Division of Revenue Bill: public hearings

Standing Committee on Appropriations

13 March 2018
Chairperson: Ms Y Phosa (ANC)
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Meeting Summary

The Standing Committee on Appropriations held a public hearing on the 2018 Division of Revenue Bill, and said that although it had highlighted the importance of educating communities about the significance of the Bill, it had received only one response, which was from Equal Education (EE).

In their submission, EE raised concern over the 6.93% increase in funding available for basic education in the 2018/19 financial year, saying the funds were not adequate to keep up with the needs in the Department of Education. Support must be provided to the DBE and Provincial Education Departments, not implementing agents. This intervention should incentivise transparent and effective infrastructure planning. EE also said that the lack of learner transport was a major barrier to education, and had made recommendations in their submission for the Department of Basic Education (DBE) to offer a grant in this regard, as promised.

EE also recommended that the equitable share formula should take into consideration the factors contributing to the high cost of rural education, including the relative distribution of schools across the five quintiles. Rural-focused indicators should be added, particularly in the equitable share formulas of the provinces.

In discussion, Members commented that the provision of water and sanitation in rural schools was inadequate, and the quality of education was still sub-standard. This indicated a failure to implement the water and sanitation norms and standards introduced in 2013. It was also indicated that 74% of grade four learners in South Africa did not know how to read with comprehension, which indicated a failure of the Early Childhood Development (ECD) programmes.

The Chairperson said that National Treasury needed to look into the Financial and Fiscal Commission (FFC) recommendation of possibly adding rural-focused indicators to the provincial equitable share formula. Equal Education’s suggestion that the 2013 water and sanitation framework should be looked into and possibly made regulatory, should also be considered.

Meeting report

The Chairperson of the Committee welcomed everyone and stated the importance of constitutional provision of public participation in scrutinizing the Division of Revenue Bill so that government policy outcomes reflect the would of the people. The Chairperson states that there were three apologies from members of the committee who couldn’t make it to the meeting.

Equal Education and Equal Education Law Centre submission

Ms Philile Ntombela-Masson, Researcher, Equal Education (EE) gave the background to the submission made by the EE on the 2018/19 Division of the Revenue Bill. The 2018/9 funding for basic education had increased by 6.93% from the previous year, which raised a concern on whether it would be able to meet the pressing needs for Early Grade Reading. She further spoke to the cost of addressing infrastructure backlogs with regards to the reductions to the infrastructure grant. 

EE was a major advocate for learner transport, as their research showed that the lack of transport was a serious barrier to education, and may sometimes go as far as causing learners to drop out. They recommend that government provide funding for transport in the form of conditional grants. The Minister of Education had made public commitments in this regard during her 2017 Council of Education Minister’s speech, saying that she would consider some form of funding for transport for learners. Furthermore, the Director General (DG) of Education had also mentioned that provision for such a grant would be made in the 2018/19 budget, EE had observed that there seemed to be no delivery in this regard. Learner transport was an issue across all provinces, but especially the rural provinces, and EE asked the Committee again to assist in making sure that something was being done.

Ms Nurina Ally, Executive Director, Equal Education Law Centre (EELC), presented a revision of the equitable share formula which had previously been presented to the Committee by the EE and EELC. Their main concerns had consistently been the failure of the equitable share formula to cater for the higher costs of delivering education, particularly in rural provinces. EE had noted National Treasury’s efforts to review the formula, but was still awaiting firm time frames that would be made public. She acknowledged that the first stages of the review seemed to be under way.

EE and EELC submitted to the National Treasury that their review must consider factors that contributed to the higher cost of rural education. Treasury had previously stated that they would be exploring the possibility of adding rural focus indicators to the provincial equitable share formula, to strengthen the quality of inter-governmental transfers. EE and EELC had presented a report to the representatives of the national and provincial treasuries on how the equitable share formula could be adjusted to make it more efficient, and this report had been welcomed. It included ways in which the formula could be adjusted, exploring two options -- adjusting the provincial share by a geographical factor that favoured rurality, and also by taking into account the relative distribution of schools in each province across the five quintiles.

Equal Education encouraged National Treasury to take into account their recommendations and to also provide firm timelines on the process so that EE and other organisations could continue to contribute to the process.


A representative of National Treasury referred to the reduction in conditional grants to the education sector, and said that the grant was going through a process at the Department of Basic Education (DBE). The challenges were being addressed with implementing agents, and the programme would not be derailed. National Treasury had previously had engagements with Equal Education on the equitable share formula, and the process was ongoing. Treasury could provide set timelines only when sector departments had provided data, since they were the sole custodians of data and had also endorsed the processes. She assured the Committee that there seemed to be more interest and more commitment to moving these processes forward.

Furthermore, in Treasury’s engagements with DBE over rural and urban tension, there was an acknowledgement that there might be rural costs that were not explicitly accounted for in their particular share. There had been further discussions on the cost per child, and how it could be a driver in rural and urban tensions, but the process was still ongoing. Treasury, however, would not engage with the public until they had something concrete to work on. Treasury solicited input from the DBE and sector departments so that they had something to engage on. Additionally, on the rural and urban tension, they had solicited input from the Financial and Fiscal Commission (FFC), given that they were a more independent referee when it came to this. This was because the FFC acknowledged that there were rural tensions when it came to costing. However, equitable shares were not just for education -- it existed across different sectors within the provinces.

Mr A Shaik Emam (NFP) asked Treasury if they were really doing something about these challenges, because a lot of the valuable information brought forward by EE had been discussed previously. He noted that the reduction of the funds posed a huge problem, and some of these problems were caused by the mismanagement of the funds, which must be Treasury’s problem. Despite all the mechanisms that had been put in place, there was a lack of implementation and consequence management. He suggested that emphasis must be put on having the right people doing the job so that they could produce the desired product, since sometimes the problem was not the resources, because even when the resources were available they were not being spent. A problem faced by the Committee was getting to the root of who the real culprits were. Only general information was being provided, which did not point to the real culprits, and the Committee had repeatedly asked that the real culprits were made to perform.

