Schools Funding Formula: Department briefing

Basic Education

19 October 2004
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Meeting Summary

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Meeting report


19 October 2004

Professor S Mayatula (ANC)

Documents handed out:
Funding of Schools: Department presentation

The Committee was briefed on the policy issues and proposed amendments to 'Norms and Standards' for school funding that would be released in the next few weeks. School allocations (per learner) would be distributed on a 'pro-poor basis' through a system of poverty quintiles. Proposed amendments to the Norms and Standards would provide for allocations to be calculated nationally, rather than provincially. Proposed amendments provided for additional fee exemptions for poorer learners. In the ensuing discussion, the Committee dealt with many topics, including possible stigma regarding non fee-paying schools, municipal service rebates to schools, and the balance between school quality and provincial equity.


Department briefing
Mr Duncan Hindle (Department Deputy-Director General, Planning and Monitoring) presented proposed amendments to the norms and standards that had to be approved by the Minister. The main legal background of the proposed amendments was the South African Schools Act of 1996, the cornerstone of the post-apartheid institution for schools. The subordinate policies on which the amendments would build, included the 'pro-poor' National Norms and Standards for School Funding (1998). The Cost of Education Study, which had shaped the 2003 Plan of Action, had called for greater equity between provinces and sustained removal of school fees in the poorest communities. The subordinate regulations on which the amendments would build, included the Regulations for the Exemption of Parents from Payment of School Fees (1998). The new Draft Norms and Standards for Funding and the New Exemption Regulations would soon be released for public comment, and should be implemented by 1 January 2006.

Mr Hindle then discussed the school allocations provided through funding allocations from the Provincial Departments of Education. School allocations would be paid to schools on a per learner basis, with greater allocations provided to poorer schools. Fee exemptions included automatic fee allocations for groups of learners such as orphans. Other exemptions were available upon application for families with insufficient incomes. There was a new proposal that any learner receiving a child grant should be exempt from paying school fees.

He then reviewed the revised draft Norms and Standards with regards to fee exemptions, the use of school allocations, and adequate amounts and measurements of poverty. The new national poverty distribution data was presented, which demonstrated how school allocations would be distributed to promote inter-provincial equity.

Ms V Mentor (ANC) affirmed that the allocations addressed did not include capital and personnel expenditure. She requested that these expenditures be considered, else it created a inaccurate broad picture.

Mr A Gaum (NNP) asked if any new money would be allocated to supplement the proposed allocations. If not, it would mean that the "cake would have to be cut differently". He asked if any provinces would receive smaller allocations. If so, those provinces would lose teachers.

The Chairperson affirmed that monies for personnel were not included in the allocations discussed. Mr Hindle added that the school allocations being discussed, comprised only 15% of the total school budget. The allocations for personnel were distributed on a pro-poor basis. Additional staff were often hired in wealthier schools because of outside funding.

The Department was in discussion with the Treasury about an increase in the baseline amount for school allocations. Additional funding would possibly lead to shifts in the equitable share formula. The provinces were preparing for possible shifts and were considering the adequacy of possible allocation amounts.

A Member of Parliament stated that during public hearings, there had been concerns about free education of an acceptable quality. He congratulated the Department for addressing the problem in a manner that would ensure quality. The Department should deal with the issue of poorer schools with sensitivity and confidentiality, as the release of certain information could fuel stigma.

Mr Hindle noted that the Minister was particularly concerned about stigma and the possibility that social tiers would emerge, differentiating between no fee and fee-based schools. The no-fee schools would receive additional allocations to make them as high quality, and more desirable, than fee-paying schools.

The Chairperson asked when exactly the draft Norms and Standards and the New Exemption Regulations would be released. Mr Hindle responded that these would be released in the next week or two.

Ms H Zille (DA) stated that there was a need for new funding, as there was a limit for redistribution without compromising the delivery of services. There was a moral case for improving the quality of poor schools. The Minister was attempting to find a combination of pro-poor and pro-quality policies. This was a huge policy departure from the original intent. The DA supported mass redistribution to the poor. Redistribution had not led to improvements in quality, and the quality of schools had even decreased. She asked what mechanisms were in place to ensure the effective use of allocations.

Mr Hindle was not convinced that the money was being utilised in the best possible manner. A production function analysis was being done in conjunction with the University of Cape Town that measured which inputs produced the best outputs.

Mr A Gaum (NNP) asked what had happened to the idea of municipal rebates to schools. Many schools were paying high levies to municipalities, and he questioned if this was right.

Mr F Patel (Department Chief Director, Budget Office) said there had been discussion with the Department of Provincial and Local Government, which had been interrupted, with regards to municipally administered prices. There was a need to show where costs occurred and to stop cross-subsidisation. There had also been discussions with the Local Government Association (SALGA) regarding taxes and municipal fees. There was a planning meeting with the Treasury to remove cross-subsidisation on goods and services such as water and electricity.

Ms H Zille (DA) said that there needed to be school-based targetting to account for poor learners travelling to wealthy schools. Automatic exemptions were available to poorer learners. She asked what assistance was available to wealthier schools accepting poor learners, so as not to jeopardise the participation of the latter.

