Can those who need it get it? - Government funding for early childhood development: Ilifa Labantwana

 
Can those who need it get it? - Government funding for early childhood development: Ilifa Labantwana
Government funding for early childhood development:
            Can those who need it get it?

                                               Sonja Giese
                                         Debbie Budlender
                                              Lizette Berry
                                            Steve Motlatla
                                          Hombakazi Zide

                                     November 2011
Foreword
Isn’t it funny that young children, who have the least say in society, will ultimately have the most say on what happens to
our country? If they are ill, stunted and miss out on early learning, we face a low-growth future mired in many of the same
problems we face today. If they are healthy, get enough food and given opportunities to learn creatively, our prospects for
education, employment, social stability and economic growth are great.

What an opportunity for South Africa! If the main consideration for programme funding were returns on investment, early
childhood development would be a top priority. The evidence – in terms of educational outcomes, employability and eco-
nomic productivity – is clear. In fact, as we look for quantum leap strategies to pull us out of our educational quagmire and
put us on a path to accelerated growth, early childhood development stares us in the eye.

Here’s the opportunity: 70% of young children do not attend preschool or participate in other early childhood development
(ECD) services. Inevitably, those who don’t participate would benefit most because they tend to come from poorer families.
Government funding for ECD has increased over the past few years, but it has largely been for Grade R provision. That’s a
good start, but the real gains lie in younger children whose brains are developing fastest.

This report reviews state funding for ECD. Its value lies in the fact that it looks at funding flows both top-down by analysing
funding channels, and bottom-up through the eyes of ECD providers. Based on national and provincial budget reviews and
research in three municipalities, it tries to answer a simple question: Can those who need Government funding get it?

If they can’t, we’re missing one of the greatest opportunities of our time.

David Harrison
Chief Executive Officer
DG Murray Trust
Contents
Foreword		 .......................................................................................................................................................3
Acronyms		                  .......................................................................................................................................................6
1 Executive Summary..................................................................................................................................... 7
         Methodology .......................................................................................................................................................7
         State funding for ECD in South Africa...................................................................................................................7
		                Department of Social Development............................................................................................................7
		                Department of Education...........................................................................................................................7
		                The Expanded Public Works Programme...................................................................................................8
		                The National Development Agency............................................................................................................8
		Local Government.....................................................................................................................................9
         Factors affecting access to funds and equity in funding of ECD services...............................................................9
2 Background and methodology..................................................................................................................... 13
         Methodology .....................................................................................................................................................13
         South African research areas.............................................................................................................................13
         Research limitations..........................................................................................................................................15
         Structure of this report.......................................................................................................................................15
3 Overview of relevant policy.......................................................................................................................... 17
4 Budget processes and ECD allocations......................................................................................................... 21
         Sources of ECD funding.....................................................................................................................................22
		                National and provincial funding of ECD by Department of Social Development..........................................22
			                         Tracking ECD budget allocations within DSD..................................................................................22
			                         Funding beyond the centre-based subsidy....................................................................................24
			Indicators......................................................................................................................................25
		                National and provincial funding of ECD by Department of Basic Education...............................................26
		                Expanded Public Works Programme........................................................................................................28
			Community Works Programme......................................................................................................32
			Non-state EPWP...........................................................................................................................33
		                The National Development Agency..........................................................................................................33
5 Department of Social Development support for ECD in the sites..................................................................... 35
         Support provided by DSD...................................................................................................................................35
		                Subsidies in the sites...............................................................................................................................35
		Infrastructure support..............................................................................................................................36
		                Training and capacity building.................................................................................................................37
		Programme funding.................................................................................................................................39
         Accessing the DSD subsidy - requirements and processes.................................................................................40
		                Step 1: Dual registration with DSD...........................................................................................................40
		                Step 2: Application for funding.................................................................................................................42
		                Step 3: Registration as supplier................................................................................................................42
		                Step 4: Claims process............................................................................................................................43
		                Step 5: Transfer of funds and reporting...................................................................................................44
         Factors aiding and inhibiting access to DSD funding..........................................................................................44
Knowledge of funding..............................................................................................................................44
		               Knowledge of registration requirements and processes.............................................................................45
		Registration backlog................................................................................................................................46
		               The norms and standards........................................................................................................................46
		Rezoning.................................................................................................................................................47
		               Environmental health inspectors..............................................................................................................47
		               DSD capacity and conditions of work.......................................................................................................48
		Clearance certificate................................................................................................................................48
		NPO certificate........................................................................................................................................48
		               Attitudes towards ECD practitioners.........................................................................................................49
6 Department of Education support for ECD in the sites................................................................................... 51
        Support available from DoE................................................................................................................................51
		               Salaries and subsidies for Grade R in community ECD centres.................................................................51
		               Funding of training for ECD practitioners..................................................................................................53
		               Other support provided by DoE to community-based ECD........................................................................54
        Accessing DOE funding.....................................................................................................................................54
		               Prescribed requirements and procedures................................................................................................54
		               Claims and transfers................................................................................................................................55
        Challenges associated with DoE funding.............................................................................................................56
7 Expanded Public Works Programme in the sites............................................................................................ 59
8 National Development Agency support for ECD in the sites............................................................................ 63
9 Local Government support for ECD in the sites............................................................................................. 65
        Mbashe Local Municipality.................................................................................................................................65
        Ratlou Local Municipality...................................................................................................................................66
        Stellenbosch Local Municipality.........................................................................................................................67
        Other municipalities...........................................................................................................................................68
10 Conclusions and recommendations............................................................................................................ 71
Appendix: examples of municipal support for ECD........................................................................................... 72
References		               ...................................................................................................................................... 74
Acronyms
AIDS                    Acquired immunodeficiency syndrome
approp                  appropriation
ASW                     auxiliary social worker
BAS                     basic accounting system
CDW                     Community Development Worker
CoT                     City of Tshwane
CSO                     Civil Society Organisation
CWP                     Community Works Programme
DHSS                    Department of Health and Social Security
DoE                     Department of Education
DoH                     Department of Health
DSD                     Department of Social Development
EC                      Eastern Cape
ECD                     early childhood development
EHI                     Environmental Health Inspector
EMIS                    Education Management Information System
EPWP                    Expanded Public Works Programme
FET                     Further Education and Training
FS                      Free State
GT                      Gauteng
HCBC                    Home and Community-Based Care
HIV                     Human immunodeficiency virus
ID                      Identity Document
IDP                     Integrated Development Plan
IDT                     Independent Development Trust
KZN                     KwaZulu-Natal
LM                      Limpopo
MEC                     Member of Executive Council
MP                      Mpumalanga
MTEF                    medium-term expenditure framework
NC                      Northern Cape
NDA                     National Development Agency
NGO                     Non-Governmental Organisation
NIP                     National Integrated Plan for Early Childhood Development
NPO                     Non-Profit Organisation
NQF                     National Qualifications Framework
NW                      North West
PED                     Provincial Education Department
PERSAL                  Personal salary system
SASSA                   South African Social Security Agency
SETA                    Sector Education and Training Authority
TIPS                    Trade and Industrial Policy Strategies
TREE                    Training and Resource for Early Education
UNICEF                  United Nations Children’s Fund
VAT                     Value-added tax
WC                      Western Cape
WCED                    Western Cape Education Department

