SUBMISSION TO PARLIAMENTARY HEARINGS ON THE EDUCATION BUDGET 1^st JUNE 2004
From: Shireen Motala
Director, Wits Education Policy Unit
University of the Witswatersand

Introduction

Since 1994 South Africa has undertaken the major task of transforming the inequitable political, economic and social system that characterized the apartheid era into a democratic society which aims to equalize opportunities for all its citizens. Central to this transformation is the establishment of a quality, equitable and democratic system.

The key goals framing the transformation of post-apartheid education are equity, quality, access and redress. These goals are important in their own right, as well as being a means towards creating an environment conducive to teaching and learning. The submission below will consider whether the Education Budget 2004 establishes a facilitative environment for the achievement of these goals.

Other major concerns in education policy and implementation emerging from Education Budget 2004 which will be discussed are:

The constitutional provision of basic rights and the financing of education as a
basic rights issue;

The adequacy of overall budgetary expenditure on education; e
The effects of decentralization and devolution;

The distribution of education expenditure between formal schooling and other sectors;
The role of private inputs in public education; and
The key issue of the redistribution of personnel costs relative to the question of historical disadvantage.

Overview Comments

The overall focus of the Education Budget for 2004 is to address poverty reduction and pro-poor spending. This is welcomed. Specific activities which address poverty and create an enabling environment for the poor are: the integration of the primary schools nutrition programme into education; the continuation of the HIV and Life Skills Grant to address youth vulnerability; the commitment to establishing funding norms for Grade R, Adult Basic Education and Training (ABET), and for the provisioning of support staff at poor schools; and the commitment to develop a capital investment plan to target the infrastructure needs of the poorest provinces.

The introduction of funding norms in Early Childhood Education (ECD) and ABET are important in effecting the distribution of provincial education spending. The revised poverty targeting framework through the school funding norms which will be based on national rather than provincial criteria, is also significant. The establishment of the Budget Monitoring Unit is critically important in terms of providing ongoing diagnostic analysis of provincial expenditure. All of these will go a long way to address the existing inter-provincial disparities in resourcing.

Attention to human resource development is represented by an increased focus on higher education and public further education and training.

However there continue to be over-arching concerns about the Education Budget. These are as follows:

The Education Budget has increased by 8.5% over last year's revised estimate of R69.8 billion. However in the overall context of pressure on social service expenditure, amounts allocated to education are not necessarily spent at a provincial level. The rapid growth in social development expenditure due to the extension of the child support grant means that at a provincial level, there is increased competition from the health and welfare-budgets.

A consequence of the above is the limited increase in provincial expenditure on education. This continues to be a source of concern particularly with increased responsibilities being passed over to the provinces. This is of particular concern for ECD, special education and ABET. Nationally provincial budgets are projected to grow at 3% in the current Medium Term Expenditure Framework (MTEF) at an annual growth of 1,2%. Across provinces, planned increases in capital spending explain most of the small aggregate real increases.

Although inter-provincial equity has improved, current concerns relate to the sustainability of equalizing these moves. Based on the logic of the Medium Term Expenditure Framework no additional funding is targeted for poor provinces. Many of these provinces still benefit from additional redress funding through the Equitable Shares Formula. However in absolute terms this is not sufficient to overhaul remaining backlogs. The expectation that significant funds would be released for redistribution through efficiency gains has not occurred.

In terms of intra-provincial equity important gains have been made through the school funding norms, a poverty targeting mechanism. This policy however, draws only on recurrent, non-personnel costs which on average represent 7,8% of provincial budgets. It could be argued that the overall amount has been too little to make an impact.

South Africa has inherited a highly differentiated schooling sector with socio economic status still determining access to better resourced schools and the burden of school costs increasingly being relegated to households. User fees, decentralized financial governance to schools, educator costs in relation to overall expenditure and hidden costs in the form of uniforms and transport contribute to problems in the achievement of intra-provincial equity.

It must be acknowledged that the Department of Education's Plan of Action (June 2003) provides a number of innovative approaches to inequality in education. Amongst these are proposed increases in non-personnel allocations for poor schools and increased allocation for infrastructure spending, and the establishment of a minimum learning package. One of the key recommendations of the Plan of Action, the top slicing of provincial expenditure to support a pro-poor approach to public schooling, has not been accepted. It is unclear how these new and important plans will be supported in budgetary terms.

A constraint highlighted by the Minister of Finance in his Budget Speech 2003 is the administrative capacity for delivery at all levels of government. Emphasis on increased expenditure must be related to improved service delivery. Again in the education sector under spending continued to be a feature particularly in relation to conditional grants. These grants are made to address the needs of the most vulnerable and most poor. The conditional grant for ECD shows that by the end of January 2003, 38% less than allocated was spent. The conditional grant for rural schooling shows even less success - by the end of January 2003 only 14% of the available of the R47,7 million was spent. Spending on the HIV/Aids and Life Skills Grant averaged 61% in 200112002. Expenditure has to be aligned with other aspects of systemic reform which address improving capacity for delivery.

