SOUTH AFRICA SOCIAL DEVELOPMENT BUDGET - SOUTH AFRICA - UNICEF
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South Africa
© UNICEF/Hearfield
Social development BUDGET
SOUTH AFRICA
2017/2018
1
0.2 %
eal average annual rate
R
projected growth of DSD
© UNICEF/Bart de Ruigh
budgets
Preface
This budget brief is one of four that explore the extent to which Framework (MTEF) baseline are not an option;
the national budget and social services sector budgets address 2. Protect the real spending power of social grants for children
the needs of children under 18 years in South Africa. The briefs such that these grants can meet children’s nutrition and food
analyse the size and composition of budget allocations for diversity requirements;
fiscal year 2017/18 as well as offer insights into the efficiency, 3. Develop its legislative agenda to include service delivery
effectiveness, equity and adequacy of past spending. Their main norms and standards that can be used by provincial social
objectives are to synthesise complex budget information so development departments to anchor bids for additional
that it is easily understood by stakeholders and to present key funding for social welfare services.
messages to inform financial decision-making processes.
Equity of spending: Provincial Departments of Social
Key Messages and
Development (DSD) budgets are projected to grow at a real
average annual rate of 0.2 per cent, which is not enough to
cope with increasing demands for children’s services. The
Recommendations government is encouraged to:
1. Support the full spending of available resources on the Early
Childhood Development (ECD) conditional grant so as to
increase the number of qualifying ECD centres and young
Overall spending trends: Expenditure on social
children accessing the ECD subsidy;
development programmes as a share of total government
2. Publish service delivery norms and standards for key children’s
expenditure appears stable and averages around 13 per cent.
programmes such as the Children and Families programme to
Nonetheless, more work is required to reach all eligible social
eliminate large disparities in per-child spending;
grant recipients and extend much-needed services to targeted
3. Urgently introduce much-needed stability and certainty in
beneficiaries. The government is encouraged to:
the transfers to Non-profit Organisations (NPOs) to avoid any
1. Expedite the process of developing a single overarching
disruptions to key social welfare services.
legislative framework;
2. Implement the widely accepted and Cabinet-backed ‘Social
Protection Floor’;
Financing: The government’s review of the provincial
allocation formula holds promise for the better funding of the
3. Finalise the core set of services that will be funded as integral
social development portfolio. Nonetheless, the government is
to the Social Protection Floor.
encouraged to:
1. Promote the introduction of a social development component
Composition of spending: The government has done
in the provincial equitable shares formula (PES);
well to maintain the real value of children-specific grants such
2. Build understanding among stakeholders that changes in
as the child support, the foster and care dependency grants.
national allocation formulae do not automatically translate into
The government is encouraged to:
better funding for provincial social welfare services.
1. Convince the National Treasury that further expenditure
reductions over the new 2017 Medium-Term Expenditure
2
Section
1.
Introduction
Social protection involves the delivery of goods © UNICEF/Bart de Ruigh an administrative and regulatory framework for NPOs;
• The Social Services Professions Act (1978), amended
and services across a range of departments, 1995,1996 and 1998, which provides for the establishment of
which include the delivery of social assistance a South African Council for Social Service Professions and for
establishing control over the various social work professions;
(social grants), education, interventions in health,
• The Prevention of and Treatment for Substance Abuse (2008)
the expanded public works programme, water (Act No. 70 of 2008), which provides for a comprehensive
response for the combating of substance abuse and for
and sanitation services, the provision of basic
mechanisms aimed at demand and harm reduction in relation
services at local government and various labour to substance abuse through prevention, early intervention,
treatment and re-integration programmes.
market interventions. In this budget brief, we
restrict our focus to the ten social development In terms of the government’s Outcomes Framework, 2 the
departments and examine their contribution to social development sector takes ownership of Outcome
13, which calls for an “Inclusive and responsive social protection
social protection 1 in South Africa. system” (RSA Government, MTSF, 2014–19).
The high-level targets for social development (and their
South Africa has nine subnational (provincial) departments corresponding share of the social protection commitments)
of social development, and a national Department of Social are articulated in the country’s National Development Plan
Development that leads policy-making and coordination in 2030 3 and confirmed in the sector’s Medium Term Strategic
the sector. The mandate of the social development sector has Framework (MTSF). These include:
been established through several laws and policies and these • By 2030, South Africa should have a comprehensive
include: system of social protection that includes social security
• The 1997 White Paper for Social Welfare, which sets out the grants, mandatory retirement savings, risk benefits (such as
broad principles for a developmental social welfare system in unemployment, death and disability benefits) and voluntary
South Africa; retirement savings.