         Government funding for early childhood development: Can those who need it get it?
                                                                                             6
1 Executive Summary
This research set out to determine the extent to which ECD service providers are able to access
state funding for ECD. It explored: government ECD funding sources; prescribed procedures,
systems and requirements for funding; actual procedures for accessing state funding; support
from local government for ECD services within selected municipalities; and factors that enable
and inhibit access to state funding for ECD service providers.

Methodology                                                       ing ECD although much of this funding        increased over the past decade from
                                                                  is not “new” funding as such. Some           less than R335 million in 2003/04 to
A multi-method approach was adopt-                                funding for ECD is also available from       more than a billion rand in 2011/12.
ed. This included:                                                the National Development Agency.             Funding for non-centre based activi-
•   a desk review of previous re-                                                                              ties (ECD programme funding) is even
    search and other data sources                                 There was little evidence from this re-      more difficult to track than the subsidy.
                                                                  search of financial support from local       The one thing that is clear is that much
•   a policy review of government ob-
                                                                  government for ECD.                          less is allocated for non-centre based
    ligations and prescribed require-
                                                                                                               ECD than for centre-based.
    ments and procedures
•   analysis of budgets within national                           Department of Social                         Within the sites, approximately one third
    and provincial spheres of govern-
                                                                  Development                                  of the known ECD centres in Mbashe
    ment
                                                                                                               (Eastern Cape) reportedly received the
                                                                  Funding from the Department of Social        DSD subsidy at the time of the research.
Primary research was undertaken in                                Development is available through two         In the North West site, about 16 of the
one municipality in each of three prov-                           main channels:                               74 ECD centres on the DSD database
inces, namely:                                                    •       A subsidy provided to registered     in Ratlou were receiving the subsidy
•   Mbashe in the Eastern Cape                                            ECD centres – the subsidy is         and in the Western Cape approximately
                                                                          calculated per child per day for     130 of the 306 ECD centres on the DSD
•   Ratlou in the North West
                                                                          children 0-4 years whose caregiv-    database for the district were receiving
•   Stellenbosch in the Western Cape
                                                                          ers pass an income means test.       the subsidy. These proportions give an
                                                                                                               over-optimistic picture of actual reach
                                                                  •       Programme funding for NPOs
Interviews were conducted with 61 lo-                                                                          given that many ECD centres are not
                                                                          in respect of ECD programmes
cal ECD practitioners and 37 govern-                                                                           recorded on the DSD database.
                                                                          (mostly non-centre based).
ment officials.
                                                                                                               Western Cape reported funding to
                                                                  Both channels are difficult to track with-   NGOs for a range of non-centre based
State funding for ECD in                                          in state budgets because they are “hid-      activities. There was less evidence of
                                                                  den” within the Child Care and Protec-       ECD programme funding in the North
South Africa                                                      tion Services Budget Sub-Programme.          West and almost no evidence of DSD
                                                                  Tracking expenditure is complicated by       support for non-centre-based ECD in
The overwhelming bulk of ECD-related                              the fact that ECD-specific reporting in      the Eastern Cape.
budget allocations are made at provin-                            budget books and to National Treasury
cial level by the Departments of Social                           on budgets and performance indicators
Development (DSD) and Education                                   is non-standard or missing.                  Department of Education
(DOE). The Expanded Publics Works
Programme and Community Work Sub-                                 Despite these challenges it is clear that    The Department of Education has sev-
Programme also play a role in support-                            subsidy funding for ECD centres has          eral provincial flows for ECD funding.

