17,468
Limpopo
104,993
Mpumalanga
Northern Cape
Hostel
redevelopment
Emergency
housing
Total
–
–
252,296
1,300
516
–
131,133
20,407
563
162,282
30,077
23,270
12,648
–
–
326,777
4,348
3,252
–
61,606
1,780
–
175,979
85,845
16,862
46,546
5,450
1,476
885
–
157,064
37,657
8,465
384
1,000
–
–
–
47,506
North West
139,462
8,419
7,326
1,154
18,794
1,273
–
176,428
Western Cape
194,221
11,200
51,539
6,998
44
4,866
283
269,151
97,481
171,602
Total
1,858,263
161,174
248,519
65,289
Source: National Department of Housing data to December 2004
– 1,066,277
283 2,602,611
83
Delivery: Subsidised housing units
Table 5.3 Houses completed or under construction, 1994 to 20051
Number
Eastern Cape
1994/95 –
1999/00
83 738
2000/01
2001/02
2002/03
2003/04
2004/05
Total
34 021
10 816
58 662
27 119
37 524
251 880
55 611
16 088
7 005
9 155
16 746
16 447
121 052
Gauteng
230 717
38 547
46 723
24 344
49 034
28 002
417 367
Kw aZulu-Natal
178 123
28 547
14 379
24 485
33 668
36 734
315 936
Limpopo
62 151
20 996
16 667
14 953
15 810
16 514
147 091
Mpumalanga
52 403
16 457
14 584
21 649
21 232
18 000
144 325
Northern Cape
16 421
4 148
2 588
6 056
3 787
3 598
36 598
North West
73 575
14 109
13 885
23 784
10 484
10 037
145 874
130 646
17 730
16 634
20 500
15 735
11 756
213 001
Free State
Western Cape
Total
883 385
190 643
143 281
203 588
193 615
178 612 1 793 124
1. Historical delivery figures have been adjusted since 2003 as a result of audits carried out in the provinces.
Source: National Department of Housing
84
Challenges
• Housing backlog growing
• Stagnating property values for low cost
housing
– Non-appreciation of assets
• Sustainable communities and the built
environment
• Greater role for municipalities
– Capacity and possible accreditation
85
Comprehensive plan for sustainable human
settlements
• The Comprehensive plan for sustainable
human settlements introduces:
– Area-based human settlements development
model
– Sustainable human setllements
• Include social and economic infrastructure
– More flexible housing subsidy mechanisms to
cater for greater range of housing needs
• Sustainable housing market
• Improve the value of the house as a capital asset
– Devolution of subsidy administration to
municipalities
• Focus on metros
86
Provincial Budgets and Expenditure Review:
2001/02 – 2007/08
Chapter 6: Agriculture
87
Agriculture and Land
• Introduction
– The importance of agriculture in the economy
• Overview of budget and expenditure:
– Provincial expenditure trends
– National Agriculture and land reform trends
• Service delivery trends on selected
programmes
• Conclusions: Opportunities & challenges
88
Budget & Expenditure Trends: Overview
• Objectives to broaden access to Agriculture:
– increase access to agricultural land
– improve productivity – broadening access to
finance and skills (managerial & technical),
– reduce vulnerability to natural disasters, and
enhance job creation potential.
• Aggregate budget grows by 11,7% over the
2005 MTEF from R4,6bn in 2004/05 to R6,4
bn in 2007/08.