• The Social Assistance Act (2004), which provides the • Social welfare services should be expanded, with more
legislative framework for providing social assistance (the education and training for social work practitioners (social
social grants system); workers, auxiliary social workers, child and youth care
• The Children’s Act (2005), which sets out the principles workers, and community development practitioners) and a
relating to the care and protection of children; review of funding for non-profit organisations;
• The Older Persons Act (2006), which provides a framework • Ensuring that individuals and households that are eligible to
for empowering and protecting older persons; receive social grants receive the support they need to access
• The Non-profit Organisation’s Act (1997), which establishes much-needed grants.
3
Table 1: Key indicators of the health of the social development system
Social Development as a percentage of consolidated government budget, 2017/18 13.5%
Child Social Assistance as a percentage of social development budgets, 2017/18 36%
Child Welfare Services as a percentage of social development budgets, 2017/18 4.3%
Total number of Child Support Grant beneficiaries (aged 0–17), July 2017 (SASSA database) 12.1 million
The percentage of children aged 0–17 receiving Child Support Grants in 2016 (GHS 2016) 63.9
Number of vulnerable individuals accessing food through a network of community nutrition and
415,000
development centres per year, 2016/17
The percentage of children aged 0–4 accessing pre-Grade R ECD services, 2016 (GHS 2016) 35.7
Source: Estimates of National Expenditure; GHS 2015 and 2016; and SASSA database, 2017
Figure 1: The performance of the social development sector in South Africa, 2015 and 2016
% of appeals on social grants that are 70.0
adjudicated within 90 days
81.0
% of children between 0-4 accessing 35.7
pre-Grade R ECD services
31.6
% of children receiving the child support 63.9
grant
63.6
2016 2015 0 10 20 30 40 50 60 70 80 90
Source: Department of Social Development 2017 and GHS 2015 & 2016 (official reports and own calculations)
Takeaways:
• The government is committed to a target of 90 per any exclusion errors.
cent of appeals to be adjudicated within 90 days • Important strides have been made in ECD and the
by the end of the present MTEF. Judged by the introduction of a conditional grant for provinces in
provisional results in 2016, much more work needs to 2017 which will help to enhance the momentum of
be done to achieve this goal. expanding the service to vulnerable children.
• Progress has been made in implementing existing • While great strides have been made in extending
laws and policies and the government is encouraged social grants to children, the provision of social
to complete the process of developing consolidated welfare services accounts for a small proportion
legislation for the social welfare sector. of the budget, especially when compared to the
• Social assistance for children continues to expand provisioning for social assistance, and greater focus is
in coverage and it is vital that the sector makes a required to re-orient investment towards prevention
concerted effort to reach all eligible beneficiaries who and early intervention programmes.
are not presently receiving child grants, to eliminate
4
Section
2.
Social Development
© UNICEF/Bart de Ruigh
Spending Trends
Size of Spending
Table 2 shows that the social development sector plans Department of Social Development, which consumes roughly
to spend almost ZAR180 billion on programmes that 90 per cent of the resources of the sector. The bulk of the
benefit poor and vulnerable children and adults. Provincial expenditures at the national level involves payments of social
budgets are small in comparison to the budget of the national grants to poor, orphaned and disabled children and adults.
Table 2: Summary of nominal national and provincial social development budgets, 2017/18 (ZAR’000)
Department National Provincial % of total
National Department of Social Development (DSD) 160,707,800 89.4%
National DSD transfer to provinces -556,392
Combined provincial DSD budgets 19,023,992 10.6%
Eastern Cape 2,632,799 1.5%
Free State 1,172,295 0.7%
Gauteng 4,442,332 2.5%
KwaZulu-Natal 3,041,364 1.7%
Limpopo 1,821,036 1.0%
Mpumalanga 1,456,009 0.8%
Northern Cape 818,613 0.5%
North West 1,532,570 0.9%
Western Cape 2,106,974 1.2%
Total DSD budget 179,175,400 100%
Source: Estimates of National Expenditure 2017 and Provincial Estimates of Revenue and Expenditure 2017
Figure 2 shows that the social development budgets and only the basic education sector (17%) has a larger share of
(national and provincial) consume approximately 13 per cent government expenditures. Expenditure on social development
of total government resources. This is roughly the same share appears planned and in line with the government’s thinking on
of total government resources that the health sector commands, extending social grant benefits and services in a gradual manner.
5
Figure 2: Consolidated expenditure and allocation on social development as a percentage of consolidated government
expenditure and the GDP (GDP)
16
13.2 13.4 13.0 13.4 13.5 13.5 13.4 Consolidated social
14 development
12 expenditure as a %
of GDP
10
8 Consolidated
6 social
3.6 3.7 3.7 3.7 3.8 3.8 3.7 development
Percentage
4 expenditure as a
2 % of consolidated
0 government
expenditure
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Outcome Outcome Outcome Revised MTEF MTEF MTEF
estimate
Source: Estimates of National Expenditure 2017 and Provincial Estimates of Revenue and Expenditure 2017
Spending Changes main reason for this has been the government’s commitment to
Expenditure on social development budgets has enjoyed link changes in social grant allocations to the prevailing inflation
relative prioritisation, evidenced by the small difference rate. This trend is continued over the MTEF, thus signalling
between the inflation-adjusted estimates and the current further commitment from government to protect vital priority
allocations. No large negative deviations are detected, and the expenditures for poor children and families.
