Where to for Provincial Education?: Reviewing Provincial Education Budgets 2006 to 2012

Executive summary

Executive summary In the Education for All Global Monitoring Report 2010, the United Nations Educational, Scientific and Cultural Organization (UNESCO) argues that, although some developed countries were beginning to show signs of economic recovery, many developing countries now have to deal with the aftershock of the global financial crisis. This raises concerns about the extent to which positive gains on the realisation of the Education for All (EFA) goals are being threatened. Given the developing country status of South Africa and the precarious nature of education delivery, it appears vital to ask how recent developments will affect public finances more generally, and education funding more specifically. In its National Budget Review 2010, the National Treasury makes the point that South Africa has fared well given the overall negative impact of the global crisis. In fact, it recommits government to increase and maintain spending on education, social and economic infrastructure, and crime. However, it argues that efficiency savings and the re-jigging of various categories of spending are necessary to pay for education and other prioritised services. Of particular interest will be changes in spending on salaries, given the central role of this input in service delivery in the social services sectors. Current payments on the consolidated national budget (the bulk of which are salary payments) will take a knock in 2010 and the contingency reserve is projected to be significantly smaller in 2010 and 2011, partly to compensate for lower available revenue and to maintain spending on key prioritised areas. However, apart from 2010, where spending on transfers and subsidies is projected to be more than R600 million lower, over the rest of the present medium-term expenditure framework (MTEF), favourable forward revisions are made to the 2009 budget estimates. There has clearly been a determined effort by the South African government to protect social spending, but the finer expenditure blueprint can only be assessed by undertaking detailed sectoral analyses. This paper continues our long-standing interest in how the education expenditure framework responds to national challenges and whether we have a set of spending proposals fit for the purpose of delivering quality education. Our objectives in this paper are threefold: one, we attempt to describe expenditure trade-offs in the consolidated education budget in the context of the slowing down in general economic growth; two, we EXECUTIVE SUMMARY|5| WHERE TO FOR PROVINCIAL EDUCATION? REVIEWING PROVINCIAL EDUCATION BUDGETS, 2006 TO 2012|6| continue our running commentary on the state of inter-provincial spending equity to understand what progress has been made in reducing unequal spending ratios across provincial education departments; and three, we assess the coherence of government’s education spending proposals against the background of existing policy mandates that govern the various education sub-sectors. Expenditure trends in provincial education 2010 The nine provincial education budgets are expected to grow from R126 billion in 2009/10 to R157 billion at the end of the current MTEF cycle (2012/13). This represents a real average annual increase of 1.5%, a much lower increase than that projected for the six-year period leading to 2012/13 (5%). Evidence presented in the 2010 budget review suggests that the existing transversal expenditure framework does not deviate from the now well-established thinking about education budgets. Expenditure on wages (principally teacher salaries) is tightly reined in, while more expenditure room is provided for non-personnel expenditures that service public schools and other emerging programmes. Expenditure on goods and services, which covers the school allocation that goes to non-Section 21 public schools, continues to grow in support of the policy goal of declaring at least 60% of our public schools as no-fee schools. Expenditure on transfers and subsidies, which involve the school allocation for Section 21 schools and the school nutrition programme, is also projected to grow robustly over the first two years of the present MTEF cycle. Allocations for the school nutrition programme appear to support its expansion to more poor primary no-fee schools, but very few poor secondary schools will benefit from additional funding for this anti-poverty programme. Finally, expenditure on the acquisition of new buildings shows positive growth over the present MTEF cycle. In other words, education 2010 does not offer any breaks or radical discontinuity from previous education transversal expenditure frameworks. In the programme expenditure framework, early childhood development (ECD) expenditure is projected to grow from R1.7 billion to almost R3.3 billion, a real average annual increase of about 20%. Expenditure on special...