ATC200717: Report of the Portfolio Committee on Public Service and Administration on the Revised Adjustment Strategic Plan 2019/20—2023/24, Annual Performance Plan (App) 2020/21 and the Budget Vote 14 of the Statistics South Africa: Date 16 July 2020
REPORT OF THE PORTFOLIO COMMITTEE ON PUBLIC SERVICE AND ADMINISTRATION ON THE REVISED ADJUSTMENT STRATEGIC PLAN 2019/20—2023/24, ANNUAL PERFORMANCE PLAN (APP) 2020/21 AND THE BUDGET VOTE 14 OF THE STATISTICS SOUTH AFRICA: DATE 16 JULY 2020
The Portfolio Committee on Public Service and Administration (hereinafter referred to as the Portfolio Committee) having considered the directive of the National Assembly to reconsider and report on the revised adjustments of the Strategic Plan, Annual Performance Plan and Budget allocations of the Statistics South Africa tabled by the Minister of Planning, Monitoring and Evaluation in terms of the Public Finance Management Act (Act No 1 of 1999), reports as follows:
South Africa is among countries worldwide seized with managing the outbreak of the Coronavirus 2019 (hereafter referred to as COVID-19) which has been declared a global pandemic by the World Health Organisation. The emergence of the COVID-19 pandemic has had a devastating effect on the health, economic and social systems of most countries around the globe. In South Africa contexts, its impact is already observable in the resources of government and has put a strain in its delivery capacity and the country’s ability to meet its NDP priorities. In April 2020, the President announced a R500 billion fiscal support in response to COVID-19 and revised priorities.
Based on the above, the Public Finance Management Act of 1999 and the Money Bills Act Amendment Procedure and Related Matters Act of 2009 empowers the Minister of Finance to table an adjusted budget whenever necessary to Parliament. On 24th June 2020, the Minister of Finance tabled special adjustments budget from the initial budget tabled in February 2020 to Parliament to fund government activities relating to COVID-19 pandemic. According to Section 5 of the Money Bills Act, Committees are therefore required to review strategic plans, annual performance plans and budgets of government departments to be in line with supplementary/or adjustments budget as tabled by the Minister of Finance in Parliament.
In considering adjusted strategic, annual performance plan and special budget, the Committee ensured that Stats SA plan and budget allocations are in line with Medium Term Strategic Plan 2019/24. On 10th July 2020, the Portfolio Committeeconsidered a presentation on the adjusted Strategic Plan and Annual Performance Plan and budget allocation of Stats SA. This report summarises presentation received from Stats SA, focusing on the 2019/24 adjusted Strategic Plan and 2020/21 Annual Performance Plan and special adjustment Budget.
- THE IMPLICATIONS OF THE COVID-19 PANDEMIC ON THE MANDATE OF THE DEPARTMENT
The advent of COVID-19 has implicated on Stats SA, however, the mandate still remains the same. Stats SA will continue to provide relevant and accurate statistical information for better informed decisions by leading the statistical production and coordination in the data ecosystem through optimisation, partnership and diversification. This will be achieved by using internationally approved practice to inform users of the dynamics of the economy and society. Stats SA is mandated through the Statistics Act [No.6 of 1999] to coordinate statistical production from organs of state, the private sector and other institutions to facilitate proper planning, decision making and monitoring and evaluation of policies and projects. Stats SA is guided by the 10 fundamental principles of official statistics of the United Nations, as well as the 6 principles adopted by the African Union in carrying out its function.
Stats SA is committed to using scarce resources to deliver quality basic statistics as it invests and strengthens partnership with various stakeholders within the data ecosystem. In the sixth administration of Government, key priorities for 2020/21 financial year are outlined below:
- Driving legislative reform.
- Sustaining the quality of national indicators.
- Modernising the statistical value chain.
- Leading a transformation and change agenda.
- Rolling out the integrated indicator framework.
- Conducting Census 2021 pilot project.