Figure 3: Nominal and inflation-adjusted consolidated social development spending and allocation trends, 2013/14 to
2018/19 (2016/17=100)
250 Consolidated
social
development
200 207 (nominal)
192
179
163 165 165 169 171 174 Consolidated
150 155 160
143 153 social
131 development
100 (real)
50
0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Outcome Outcome Outcome Revised estimate MTEF MTEF MTEF
Source: Estimates of National Expenditure 2017 and Provincial Estimates of Revenue and Expenditure 2017
The Priority of Social Development in the Budget
While the consolidated basic education share of Given an incomplete legislative framework, it is not clear
consolidated government resources is set to decline from what mechanisms and tools the national Department
17.8 per cent in 2013/14 to 16.7 per cent by the end of the of Social Development will use to protect and advance
MTEF, the shares of the social development and health spending in this sector. One possible avenue that is being
functions remain stable over the period above. Expenditure pursued is to provide policy and legislative backing to the National
and allocations to social development consume between 13.2 Development Plan’s (NDP) call for a ‘Social Protection Floor’
and 13.4 per cent of consolidated government resources. In (National Development Plan, 2011). The NDP document embraces
2017/18 alone, the three largest social service sector votes a human rights approach and states that a societal understanding
account for more than 44 per cent of consolidated government is required of what constitutes the “social floor or minimum social
expenditure. The stability of the key social services sectors protection floor below which no one should fall”. More specifically,
enabled the government to expand provision for higher education the NDP elaborates on the requirements of Section 27 of the
and training, especially for the university sector. Constitution, which recognises social security as a basic right.
6
Figure 4: Social service sectors as a percentage of consolidated government expenditure, 2013/14 to 2018/19
100
Other
90
80 Public order and safety
34.4 34.3 34.6 35.0 35.7 36.5 37.3
Percentage of consolidated
government expenditure
70
Economic affairs
60
10.0 9.8 9.3 9.3 9.3 9.2 9.0
50 Health
11.2 11.2 12.6 10.6 10.2 10.1 10.1
40 Social development
13.4 13.5 13.4 14.1 13.8 13.6 13.4
30
13.2 13.4 13.4 13.5 Basic education
20 13.0 13.5 13.4
10 17.8 17.7 17.1 17.7 17.4 17.1 16.7
0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Outcome Outcome Outcome Revised MTEF MTEF MTEF
estimate
Source: Estimates of National Expenditure 2017 and Estimates of Provincial Revenue and Expenditure 2017
The response of the national Department of Social Figure 5: Social assistance as a % of the GDP, 2013, 2014
Development was to initiate a review of the 1997 and 2015
White Paper for Social Welfare (Department of Social
Development, 2016 4), and one of its recommendations 4
endorsed the adoption of a Social Protection Floor. It argues 3.7 South Africa
3.5
that the establishment of a Social Protection Floor will require 3.4 Namibia
Social assistance as a % of GDP
additional resources and the re-prioritisation of expenditure. 3 2.9 Belarus
However, the document is less clear on the details of the re-
2.5
prioritisation of expenditure.
2
The combined social development expenditures translate
1.5 1.5 Argentinia
into a share of 3.6 per cent of the country’s Gross Domestic
1.1 Ethiopia 1.0 Senegal
Product (GDP). South Africa’s spending on social development 1
(excluding other social protection expenditures) is high when
0.5 0.5 Tunisia
compared with other middle-income countries. Its share of the
country’s GDP is almost three times the spending in comparable 0
countries such as Argentina, Senegal and Ethiopia.
Source: World Bank ASPIRE Social Expenditure Indicators (accessed July 2017) and
Estimates of National Expenditure, 2017 5
Note: The Social Assistance definition used by the World Bank is not consistent
with the South African estimates represented above because the South African
figure excludes school feeding, public works and other social expenditures not
under the control of the Department of Social Development.
Takeaways:
• Compared to other social service sectors, expenditure trends among subnational government and continued
on social development has performed well over the six- exclusions of some vulnerable individuals and families
year period considered in this budget brief. invariably mean that the social development budget is
• Expenditure on social development programmes as a far from ‘adequate’.
share of total government expenditure appears stable • Recommendations for a social protection floor are
and averages around 13 per cent. promising, but it is unclear how the introduction of
• The lack of comprehensive social development this practice will be accommodated in a cash-strapped
legislation, the existence of uneven service delivery spending environment.
7
Section
3.
