1

Intergovernmental Fiscal Review

Presentation to Select Committees of Finance, Social Services, Education and

Recreation17 October 2007

DEPARTMENT OF EDUCATION

2

IGRF

• This comprehensive review for the period 2003/4 to 2009/10 of the fiscal situation on provinces welcomed.

• The review is very clear and succinct and does accurately reflect the situation.

• We acknowledge that relatively on world wide comparisons we are well resourced in education yet perform poorly.

• We acknowledge provincial inequalities from 1995 continue to become overcome, however…

• Without repeating what’s in the report, this presentation raises some concerns about the outcomes of the report especially in regards to legacies and provincial equity

3

Concerns• While real growth in education expenditure is noted, it is

not sufficient.• Education expenditure 5.4% of GDP – while comparable

internationally it has dropped from about 6.3% in 1995.• Total education spend as a proportion of total

government expenditure has declined from 22.6% in 1995 to 17.7% in 2006 (using the UNESCO methodology of total government exp including local government)

• National and Provincial Education spend as a proportion of only national and provincial government expenditure has declined from 27.9% to 20.0%

• In both cases it continues to decline going forward.

4

Concerns

• Falling shares of education expenditure from a share of 51% to an actual of 45.7% declining to 41.8% over the period 2003/4 to 2009/10

• Yet backlogs in infrastructure, school allocations, class sizes, text books, grade R, ABET persist,

• Per capita (1000 000 grade R) in 2009/10 for grade R is R1253 as opposed to a per capita for ordinary schools of R9045. Thus grade R funding is currently inadequate and additional funds are required into the next budgeting process.

• Inter-provincial inequalities in education while narrowing from 1995 continue to be present.

• South Africa’s performance on international, regional as well national assessments are worrying.

5

Comparison of Education Expenditure to Equitable Share

30.00

35.00

40.00

45.00

50.00

55.00

60.00

2003/4 47.50 45.80 40.20 47.20 50.00 50.20 41.60 48.10 40.30

2004/5 49.30 45.30 39.70 46.50 51.30 48.60 42.10 46.60 38.90

2005/6 48.70 46.00 38.40 45.10 49.50 49.80 39.50 45.30 38.50

2006/7 47.80 43.50 33.40 43.90 47.50 49.40 36.00 44.50 36.70

2007/8 47.50 42.80 36.10 42.70 46.20 49.10 40.00 36.90 37.10

2008/9 47.60 42.10 36.50 41.60 47.60 48.30 39.90 36.30 36.50

2009/10 47.70 41.90 36.50 41.20 47.30 47.90 39.40 35.60 37.30

ESF 54.39 46.55 45.80 54.04 55.16 54.32 41.20 47.65 47.59

EC FS GP KZN LP MP NC NW WC

6

Education allocation with Equitable as a base

0.00

0.20

0.40

0.60

0.80

1.00

1.20

2003/4 0.87 0.98 0.88 0.87 0.91 0.92 1.01 1.01 0.85

2004/5 0.91 0.97 0.87 0.86 0.93 0.89 1.02 0.98 0.82

2005/6 0.90 0.99 0.84 0.83 0.90 0.92 0.96 0.95 0.81

2006/7 0.88 0.93 0.73 0.81 0.86 0.91 0.87 0.93 0.77

2007/8 0.87 0.92 0.79 0.79 0.84 0.90 0.97 0.77 0.78

2008/9 0.88 0.90 0.80 0.77 0.86 0.89 0.97 0.76 0.77

2009/10 0.88 0.90 0.80 0.76 0.86 0.88 0.96 0.75 0.78

ESF 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

EC FS GP KZN LP MP NC NW WC

7

Priorities• Increasing participation in the measurement of education outputs through

international, regional as well country assessments. • Expansion of universal assessment to every school (frequency and target

group) • Increasing teacher remuneration and rewards - on the table through the

Occupations Specific Dispensation• National Framework for Teacher development – improving continuous

professional development and pre-service training of teachers.• National Education Evaluation Unit – Independent evaluation of teacher

performance using learner performance as an entry point.• Teacher Recruitment especially in Mathematics and Science while reskilling

and retooling current employees• Revitalization of Special Schools• Improve funding and delivery of school infrastructure• Provide additional and meaningful resources for Grade R and ECD (0-4