             Government funding for early childhood development: Can those who need it get it?
                                                                                                 7
The most important of these are:
•   Funding for Grade R in schools                                   Contrary to the evidence from the budget books, research partici-
    (not the focus of this research).                                pants reported a perceived decline in funding support for commu-
•   Subsidies for community-based                                    nity-based Grade R in all three sites ... There was, however, strong
    Grade Rs registered as ‘inde-                                    evidence that training is reaching many ECD centres across the
    pendent schools’ – this may take
    the form of a per child subsidy or                               provinces.
    a salary for a Grade R practition-
    er. The amount of the per capita
                                                                 There was, however, strong evidence         ing for community-based ECD assis-
    learner subsidy is based on the
                                                                 that training is reaching many ECD          tants) have been “relabelled” as EPWP
    number of Grade R learners and
                                                                 centres across the provinces. Twenty        achievements. There is therefore a se-
    the quintile ranking of the school.
                                                                 eight of the 52 ECD centres in the          rious danger of double-counting and
•   Funding of training fees and
                                                                 sample had staff enrolled in training       while many ECD activities are reported
    stipends for those on learnerships
                                                                 at NQF levels 1, 4 or 5 at the time         against the EPWP, this does not neces-
    under the social sector EPWP.
                                                                 of the research or reported that staff      sarily reflect “new” funding.
                                                                 had recently completed NQF training
Unlike in DSD, the provincial DOE                                or were due to begin training within        EPWP funding is also available via
budgets have a distinct programme,                               the next few months. Most of this           the Community Works Programme
with several sub-programmes, devoted                             training is funded via the Department       (CWP). This programme is part of the
to ECD. This makes it simpler to track                           of Education as part of the EPW Pro-        new category of EPWP II and pays a
ECD allocations. The ECD programme                               gramme.                                     stipend to community members for
accounts for a small share of the over-                                                                      work on projects that address needs
all provincial education budgets, but                                                                        identified by the communities in
the share has increased markedly                                 The Expanded Public Works                   which the project operates. The pro-
over time from only 0.7% in 2006/07                              Programme                                   gramme cannot fund ECD centres di-
to about 2% in 2012/13. However, the                                                                         rectly, but ECD-related activities can
main focus of the budget programme                               The Expanded Public Works Pro-              be included in work done by com-
is on Grade R in public schools.                                 gramme was first introduced in 2004,        munity members. There is evidence
                                                                 with two components related to ECD,         of this happening in about 20 of the
There are large variations across                                namely: (1) increasing the number of        55 CWP sites nationally, including
provinces in the funding allocated to                            registered ECD centres and subsidised       one of the research sites, if one uses
community-based Grade R. Alloca-                                 children, and the subsidy value and         a very broad definition of ECD. Access
tions to community-based Grade R                                 (2) training of ECD practitioners servic-   to CWP funding is dependent on the
in the Western Cape and North West                               ing the 0-4 age group.                      existence of an implementing partner
increased between 2008/09 and                                                                                within the area that is willing to take
2012/13. The Eastern Cape’s annual                               EPWP II, which started in April 2010,       the risks associated with short-term
allocations to community-based Grade                             brought several important changes rel-      contracts and is able to manage com-
R vary markedly from year to year.                               evant to ECD. These included:               plicated administrative systems.
                                                                 •       the introduction of a minimum
Contrary to the evidence from the                                        stipend
budget books, research participants                                                                          The National Development
                                                                 •       a new category of EPWP not man-
reported a perceived decline in funding
                                                                         aged by government                  Agency
support for community-based Grade R
                                                                 •       training for ECD practitioners      The National Development Agency is
in all three sites. Several ECD centres
                                                                         beyond the 0-4 year age group       another potential source of govern-
noted that their Grade R funding had
stopped in 2009 and DOE officials                                                                            ment funding for ECD, although the re-
who were interviewed acknowledged                                EPWP reporting is even more unreli-         searchers were unable to obtain much
a move away from community-based                                 able (and contradictory) than report-       information on this funding source. The
Grade R with an emphasis on promot-                              ing for other sources of funds. Some of     NDA is funded from the national DSD
ing Grade R within ordinary public                               the ECD-related activities funded (for      Budget with an allocation of R161,4
schools.                                                         example, centre subsidies and fund-         million in the 2011/2012 financial

            Government funding for early childhood development: Can those who need it get it?
                                                                                                8
year. However, the NDA reports seri-                              Factors affecting access to funds and equity in
ous under-spending in previous years
and the total number of projects fund-                            funding of ECD services
ed has remained constant or declined
over time. In the Eastern Cape, site                              The research identified many factors that affect access to funding for ECD services:
practitioners reported receiving NDA
funding for ECD with most funds being                             •       Neither the DSD nor the DOE is under any obligation to fund ECD services,
allocated for infrastructure.                                             even those serving the poorest communities.
                                                                  •       In order to qualify for DOE funding for Grade R, ECD centres offering Grade
                                                                          R must first be registered with the Department of Education as an independ-
Local Government                                                          ent school. Registration requirements differ across provinces. Knowledge of
                                                                          registration is poor and access to registration processes is severely limited.
Municipalities are responsible for en-                            •       ECD services are legally required to register with the Department of So-
suring that ECD centres comply with                                       cial Development. Non centre-based ECD services must be registered as
Municipal Health and Safety By-Laws.                                      an “ECD programme”. ECD centres must register both as an “ECD pro-
Municipalities may include ECD within                                     gramme” and as a “partial care facility”. This dual registration is both a
their Integrated Development Plans                                        legal requirement and a prerequisite for DSD funding. It is also a source of
but there is no obligation on local gov-                                  confusion.
ernment to fund ECD activities.
                                                                  •       The DSD registration processes require compliance with a set of stringent
                                                                          norms and standards which are impossible to achieve for many centres,
The research found varied levels of
                                                                          particularly those serving poor and rural communities. While well-inten-
support from municipalities for ECD.
                                                                          tioned, these norms and standards prejudice those centres serving the
There was no evidence of local or dis-
                                                                          poorest communities; hence reinforcing inequalities in early childhood care
trict municipality funding for ECD in
                                                                          and education.
the Eastern Cape site. In Ratlou, the
municipality provided no financial                                •       DSD registration is also dependent on centres’ compliance with health and
support for ECD activities but report-                                    safety by-laws of the relevant municipality. Municipal Environmental Health
edly assisted with land and infrastruc-                                   Inspectors are responsible for determining compliance. Municipal capacity
ture. In contrast, a range of support                                     constraints mean that inspection visits may be delayed for months, holding
was available for ECD from the better-                                    up the registration process.
resourced Cape Winelands District                                 •       Many ECD centres are established on private land. Registration with DSD
Municipality in the Western Cape. This                                    requires that private land be zoned appropriately. Rezoning can be costly
included training of ECD practitioners,                                   and time-consuming. This is a further barrier to registration and hence ac-
assistance with registration and provi-                                   cess to funds.
sion of (limited) funding. While grant                            •       There is strong resistance on the part of some officials to registering ECD
amounts were typically small and                                          centres because of the perception that individuals are establishing centres
once-off, requirements for accessing                                      as money-making ventures. The reality is that most ECD centres generate
these grants were less stringent than                                     very little income for the individuals who run them. In some instances run-
the requirements for accessing provin-                                    ning a centre may even deplete household income.
cial funding.                                                     •       Implementation of the Children’s Act began in April 2010, making it illegal
                                                                          for any ECD centre to operate without being registered with the DSD. The
                                                                          complicated processes involved in registration and the large numbers of
                                                                          historically unregistered facilities have resulted in bottlenecks and backlogs.
  Municipalities may include                                      •       Once registered with DSD or DOE, access to funding is dependent on the
  ECD within their Integrated                                             centre meeting additional department-specific criteria, including registra-
  Development Plans but                                                   tion with the NPO directorate. The delay in obtaining NPO certificates
                                                                          presents a further barrier to accessing funds.
  there is no obligation on lo-
                                                                  •       ECD centres may only claim the DSD subsidy in respect of children who are
  cal government to fund ECD                                              eligible in terms of a means test based on the income of the child’s parents.
  activities.                                                             The onus lies on centres to obtain the necessary supporting documents to
                                                                          prove eligibility.