Composition of Social
© UNICEF/Bart de Ruigh
Development Spending
Composition of Spending by Department our analysis is the fact that since 2016/17, spending on social
Given the profile of social grants and their location in welfare services at the provincial level trails national spending
the budget of the national DSD, one would expect the on social grants. A below-inflation spending growth is projected
spending of the national DSD to mirror that of consolidated for 2018/19, while the remainder of the MTEF registers very low
(combined national and provincial) social development growth rates for social welfare programmes at the provincial
spending. This is evident in Figure 6 below. More relevant for level.
Figure 6: Inflation-adjusted spending and allocation trends in social development departments, 2013/14 to 2019/20
(2016/17=100)
4.6
5 National Department
of Social Development
4 3.5
3.1 Consolidated provincial
2.8 social development
Real annual change %
3
3.4 2.0 1.8 Total consolidated
2 1.6 1.5
2.3 social development
1.4 1.6 1.6
1 1.4
1.1
0 0.6 0.4
-1 -0.3
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Outcome Outcome Revised MTEF MTEF MTEF
estimate
Source: Estimates of National Expenditure 2017 and Estimates of Provincial Revenue and Expenditure 2017
Note: Total consolidated social development expenditure nets out the transfers to provincial social development departments.
Composition of Spending by Programme: National DSD
Spending in the national DSD budget totals ZAR161 billion grants allocation is projected to grow by more than 2 per cent on
in 2017/18. The allocation to social grants (Social Assistance average over the medium term. Planned savings and reductions
Programme) and the provision for the administration of social over the previous MTEF baseline reduce the Social Security
grants (Social Security Policy and Administration) are the largest Policy and Administration budget to that of a virtual maintenance
programmes in the budget of the national DSD. The social budget over the corresponding period.
8
Table 3: Programme spending and allocations in the budget of the national Department of Social Development, 2013/14
to 2019/20 (ZAR million)
Real change
2016/17 Real average
between
ZAR million revised 2017/18 MTEF 2018/19 MTEF 2019/20 MTEF annual change
2016/17 and
estimate over MTEF (%)
2017/18 (%)
Administration 339 351 365 388 -2.5 -1.1
Social Assistance 138,699 151,580 163,223 175,579 2.8 2.2
Social Security Policy and 6,997 7,333 7,894 8,338 -1.4 0.2
Administration
Welfare Services Policy 721 1,055 1,295 1,370 37.6 18.0
Development and
Implementation Support
Social Policy and Integrated 378 389 410 435 -3.1 -1.0
Service Delivery
Total 147,133 160,708 173,187 186,110 2.8 2.2
Source: Estimates of National Expenditure 2017
Composition of Spending by the Type of Expenditure: National DSD
As was evident in Figure 6, the growth in the social grant while provision for grant administration takes up the remaining
allocation equals the growth of the entire budget of the spending space (transfers to departmental agencies). The profile
national DSD. This reinforces the dominant position social of social grants in the budget of the national DSD has obvious
grants occupies in the budget of the national DSD. Figure 7 implications for the ability of subnational governments to expand
indicates that between 94 and 95 per cent of the national DSD spending on social welfare services.
budget is devoted to social grants (transfers to households),
Figure 7: Expenditure by type in the budget of the national Department of Social Development, 2013/14 to 2019/20
Fig 7
0.7 0.7 0.7 0.7 1.0 1.1 1.0
100
Other
90
80 Transfers to
Percentage of national social
70 households
60
Transfers to
development budget
50 93.8 94.0 94.3 94.5 94.4 94.3 94.4 departmental
40 agencies
30
20
10
5.5 5.2 5.0 4.8 4.6 4.6 4.5
0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Outcome Outcome Outcome Revised MTEF MTEF MTEF
estimate
Source: Estimates of National Expenditure 2017
Note: Expenditure on compensation of employees and capital expenditure is insignificant and is not reflected in the graph above.
Trends in Social Grants Spending and Allocations
Social grants that target children directly make up about are 60 years and older, research has shown that poor and/or
42 per cent of all grant expenditures. More than ZAR56.2 orphaned children in female-headed households benefit directly
billion will be spent on the child support grant in 2017/18, while from this grant. Almost ZAR3 billion will be spent on the care
corresponding spending on the foster care grant is ZAR5.3 dependency grant, which enables caregivers to provide full-time
billion. While the Old Age grant goes to eligible adults who support to children with disabilities.