years)• Explore using ICT’s in education

8

Provincial Inequalities

• Learner Educator ratio’s

• Conditions of schools

• No fee school allocations

• Per Capita Expenditure

9

Learner:Educator Ratio

20

30

40

2004 33 31 37 37 38 37 30 38 38 35

2005 35 31 37 37 35 35 34 32 37 35

2006 35 31 39 35 34 36 31 34 37 35

EC FS GP KZN LP MP NC NW WCNation

al

10

Learner:Educator ratio with national average as baseline

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

2004 1.06 1.13 0.95 0.95 0.92 0.95 1.17 0.92 0.92 1.00

2005 1.00 1.13 0.95 0.95 1.00 1.00 1.03 1.09 0.95 1.00

2006 1.00 1.13 0.90 1.00 1.03 0.97 1.13 1.03 0.95 1.00

EC FS GP KZN LP MP NC NW WC National

11

NO FEE SCHOOL ALLOCATIONS IN RANDS NO FEE THRESHOLD = R554

0100200300400500600700800900

Q1 738 554 721 738 629 579 829 557 658 738

Q2 677 554 596 738 560 579 648 555 658 677

National EC FS GP KZN LP MP NC NW WC

12

No fee school allocation with target amounts as baseline

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Q1 1.00 0.75 0.98 1.00 0.85 0.78 1.12 0.75 0.89 1.00

Q2 1.00 0.82 0.88 1.09 0.83 0.86 0.96 0.82 0.97 1.00

National EC FS GP KZN LP MP NC NW WC

13

PER CAPITA EXPENDITURE AS A PERCENTAGE OF AVERAGE

0%

50%

100%

150%

2003/4 92% 111% 108% 81% 86% 93% 122% 103% 104% 100%

2006/7 88% 113% 102% 87% 86% 97% 114% 109% 105% 100%

2009/10 93% 113% 102% 90% 94% 94% 117% 91% 106% 100%

EC FS GP KZN LP MP NC NW WC National

14

THANK YOU

15

> The policy trajectory

A use of the inter-provincial poverty distribution to determine how much pro-poor funding in each province.

THE POVERTY TABLE

National quintiles

1 (poorest)

2 3 4 5 (least poor)

Total

Eastern Cape 35% 22% 21% 12% 11% 100%

Free State 31% 15% 20% 19% 15% 100%

Gauteng 11% 11% 27% 27% 24% 100%

KwaZulu‑Natal 24% 19% 26% 17% 14% 100%

Limpopo 34% 22% 25% 12% 7% 100%

Mpumalanga 17% 20% 30% 20% 14% 100%

Northern Cape 26% 18% 22% 15% 20% 100%

North West 23% 15% 31% 21% 11% 100%

Western Cape 7% 8% 23% 28% 35% 100%

South Africa 20% 20% 20% 20% 20% 100%

16

> Budgetary issues Gradual and uneven increase in per capita spending over

the longer term

In real terms, spending on the average public ordinary school learner will be 30% higher in 2007 than it was in 1994.