             Government funding for early childhood development: Can those who need it get it?
                                                                                                 9
•       ECD centres may only claim DOE funding for Grade R learners if they have a
                                                                     minimum number of learners within the centre. In rural areas the number of
                                                                     Grade R learners is often insufficient to qualify for a DOE subsidy.
                                                             •       ECD centres reported being unable to access funding for children aged five
                                                                     years who are not yet old enough to proceed to Grade R. These children are
                                                                     no longer eligible for the DSD subsidy and cannot yet qualify for Grade R
                                                                     support.

                                                             The research also identified numerous instances of inequity in provisioning for
                                                             ECD across provinces and between municipalities. This is evident, for example, in
                                                             the different income thresholds used in the DSD means test to determine eligibility
                                                             for the subsidy, and in the number of days of the year for which the subsidy is paid
                                                             in each province.

                                                             Inequity in remuneration of practitioners is also a concern. Disparity in remu-
                                                             neration between Grade R practitioners and those working with younger children
                                                             means that the better trained practitioners are lured into training and teaching
                                                             posts for older children where remuneration is better. The quality of ECD services
                                                             for the youngest children is then compromised.

 Recommendations
The research suggests that the following recommendations could be considered:
• S ystems applied to enable better tracking of ECD allocations and expenditure.
• A review and simplification of processes for ECD registration, funding application and claims.
• “ Relaxing” of the norms and standards for ECD registration, while still maintaining minimum acceptable levels.
• I mproved linkages between the different departments and between provincial and local government to improve effec-
   tive use of resources, avoid unnecessary duplication of administrative processes and address funding gaps.
• G reater equity across provinces and municipalities in terms of ECD provisioning.
• B etter training and access to information for ECD practitioners and officials on legislation governing ECD provision and
   on funding sources and application processes.

          Government funding for early childhood development: Can those who need it get it?
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Government funding for early childhood development: Can those who need it get it?
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Government funding for early childhood development: Can those who need it get it?
                                                                                    12
2 Background and methodology
This research was commissioned by Ilifa Labantwana, a national Early Childhood Development (ECD) project
supporting ECD innovation in South Africa. The project focuses on marginalised and poverty-affected children
living in rural or hard-to-reach communities. It is a four-year initiative funded equally by three partners: The
Elma Foundation, The DG Murray Trust and The UBS Optimus Foundation.

Ilifa Labantwana’s mission is to ensure
that by 2013 increased numbers of chil-                                This research responds primarily to the core activity of promoting
dren in rural and isolated communities
                                                                       access to government support. The research aimed to identify fund-
in South Africa enjoy access to quality
early childhood development education,                                 ing that is available for ECD within key government programmes at
social services and government support.                                national and provincial levels and to determine the extent to which
                                                                       ECD service providers are aware of and accessing these funds.
There are seven core areas of activity
that make up the Ilifa interventions.
This research responds primarily to
the core activity of promoting access                             The study excludes a review of fund-                  Methodology
to government support. The research                               ing for Grade R ECD services within
aimed to identify funding that is avail-                          ordinary public and private schools.                  The research was undertaken primarily
able for ECD within key government                                It does however include a review of                   in the Eastern Cape (EC), the North West
programmes at national and provincial                             funding for Grade R services within                   (NW) and Western Cape (WC). Within
levels and to determine the extent to                             community-based ECD centres.                          each of these provinces, the primary
which ECD service providers are aware                             In terms of Pre-Grade R, the study                    research focused on activities in one lo-
of and accessing these funds.                                     looks at services located within ECD                  cal municipality, namely: Mbashe in EC,
                                                                  centres (eg. preschools, educare                      Ratlou in NW and Stellenbosch in WC.
The objectives of the study are:                                  centres, crèches) and non-centre                      These were selected in consultation with
•   to describe existing government                               based ECD activities.                                 Ilifa partners. Selection took into account
    policies to support ECD pro-
    grammes and clarify prescribed
    procedures, systems and require-                              South African research areas
    ments for funding.
•   to identify state ECD funding
    sources and describe actual
    procedures, systems and require-                                                                                   Ratlou
    ments for accessing this funding.                                                                           North West
•   to identify support (financial,
    administrative, informational,
    other) for ECD services at local
    government level in selected
    municipalities.
•   to investigate public access to
    information on ECD funding and                                                                                     Eastern Cape
    subsidies and identify the factors
                                                                                                                         Mbashe
    that enable and inhibit access
                                                                                                      Western
    to this funding by ECD service                                 Stellenbosch                       Cape
    providers.