There was a need to amend legislation to empower the organisation and the Statistician-General to fulfil the mandate. Stats SA has finalised the proposed changes to the Act. An amendment to the Statistics Act (Act No.6 of 1999) will be submitted to the legislature to ensure that there is administrative and legislative consistency in accountability, as Stats SA was gazetted to be accountable to the Minister in the Presidency. The key focus of the amendments is to strengthen statistical coordination mechanisms, to define and broad the scope and participation in the national statistical system and to create a state-wide statistical service. Other amendments include changing the execution of a population census from a 5-yearly to a 10-yearly cycle.
- ANALYSIS OF THE REVISED BUDGET ON EACH PROGRAMME
- ADJUSTED BUDGET
The main allocation to Statistics South Africa in February for 2020/21 financial year was R3 452.2 billion. The supplementary budget of June revises this allocation downward to R3 252.2 billion. This represents budget decrease of R200 million for the 2020/21 financial year. Due to budget cuts, Stats SA has suspended face-to-face data collection which brought the household survey programme to a standstill. All data collection activities for business also came to a standstill during Level 5 which impacted on the release of key economic indicators.
Stats SA embarked on designing new statistical methodologies in area of data collection and intensified the development of systems and processes to respond to emerging needs. Reimagining the future and planning for this global disruption has become normal. Technological interventions and new partnerships present vast opportunities to the organisation. Stats has 2 836 filled posts against 3 511 permanent posts, representing a vacancy rate of 19.2% as at the end of September 2019, which continues to increase due to declining financial resources in the budget allocation of the compensation of employees. However, it is pleasing that the budget cuts did not affect additional budget of R49.4 million allocated in February 2020/21 on compensation of employees. Additionally, budget for Census 2021 was also not affected by the budget cuts.
Table 1: Revised adjustment budget
Source: National Treasury (2020)
- PERFORMANCE PROGRAMME
Stats SA has seven programmes, which are as follows:
- Programme 1: Administration
The purpose of the programme is to provide strategic leadership, management and services to the department. Administration programme has four sub-programmes which are as follows, namely, Department Management, Corporate Services, Financial Management Services, Internal Audit and Office Accommodation. The strategic intention of the programme is focused on driving the outcome of transformed capability. The programme will align itself to the strategy of digitisation through automation of processes. The provision of support to projects, including the Census 2021 project, will be utilising all facets of automated processes. A cost-effective strategy to reduce the major cost driver in surveys, which, apart from the compensation of employees is the utilisation of vehicles, will be explored.
The programme revised adjustment budget is R663.3 million as compared to the actual budget of R675.5 million allocated in February 2020. Meaning a total of R12.3 million has been cut to fund government priorities aimed at fighting the impact of COVID-19 pandemic. The primary cost driver is expenditure on compensation of employees. Within the remaining goods and services budget, the primary cost drivers relate to fleet management services, travel and subsistence and communication. The strategic intention of the programme is focused on driving the outcome of transformed capability. The programme will align itself to the strategy of digitisation through automation of processes. The provision of support to projects including the Census 2021 project, will be utilising all facets of automated processes.
- Programme 2: Economic Statistics
Economics Statistics programme aims to produce economic statistics to inform evidence-based economic development and transformation in line with internationally recognised practices. Programme Management for Economic Statistics provides strategic direction and leadership. There are six sub-programmes, which are as follows: Business Cycle Indicators, Structural Industry Statistics, Price Statistics, Private Sector Financial Statistics, Government Financial Statistics and National Accounts.
Programme 2 budget allocation remained the same with R282.1 million from February 2020 allocation. This was a noble decision by the government to not interfere with a programme mainly focusing on driving a range of statistics that describe the dynamics of the economy as well as its links to job creation, economic growth, the environment and society such as Consumer Price Index releases. A key strategic intent is to increase the supply of economic statistics through the development of new surveys, funded through efficiency gains within the current resource constraints. These will primarily be focused on developing a better understanding of the service sector of the economy.
