Role of the Financial and Fiscal Commission with Reference to Education

Basic Education

02 April 2001
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Meeting report

EDUCATION PORTFOLIO COMMITTEE

EDUCATION PORTFOLIO COMMITTEE
3 April 2001
ROLE OF THE FINANCIAL AND FISCAL COMMISSION WITH REFERENCE TO EDUCATION

Chairperson: Prof S Mayatula

Relevant Document:
Role of the Financial and Fiscal Commission with special reference to Education

FFC delegation: Mr J Josie, Deputy Chairperson and Dr N Abonta, FFC Programme Manager, Mr P Mabuza, FFC Research Co-ordinator

SUMMARY
The Committee was briefed by the Financial and Fiscal Commission on their role in the budget process. A common concern expressed by Committee Members was that the proposed formula of the FFC did not adequately take into account certain groups and that it would serve to disadvantage those sectors already disadvantaged, especially with regard to the allocation to inappropriate age learners. Members of the FFC took the concerns of the Committee into consideration and stressed that their proposals were not policy guidelines, but merely a general approach of the FFC at this stage. The FFC agreed that work needed to be done on defining basic education as set out in the Constitution

MINUTES
Role of the Financial and Fiscal Commission
Mr Josie outlined the background and role of the FFC. It was established according to Chapter 13 of the Constitution to make recommendations on equitable sharing between the three spheres of government. These recommendations are submitted to Parliament through the Department of Finance ten months before the Minister of Finance presents his budget. Therefore the 2002 recommendations will be ready at the end of April. Recommendations were made in consideration of the Constitution, the Financial and Fiscal Commission Act and the Intergovernmental Fiscal Relations Act. The minister of Finance must consult with the FFC at least two weeks before the budget is announced and FFC comments are contained in Annexure E of the budget.

In reviewing the key functions of the FFC, Mr Josie stressed that the horizontal and vertical divisions of revenue are divided equitably and that equitable meant that each level would receive an amount according to their needs from the amount available. He noted that provincial and local government have the constitutional mandate to collect their own revenue but this was not in place for provinces at this stage. Conditional grants are funds allocated to provinces to perform specific tasks whereas the 'equitable share' is an unconditional grant.

The key focus of the FFC is that all spheres of government fulfil their mandate as stated in the Bill of Rights. The FFC's focus was therefore in providing basic services, especially in light of litigation on the non-deliverance of basic services in the provinces.

Dr Abonta addressed the meeting on the response of government to the FFC's recommendations for 2001, both of which were accepted by government. The first was that the provincial equitable share should provide for constitutionally mandated basic levels of social service provision and provinces be held accountable for the delivery of such services. The second was that basic services be defined in terms of cost per beneficiary with allowances made for variations in the cost of delivery for different target groups and the inclusion of national (or provincial) policy parameters.

Dr Abonta outlined how the FFC aimed to reach an equitable share of National Revenue. (See Matrix in document) He stressed that these were recommendations and not policy statements.

Discussion
Mr Aucamp (AEB) asked who the beneficiaries mentioned by Dr Abonta were. He asked if they were only pupils at state schools or if pupils from independent schools would be included.

Mr Mpontshane (IFP) said that he foresaw difficulty in making the provinces accountable for the delivery of social services as 95% of their budgets are for personnel while only the remaining 5% is used for basic services.

Mr Ntuli (DP) asked what the FFC's response was to offers from independent schools to take children on board from historically disadvantaged schools.

Mr Josie responded that questions relating to education will be covered by Mr Mabuza in the final part of the presentation. He said that the cost of providing services includes the salary of teachers as teachers are the fundamental deliverers of education. He added that welfare provides social services, here we are interested in education.

The Chair asked whether basic needs included things like transport for children to get to school. He said that in the Eastern Cape, there is little transport available. He asked if the people can take the government to court for something like this?

Mr Josie again responded that Mr Mabuza will respond in his presentation.

Costed Norms Approach
Dr Abonta outlined the Costed Norms Approach and how the FFC plans to implement it (see document).

FFC approach as applied to Education
Mr Mabuza explained the current FFC allocation formula, the move to targeting poor learners through a weighting system as well as the FFC recommendation proposal for 2002 with regard to education (see document).