9
© UNICEF/Schermbrucker
Table 4: Nominal values of key social grants in 2017/18 (ZAR billion)
% of total
Social grant ZAR, billion Beneficiaries Rand value of grant
grant funding
Old age grant 64.5 Adults: 60 years+ ZAR1,600 (60–74) and ZAR1,620 (75+) 42.5%
Child support grant 56.2 Children: 0–17 years ZAR380 37.1%
Disability grant 21.2 Adults: 18–59 years ZAR1,600 14.0%
Foster child grant 5.3 Children and adults: 0–21 years ZAR920 3.5%
Care dependency grant 2.9 Children: 0–17 years ZAR1,600 1.9%
Source: Estimates of National Expenditure, 2017
The values of the child support, and care and dependency in part, to the government’s attempts to minimise legal and
grants show above-inflation growth for the period administrative burdens by converting the foster care grants for
represented in Table 4, while the opposite growth pattern orphans into an extended (or higher value) child support grant.
is observed for the disability and foster care grants. The real The care dependency grant maintains its real value for the year
value of the old age grant has been maintained over this period. represented in Figure 8.
The decline in the real value of the foster care grant relates,
Figure 8: Inflation-adjusted annual growth in key social grants affecting children in South Africa, 2013/14 to 2017/18 (%):
2016/17=100
-0.6
2017/18 MTEF
Disability Grant
-0.1
2016/17 Revised estimate 2.9
Old Age Grant
5.4
2015/16 Outcome
3.3
Care Dependency Grant
2014/15 Outcome 5.1
-8.9
Foster Care Grant
-3.8
3.1
Child Support Grant 4.5
-10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0
Real annual change %
Source: Estimates of National Expenditure 2017
Note: Real percentage changes are indicated for 2014/15 and 2017/18.
10Figure 9 shows that almost 64 per cent of children received Survey (GHS) and as indicated below, the percentage of children
the child support grant in 2015, and 1.5 per cent of children who have accessed the foster child grant might be lower than
received the foster care grant during the same period. corresponding data provided by the South African Social Security
These estimates were calculated from the General Household Agency (SASSA).
Figure 9: Percentage of children with child support and foster child grants in South Africa in 2016 (children aged 0–17)
Fig 9
Percentage of children receiving CSG
Percentage of children receiving FCG
CSG
80 76.0 73.0 74.7 3.0 FCG
70.2 72.2
70 67.8 66.4 63.9 2.5
60
50 47.3 2.0
41.6
40 1.5
30
1.0
20
10 0.5
0 0.0
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en
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Source: General Household Surveys 2016 (own calculations)
Note: The actual number of foster child grant recipients reported by SASSA is much larger than the estimated numbers from the GHS 2016. At the end of 2015, SASSA 6
reported 427,928 grant recipients against an estimated 284,455 recipients in GHS 2016.
Takeaways:
• The government has succeeded in maintaining the attempts to remove orphaned children from this grant
real value of social grants over the medium term, thus and introduce a new ‘child support top up’ grant, which
continuing a long-standing practice to protect spending minimises the administrative and legal burden on the
on social grants. system, while still maintaining an allocation value in
• Spending on social grants accounts for approximately line with the existing foster care grant.
95 per cent of the spending in the budget of the • A substantial number of poor children are receiving the
national DSD, while roughly 5 per cent of expenditure child support grant and more children are expected to
provides for allocations on the administration of the be covered over the medium term.
grant. • The Department of Social Development has committed
• Key child-specific grants such as the child support and to reducing overall social grant transaction costs, in line
the care dependency grants maintain their positive with reduced budgets over the previous MTEF baseline.
real value, while grant spending that indirectly benefit • While strong spending on social grants offers
children (spending on the old age grant) also grew protection to poor and vulnerable children, this has
above inflation. often come at the expense of spending on services that
• The real decline in the foster care grant relates to are developmental and preventative in orientation.
11Section
4.
© UNICEF/Schermbrucker
Decentralisation and
the Equity of Social
Development Spending
Spending and Allocations on Provincial Social Development Budgets
Table 5 indicates that provincial social development the medium term. These budgets can rightly be regarded as
departments will spend ZAR19 billion on social welfare maintenance budgets, and in the interest of better understanding
services in 2017/18 and these joint budgets are projected key social welfare sectors, the next section focuses on prevention
to grow by 0.2 per cent on average in real terms over and early intervention services, ECD and the financing of NPOs.