0

1,000

2,000

3,000

4,000

5,000

6,000

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Per

lear

ner

exp

end

itu

re in

sch

oo

ls20

04 p

rices

17

Alban

Argen

Armen

AustrAustr

Bahra

Belgi

Botsw

Brazi

Bulga

Canad

Chile

Colom

Cypru

Czech

Denma

Egypt

Finla

Franc

Germa

Ghana

Greec

Hong

Hunga

Icela

IndonIran-

Irela

IsraeItaly

Japan

Jorda

Korea

Kuw ai

Latvi

Leban

LiechLithu

Luxem

Macao

Maced

Malay

Mexic

Moldo

Moroc

Nethe

New Z

Norw a

Pales

PeruPhili

Polan

PortuRoman

Saudi

Slove

SouthAfr

SpainSw ede

Sw itz

Tunis

Turke

UniteUnite

250

300

350

400

450

500

550

600

30 40 50 60 70 80 90 100

Average Secondary Net Enrollment Rate, 1995 to 2003

TIM

SS

2003 e

qu

ivale

nt

scale

r=.76

18

Urugu

UniteUnite

Turke

Tunis

Thail

Sw itzSw edeSpain

SouthAfr

SloveSlova

Singa

Serbi

Saudi

Russi

Roman PortuPolan

PhiliPeru

Norw aNew Z

Nethe

Moroc

MoldoMexic

Malay

Maced

Macao

LuxemLithu

Leban

Latvi

Kuw ai

Korea

Jorda

Japan

Italy IsraeIrela

Iran-Indon

IcelaHunga

Hong

Greec

Ghana

GermaFranc

Finla

Egypt

DenmaCzech

Cypru

ColomChile

Canad

Bulga

Brazi

Botsw

Belgi

Bahra

AustrAustr

ArmenArgen

Alban

0

100

200

300

400

500

600

700

0 1 2 3 4 5 6 7 8 9Public exp as share of GDP 1995 to 2003

Perf

orm

ance o

n T

IMS

S2003 e

quiv

ale

nt scale

19

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Ed

ucati

on

exp

en

dit

ure

over

GN

P

Total exp./GNP Total exp.*/GNP

Recurrent/GNP Priv. + pub. exp./GNP

Figure 1: Total education expenditure over GNP 1987-2007

Sources: Buckland and Fielden (1994); Budget Reviews 1995-2005; Estimates of National Expenditure 2003-2005; Intergovernmental Fiscal Reviews 1999-2003; Provincial Budget Statements 2005 (for public expenditure); Reserve Bank website (for GNP).

20

Figure 2: Public education expenditure over total government expenditure 1987-2007

14%

15%

16%

17%

18%

19%

20%

21%

22%

23%

24%

25%

26%

27%

28%

29%

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007E

du

ca

tio

n e

xp

en

dit

ure

ov

er

go

vt.

ex

pe

nd

itu

re

Total exp./ Govt. general Total exp./ Govt. nat. + prov.

Recurrent/ Govt. nat. + prov.

Source: As for Figure 1 (with respect to education expenditure); Budget Reviews 1998-2005 (for national plus provincial government expenditure); Reserve Bank Quarterly Bulletins 1999-2005 (for general government expenditure). Note: ‘Total exp.’ means the same in this graph as in Figure 1. All government expenditure totals exclude debt repayments.

21

Figure 3: Public education expenditure over 12 age cohorts in real terms 1991-2007

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007E

du

cati

on

exp

end

itu

re o

ver

12 a

ge

coh

ort

s20

04 p

rices

Total exp./ Population Recurrent/ Population

Source: As for Figure 1 (with respect to expenditure) plus DoE population projections.

22

Figure 4: School expenditure per learner in real terms 1987-2004

0

1,000

2,000

3,000

4,000

5,000

6,000

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Sch

oo

l exp

end

itu

re o

ver

enro

lmen

t20

04 p

rices

School total exp./ Enrolment School recurrent exp./ Enrolment

Source: Buckland and Fielden (1994); Intergovernmental Fiscal Reviews 1999-2003; Provincial Budget Statements 2004-2005; EMIS; DoE population projections (to project enrolments beyond 2004).

23

Table 1: The education share across three levels of government 1998-2007

1998/99 2007/08

Pool(R billion

2004 rands)

% of GNP

Pool(R billion

2004 rands) % of GNP

GNP 1 074.9   100.0% 1 533.5   100.0%

National pool 106.9   9.9% 132.1   8.6%

Education portion of this 9.5 8.9% 0.9% 11.0 8.3% 0.7%

Provincial pool 144.9   13.5% 222.6   14.5%

Education portion of this 57.0 39.3% 5.3% 71.1 32.0% 4.6%

Local government 3.2   0.3% 23.5   1.5%

Education portion of this 0.0 0.0% 0.0% 0.0 0.0% 0.0%

TOTAL 255.0   23.7% 378.2   24.7%

Education portion of this 66.5 26.1% 6.2% 82.2 21.7% 5.4%Source: Reserve Bank website; Budget Review 2000, 2002, 2005; Intergovernmental Fiscal Review 2001; Provincial Budget Statements 2005. Note that the ‘provincial pool’ includes own revenue of provinces, whilst ‘Local government’ includes only funds from the National Revenue Fund.