             Government funding for early childhood development: Can those who need it get it?
                                                                                                 13
the need for varied contexts as well as                                      explored the extent to which local           sample were centre-based (20/20 in
practical considerations and future plans                                    ECD practitioners and relevant               NW, 18/21 in EC and 14/20 in WC).
of the Ilifa Labantwana project.                                             officials were aware of funding              This reflects the predominantly centre-
                                                                             available for ECD and were knowl-            based nature of ECD services within
The research took place over seven                                           edgeable about requirements                  these sites. The few non centre-based
months, between February and Au-                                             and procedures for accessing this            ECD activities identified included play
gust 2011. A multi-method approach                                           funding. Interviews also explored            groups, home visits, caregiver training
was used, as follows:                                                        the factors that aid and inhibit             and parenting skills programmes, sto-
                                                                             access to state funding for ECD.             ry-telling and library facilities, and the
•     A desk review was undertaken                                           Interviewees were purposefully               provision of assistance to ECD centres
      to identify and draw on previous                                       selected to include a range of               with registration, equipment and infra-
      related research and other data                                        experiences with regard to fund              structure.
      sources.                                                               access and administration.
•     A policy review was done to                                                                                         Table 1 below provides a more de-
      identify obligations on the state for                          A total of 112 interviews were conduct-              tailed breakdown of the 52 ECD cen-
      ECD service provision and require-                             ed, including 40 in the Eastern Cape,                tres that were included in the sample.
      ments and prescribed procedures                                34 in the Western Cape, 29 in the                    Each provincial sample purposefully
      for funding of ECD activities.                                 North West and nine interviews with                  included centres that were registered
•     A budget analysis was carried out                              representatives from national depart-                with the DSD and those that were not,
      of current national budgetary al-                              ments or organisations.                              as well those that received funding
      locations and expenditure for ECD                                                                                   from the DSD and those that did not.
      within the national and provincial                             Within each of the three sites, the re-
      Departments of Basic Education                                 searchers included a sample of 20                    For sampling purposes, names and
      and Social Development. Detailed                               ECD service providers, including ECD                 contact details of ECD services were
      analysis of provincial budgets was                             centres and non-centre based activi-                 obtained from the Department of Social
      undertaken in the three selected                               ties where these were available. Most                Development (for all three sites), the
      provinces only. A more basic com-                              of the ECD services included in the                  municipality (NW and WC) and ECD fo-
      parative analysis was included on                                                                                   rums (EC and WC). Services were also
      all provinces for which information                                                                                 identified through snowball sampling in
      was available. Telephonic inter-                                                                                    order to ensure that the sample was not
                                                                         Most of the ECD services                         biased towards the more ‘high profile’
      views and email communication
      with key staff within the relevant                                 included in the sample were                      centres. Most of the interviews in the
      departments were undertaken                                        centre-based (20/20 in NW,                       EC and WC were conducted in person,
      to supplement, substantiate and                                                                                     and half the interviews in the NW were.
                                                                         18/21 in EC and 14/20 in WC).
      query information obtained through                                                                                  Due to the extensive distances involved,
      the documentary budget analysis.
                                                                         This reflects the predominant-                   the remaining NW interviews were com-
•     Most of the primary research                                       ly centre-based nature of ECD                    pleted telephonically. The majority of
                                                                         services within these sites.                     interviews were conducted in the inter-
      took place in the three selected
                                                                                                                          viewees’ mother tongue.
      case study sites. The research

Table 1. Registration and funding status of ECD centres included in the sample
    Province              Registration status                                                                                                 DSD funding
                                Registered                        Unregistered,                        Unregistered,        Registration          Yes          No
                                                                 but in process of                    and registration    status unknown
                                                                    registering                     process not started
    Eastern Cape          1                                     3                                   14                    -                   3            15
    North West            14                                    3                                   2                     1                   8            12
 Western Cape             9                                     5                                   -                     -                   6            8

               Government funding for early childhood development: Can those who need it get it?
                                                                                                   14
Research limitations
                                                                                                      The study included NGO re-
                                                                                                      spondents from only three mu-
The study had several limitations.
                                                                                                      nicipalities and field samples
•   The researchers experienced difficulty tracking national and provincial budgets
    for ECD because, as discussed further below, there is seldom a budget line                        cannot therefore in any way be
    item for this service. Where there are line items, it is often unclear (even to                   taken as representative. The
    those responsible for the relevant activities) exactly what the allocation is for.                variability across municipalities
•   It is generally difficult to obtain data from officials and, when provided, data                  (even within the same province)
    are often untrustworthy and contradict other information. One of the reasons
    for this may be that responsibilities are split between people. For example,
                                                                                                      highlights the fact that findings
    programme staff do not collect the delivery statistics and do not know about                      regarding ECD support from
    the finances. Underlying at least some of this is the poor quantitative skills                    local government cannot be
    and understanding of many of the government staff.
                                                                                                      extrapolated.
•   The study included NGO respondents from only three municipalities and field
    samples cannot therefore in any way be taken as representative. The variability
    across municipalities (even within the same province) highlights the fact that
    findings regarding ECD support from local government cannot be extrapolated.
•   The research focused mostly on centre-based ECD. This was because non
    centre-based activities were rare in the sites and because officials tended to
    associate ‘ECD’ with preschools, crèches and educare centres. This in itself
    is an important finding from the research.
•   ECD practitioners who were interviewed were not always clear on the source
    of the funding they received. In particular, interviewees were frequently un-
    able to distinguish the source of funding for training because of the involve-
    ment of multiple partners.
•   ECD respondents also had difficulty providing accurate information on cen-
    tres’ budgets, income and expenditure.
•   Information on ECD centre funding was obtained primarily from the principal
    or founder of each of the centres and did not include interviews with parent
    committees which ECD centres are required to put in place in order to access
    state funding and which are often signatories to the bank accounts.

