Basic Education Laws Amendment (BELA) Bill: engagement with FFC

Meeting report

Chairperson’s opening remarks

The Chairperson said the meeting followed the concern expressed by Members of the Committee and the public regarding the possible costing and financial implications of the source of funding for the Basic Education Laws Amendment (BELA) Bill. She referred to the meeting of 2 February, where the Department of Basic Education (DBE) had that National Treasury (NT) had confirmed the budget for BELA Bill, and that NT should brief the Committee. An invitation had been extended to NT to brief the Committee on 19 March, but later, it received a letter indicating that the BELA Bill was regarded unfunded in terms of the Public Finance Management Act (PFMA), noting the relative provisions. In addition, the NT was unable to brief the Committee on a bill that did not belong to them, as it had been introduced by the DBE.

Briefing by Financial and Fiscal Commission: Cost Implications of BELA Bill [B2-2022] 

Mr Chen-Wei Tseng, Head of Research, Financial and Fiscal Commission (FCC), gave an overview of the Commission's mandate. He expressed appreciation for the FFC's significant opportunity to brief the Committee on a matter that was determining the financial and fiscal flows and inter-governmental relations of the provincial budget. He mentioned concerns the FCC had in terms of how the BELA Bill would affect the financial arrangements of the provinces. Also, there was concern about how easy it was to move to just another grade without paying attention to how the gap on unfunded considerations, such as education infrastructure, may affect the livelihood and employability of the learners in future, considering that education was an intergenerational investment.

Ms Sasha Peters, Research Specialist, FFC, continued the presentation by sketching the context within which education was delivered in South Africa. She referred to Section 29(1) (a) of the Constitution, which enshrines education as a basic right, and Schedule 4 of the Constitution, which lists education as a concurrent function to be shared between the national and provincial governments. Thus, the national sphere was responsible for policy development and oversight, whereas the provinces were responsible for implementation. She also referred to the National Development Plan (NDP), which emphasises the importance of the role of basic education in building the foundation for long learning.  

She touched on the institutional changes in the education system in South Africa since 2009, from the split of the DBE and the Department of Higher Education and Training (DHET), to the Early Childhood Development (ECD) function shift from the Department of Social Development (DSD) to the DBE in 2022.

Ms Peters gave a quick overview of the funding of basic education. The presentation included an overview of the consolidated government expenditure by function over the 2024 medium term expenditure framework (MTEF).

The purpose was to bring to light the constrained nature of the basic education sector, and its lacklustre performance in terms of delivery and outputs. Moreover, despite the merits attached to making Grade R compulsory, the implementation of the amendments would put a further burden on the system. In addition, additional resources would need more money to ensure proper implementation of the Bill.

She indicated that basic education was projected to grow more rapidly relative to the other components within the learning and culture functional category. It was projected to increase by an annual average growth rate of 4.7%, relative to the 2.5% and 0.6% projected for post-school education and training (PSET) and arts, culture, sport and recreation respectively.

Ms Peters also presented an overview of the provincial funding of basic education. She provided a picture of Grade R funding within the Intergovernmental Fiscal Review (IGFR) system.

A table that illustrated the consolidated expenditure, taken from the 2024 Divisions of Revenue, showed that the DBE would receive double the allocation compared to the Department of Higher Education and Training (DHET). The DBE was projected to receive R324 billion, while the DHEAT would receive R144 billion.

She gave an overview of what the BELA Bill was all about, and the DBE funding of the Bill, and mentioned that the FFC had looked at the projections regarding the anticipated cost of implementing the Bill. She said that the DBE's costing had focused mainly on the fact that Grade R would be compulsory, thus making an additional year of compulsory education. She noted that the amendments were in line with the National Development Plan (NDP), which sets a target of universal access to two years of ECD. According the DBE exercise, the costing of the proposed amendment would relate mainly to the need for more educators and classrooms.

The FFC took Members through the personnel costs associated with the implementation of the Bill, and indicated that expanding schooling by the compulsory Grade R was cost-inclusive, and would require an estimated R56 billion. The estimated personnel costs due to expanding compulsory schooling by one year to include Grade R, would require R5.3 billion. This would be propelled by the alignment of the ECD educators' salaries, which was benchmarked in the basic education sector, and the need to appoint additional Grade R educators due to the anticipated enrolment increases. A total of 19 767 ECD educators would need to be brought in line with conditions of service of educators in the broader basic education sector. An estimated R2.6 billion would be required in Year 1 to address the pay disparity. However, that was not a once-off annual cost. Qualification levels would also inform remuneration decisions. Assuming a teacher-learner ratio of 1:40, it was estimated that an additional 6 560 Grade R educators would be required, requiring a total of R2.7 billion a year. It gave a breakdown of the cost of additional Grade R educators by province.

The FFC presented the cost for infrastructure associated with implementing the BELA Bill. It mentioned that expanding the schooling to include Grade R would necessitate additional infrastructure such as additional mobile classes, or the conversion of ordinary classrooms into Grade R classrooms. Already, 969 schools had indicated plans to introduce Grade R classes over the medium term. Overall, 7 088 schools in South Africa required Grade R. KwaZulu-Natal (KZN) had the highest number of schools with Grade R, while the Eastern Cape seemed to have the highest number of schools that would require Grade R. R12.5 billion would be required for additional infrastructure requirements. Potential sources of funding to cover the additional infrastructure needed would be the provincial equitable share (PES), the education infrastructure grant and the schools infrastructure backlog grant.