Table 5: Spending trends in provincial social development budgets, 2013/14 to 2018/19 (ZAR’000)
Real change
Real average
2016/17 Revised between
ZAR’000 2017/18 MTEF 2018/19 MTEF 2019/20 MTEF annual change
estimate 2016/17 and
over MTEF (%)
2017/18 (%)
Eastern Cape 2,410,459 2,632,799 2,830,906 3,021,797 2.8 1.9
Free State 1,114,101 1,172,295 1,230,023 1,297,976 -1.0 -0.6
Gauteng 4,271,602 4,442,332 4,698,197 4,982,985 -2.2 -0.6
KwaZulu-Natal 2,767,906 3,041,364 3,181,765 3,382,158 3.4 1.0
Limpopo 1,679,839 1,821,036 1,920,534 2,032,940 2.0 0.7
Mpumalanga 1,436,091 1,456,009 1,492,946 1,561,130 -4.6 -2.9
Northern Cape 756,899 818,613 854,006 903,446 1.7 0.2
North West 1,392,691 1,532,570 1,640,719 1,745,474 3.5 1.8
Western Cape 1,963,864 2,106,974 2,204,487 2,329,657 0.9 0.0
Total 17,793,452 19,023,992 20,053,583 21,257,563 0.6 0.2
Source: Estimates of Provincial Revenue and Expenditure 2017
Spending and Allocations on Programmes: Provincial Social Development Budgets
Although prevention and early intervention is central to of the nine provincial social development departments. Gauteng
the social development policy framework, there is a wide spends the largest share of its Children and Families budgets on
variance on spending on relevant services across provinces PEI services (28%), while the Western Cape spends the smallest
(Figure 10). This Budget Brief operationalises prevention and early percentage of its budget on PEI services (7.1%). Similarly-sized
intervention services (PEI) by combining the ‘Care and Services Children and Families programme budgets (for example, the
to Families’ and the ‘Community-based care services for children’ Eastern Cape and Limpopo DSDs) do not imply the same level of
subprogrammes in the Children and Families programme for each spending on PEI services (15% vs 26% respectively).
12© UNICEF/Schermbrucker
Figure 10: Prevention and Early Intervention Services as a percentage of the Children and Families Programme Budget,
2017/18
Fig 10
2,500 27.6 30
25.9
children and familes budget
Children and families budget
PEI as a percentage of the
2,000 25
17.7 20
(ZAR million)
1,500 14.8
13.2 15
11.8
1,000 10.2 7.8
7.1 10
500 5
2,100
1,301
784
766
652
558
447
402
275
0 0
g
l
po
pe
pe
ga
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t
pe
ta
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at
Na
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Ca
an
Ca
W
St
ut
Children & families
Lim
al
u-
Ga
n
rn
n
ee
rth
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er
er
ul
te
Fr
pu
No
st
rth
aZ
PEI as a percentage of
es
Ea
M
Kw
No
W
children & families
Source: Estimates of Provincial Revenue and Expenditure 2017
Spending on ECD services for children aged 0–4 as a The numbers for the period 2017/18 are boosted with the
share of total provincial DSD budgets has improved from introduction of the national ECD conditional grant, which aims
an average 12 per cent prior to 2016/17 to almost 15 per to increase the number of ECD centres (and children, therefore)
cent for the remainder of the period represented below. that have access to the ECD subsidy.
Table 6: ECD provincial budgets as a percentage of provincial social development budgets, 2013/14 to 2019/20
Average share
2016/17 Revised
between 2013/14 2017/18 MTEF 2018/19 MTEF 2019/20 MTEF
estimate
and 2015/16
Eastern Cape 7.1% 10.8% 11.8% 13.0% 12.9%
Free State 18.6% 19.8% 21.1% 20.3% 19.4%
Gauteng 10.5% 10.5% 10.9% 9.9% 9.6%
KwaZulu-Natal 10.9% 14.4% 16.4% 16.5% 16.7%
Limpopo 14.7% 16.0% 17.4% 19.2% 18.6%
Mpumalanga 11.7% 18.7% 18.3% 18.3% 18.6%
Northern Cape 11.3% 11.2% 11.8% 12.1% 12.0%
North West 10.3% 10.7% 11.4% 13.7% 13.6%
Western Cape 15.5% 14.8% 14.9% 14.9% 14.3%
Total 11.7% 13.4% 14.3% 14.5% 14.3%
Source: Estimates of Provincial Revenue and Expenditure 2017
13Overall, the Children and Families budget increases its the Western Cape show declining shares. As reported earlier,
share of provincial social development budgets from 34 per the introduction of the ECD conditional grant in 2017/18 and
cent in 2013/14 to more than 38 per cent in 2017/18. Gauteng expanding allocations on this programme explains part of the
has maintained its 47 per cent share, whereas Free State and growth in the Children and Families budget.
Fig 11 11: Children and families as a % of provincial DSD budgets, 2013/14 and 2017/18
Figure
Percentage of total provincial DSD budget
46.6
46.8
50
2013/14
42.8
43.0
45
39.2
38.1
38.3
38.2
35.8
40
33.9
33.6
33.1
2017/18
30.9
30.1
35
28.1
29.1
29.0
26.3
26.2
30
25
19.7
20
15
10
5
0
a
l
g
po
ga
e
t
e
te
e
ta
es
ric
en
p
p
p
a
Na
po
an
Ca
Ca
Ca
W
St
Af
ut
Lim
al
u-
Ga
n
rn
rn
rth
ee
th
m
er
ul
e
te
u
Fr
pu
No
aZ
rth
st
So
es
Ea
M
Kw
No
W
Source: Provincial Estimates of Expenditure 2017
In absolute terms, Gauteng set aside the largest allocation per child, which is to be expected given the large population
on the Children and Families budget (almost ZAR2.1 billion) differences between these provinces. Six provincial departments
in 2017/18, while the Northern Cape made provision for a of social development plan to spend below the national average,
ZAR275 million budget. When adjusting the allocations for the which is clearly driven by the large per-child allocations in the
provincial child populations, the Northern Cape spends about Northern Cape and Gauteng.
