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 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 needs or inclusive education sees an increase in expenditure from R3.5 billion to just over R5 billion. This represents a 7% real average annual increase over the medium term, showing that this will be yet another education priority in the coming years. Further education and training (FET) is the third programme that comes through as a strong priority. In the current MTEF, FET has seen a budget increase from R3.1 billion in 2009/10 to an expected R4.3 billion for the 2012/13 fiscal year. This represents a 5% real average annual growth over the medium term. Expenditure on public ordinary schools averages 1.1% over the medium term, while a small negative average rate (1.1%) is projected for adult basic education over the corresponding period.

Inter-provincial equity in service delivery programme spending

The least unequal provincial service delivery programme is public ordinary schools, whereas inter-provincial spending in special needs education and public FET programmes is approximately five times more unequal than public schools. The small inequality ratio in public ordinary school budgets is a direct result of the extensive policy and funding attention devoted to this sector. Emerging policy and budgetary interventions in the two other programmes are likely to reduce inter-provincial spending inequalities. The most unequal inter-provincial spending is found in the adult basic education and training programmes, and ECD programmes. With the former, the policy sector has been in decline over the last few years and the recently announced review by the Department of Higher Education and Training will delay further equalisation measures. In ECD (principally Grade R), provincial education departments have vastly different universal access attainment rates and different fiscal capacities.

Coherence of provincial education spending proposals

Just how coherent are the latest spending proposals? Firstly, the quality agenda in public schools is being supported in a contained manner, but there has not been a radical rethink about how one gets scarce government resources to support a quality agenda.

Secondly, the support to Grade R is consistent with the idea of building early learning foundations and minimising the wastage associated with illprepared learners. However, there has been very little monitoring of young learners who have completed various pre-school phases and we have yet to assess the efficacy of existing Grade R programmes.

Thirdly, government’s push to create viable medium-level skills through the public FET programme is laudable, and expenditure proposals are welltargeted at infrastructure and human resources. Although this sector has been notoriously inefficient in its use of government resources, we believe that the recapitalisation of technical colleges will make a real difference to academic outcomes.

Fourthly, spending proposals for the special needs education/inclusive education sector are encouraging, but we do not quite understand the logic behind the latest spurt in funding. We assume additional monies went to special needs education schools and programmes because interprovincial differences in access are marked, but government’s commitment to inclusive education will only become clear in time.

Fifthly, spending proposals for the adult education sector continue to lack coherence, especially given the large adult illiteracy rates in the country. However, the national mass literacy campaign is beginning to change the face of the sector and is making an invaluable contribution to reducing adult illiteracy.

Finally, the 2010 spending proposals bring to the fore the powerful role that the national departments of Basic Education and Higher Education and Training are playing in the delivery of education services at provincial level. The adult education and public FET programmes are now national functions. The largest cost driver in education, namely teacher salaries, is determined nationally and the redress framework in schools has been developed at national level. Key anti-poverty measures, such as school nutrition, are being funded by a national conditional grant. Also, although provinces transfer grants to school governing bodies for the delivery of Grade R education, schools themselves determine how this money will be spent. Most of the main quality and redress issues are being handled by the national sphere, which raises the awkward question about the role of provincial authorities in delivering education. We believe this question and the future role of provincial education departments must be discussed openly and publicly as they appear increasingly redundant in a hegemonic nationally dominated educational universe.