- Programme 3: Population and Social Statistics
The purpose of the programme is to produce population, demographic, labor market and social statistics to inform socio-economic development. Population and social statistics inform evidence based socio-economic development and transformation in line with internationally recognised practices. Programme 3 contributes to strategic objective to sustain national population and social indicators to inform evidence-based planning, monitoring and decision-making for use by the public and private sector through publishing numerous series such as labour market and employment surveys.
The outputs produced under this programme contribute immensely towards monitoring of the MTSF 2020-2024, the National Development Plan goals and indicators, Agenda 2063 as well as the Sustainable Development Goals.
Population and Social Statistics programme has experienced severe budget cuts of R151.8 million from the allocated budget of R275.9 million in February 2020. The revised adjusted budget is R124.2 million for 2020/21 financial year. Activities under this programme are severely impacted due to this major budget cut. A budget cut will negatively impact on the ability of Stats SA to sustain the quality of key national indicators and to increase responsiveness to users’ basic statistical needs and demands by collecting and analysing data across a range of themes. The outputs produced within the programme will contribute towards monitoring of the MTSF 2020-2024, the National Development Plan goals and indicators, Agenda 2063 as well as the Sustainable Development Goals, which are outlined in the integrated indicator framework.
- Programme 4: Methodology and Statistical Infrastructure
The purpose of the programme is to set standards, statistical frames, methodologies and conduct statistical research. The main objective of the programme is to improve the quality and methodological soundness of statistical information by researching, developing, reviewing and applying statistical methods, standards, classification and procedures in the statistical value chain annually. The programme further monitors and evaluates the methodological compliance of statistical operations by conducting independent evaluations on statistical practices annually. In addition, it ensures complete and accurate sampling frames to enhance the quality of economic and social statistics by maintaining and updating frames for business and geographic information annually.
Methodology and Statistical Infrastructure programme budget was reduced by R18.2 million from the actual budget of R161.9 million. The programme’s revised budget is R143.8 million for the 2020/21 financial year. The budget was aimed at ensuring availability and use of relevant statistical standards and classifications for Stats SA and SANSS programme. The programme further provides technical expertise on methodologies for producing official and other statistics and review surveys as to their methodological compliance and alignment with international frameworks and practices to render quality statistics able to inform debate, research and decision-making.
For the organisation to sustain the quality of key indicators and to curb the challenges of declining quality of data, there is a need to reposition and strengthen monitoring and evaluation of the statistical system. This will only be achieved through building of a quality management system that will have to be tested, integrated, interfaced and institutionalised across the organisation. Monitoring compliance of the application of the statistical standards and quality dimensions across the statistical value chain is key to improvement of quality of statistics across the organisation.
- Programme 5: Statistical Support and Informatics
This programme aims to enable service delivery programmes by using technology in the production and use of official statistics. The main objective is to modernise business processes by building enterprise architecture and applying emerging technologies for data collection, processing and the dissemination of statistical information over the medium term. The programme further aims to enable the Department’s production of official statistics by providing a technology infrastructure that is reliable, sustainable and cost effective over the medium term.
Statistical Support and Informatics programme budget cuts wereat R2 million from the actual budget of R283.5 million of February 2020. The revised adjusted budget is R281.5 million for the 2020/21 financial year. The programme budget was cut, however, activities under this programme can still be fully achieved. Among key activities under this programme is to enable service delivery programmes by using technology in the production and use of official statistics.
- Programme 6: Statistical Operations and Provincial Coordination
The purpose of the programme is to collect and process data and interact with stakeholders and users at provincial and local levels to inform policy implementation and support decision-making through statistical information. Engaging stakeholders through platforms and provide effective communication services is also a function of the programme. The main objective is to provide integrated data collection services, and disseminate quality statistics to provincial and local stakeholders and the public by ensuring an average response rate of 85 per cent annually. Expanding the statistical information base for use by government, the private sector and the public by conducting a population census every 10 years, and large‐scale population surveys every 5 years between censuses, remains the focus.