The presentation noted additional needs not included in the Bill, such as special infrastructure ablution facilities. The Bill did not provide clarity on the infrastructure needed for learners with special needs.

In addition to increasing critical inputs, such as educators and infrastructure, growth in learner numbers would also necessitate increases in other interventions, notably, the National School Nutrition Programme (NSNP). Therefore, the expansion of compulsory school attendance would mean upward pressure on the NSNP. Consideration was given to learners with special needs, who require specific types of learner-teacher support material (LTSM) such as assistive devices. In addition to Grade R educators, Provincial Education Departments were likely to require additional staff to assist in assessing schools’ admissions (amendment of section 5) and language policies (amendment of section 6), as well as staff to conduct pre-registration consultations with home education applicants (section 51).

Remarks and Recommendations

The FFC concluded its presentation making comments and making specific recommendations on costing.

It commended the steps taken by government to ensure alignment between current practice and education sector legislation, and its progress in terms of recognising the importance of ECD through the expansion of Grade R into the formal basic education sector.

The FFC further noted that the estimated cost of implementing the BELA Bill was R17.7 billion. With respect to the assumptions underpinning the financial implications of the BELA Bill, the FFC recommended that:

• To ensure a realistic needs assessment, the norms informing planning for educators (a 1:40 ratio) and infrastructure (1:30) must be consistent to avoid issues such as overcrowding.
• Government should consider alignment with the norms in the ECD sector, where the learner-educator ratio was 1:30.
• Estimates of personnel-related costs were conservative, given the absence of cost-of-living (CoLA) considerations. This was important, given the fiscus-wide impact of CoLA adjustments.
• Learner numbers would prompt growth in the demand for ablution facilities, LTSM, learner transport, the school nutrition programme and special needs education. The financial implications related to these aspects should be factored in.
• From a funding perspective, the amendments and associated costs were being proposed in a strained fiscal environment, so if the benefits of expanding compulsory education to include Grade R were to be realised, additional funding to the sector would be required
• Over and above costs related to the inclusion of Grade R as compulsory, broader administrative types of costs were likely to arise from implementing the BELA Bill. These were related to requirements for PEDs to assess school admission and language policies. Similarly, there were likely to be costs related to the PEDs consulting home education applicants.

(Please refer to the presentation document)

Discussion

Mr F Christians (ACDP) expressed his concern, commenting that the BELA Bill was not ready for implementation. He indicated that even if the BELA Bill could pass, there would be no funding available for its implementation, especially in relation to the entrance of Grade R into the schooling system.

The Chairperson wanted to know why the FFC believed it had reached a figure of R17.7 billion conservatively without the uncontested matters it had mentioned, whilst the DBE had got R16 billion. According to the FFC presentation, other considerations, such as the CoLA, LSTM, and NSPS, were not funded. If these were costed, would the conservative costing of the Bill exceed the estimated R18 billion? She wanted to know from the FFC where the DBE would find the money for the unfunded considerations.

FFC's response

Ms Peters responded on the specifics of the costing. She said the FFC had received a document titled, "Costing of financial implications of provisioning of additional Grade R educators as a result of the proposed BELA Bill revisions,” as well as one for the cost of government for the provision of Grade R infrastructure. She said the cost estimate figures were DBE cost estimates. She gave an example, where the FFC's reference to R5.2 billion with respect to personnel was based on page 4 of the Bill, but the DBE had indicated that R2.6 billion was needed to bring the pay scale of ECD educators to the level of educators in the rest of the basic education sector. The FFC's additional R2.6 billion was for the employment of additional ECD educators.

She said that in the R12 billion costing for infrastructure, the only item mentioned was classrooms, yet the inclusion of Grade R in schools would require ablution infrastructure, as well as security infrastructure. In addition, there was no mention of the yearly adjustments in relation to the CoLA. There were also no additional manpower costs, should the PEDs want to assess language and admission policies, and consultation with home-schooling applicants was not factored in.

Mr Tseng made further input, alluding to the fact that all South African legislation needed to be costed, but the FFC had noted gaps in various departments.

Concerning infrastructure, he advised that the Department could introduce innovative ways of using infrastructure, although that might require a differentiated approach.

Concerning items such as the LTSM and learner transport, he was of the view that some collaboration with various provincial departments could be considered.

On the question of funding, he said there were reserves within different spheres of government that had been accumulating over the years, even during the 2009 crash and COVID-19 pandemic, but it seemed those reserves were not used effectively. The FFC was of the view that the government could devise creative arrangements for the use of those reserves.

Follow-up discussion

Ms Baartman raised a concern on the legal requirement regarding the costing of the implementation of the Bill. She wanted to know whether the non-costing of the Bill was in conflict with the Constitution.

Mr Tseng responded that there were provisions in the Constitution that addressed costing implications. He referred to Section 195(1) (b), which provides for the promotion of efficient and effective use of resources. In addition, he noted that the PFMA had provisions that were related to the costing of legislation. He undertook to seek a legal opinion on the legalities of uncosted legislation, and would provide a written response in that regard.

Regarding the reprioritisation exercise, he said that there was more work to be done before the determination. The FFC was certain that every year there was cash left over after the operating activities of the various spheres of government. It was therefore in the process of researching that aspect to look at the discrepancy between the budget and the actual expenditure at the end of the financial year.

The meeting was adjourned.