• It increased from R3,1bn in 2001/02
89
Provincial Expenditure Trends
• Spending increased by about 50% from
R2,3 bn in 2001/02 to R3,4bn in 04/05, will
rise by annual average 11% to R4,7bn in
2007/08 – Table 6.1
• Strong growth in personnel, rising by
average 8,9% over the 2005 MTEF, but
declining as a proportion of total
expenditure – from 69,4% in 2001/02 to
51,9% in 2007/08 - Table 6.2
• Proportion of non-personnel spending
grows from 30,6% in 2001/02 to 48,1% in
90
2007/08
Provincial Expenditure By Programme
Table 6.4 Provincial agriculture expenditure by programme, 2001/02 to 2007/08
2001/02
R m illion
Administration
Sustainable resource
management
Farmer support and
development
Veterinary services
2002/03
Outcom e
2003/04
539
610
671
226
246
272
991
1,170
2004/05
Pre lim inary
outcom e
833
2005/06
2006/07
2007/08
Me dium -te rm e s tim ate s
798
865
937
263
468
537
577
1,400
1,588
1,745
1,990
2,215
255
280
308
340
370
400
423
Technology research
and development
services
Agricultural economics
181
220
244
224
281
290
309
20
23
33
46
59
65
70
Structured agricultural
training
Total
88
93
123
152
155
171
183
2,299
2,641
3,052
3,447
3,876
4,318
4,714
Pe rce ntage of provincial agriculture e xpe nditure
23.4%
23.1%
22.0%
Administration
24.2%
20.6%
20.0%
19.9%
9.8%
9.3%
8.9%
7.6%
12.1%
12.4%
12.2%
43.1%
44.3%
45.9%
46.1%
45.0%
46.1%
47.0%
11.1%
10.6%
10.1%
9.9%
9.5%
9.3%
9.0%
Technology research
and development
services
Agricultural economics
7.9%
8.3%
8.0%
6.5%
7.2%
6.7%
6.6%
0.9%
0.9%
1.1%
1.3%
1.5%
1.5%
1.5%
Structured agricultural
training
Total
3.8%
3.5%
4.0%
4.4%
4.0%
4.0%
3.9%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Sustainable resource
management
Farmer support and
development
Veterinary services
Source: National Treasury provincial datab ase
91
National Expenditure Trends
Table 6.6 National agriculture and land reform expenditure by programme,
2001/02 to 2007/08
2001/02
2002/03
Outcome
2003/04
R million
2004/05
Preliminary
outcome
2005/06
2006/07
2007/08
Medium-term estimates
Agriculture
Administration
115
137
157
170
170
181
190
Farmer support and
development
Agricultural production
Sustainable resources
management and use
National regulatory
services
101
123
282
330
477
581
750
278
285
320
368
408
451
473
123
121
121
143
177
193
202
150
147
177
247
231
245
258
Communication and
information management
60
76
82
83
93
97
102
Other programmes
44
29
37
45
129
183
187
871
976
917
1,077
1,177
1,608
1,387
1,991
1,685
3,882
1,932
4,815
2,163
5,637
291
394
839
1,183
2,706
3,369
3,838
444
416
454
454
770
1,016
1,349
735
810
1,293
1,636
3,476
4,385
5,187
1,606
1,728
2,470
3,023
5,161
6,317
7,350
Subtotal
Land Affairs
of which
Restitution
Redistribution and
tenure reform
Subtotal
Total
Source: 2005 Estimates of National Expenditure; 2004/05 Vulindlela
92
Land Reform
• Spending on land reform increases from
R735m in 2001/02 to R1,6bn in
2004/05, rising to R5,2bn in 2007/08
• Restitution increases at an annual
average of 48% from R1,2bn in 2004/05
to R3,8bn 2007/08
• By Dec. 2004, 57 257 claims were
settled out of a total of 79 694, and 164
000 HH benefited – Table 6.7
93
Land Reform
• Total land transferred up to Dec 2004 is
about 2.8m ha,
• Redistribution Land transferred (2m ha)
to about 200,000 HH
• Largest land trasfered in NC (28%),
followed by EC (16%), KZN(15%) and
FS(12%)
• EC (29%) accounts for largest number
of HHs followed by NW (23%), and NC
is the lowest (4%)
94
Opportunities And Challenges
• Strong growth in agriculture and land reform
expenditure
• Increasing pace of land reform increases the
need for farmer support programmes
• CASP was introduced in 2004/05 to
complement LRAD
• It has six main priority areas:
–
–
–
–
–
–
Information and knowledge management
Technical and advisory assistance
Training and capacity building
Marketing and business development
0n-and off farm infrastructure
Financial support
95
Provincial Budgets and Expenditure Review:
2001/02 – 2007/08
Chapter 7: Roads and Transport
96
Outline
•
•
•
•
•
•
Introduction
Institutional arrangements
Roads infrastructure
Traffic management & safety
