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

Introduction

Introduction In the Education for All Global Monitoring Report 2010, UNESCO makes the important point 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 EFA goals are being threatened by developing countries’ inability to exceed lower revenue projections and, hence, reduced expenditure commitments to achieving EFA goals. The report states: With just five years to go to the target date, the challenge is to consolidate these gains and accelerate progress in countries that are off track. The danger is that the aftershock of the financial crisis will slow, stall or even reverse the hard-won gains of the past decade. Such an outcome would be indefensible. (p.19) UNESCO recommends a double dose of deeper donor investments and increased targeted spending in poor developing countries. To support its call for targeted spending, the 2010 report has developed an extensive database that maps various indicators of what it calls ‘education poverty’. These are indicators of the share of the population between the ages of 17–22 that have less than four years of formal education. Staying with its poverty terminology, UNESCO also proposes the use of extreme education poverty measures, which refer to the proportion of 17–22 year olds with fewer than two years of formal education. Figure 1 (on page 10) provides data for the share of the population aged 17–22 years who have fewer than four years of formal education for several southern and east African countries. Figure 1 reveals an astonishing picture of education poverty in southern and east Africa, ranging from a relatively low figure of 1.2% in South Africa to 61% in Ethiopia. Due to the different survey dates used in the database, one would expect much lower figures now in some of the east African countries in particular.1 It is important to note that, while there are large quantitative differences in access to education, these statistics do not tell us anything about the overall quality of education in each of the 16 southern and east African countries. What is clear, however, is that both access and quality are potentially threatened if concerns about the appropriate levels of funding of education are not properly dealt with. INTRODUCTION|9| WHERE TO FOR PROVINCIAL EDUCATION? REVIEWING PROVINCIAL EDUCATION BUDGETS, 2006 TO 2012|10| Figure 1: Percentage of 17–22-year-olds with fewer than four years of formal education by country Source: UNESCO-DME 2010; National Income Dynamics Survey 2008 Focusing on education poverty in South Africa, Figure 2 shows the distribution of education poverty by province. Figure 2: Education poverty in South Africa by province in 2008 (N=5 977 713) Source: National Income Dynamics Survey 2008 (own calculations) Note: The data have been weighted by the appropriate post-stratification weight variable. South Africa Zimbabwe Namibia Swaziland Kenya Lesotho Uganda Zambia Malawi DRC Tanzania Burundi Rwanda Madagascar Mozambique Ethiopia 70% – 40% – 50% – 60% – 30% – 20% – 10% – 0 – Eastern Cape Free State 2.5% 1.7% 1.4% 1.8% 1.0% 1.5% 1.2% 0.4% 0% 0.2% Gauteng Province KwaZulu-Natal Mpumalanga Limpopo Province Northern Cape North West Province Western Cape Total % of 17–22 with < 4 years of education 3.0% – 2.0% – 2.5% – 1.5% – 1.0% – 0.5% – 0.0% – According to the data above, the Eastern Cape has the largest percentage of 17–22 year olds (2.5%) with fewer than four years of formal education. This is followed by the Northern Cape (1.8%) and KwaZulu Natal (1.7%). The data for Free State indicate no 17–22 year olds in that province with less than four years of formal education whereas only 0.2% education poverty (as defined by the UNESCO measure) exists in Gauteng. The result in the Free State is unexpected and may relate to the way in which respondents were sampled in that province. The results above only partly follow the distinction between traditionally rich and poor provinces in South Africa, and may reflect on the appropriateness of using the UNESCO measure in South Africa where young South Africans in this age cohort have high rates of participation and access to formal education. Despite our reservations about the appropriateness of the measure in the South African context, there are still concerns about young male adults,2 those who live in rural areas and young African South Africans. Hence, the appropriateness of the UNESCO recommendations around targeted funding still holds, even though many of the southern and eastern African countries in the sample bear little comparison to Zimbabwe and South Africa in terms of access. How has the South African government responded to the global financial and economic crisis, and what is the thinking around education funding? In the National Budget Review 2010, the National Treasury makes the argument 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 makes the important point that efficiency savings and the re-jigging of various categories of spending are necessary to pay for education and other prioritised services. It is the latter that will be of interest to education analysts and stakeholders because the Budget Review makes the point that spending on salaries will be moderated over the medium term. It is vital because the composition of education matters as much as the global sum of money that is allocated to this national priority. Table 1 provides information on how government has had to adjust its spending projections given lower revenue projections. INTRODUCTION|11| WHERE TO FOR PROVINCIAL EDUCATION? REVIEWING PROVINCIAL EDUCATION BUDGETS, 2006 TO 2012|12| Table 1: Changes to the 2009 forward estimates as reflected in the consolidated government budget, 2010/11 to 2012/13 (ZAR Million) Expenditure Type 2009 Forward Estimate 2010 Budget Change to Baseline 2009 Forward Estimate 2010 Budget Change to Baseline 2010 Budget 2010/11 2011/12 2012/13 Current payments 456,801 456,534 -267 491,228 491,677 449 519,693 Transfers and subsidies 284,642 284,016 -626 304,398 315,049 10,651 337,335 Payment for capital assets 66,16 12,002 70,617 69,418 -1,199 73,567 Payment for financial assets 20,000 20,893 893 -754 754 5 Contingency reserve 12,000 6,000 -6,000 20,000 12,000 -8,000 24,000 Total expenditure 839,604 835,606 -3,998 886,243 888,898 2,655 954,600 Source: National Budget Review 2010: 57 Note: Current payments exclude debt service costs, thus offering a more realistic look at overall expenditure adjustments over the medium-term It is notable to see that current payments (of which the bulk is salary payments) will take a knock in 2010 and will be moderated over the medium term. Also, the size of the contingency reserve is projected to be significantly smaller in 2010 and 2011, partly to compensate for the lower available revenue and to maintain spending on the 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 MTEF, favourable forward revisions are made to the 2009 budget estimates. While this provides the overall government picture, it will be necessary to examine closely how such developments have affected education spending and to probe its potential impact on service delivery in the poorest communities. The purpose of this paper is to assess the coherence of government’s education spending proposals and to contextualise such proposals in the light of relevant policies that govern the various education sub-sectors. We do this on the basis of the published 11 education budgets (nine provincial and two national) and non-financial information on the key sub-sectors obtained from the Department of Basic Education and the Department of Higher Education and Training. This paper also traces the expenditure trade-offs in the consolidated education budget in order to better understand the adjustment in education spending following the slowing down in general economic growth. Finally, the paper provides a snapshot of inter-provincial spending equity across the main service-delivery programmes to understand what progress has been made in reducing unequal spending ratios across provincial education departments. In this instalment of the annual review of provincial education spending, we pay considerably more attention to smaller service-delivery programmes because of their policy significance and because relatively few analyses are available of these education sub-sectors. Road map of the paper The paper is set out in the following way: The next section provides a snapshot of the education budget 2010 and focuses on the trade-offs in spending categories (as alluded to by the National Budget Review 2010). It also provides an update on overall funding equity across provincial and national education programmes. Thereafter, we undertake an analysis of the key service-delivery programmes in education using both financial and non-financial information to assess progress in policy implementation. The concluding section summarises the evidence on the various expenditure frameworks in provincial education budget 2010 and draws some conclusions on their coherence. INTRODUCTION|13| ...