Structure of this report
The section that follows (chapter 3) presents a brief overview of relevant policies
and laws governing ECD provision in South Africa. The report then goes on to de-
scribe budgeting processes and allocations relevant to ECD (chapter 4). Chapter 4
focuses on the four primary sources of funding, namely:
•   the Department of Social Development
•   the Department of Education
•   the Expanded Public Works Programme
•   the National Development Agency

The report then looks at each of these funding sources in turn (chapters 5 - 8),
reviewing knowledge of and access to funding within the three case study sites and
describing the factors that aid or inhibit fund access. Chapter 9 presents the findings
of the research with regard to support provided by local government (district and local
municipalities) to ECD services. The last chapter (chapter 10) presents conclusions
and preliminary recommendations for consideration.

             Government funding for early childhood development: Can those who need it get it?
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Government funding for early childhood development: Can those who need it get it?
                                                                                    16
3 Overview of relevant policy
There are numerous laws, policies, white papers and plans that govern the provision of ECD services in South
Africa and that give effect to international and regional obligations to young children1. Four of the most impor-
tant of these are: (1) The White Paper on Early Childhood Development (2001); (2) the National Integrated Plan
for ECD (2005-2010), currently under review; (3) the Children’s Act No. 38 of 2005 (and corresponding regula-
tions and norms and standards); (4) The Norms and Standards for Grade R Funding (2008) in accordance with
the South African Schools Act (1996)

The Department of Education’s White                                      ECD settings, prisons, child and youth
Paper 5 on ECD provides for the es-                                      care centres, and places of safety.              The Children’s Act (No 38 of
tablishment of a national system for                                                                                      2005) defines ECD as “the
the Reception Year (Grade R) aimed                                       The Children’s Act (No 38 of 2005) de-
at children aged 5-6 years. This paved                                   fines ECD as “the process of emotion-            process of emotional, cogni-
the way for the integration of Grade R                                   al, cognitive, sensory, spiritual, moral,        tive, sensory, spiritual, moral,
in ordinary public schools. The White                                    physical, social and communication               physical, social and com-
Paper also requires the development                                      development of children from birth to
of a strategic plan for intersectoral                                    school-going age”. Like the NIP, the
                                                                                                                          munication development of
collaboration and targeted services                                      Act’s provisions for ECD focus predom-           children from birth to school-
and programmes for children under 5                                      inantly on the 0-4 age cohort. Annex-            going age”.
years “that are appropriate, inclusive                                   ure B, Parts 1 and 2 of the regulations
and integrated”. It calls for improve-                                   to the Children’s Act detail norms and
ments to the quality of Pre-Grade R                                      standards for ECD facilities and pro-
                                                                                                                      •    to make early childhood develop-
programmes, inclusion of health and                                      grammes (these are discussed in more
                                                                                                                           ment programmes available to
nutrition, appropriate curricula as well                                 detail on page 40 under Step 1: Dual
                                                                                                                           children with disabilities
as practitioner development and ca-                                      registration with DSD). Compliance
reer pathing.                                                            with these norms and standards is a          Section 92 of the Act states that the
                                                                         requirement for DSD registration and         National Minister for Social Develop-
The National Integrated Plan for ECD                                     funding. There is however no obliga-         ment must include in the departmen-
(2005-2010) takes forward these provi-                                   tion on the state to fund ECD services       tal strategy a comprehensive national
sions of White Paper 5. It focuses pre-                                  that meet the prescribed requirements        strategy aimed at securing a properly
dominantly on addressing the needs of                                    of the norms - Section 93 of the Act         resourced, coordinated and managed
children aged 0-4 years, “in line with the                               states that the MEC for social develop-      early childhood development system.
international experience of targeting, in                                ment may, from money appropriated
this case by age, as a key mechanism                                     by the relevant provincial legislature,      Responsibility for registration and
for dealing with the challenge of scarce                                 provide and fund early childhood de-         funding of ECD services for children
resources” (p.8). The NIP extends well                                   velopment programmes for that prov-          aged 5-6 years (Grade R) lies with the
beyond centre-based ECD services,                                        ince. The Act states further that ECD        Department of Education. Norms and
calling for an integrated approach to                                    services should be prioritised:              standards for Grade R funding2 were
ECD with primary components of the                                       •       in communities where families        released in 2008. In accordance with
plan located in a range of sites where                                           lack the means of providing          Education White Paper 5, the norms
children live and are cared for. These                                           proper shelter, food and other       support a pro-poor phased in approach
include homes, formal ECD centres,                                               basic necessities of life to their   “to publicly funded Grade R classes
community childcare centres, informal                                            children                             across the whole public schooling sys-

1
    It is beyond the scope of this report to include information on all of these documents. These are usefully summarised in a document entitled “Young Children’s Position
     Paper” (2008) commissioned by the Alliance for Children’s Entitlement to Social Security (ACESS) and compiled by Karen Kallman.
2
    For the South African Schools Act (84/1996), Government Gazette No. 30679.

                    Government funding for early childhood development: Can those who need it get it?
                                                                                                        17
tem by 2010” (this period was subse-                              tutions where there is a need for the      licly funded programme. Registration
quently extended). While the norms                                piloting of new approaches or there is     as an independent school therefore
focus mainly on funding of Grade R in                             a need to reduce the distance travelled    does not guarantee state funding.
public schools, they also make provi-                             by poor Grade R learners between
sion for publicly funded Grade R in                               home and the institution” (p.18). No       More detailed information on legal re-
independent schools. The norms state                              independent school has the right to        quirements for registration and fund-
that “in accordance with the proposals                            receive public funding for Grade R un-     ing for each government department is
of Education White Paper 5, the state                             less the school has been explicitly tar-   included in the relevant chapters.
will fund Grade R in non-public insti-                            geted by the state to be part of a pub-

    Summary
   In summary, ECD service providers offering services to children aged 0-4 years must register their services with the De-
   partment of Social Development, either only as an ECD programme (non-centre-based services), or as both a partial care
   facility and an ECD programme (ECD centres).