Public transport
Conclusion
97
Part 1: Roads Infrastructure
•
•
•
•
•
•
Extent of Provincial Road network – 344 000
Number of registered vehicles – 6.8million
Consolidated Roads Budgets – R10.6 billion
Provincial roads expenditure patterns
Expenditure on roads maintenance
Service delivery outputs both capital and
maintenance
98
Part 2: Revenue Collection
• Trends on revenue collected from
motor vehicle licences
• Revenue collected from RTA fees
• Administering agents
• Motor vehicle licence fees per province
99
Part 3: Traffic Management & Safety
• Initiatives geared towards improved
traffic management and safety
• Expenditure in traffic management
• Overload control measures
• Effectiveness of overload control per
province
• Traffic personnel per province
100
Part 4: Public Transport
• Bus subsidies
• Spending on national bus subsidies
• Public transport expenditure
101
Provincial Budgets and Expenditure Review:
2001/02 – 2007/08
Chapter 8: Personnel
102
Introduction
• This Chapter highlights the following:
– Institutional arrangements in the public
service
– Policy developments in personnel
– Personnel spending and employment
trends
– 2004 Wage agreement
103
Legal framework and institutional
arrangements
• Legislation that govern the public service:
– Public Service Act
– Employment of Educators Act
– South African Police Services Act
– National Prosecuting Authority Act
– South African Defence Force Act
• PSCBC is the major negotiating chamber for national and
provincial governments
• SALGA caters for local government
• Personnel policy development has undergone these phases:
– 1st phase (1994-1997): Unification of the highly fragmented
dispensations
– 2nd phase (1997-2000): Alignment of personnel costs with
public priorities
– 3rd phase (2001-current): Ability to deliver quality services
104
Policy developments
• To improve service delivery and align
personnel spending with the service delivery
objective, the following are put in place:
– 2004 Wage agreement – first multi-year wage
agreement based on inflation projections
– Macro benefits – housing and medical aid
(GEMS) allowances
– Introduction of pay progression, career pathing
and retention of scarce skills
– Introduction of Incapacity Leave and Ill-health
Retirement policy
– Enable restructuring in government to allow for
excess employees to leave the public service
105
Personnel spending trends (table 8.1)
• Slower growth in personnel expenditure has
been a success (55,5% in 1997/98 of total
expenditure to 46,5% in 2004/05)
• In 2004/05, provinces spent R87,9 billion, a
4,4% real increase from 2003/04 due to:
– 2004 Wage Agreement
– Employment increase in 2004
• Expectations:
– Slower growth rate for personnel expenditure (low
inflation environment)
• Provincial share of personnel expenditure:
– KZN 20,4%, EC 16,3%, GP 15,4%, LP 14,2%,
WC 9,5%, NW 8,2%, FS 7,1%, MP 6,7% and NC
106
2,2%
Provincial employment trends
• 2004/05: employment increased by 2,2%
(table 8.3)
– Significant increases experienced in GP 6,7%, LP
4% and MP 4,2%
– Employment contraction in EC 1,9%
• Technical skills people (levels 6-9) comprises
of 62% of provincial employment
• Shift towards employing more SMS in
provinces (table 8.4):
– Ratio decreased from 1:436 (in 2001) to
1:263 (in 2004)
– Significant increases in EC, LP and NW
107
2004 Wage Agreement
• First multi-year agreements (3 years) based
on inflation projections (forward-looking)
• Introduced pay progression system and
addressed backlogs in educator
remuneration
• Provided macro benefits – housing and
medical aid allowances (GEMS)
• Addressed the need for the development of
policies around the attraction and retention of
scarce skills in the public service
108
Conclusion
• To achieve good personnel management, the
following needs to be in place:
– Restoration of balance in the use of resources –
personnel vs. non-personnel expenditure
– Performance based remuneration dispensation
– Flexible remuneration dispensation for
professionals
– An empowered public service to drive the
development and implementation of policy
109