ZAR700 per child, whereas Gauteng spends just under ZAR600
Figure 12: Children and Families allocation per child (ZAR), 2017/18 (children aged 0–17)
Fig 12
South Africa 391
Northern Cape 677
Gauteng 571
Free State 503
Mpumalanga 365
Limpopo 356
Western Cape 341
KwaZulu-Natal 319
North West 314
Eastern Cape 291
Per child allocation, ZAR 0 100 200 300 400 500 600 700 800
Source: Provincial Estimates of Expenditure 2017 and General Household Survey 2016 (own calculations)
The review of the social welfare sector (Department of NPOs that provide services for children, while over the entire
Social Development, 2016) highlights the centrality of period displayed in Figure 12 above, poor and variable funding
financing for NPOs and the need to bring more stability is common across all provincial DSD budgets. The situation is
to NPOs that deliver services to children and families. In particularly acute for the Free State and Limpopo.
2017/18 alone, four provinces plan to spend less on transfers to
14Figure 13: Real annual growth of NPO transfers within Children and Families Programmes, 2013/14 to 2019/20
Eastern Cape 6.9
Free State -4.4
Gauteng 1.6
KwaZulu-Natal 0.7
Limpopo -2.9
Mpumalanga 0.9
Northern Cape -2.2
North West 17.4
Western Cape -3.5
South Africa 0.5
-25 -20 -15 -10 -5 0 5 10 15 20 25 30 35
2019/20 2018/19 2017/18 2016/17 2015/16 2014/15
Source: Estimates of Provincial Revenue and Expenditure 2017
Note: Percentage changes are indicated for 2017/18 only.
The White Paper Summary Review report identified some • In the absence of a finalised policy and financing framework,
of the most pressing challenges facing the financing of many NPOS are forced to cut staff and cut back on key
NPOs. These issues are: service delivery areas;
• The total funding available to NPOS to deliver services; • In the context of funding cuts, the report argues that there is
• Differences in NPO financing across provincial departments; a real danger that NPO transfers may be further reduced.
Takeaways:
• Provincial DSD budgets are planned to grow from an are concerns that prevention and early intervention
allocation of R19 billion in 2017/18 to R21 billion at the services are not funded at the same level as ECD
end of the MTEF. services.
• Provincial budgets are projected to grow at a real • The key programme for children at the provincial
average annual rate of 0.2 per cent, which is not enough level, Children and Families, displays varying per-child
to cope with increasing demands for children services. spending and three provinces are spending below (an
• Spending on ECD budgets continues to grow due already low) national average in 2017/18.
to expanding allocations in earlier years and the • Transfers to NPOs that deliver services to children
introduction of a dedicated grant in 2017/18. and families, show variable performance and this is
• While the growth in ECD budgets is admirable, there particularly worrying in the Free State and North West.
15Section
5.
Financing the Social
© UNICEF/Pirozzi
Development Sector
In terms of the financing of provincial governments, division of revenue (using a formula to divide resources among
Section 214 (a-c) of the Constitution 7 makes provision for provinces), and through special allocations (conditional grants
three revenue sources. These include a vertical division of that have strict conditions for their use).
revenue (among the three spheres of government), a horizontal Table 7 presents the components and corresponding weights of
the provincial revenue-sharing formula.
Table 7: Distributing the equitable shares by provinces, 2017
Economic
Education Basic share Institutional Weighted
Health (27%) Poverty (3%) activity
(48%) (16%) (5%) average
(1.0%)
Eastern Cape 15.1% 13.5% 12.6% 16.3% 7.6% 11.1% 14.0%
Free State 5.3% 5.3% 5.1% 5.2% 5.0% 11.1% 5.6%
Gauteng 18.0% 21.8% 24.1% 17.3% 34.3% 11.1% 19.8%
KwaZulu-Natal 22.3% 21.7% 19.8% 22.2% 16.1% 11.1% 21.1%
Limpopo 13.0% 10.3% 10.4% 13.6% 7.1% 11.1% 11.7%
Mpumalanga 8.4% 7.3% 7.7% 9.1% 7.5% 11.1% 8.1%
Northern Cape 2.3% 2.1% 2.1% 2.2% 2.1% 11.1% 2.7%
North West 6.5% 6.7% 6.8% 8.0% 6.5% 11.1% 6.9%
Western Cape 9.1% 11.3% 11.3% 6.1% 13.6% 11.1% 10.1%
Total 100% 100% 100% 100% 100% 100% 100%
Source: Budget Review 2017
Note: Green represents the highest value, while red represents the lowest value for each component and the total weighted share by province.