   This is a legal requirement and it is also a prerequisite for accessing state funding. However, successful registration does
   not guarantee funding and there is no obligation on the MEC for Social Development to fund all registered ECD services in
   a province. ECD centres offering Grade R are not legally obliged to register with the Department of Basic Education but
   registration (as an independent school) is a prerequisite for accessing funding. However, as with DSD, successful registra-
   tion with DoE does not guarantee funding.

             Government funding for early childhood development: Can those who need it get it?
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Government funding for early childhood development: Can those who need it get it?
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Government funding for early childhood development: Can those who need it get it?
                                                                                    20
4 Budget processes and ECD allocations
This section briefly describes relevant aspects of the national and provincial budget processes.

The first point to note is the relative sta-
bility of the South African government                                In 2010 South Africa was rated first internationally on the Interna-
budgeting process, which discour-                                     tional Budget Partnership’s Open Budget Index. One aspect of this
ages major shifts from year to year.
The stability is encouraged by use of a                               availability is that the standard budget books tabled in the national
medium-term expenditure framework                                     and provincial legislatures provide budget estimates for a period of
(MTEF). Using this approach, each                                     seven years.
year government agencies draw up
budget estimates for three years – the
immediate following year which will be
voted on by the various legislatures,                              cial budgets include three estimates –    The first step in the process of provin-
and the two following “outer years”                                the original allocation voted on by the   cial allocations is the determination
of the MTEF. The outer years are not                               legislature the previous year, the “ad-   of how the money available at nation-
voted on and thus do not become law.                               justed” estimate which includes any       al level will be split between the three
However they constitute the basis on                               additions or subtractions voted by the    spheres (national, provincial and lo-
which the next year’s MTEF is built,                               legislature mid-year, and the “revised”   cal) in what is called the vertical divi-
with the assumption that any substan-                              estimate, which is the relevant depart-   sion of revenue.
tial deviations must be well motivated.                            ment’s estimate of the amount that will
The stability is good in that it allows for                        actually have been spent by the end of    The next step is the determination of
the smooth ongoing operation of gov-                               the budget year.                          how the money within each sphere
ernment. It can, however, encourage                                                                          will be split between the entities in
continuation of less necessary expen-                              The overwhelming bulk of ECD-related      that sphere, that is between the prov-
ditures and make it difficult to increase                          budget allocations are made at pro-       inces or municipalities.
funds for new areas or those that have                             vincial level by the provincial DSD and
become more important.                                             DoE.                                      Within both local and provincial
                                                                                                             spheres, this is done primarily through
A related point is the relative avail-                             The first step in the overall budg-       formulae that determine the “equitable
ability of government budget informa-                              et allocation process (covering all       share” of each entity. In the case of the
tion in South Africa when compared to                              spheres of government) is the Na-         provincial sphere, the variable with the
other countries. Indeed, in 2010 South                             tional Treasury’s determination of        largest weight in the formula relates to
Africa was rated first internationally on                          how much revenue will be available        education. The equitable share formu-
the International Budget Partnership’s                             and what level of deficit (excess of      la does not include a variable related
Open Budget Index. One aspect of this                              spending over revenue) or surplus         to social development and welfare. In-
availability is that the standard budget                           (revenue exceeds surplus) should          stead, the poverty variable is meant to
books tabled in the national and pro-                              be targeted.                              cater for this aspect of service delivery.
vincial legislatures provide budget esti-                                                                    In addition to their equitable share,
mates for a period of seven years. This                            In cases where revenue is growing         each province will receive a range of
includes the three years preceding the                             more than expected, there will then       conditional grants from various na-
“current” budget year (which is the fi-                            be more room for maneuver and             tional departments that must be used
nancial year that is coming to an end                              “new” expenditure in the budgeting        for pre-specified purposes. The equi-
when the budget for the next year is ta-                           process. In cases where revenue is        table share comes in a single “pot” of
bled in parliament), the current budget                            less than expected, National Treas-       money for each province, and it is up
year, and the three years of the MTEF.                             ury will want government agencies to      to the province to decide how to allo-
In respect of the current year, provin-                            propose cuts.                             cate it between different departments.