Over the last ten years, policy has been oriented mainly around addressing the huge disparities inherited from the apartheid system, both through redistribution and allocation of resources to historically disadvantaged schools, and through increased access to schooling. One of the most important questions for the education sector emerging from South Africa's Constitution (RSA 1996) was how to approach the finance of education, consistent with the right to basic education and equity. Proponent of a rights based approach suggest that such an approach will minimize the persistence of fiscal driven choices about social policy and social budgets (Rothmayr, 2002). The "costed norms" approach of the Financial and Fiscal Commission argues that the resource distribution model must aim to deliver a minimum level of basic education nationally. This should be the starting point rather than the availability of resources. The adequacy approach (Fiske and Ladd, 2002), suggests that all schools have sufficient resources to provide an adequate level of education to the students it serves.

What is apparent in our current context is that minimum and adequate teaching and learning conditions are still being defined in order to ensure that all learners have access to a quality education system. How greater resource allocation will occur continues to be a challenge - either through a greater fiscus of by shifting resources from wealthier provinces to needy students in poor provinces. The related challenge is to define adequacy and minimum learning conditions

Specific Comments

In this section, some of the points made above are detailed. Specific education sectors such as FET, ABET, and Special Education are then addressed

Equity in Conditions of Learning Attainment

A key concern continues to be the creation of equity in conditions of learning across all schools. While funding commitments that came from the poverty relief allocations to finance rural school building ends in 2004, the importance of infrastructural development which satisfies the minimum conditions for teaching and learning is paramount. We continue to have a schooling system marked by significant disparities between the poor and the more privileged parts of the public schooling system as indicated in the School Register of Needs Survey in 2002. Together with this there is an under-utilization of the teacher corps because of a shortage of classrooms (55 000). While attention may be given to this through joint initiative of the expanded public works programme and education, agreement on the minimum teaching and learning conditions which include the provision of electricity, water and sanitation must be prioritized.

Differentiation amongst Poor Learners

Capital spending has been targeted for provinces with the greatest needs. How this addresses the needs of poor learners in less poor provinces is a source of concern. The overall policy intent is sound however we must guard against causing differentiation amongst poor learners. This is also relevant with the exemption of the poorest learners (in Quintiles 1 and 2) from school fees. Research (Wildeman, 2001 and 2003) has indicated that there is often little significant difference in the socio economic status of the first three quintiles, and that middle income schools (Quintiles 3 and 4) have benefited substantially less from non-personnel allocations.

Educator Expenditure

Poorer provinces continued to experience the largest budgetary increase in line with the Equitable Shares Formula. Between 1998 and 2002 e.g. the education budget increased by 51% in Mpumalanga, by 46% in kwaZulu Natal and 41% in the Eastern Cape. However these positive trends hide the fact that the more disadvantaged provinces tend to spend more of their education finance on personnel, leaving insufficient funds for non-personnel items such as learner support materials. This also raises the broader concern that between 80% to 86% of all provincial expenditure is on personnel. Hence the re-distributive targeting in terms of a pro-poor approach comes from the remaining 14% to 15% and from the most recent revisions to the Equitable Shares Formula.

It is unclear whether such allocations will be sufficient to meet the extent of the redress required. If as suggested by the Plan of Action that about 80% of all funds should go to the poorest 60% of learners, the total national cost of meeting these targets will be R3.3 billion in 2004, rising to R5.2 billion in 2006 (Bot, 2004). There is no vision of additional resources being provided from a national level to support this.

While the Plan of Action is of the view that personnel expenditure must be driven by pro-poor norms it is not clear as how this is going to occur. Preliminary research on post- provisioning as a way of redistributing educators in terms of equity criteria shows less success than anticipated. One of the major gains in post-apartheid education has been an increase in the qualification of educators and higher salaries. However while educator qualifications have improved from 1994 onwards this has not always translated into better quality outcomes. While targeted interventions for educator development (under qualified educators, maths and science) are welcomed, the relation ship between teacher quality and improving learner outcomes both in primary and secondary schooling must be given priority.


Distribution of Expenditure between Primary and Secondary Schooling

The distribution of expenditure between primary and secondary schooling and the larger increases in the secondary sector suggests that this sector continues to occupy priority in terms of schooling. While expenditure on primary schools in the current period will grow by 7.9% from R24.5 billion to R30,8 billion, whether these increases are sufficient to cover the addition of Grade R in all schools remains to be seen. Investment in basic primary education is critical to improvements in quality across the schooling sector (discussed further in ECD section).

User Fees and Private In puts into Public Education

There continue to be a number of concerns about the practice of user fees - the effects on access and the constitutional right to basic education, the complexities of implementing the exemptions and the devolution of redress decisions to the school level, the effective management of devolved financial powers by schools and the actual level of income in poor communities and the relative proportion that is used for school access.

The South African Schools Act (RSA, 1996) has fundamentally shaped the nature of public schooling in South Africa. All public school governing bodies are obliged 1to support the school as best they can, including through the levying of school fees". What has been very apparent in the last few years is that the responsibility for closing the gap between state subsidization and the remaining financial requirements of the school has become increasingly central to the functioning of locally elected school governing bodies. The varying ability of institutions to supplement state funding has resulted in the persistence of quality differences (Motala, 2003). In some instances, poor schools have had difficulty in managing their devolved financial allocations resulting in the rolling back of such expenditure to provinces (Simkins 2002).

