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Processes for Financing Public Basic Education in South Africa

Authors: Conrad Barberton, Jonathan Carter, Angela Biden
Date: 2017-01-30

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This paper was prepared for the International Budget Partnership (IBP) to assist in responding to questions from Civil Society Organisations in the public basic education space regarding what budget and expenditure information is available on the public basic (school) education function in South Africa. The paper aims to assist organisations that wish to influence allocations to education, by explaining education funding processes in South Africa, and identifying and explaining publicly-available sources of expenditure information.

The answer to many of these questions was that the information asked for is not available for one the following reasons:

  • the information is not reflected in the budget documents because the format of budget documents does not cater for it to be shown – they are either too aggregated or not structured to show the requested information;
  • the information is not collected during the recording of expenditure transactions; or
  • the question was asked with an incorrect understanding of how public education is funded in South Africa. 

If CSOs wish to influence allocations to education, they should understand how education is funded, the process of funding it (the budget process), and what sources of expenditure information are available.

National and provincial government departments are required to prepare budgets following a prescribed budget template. The budget format ensures uniformity across departments, which is useful when analysing expenditure across provinces for the purposes of comparing expenditure on policy objectives. As a result, only so much information can be meaningfully presented in the published budget documents. Consequently, budget information is very useful, but often limited in its scope. It is designed to answer high-level questions regarding the funding of public education, and not necessarily the more detailed questions different parties may have. Expenditure information on public education (and government functions generally) is more detailed, but often not easily accessible. It may still not answer certain questions some parties may have. These issues are explored in the paper.

It is emphasized that influencing the allocation to any budget is a difficult, involved process. This applies to education too. To have any chance of influence requires a thorough understanding of the budget process, and persistence. A long-term approach is required, in which submissions, interventions and interactions are timed to match a very rigid budget process timetable, during which there are key moments when information needs to be fed into the process to make an impact. If one’s timing is out, then the opportunity to influence is lost for another year. Not only is timing crucial, but it’s also crucial to know what to try to change, what information is most likely to get a hearing, and who (which sphere of government) to lobby for particular changes.

Public basic education is funded from the provincial equitable share, provincial own revenues and national conditional grants to provinces. Conditional grants account for, on aggregate, less than five per cent of basic education budgets. The other 95 per cent comes from each provincial budget, and is funded by a combination of the provincial equitable share and provincial own revenues. These sources of funding are also described as discretionary funds, because provinces have discretion over how these funds are allocated. During the provincial budget process, each province identifies their budget priorities and allocates their discretionary funds according to their chosen priorities.

In terms of the Constitution, provinces are fully responsible for compiling their budgets, and any direct interference by national government in the exercise of this responsibility would be unconstitutional. In other words, national government cannot dictate to provinces how much they must budget for education (or any other budget). However, the Constitution does allow national government to prescribe national uniform service delivery norms and standards in national legislation. Provinces are required to fulfil these legislated service delivery obligations. National legislation invariably prescribes, or directs, how services must be provided and the quality of inputs used. Vary rarely (if ever) does national legislation prescribe “how much” a province must allocate to a particular function. This means that national government can only exercise indirect influence over provincial budget allocations. Thus, in the education sector, service delivery norms and standards in national legislation are used to indirectly coerce provinces into budgeting certain amounts for education. As counterintuitive as this may sound, especially considering the importance of education, understanding this is central to influencing education expenditure. It means that the primary avenues for influencing budget allocations for public education are:

  • directly, through the budget processes of each province (not the national government’s budget process);
  • indirectly, through the development and enforcement of national service delivery norms and standards for public education (which cannot be so-called costed funding norms, i.e. norms that set an explicit monetary value);
  • indirectly, through processes related to the division of nationally-collected revenue (which may give provinces a larger provincial equitable share that they may or may not allocate to education); and
  • directly, through the creation and design of conditional grants within the national government budget process (though this is a relatively minor funding source for education).