              Government funding for early childhood development: Can those who need it get it?
                                                                                                  21
The province is not obliged to follow
the formula. In contrast, conditional                                  It is against this background that the issue of budget “bids” arises.
grants must be spent on the purpose                                    If additional funds are wanted for a particular activity such as ECD,
for which they are allocated.
                                                                       a strong “bid” needs to be made by the relevant directorate, with a
The third step is therefore the deter-                                 subsequent strong “bid” by the department to the provincial treasury.
mination by each province of how the
available funds will be divided between
the departments so as to stay within
the “ceiling” for each province i.e. the                          using the standard formula, there is a         Sources of ECD funding
total amount of money available.                                  strong expectation, but no compulsion,
                                                                  that the provincial treasuries will allocate
Within a department a budget is drawn                             the extra money for the purpose speci-         National and provincial fund-
up by or for each directorate and sub-                            fied in the national bid (and repeated in      ing of ECD by Department of
directorate, and these budgets are ag-                            the provincial bids). Successful national      Social Development
gregated at departmental level. Within                            bids of this sort resulted in additions to
each department the chief financial of-                           the equitable share for ECD for 2007,          There are two main ways in which ECD
ficer needs to ensure that all the com-                           2008 and 2009. Similar bids were not           can be funded by provincial DSD:
ponent allocations are within the budg-                           successful in the subsequent two years.
et ceiling specified for the department                                                                          •   The per child per day subsidy for
by the provincial treasury. Throughout                            The successful bids of 2007-2009 re-               registered ECD centres in respect
these processes there will be a strong                            sulted in a total of approximately R2,4            of children aged 0-4 years whose
tendency to allocate in a similar way to                          billion being added to the baseline (the           caregivers pass the income
how it was done in the previous year.                             previous year’s MTEF estimates) across             means test.
Not doing so would usually mean that                              the nine provinces. This amount was in-        •   “Programme” funding for NPOs
some staff’s jobs would be on the line                            tended to provide for subsidisation of 1           in respect of ECD programmes,
and/or some activities cut.                                       million children in ECD centres and was            for which organisations must
                                                                  thus most likely to be allocated to the            typically apply using the general
It is against this background that the                            provincial DSDs. In addition, a further            NPO funding application forms.
issue of budget “bids” arises. If addi-                           R722 million was added in respect of               The applications could include
tional funds are wanted for a particular                          training of practitioners for the 0-4 age          funding for activities such as
activity such as ECD, a strong “bid”                              groups. This money was likely to be al-            training and other support, or
needs to be made by the relevant direc-                           located to the provincial DoEs.                    for home-and-community-based
torate, with a subsequent strong “bid”                                                                               ECD. The types of expenditure
by the department to the provincial                               Several reasons were advanced why                  to be subsidised would include
treasury if the bid cannot be accommo-                            further additional monies were not                 ECD practitioner stipends, train-
dated within the ceiling. If national and                         added to the equitable share in respect            ing, travel, venue, catering and
provincial agree that there is a priority                         of ECD after 2009. These included:                 management/supervision costs.
that is common across provinces, a fur-                           •       The overall tightness in the               (Budlender, 2010a; 2010b).
ther possibility is a national bid. Where                                 budget in the face of the global
a priority has been spelt out at national                                 financial and economic crisis          Tracking ECD budget allocations
level, for example in the APEX priorities,                                                                       within DSD
                                                                  •       A strong focus on education and
the National Treasury may request a bid
                                                                          health
from a sector. In these cases the rel-                                                                           It is difficult to track the exact amounts
evant national department draws up a                              •       The fact that the bid went through     allocated for ECD within DSD budg-
bid that brings together information and                                  the Expanded Public Works              ets. It is especially difficult in respect
estimated costs across all provinces. If                                  Programme (EPWP) rather than           of non-centre-based budgets, but also
the bid is successful in achieving addi-                                  going directly from national DSD       difficult in respect of the centre subsi-
tional funds through a conditional grant,                         •       The lack of a clearly focused bid      dies which account for the bulk of the
the extra money received by provinces                                     for ECD                                ECD funding.
must be spent on the specified issue. If                          (The issue of EPWP funding is dis-
the bid is successful and the money is                            cussed in more detail below.)                  Orgill (2010) quotes Biersteker’s ob-
channelled through the equitable share                                                                           servation that ECD subsidy budgets

             Government funding for early childhood development: Can those who need it get it?
                                                                                                 22
more than doubled from R422 mil-                                  budget format does not specify a
lion in 2007/08 to R900 million in                                budget line item for ECD, it is possible          The overwhelming bulk of
2008/09. For this research a national                             to identify some ECD allocations in the           the funding for ECD – all
official reported that the total subsidy                          tables that some provinces provide
amount had increased from just under
                                                                                                                    the centre-based subsidies
                                                                  detailing transfers to NPOs. Unfortu-
R335 million in 2003/04 to more than                              nately this is again done in different            and most of the non-centre-
a billion rand in 2011/12. This is a sub-                         ways across the provinces. Further,               based funding where it exists
stantial increase given the fact that the                         some provinces do not include any                 – falls under the Child Care
general trend is for allocations for spe-                         tables detailing transfers while some
cific activities to increase only in line                         that provide tables do not disaggre-              and Protection Services Sub-
with inflation.                                                   gate in a way that allows identification          Programme. Unfortunately
                                                                  of ECD.                                           there is no standard line item
Across provinces the social welfare
                                                                                                                    for ECD within this sub-pro-
budget programme is composed                                      Table 2 shows the transfers that can
of more or less standard sub-pro-                                 be identified as ECD-related in the               gramme.
grammes. The overwhelming bulk of                                 2011 provincial budget books. Unfor-
the funding for ECD – all the centre-                             tunately amoung our target provinces
based subsidies and most of the non-                              there is only information for the East-
centre-based funding where it ex-                                 ern Cape. Mpumalanga is not includ-
ists – falls under the Child Care and                             ed in the table as it lists each of the
Protection Services Sub-Programme.                                beneficiary organisations, of whom
Unfortunately there is no standard                                about 100 appear to be crèches or
line item for ECD within this sub-pro-                            ECD centres.
gramme. Nevertheless, over the last
five years ECD is probably the most                               Looking beyond the tabled budget
well reported service within the narra-                           books, Orgill (2010) obtained informa-
tive parts of DSD’s vote. The mentions                            tion from officials in the Western Cape
include some performance indicators                               and the Eastern Cape on ECD alloca-
and indications of allocations along-                             tions. The data relate to earlier years
side affirmations of the importance of                            but are nevertheless useful given the
ECD. Unfortunately, however, the way                              relative lack of more recent budget in-
ECD is reported differs across prov-                              formation. The data also illustrate the
inces and across years. The annual                                extent to which the two provinces have
analysis by Budlender and Proudlock                               allocated funds for ECD beyond the
(2008, 2009, 2010) highlights these                               additional bid-related amounts includ-
differences.                                                      ed in the provincial equitable shares
                                                                  for this purpose, which are referred to
While the standard provincial DSD                                 by Orgill as the “EPWP budget”.

Table 2. ECD-related transfers in 2011 budget books (R000s)

                                                               2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 2013/14
 EC ECD                                                        615                                                  134876    136715      144234
 FS Places of care (ECD)                                       40452               85611          126684   148199   172260    177920      182633
 FS Educare Regional Training                                  259                 273            273      302      332       349         368
 FS Children-EPWP-ECD                                          2310                2406           10067    3879     4265      4478        4724
 KZN ECD                                                       95681               111188         110951   168001   274391    289385      305841
 NC Expansion of ECDs                                          23892               25240          26533    31309    36051     37017       39142
 NC Projects Expansion of ECDs                                                                             2550     17432     19107       19754
 NC Projects Expansion of ECDs                                                                                      730       739         780

             Government funding for early childhood development: Can those who need it get it?
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