For parents, including poor parents there is a relationship between paying fees and improving the quality of education for their children. Transport and other hidden costs limit access to well resourced schools for children living in poor areas.

While the fee exemption process does exist it is cumbersome and administratively difficult. It also devolves the responsibility of means testing and redress to the school level. The revision of legislation to exclude the two poorest quintiles from fees is welcomed. Adequate funding, for both personnel and non-personnel resources are required for the most disadvantaged in order to ensure that they have access to a quality education system.

Research on the role of private inputs (Bray, 1996) into public education makes two important observations which are relevant to the South African case -that the private costs of schooling in developing countries are a source of education inequity for households from different backgrounds and are an important source for financing some quality relating inputs. The assumption in the South African context, that the cost containment of the more privileged sector in public schooling would provide significant resources for redistribution to poorer schools, has not occurred.

Decentralization and Self-Managing Schools

While our policies have devolved significant powers to schools and to self-managing schools whether we have accrued the benefits of decentralization are yet to be seen. The rationale for devolving power to the local level include the promotion of efficiency and redress, greater localized citizen control over social services, strengthening partnerships at the school level and thereby increasing community participation and institutionalizing experimentation and innovation at the local level.

Funding from conditional grants for financial management and quality enhancement at the district level in the last financial period was significant. There continue to be a number of concerns about how schools manage their devolved responsibilities. Capacity building at these different systemic levels must be prioritized and given support.

Further Education and Training

While higher education and training has grown significantly (5.1%) there is a concern that no national funding has been allocated to public FET Colleges. In our socio economic context where there are large numbers of youth who are unable to complete secondary education in formal schooling, FET should enjoy greater budgetary attention. Research has revealed the declining cohort in the Senior Certificate Examination and a surprisingly constant matriculation exemption pass rate for the last five years of and a 19%. A large section of our youth leave school without access to further tertiary education or opportunities for participation in the labour market. The further education and training sector provide the only opportunity for skills development and enhancing possibilities for job opportunities. While FET Colleges are a provincial responsibility it was expected that the restructuring process in the sector would receive national allocations as well as its own provincial allocations.

Early Childhood Development

Early childhood development continues to be central to addressing quality issues and attainment in the primary schooling sector. The Systemic Evaluation undertaken by the Department of Education in 2002 provides evidence of low levels of attainment in literacy and numeracy in primary schools. This reinforces a point made in the Minimum Learning Attainment Survey done by Unesco in 2000. While the plan to roll out Grade R through a phased approach by 2010 must be welcomed, the devolution of ECD to the province requires review once the provincial ECD allocations are available. ECD has now been incorporated into the provincial equitable share formula. Again ECD faces the possibility of marginalisation on two accounts. Firstly, that if there are budgetary choices which are made in social service expenditure at a provincial level it is likely that the education allocation would be reduced. Within education and given the current emphasis on formal schooling from Grade 1 to Grade 12, it is likely that ECD could receive lower levels of funding than required. While ECD spending is projected to increase from R510 million in 2003 to R591 million in 2005, amounts for 2004 and 2005 are discretionary allocations from provincial education departments, as conditional grants of ECD ended after 2000

Adult Basic Education and Training

The education budget report in 2004 suggests growth in the ABET sector in terms of greater coverage. This is welcomed. However it is not clear whether devolving ABET to provincial budgets will ensure that it will enjoy sufficient attention. Again it is difficult to make a judgment on provincial ABET budgets without the information available. Currently less than 1 % of provincial budgets have been spent on ABET despite the need for literate, trained and skilled manpower. The National Treasury has also agreed to review ABET funding, following on recommendations of the Financial and Fiscal Commission.

Special Education

An area of omission in the current budgetary frame is the area of special needs education at a provincial level. This area requires additional support and would have benefited from the allocation of a conditional grant. This sector is occupied by the most vulnerable learners and their marginalisation is cause for concern.

REFERENCES

Bot (2004). The 200415 Education Budget in Matric Matrix Census Budget Finance, Trends; Results, March 2004. Quarterly Review of Education and Training in South Africa, Vol 11 No.1.

Bray, M (1996). Counting the Full Cost Parental and Community Finance of Education. East Asia, Washington, DC World Bank.

Fiske, E and Ladd H (2002). School Finance Equity in South Africa Paper presented to the International Conference on Decentralization and Governance. Johannesburg, June.

Motala, 5. (2003). Review of the Financing, Resourcing and Costs of Education in
Public Schools. A commentary in Education Transformation 2003 from Systemic
Reforms to Policy Education and Training in South Africa, Vol 10, No 1.

Rothmayr, D (2002). The Constitutionality of School Fees in Public Education. Issue paper 1 ERP Project CALS Wits EPU.

Simkins, C (2002). Review of the Implementation of the School Funding Norms on published report.

Wildeman, R (2001). Equity in Education. How far are we IDASA Budget Briefs. Wildeman, R (2004). The National Education Budget 2004. IDASA Budge Briefs.