He commented on the quality of education, and said that a lot of work needed to be done, especially at the lower level, particularly in rural areas, and the budgets for rural schools should also be bigger. There was also a problem with sports and recreation at these rural schools, and he suggested that government departments work hand in hand to better the state of these rural schools. It was because the role player departments were working in silos that there appeared to be no progress.

Ms D Senokoanyane (ANC) said that the division of the revenue not only posed a problem for the DBE, but for all other departments. The infrastructure budget had been reduced across all departments, and school infrastructure was a big challenge. There were inadequate schools and poor infrastructure, especially in rural areas, but the infrastructure budget was being under-spent. She endorsed the fact that rural schools needed to be a priority and get special attention.

The Chairperson asked the for the views of Equal Education and National Treasury on the issue of the 74% of grade four learners who could not read, and whether there were any interventions they thought Parliament could make. She felt strongly about the big backlog in the Eastern Cape, and asked EE what they considered the main contributing factors with school infrastructure, specifically in the Eastern Cape. How could non-performing implementing agents be dealt with, and how could these agents be empowered to ensure effective delivery of infrastructure?

Ms M Manana (ANC) commented on the issue of the grade 4 learners that could not read, and suggested that the DBE needed to expand on the early grades’ reading style. She said that if the ECD programme was really failing to build the schools, the DBE should look into handling implementing agents themselves and see if they could deliver better.

Equal Education’s response

Ms Ntombela-Masson responded that to improve early child reading, the DBE had daily lesson plans for teachers and learners, and were also encouraging parent involvement. There were other factors that contributed to early child reading, like the language of teaching and learning. EE would send this information on the possible interventions to the Committee if it wished.

EE had made a suggestion that over and above allocating funds, Treasury should also equip the different departments with skills on how to spend the money effectively. With provinces like the Eastern Cape, where there was a notable backlog, there needed to be a way that this could be dealt with systematically. EE would also like more clarity from National Treasury on what was really being done with non-performing implementing agents, and the possibility of making their actions available to the public.

Ms Ally encouraged transparent and proactive engagements in the process of reviewing the equitable share, and would also like information on the responses to the interventions made from Treasury. It was not easy to provide specific factors for the failure of the equitable share formula, but a contributing factor could be the failure of inter-governmental cooperation at every level.

The National Treasury representative responded on the delivery of infrastructure, and said that there was a difference between the backlog grant, which was run by the DBE to clear backlogs, and the educational infrastructure grant, which went straight to the provinces and was overseen by sector departments. She said that National Treasury played an oversight role and the DBE played the monitoring and planning role, and they needed to be aware of not overstepping each other’s role, but to work in collaboration. Treasury had started an infrastructure delivery improvement programme ten years ago which had also been extended to provinces, and with this programme they had realised that the problem lay with the delivery of the infrastructure. As part of the programme, an incentive had been introduced to the planning of the infrastructure. There had since been an improvement in the planning of infrastructure in provinces. National Treasury responded to recommendations by the public through committees.

Mr Shaik Emam commented that the issues brought forward by Equal Education had been heard before by the Committee, and the Committee had also sent reports to Treasury. The main issue seemed to be whether the problems were actually being heard or if something was being done. He emphasised that the inputs were not being given the desired attention and response.

Ms Manana commented on a suggestion brought forward by Equal Education on parent involvement, and maintained that majority of the parents were young and were not active participants in their children’s education, and that something needed to be done to hold parents accountable for their children’s education.

Mr Shaik Emam said that the water and sanitation programmes, and the quality of teaching and teachers at rural schools, were sub-standard. Rural areas must be made attractive to teachers in terms of accommodation in order to attract quality teachers.

Ms Senokoanyane asked if Equal Education was in communication with the provinces.

Ms Ntombela-Masson responded that the problem was that departments were working in silos, and it became an issue when a unified response was not given. It would be preferable that when dealing with issues, the departments dealing with different issues were present. She said that EE campaigns were also provincially based, so they did engage with provinces. EE suggested that for children to learn at home, there needed to be different ways to equip parents.

Ms Ally said that in 2016, there were still more than 9 000 schools with inadequate sanitation. The difficulty was that the uniform norms and standards on water and sanitation in schools were treated as guidelines rather than binding regulations by government departments.

The National Treasury representative maintained that issues with norms and standards were things that Treasury might not be able to pick up on, but that the DBE would.

Mr Shaik Emam disagreed, and said that the DBE took charge only when the infrastructure of the school was completed. It was a problem of the implementing agents.

The National Treasury representative said that the implementing agents sat with the DBE, and the guidance should be provided by the DBE before it went to the implementing agents. Only the management of the contracts and payments was the role of Treasury.

Mr Shaik Emam said that he was not sure if the implementing agents had the necessary skills to detect what was wrong, because money was being spent and one still had the same problems. He asked about measures that could be put in place to ensure that value for money was received.

The Chairperson said that some of the comments made at the public hearings were just considerations for National Treasury to look into. She urged Treasury to look into the FFC recommendations of possibly adding rural-focused indicators to the provincial equitable share formula. She highlighted that Equal Education had also suggested that the water and sanitation framework that had been introduced in 2013 be looked into and possibly made regulatory.

The National Treasury representative responded that they did meet up with the FFC, but they needed data from the sector departments to be able to deal with certain issues. They were reviewing the quintile system and the possibility of having the costs follow the child, instead of an area.

The meeting was adjourned.

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