Mr Hindle replied that there was a need for additional money to support learners and schools. At the time, 15% of learners were being subsidised at an adequate level. The proposed allocations were feasible, and were not just a 'wish list'. If school fees were too high, schools did not deserve assistance. If fees were reasonable, schools should be considered for compensation.

Ms V Mentor (ANC) affirmed Mr Hindle's assertion that money allocated to a community should be used in that community. There was a need for enabling guidelines that would allow schools to be a centre for the community. She added that the quality of a school could not only be measured in the performance results. Other factors, such as quality of books, infrastructure and the built environment were also indicators of quality. Other factors had not been recognised. There was a need to build a quality assessment within schools that would provide an adequate measure of quality.

Mr Hindle asserted that increased spending should have resulted in increased quality. Quality could include achievements and other successes. There needed to be a school evaluation policy that accounted for other indicators of quality, such as infrastructure and culture. A systematic survey of grade six achievements was currently underway to measure quality in schools.

Ms H Zille (DA) added that in the issue of funding, there was a risk of 'poverty traps'. There was a need to address other allocations such as conditional grants to schools. For example, school feeding was not included in the routine budget. Additionally, the system of information about school allocations hinged on schools having the right information at the right time. This depended on the capacity of provincial Education Departments to prepare this information. What system guaranteed that provincial Education Departments provide the pertinent information to schools? There was a need to look at the inadequate quality of education in several provinces. She asked how the Department was looking at quality when state subsidies were inadequate.

Mr Hindle commented that separate conditional grants from national government funded nutrition programmes. Provincial planning might have been destabilised in 2004 because of fear that national allocation policies would change.

The Chairperson noted that many rural schools were lacking basic resources, such as water and electricity. He asked if the new Norms and Standards would address this problem.

Mr Hindle answered that Section 20 schools had money, and that such schools could procure these items with their budgets.

Ms V Mentor (ANC) asked if parents who were temporarily unemployed would qualify for exemptions.

Mr Hindle replied that the exemptions addressed annual incomes and annual fees, and that they were not perceptive to month-by-month shifts in income. The exemptions needed to be more perceptive to individual situations.

Ms H Zille (DA) asked about parents who could pay school fees but refused to pay them. She questioned what the Department would do to support other government bodies in collecting school fees from such parents.

Mr Hindle responded that the Department had no intention to change their current position, in that they desired to collect fees without resorting to legal action whenever possible. The Constitutional Court had affirmed that the government could not take homes to compensate for unpaid school fees.

Ms H Zille (DA) asked about the provision in the proposed Norms and Standards that allowed for government monitoring and intervention in schools. She expressed concern that the provision would be an excuse for centralised control and authoritarianism in schools that were performing well.

Mr Hindle replied that Ms Zille was reading something more into the provision than was intended. There was no threat to well-managed schools.

Ms V Mentor (ANC) asked if the school allocations would 'turn around' poor schools so that they could have proper equipment.

Mr Hindle answered that the school allocations would not be used to purchase equipment. 'Capital expenditure' would go to equipment. For example, capital would pay for lab equipment, while the allocations would pay for the chemicals used in the lab.

Ms V Mentor (ANC) asked where the statistics for the National Poverty Distribution Table came from. The numbers in the poorest quintile were not in line with her understanding of poverty in South Africa. It was commonly known that KwaZulu-Natal, Limpopo and the Eastern Cape were the poorest provinces, but the numbers in the quintile one did not reflect this.

Mr Gaum (NNP) asked how recent the statistics were. Mr Hindle responded that the data came from 2002 StatsSA data and that it was fairly accurate. One needed to look at the first, second and third quintiles to get a more robust picture of the distribution of poverty.

Ms H Zille (DA) noted that the equitable share formula had been based on the census, but that changes could occur between censuses. She raised doubts about the accuracy of the census, which in turn raised doubts about the equitable share formula. She asked how the equitable share formula took cognisance of the variation, without destroying the quality of education, particularly in the Western Cape.

Mr T Mseleku (Department Director General) added that the Department could not answer questions about the equitable share formula because it was driven by the FFC. The Department did not want any province to be unable to afford education. Equity would not come at the cost of any province.

If any school deviated from a government policy, the government would have the right to intervene. The cost of education was pushing up the administration price index. 'Double dipping' was occurring. For example, a school would take money to purchase a textbook, and then would ask parents for money to buy the textbook as well.

Mr Patel stated that it was illegal to require a child to purchase textbooks or school uniforms. If there were unreasonable costs, parents could claim exemptions.

The Chairperson stated that Members of Parliament often visited their constituencies, so they were aware of the situation in their districts. He asked if the Department could provide Members of Parliament with a questionnaire that would assist them to seek adequate assistance from MECs and from the Department.
Mr Hindle agreed that this would be an extremely useful exercise.

The Chairperson stated that, in light of the day's presentation, he expected that the previous week's presentation, which had been cancelled, would not have been ready. Mr T Mseleku apologised for cancelling the presentation the week before. The matter was under consideration by the Minister. The Minister should have been ready to make the presentation in one to two weeks time.

The meeting was adjourned.


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