24

SHARES OF INPUTS AND OUTPUTS

16.316.917.117.9

9.711.3

8.8

17.5

23.524.5

11.7

14.214.2

7.86.2

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Eastern Cape

Expenditure total

Equitable share

Expenditure personnel

Public Sch lrns

Spec Sch lrns

FET Col lrns

Indp Sch lrns

No of educators

No of Schs

No Fee lrns

No of NSC Pass

No Pass Maths

No Pass Sci

No Pass Maths HG

No Pass Sci HG

25

SHARES OF INPUTS AND OUTPUTS

6.8

5.7

6.6

5.6 5.76.2

4.8

6.2

7.0

6.0 6.1

4.8

5.65.9

6.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Free State

Expenditure total

Equitable share

Expenditure personnel

Public Sch lrns

Spec Sch lrns

FET Col lrns

Indp Sch lrns

No of educators

No of Schs

No Fee lrns

No of NSC Pass

No Pass Maths

No Pass Sci

No Pass Maths HG

No Pass Sci HG

26

SHARES OF INPUTS AND OUTPUTS

14.714.814.313.5

38.4

26.8

45.0

13.1

7.5 7.6

16.315.216.8

27.326.4

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Gauteng

Expenditure total

Equitable share

Expenditure personnel

Public Sch lrns

Spec Sch lrns

FET Col lrns

Indp Sch lrns

No of educators

No of Schs

No Fee lrns

No of NSC Pass

No Pass Maths

No Pass Sci

No Pass Maths HG

No Pass Sci HG

27

SHARES OF INPUTS AND OUTPUTS

20.6

22.9

20.722.3

12.013.513.9

22.122.423.523.5

26.7

24.0

18.719.7

0.0

5.0

10.0

15.0

20.0

25.0

30.0

KwaZulu Natal

Expenditure total

Equitable share

Expenditure personnel

Public Sch lrns

Spec Sch lrns

FET Col lrns

Indp Sch lrns

No of educators

No of Schs

No Fee lrns

No of NSC Pass

No Pass Maths

No Pass Sci

No Pass Maths HG

No Pass Sci HG

28

SHARES OF INPUTS AND OUTPUTS

14.414.114.8

15.9

7.6

13.3

8.5

15.516.8

20.3

16.717.016.5

10.5

13.5

0.0

5.0

10.0

15.0

20.0

25.0

Limpopo

Expenditure total

Equitable share

Expenditure personnel

Public Sch lrns

Spec Sch lrns

FET Col lrns

Indp Sch lrns

No of educators

No of Schs

No Fee lrns

No of NSC Pass

No Pass Maths

No Pass Sci

No Pass Maths HG

No Pass Sci HG

29

SHARES OF INPUTS AND OUTPUTS

7.9

8.6

7.6 7.7

3.7

7.6

6.3

7.36.9

8.1

7.26.7

7.9

5.5

6.4

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Mpumalanga

Expenditure total

Equitable share

Expenditure personnel

Public Sch lrns

Spec Sch lrns

FET Col lrns

Indp Sch lrns

No of educators

No of Schs

No Fee lrns

No of NSC Pass

No Pass Maths

No Pass Sci

No Pass Maths HG

No Pass Sci HG

30

SHARES OF INPUTS AND OUTPUTS

2.1 2.2 2.11.7

1.5

5.5

0.8

1.8 1.72.0

7.2

1.1 1.1

1.61.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Northern Cape

Expenditure total

Equitable share

Expenditure personnel

Public Sch lrns

Spec Sch lrns

FET Col lrns

Indp Sch lrns

No of educators

No of Schs

No Fee lrns

No of NSC Pass

No Pass Maths

No Pass Sci

No Pass Maths HG

No Pass Sci HG

31

SHARES OF INPUTS AND OUTPUTS

8.5

6.5

8.4

7.5

4.5

2.83.2

8.3 8.4

5.3

1.6

6.97.5

6.1 6.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

North West

Expenditure total

Equitable share

Expenditure personnel

Public Sch lrns

Spec Sch lrns

FET Col lrns

Indp Sch lrns

No of educators

No of Schs

No Fee lrns

No of NSC Pass

No Pass Maths

No Pass Sci

No Pass Maths HG

No Pass Sci HG

32

SHARES OF INPUTS AND OUTPUTS

8.88.2 8.4

7.9

17.0

12.9

8.7 8.3

5.8

2.7

9.5

7.36.5

16.4

13.6

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Western Cape

Expenditure total

Equitable share

Expenditure personnel

Public Sch lrns

Spec Sch lrns

FET Col lrns

Indp Sch lrns

No of educators

No of Schs

No Fee lrns

No of NSC Pass

No Pass Maths

No Pass Sci

No Pass Maths HG

No Pass Sci HG