Box 1
Let’s imagine how this formula works in practice. If R100 billion was available to be spent on provinces, then the
Eastern Cape provincial government should receive 14% of R100 billion (or R14 billion). Almost half of this money (48%)
would have been decided using the education component. That means of the R48 billion decided through the education
component, the Eastern Cape government would have received 15.1% of R48 billion (or R7.2 billion). For the health
component, the Eastern Cape is entitled to 13.5% of the R27 billion (or R3.6 billion). The formula assumes that the cost
of running government is the same for all provinces and the Eastern Cape will receive 11.1% of R11.1 billion (or R1.2
billion). The same calculation is made for all the components; these are tallied and the final shares will be paid over in
quarterly instalments during the financial year.
16© UNICEF/Pirozzi
The White Paper Summary Report argues that the All these options will have to be discussed against a
challenges in social development funding could be background of fiscal space for programmes and services
addressed through a revision of the provincial equitable that benefit children. A UNICEF-commissioned study into
shares formula. The White Paper Summary Report fiscal space in South Africa 8 has highlighted several issues.
acknowledges that a change to the formula does not compel Some of the salient findings include: (i) levying taxes on the
provincial treasuries to better fund social welfare services at consumption of luxury goods and introducing the much-
the subnational level, but provincial DSD could anchor budget discussed sugar tax could lead to a sizeable amount of new
bids for better funding of social welfare services by citing the revenue that could be used to finance priority expenditures in the
broader intent of the prevised provincial allocation formulae. Two social services sector; and (ii) building on the ongoing efforts to
options were presented, namely: (i) increase the existing poverty achieve cost-savings, such as by reducing unnecessary travel,
component because of the implied correlation between poverty curbing the use of external consultants and generally decreasing
and social development expenditures; or (ii) introduce a new spending on non-priority areas that have a poor spending record.
social development component (akin to education and health) This could lead to the better application of resources currently
that allows for some dimension of poverty (such as ‘rurality’) to available in the social development sector for the education of
be considered more explicitly. The White Paper Summary Report children.
argues for the second option and it is believed that these options
are under discussion with the National Treasury.
Takeaways:
• The policy option to include a social development this will force social development authorities to be
component in the government’s allocation formula more effective at delivering key social welfare services.
holds promise, but advocacy by national and provincial • There are several options that can be pursued by the
DSD for better funding of social welfare services is still South African government to increase fiscal space for
required at the provincial level. priority expenditures such as child welfare, but it is
• The long-assumed fiscal space that existed for the unclear how local political dynamics will affect such
expansion of priority expenditures is constrained and deals and inevitable compromises.
17Endnotes
1 According to the Medium Term Strategic Framework of South Africa on progress made in achieving the relevant
(MTSF) document (http://www.gov.za/sites/www.gov.za/ outcome.
files/MTSF_2014-2019.pdf), the government defines social 3 The Presidency. The National Development Plan 2030: Our
protection as an umbrella concept that includes: future – make it work. Pretoria, Government Printers, 2011.
• Social assistance and social welfare services provided by 4 The Department of Social Development. Summary report
the ten social development departments; on the review of the White Paper for Social Welfare, 1997
• Access to basic services at the local government level; Ministerial Committee September 2013 to March 2016.
• Free basic education in 60 per cent of the country’s Pretoria, Government Printers, 2016.
poorest schools; 5 The data were downloaded from the social indicator website
• Free health care for pregnant women and children under of the World Bank. [accessed 20 July 2017].
• Statutory social insurance policies (such as the 6 Data were downloaded from the SASSA website: Fact
Unemployment Insurance Fund); sheet: Issue no 12 of 2015 – 31 December 2015 A statistical
• School nutrition and school transport; summary of social grants in South Africa: [accessed 13
labour market; August 2017].
• Income support for the working-age poor through public 7 Legally, these constitutional provisions find expression in the
works programmes; annual Division of Revenue Bill/Act that accompanies the
• The redress of inequalities that are inherent in the system main budget documentation at the start of the new financial
due to apartheid. cycle. The Division of Revenue Bill/Act is particularly helpful
2 The government has adopted an Outcomes Framework that in listing in detail the conditions under which conditional grant
is based on key issues addressed in the country’s National funding should be used, including reporting requirements and
Development Plan and the government’s electoral mandate. the duration or lifespan of the grant.
There are 14 outcomes (including Outcome 13 that involves 8 UNICEF, National political economy analysis and fiscal space
the Social Development Ministry) and the responsible profiles of countries in Eastern and Southern Africa: fiscal
minister is required to report to the President of the Republic space analysis – South Africa. Rotterdam, UNICEF, 2017.
© UNICEF/Schermbrucker
18United Nations Children’s Fund Equity House 659 Pienaar Street Brooklyn Pretoria 0181 www.unicef.org/southafrica
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