Mr Josie added that the model was indicative and illustrative and that it was not being used at this stage by government. The FFC would try and establish a definition of basic education in April with its stakeholders. He requested the support of this Committee in attempting to define basic education.

Discussion
Prof L Mbadi (UDM) expressed concern over the reference to appropriate age learners with reference to conditions in rural areas. He said that in these areas children often start school at the ages of nine or ten meaning that they will be at school until they are around twenty two years of age. He asked how the FFC intends to fund such students.

Mr R Ntuli (DP) reiterated this point saying that the average school leaving age is twenty in historically disadvantaged areas and that these areas would therefore be affected by less funding. Mr Ntuli also asked what the benchmark was between poor-urban and poor-rural.

Ms J Benjamin (ANC) said that inappropriate age learners are most likely to be black. She asked if the FFC had taken into account the commitment to life-long learning. She said that these recommendations can only advantage those already advantaged.

Mr R Van den Heever asked if the FFC could show what the allocations would be per child in terms of money as it would be easier to get a sense of the figures.

Mr Josie said that figures would be submitted in writing to the Committee.

Mr L Kgwele asked how far the FFC influenced the Public Finance Management Act. He also asked what the Commission has recommended in relation to HIV/Aids.

Mr Josie replied that the FFC makes recommendations to government on how money should be distributed amongst the provinces, not to individual schools. The outlined approach was not being applied at this stage. It is the hope of the FFC that discussions such as these will help to produce an equitable approach.

He said that inappropriate age learners is not a factor as far as allocation is concerned. The FFC is saying that a large portion of learners are not the right age. He stressed that the FFC is saying that these children should have access to education.

With regard to the Public Financial Management Act, Mr Josie said that the FFC does not influence the Act in any way. The FFC are subject to that Act.

Dr Abonta reiterated that what is being discussed are only recommendations. He said that it obvious that there are more inappropriate age learners in poor areas, which is why the allocation to poorer schools has been increased. He said that the 0.75% allocated to inappropriate learners is an additional allocation to what is already being allocated.

Mr E Moorcroft (DA) asked what category traumatised learners would fall in, regardless of their socio-economic background. He also asked how the allocations planned to accommodate adult learners who are trying to overcome illiteracy.

Mr I Vadi (ANC) asked how the formulas propose to deal with built-in inequalities. He said that the assessment of schools by physical location is superficial. He said that some urban schools have rural learners and that some whites schools will no longer be able to satisfy learners from disadvantaged backgrounds.

Mr Geldenhuys (NNP) asked whether the formulas took into account the centres of excellence that have been planned.

Mr C Aucamp (AEB) said that the age problem should be phased out. He also asked if the formulas catered for pupils of independent schools.

Mr Josie said that at this stage what has been outlined is just an approach. He re-iterated that work still needs to be done in defining basic education. He said that at this stage the FFC was concerned with primary education more than secondary and tertiary education.

Mr Josie said that the issue of inappropriate age learners is a serious concern. He said that the FFC wishes to work with the Portfolio Committee and other stakeholders to address this.

Dr Abonta told the Committee that the formula is targeting learners and not schools whereas the provinces use schools to allocate funds. Mr Josie added that schools apply for funding based on an assessment of its learners.

Proposed trip to Cuba
The Chair said that it had been agreed that seven members of the Committee would go, four ANC and three from opposition parties. He asked the opposition parties to decide who would go.

Mr Geldenhuys (NNP) complained about the fixed formula for small parties.

Mr Kwgele (ANC) said that the Committee is aware of the formula, but that it had been decided by the committee to be more inclusive of minority parties. He said that Mr Geldenhuys was new to the Committee and would therefore not be aware of this.

Mr Geldenhuys (NNP) asked which opposition party would be excluded.

The Chair said that if the formula was adhered to, then some parties would never be part of delegations. He said it is up to the opposition to decide which members from which parties were going. He said that a precedent had been started in the Committee that could not be broken now.

Mr Aucamp (AEB) asked when the Chair would need the names of the three members and the Chair said that he would need them by Friday 6 April.

Mr Kwegle proposed that the Committee use the date set to visit Stellenbosch University for a combined visit to Peninsula Technikon and the University of the Western Cape. All agreed.

Finally, the Chair asked for a minutes silence in respect of the recent death of the wife of Committee member, Mr Nzimande, and the death of the Director General for Education of the Orange Free State.

The Chair adjourned the meeting.

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