Statistical Operations and Provincial Coordination programme budget cut was R15.6 million from the actual budget of R1 729.5 billion. The revised adjusted budget is R1 713.9 billion for the 2020/21 financial year. The core mandate under this programme is to collect and processes data, and interact with stakeholders and users at provincial and local levels. Due to the COVID-19 national lockdown, Stats SA was unable to collect data using face-to-faceinteraction with the households.Therefore, a saving has been realised on goods and services, which was used to fund COVID-19 pandemic activities. The key strategic priority and output of this programme is to pilot census in October 2020 and conduct the full population census in October 2021.
- Programme 7: South African National Statistics System
The purpose of the programme is to develop and coordinate the national system in South Africa. The objective of the programme is to ensure that national statistics are produced based on common statistical standards and principles by providing statistical support and advice on an ongoing basis, and annually certifying statistics as official. It also manages the distribution of statistical information by establishing and providing mechanisms, platforms and criteria for sharing data annually. The programme drives statistical reporting by coordinating the compilation of statistical reports in line with the integrated indicator framework annually.
South African National Statistics System programme revised adjusted budget is R43.3 million for the 2020/21 financial year. The Programme will fully develop an Integrated Indicator Framework (IIF). The IIF is a tool to promote coordination among producers of official and other statistics in order to advance quality, comparability and optimum use of official statistics. It is also a key contributor to the achievement of the interconnected statistics system. Once fully developed, the IIF will be able to ascertain what the information gap is in the statistics system.
- OBSERVATIONS AND FINDINGS
The Portfolio Committee identified the following matters in relation to the special adjustment budget for the Budget Vote 14, which are as follows:
- The Committee noted and welcomed the presentation of Statistics South Africa on the revised Strategic Plan and Annual Performance Plan as well as adjusted budget for the 2020/21 financial year. The Committee noted budget cuts of the Department to fund government priorities regarding the COVID-19 pandemic.
- Stats SA did not make any changes to the Strategic Plan andAnnual Performance Plan due to special adjustment budget,except to reprioritise some statistical surveys/activities.
- The Committee was of the view that budget cuts at Stats SA have worsened the institution’s financial constraints, taking into consideration its historical budget shortfall over the past five years. The Committee intends to invite the National Treasury to explain the rationale for cutting budget for Stats SA with a historical record of financial constraints and it is still currently not well funded, even if there was no pandemic.
- The Committee was not happy with the declaration that Stats SA will no longer be able to conduct Income and Expenditure Household Survey, due to budget cuts aimed at funding COVID-19 priorities. The Committee highlighted the importance of the Income and Expenditure Household Survey under COVID-19, as it is critical in measuring the impact of the pandemic on poverty, unemployment and inequality in the country.
- The Committee further noteda lack of cooperation of the municipalities with regard to requestsmade by Statistics South Africa fortheir participation to providecertain information for statistical purposes. The Committee proposedto assist Stats SA by approaching the Minister of Cooperative Governance and Traditional Affairs and South Africa Local Government Association (SALGA) to facilitate cooperation of municipalities.
- The Committee noted with regretthe suspension of the production of the Gross Domestic Product (GDP) series in the 2020/21 financial year, which wasdeferred to the 2021/22 financial year due to financial constraints. The Committee was concerned about the unavailability of important statistical series due to financial constraints. The Committee cautioned government to adequately support Stats SA to avoid any repercussion in future onthe country’s planning and distribution of resources due to the lack of evidence based information to policy decisions.
- The Committee further cautioned Stats SA on the reliance on the administrative data in compiling official statistics. The risk of relying on the administrative data conducted by various government departments results is that outcomes tend to be biased, not credible and can be compromised to appease policy makers with inaccurate results.
- The Committee was pleased thatStats SA remained resolute about continuing with the pilot for Census 2021 in October 2020. However, the Committee urged Stats SA to be proactive in analysing the risk and forecasting, in case the country still experienced cases of COVID-19 pandemic.
The Portfolio Committee recommends that the Statistics South Africa undertakes the following activities:
- The National Treasury together with Stats SA should develop lasting funding solutions to avoid collapse of the Department, thus unable toproduce reliable, credible and quality statistics for both public and private institutions towards ensuring better planning.
- The Portfolio Committee should invite the National Treasury to brief it on its rationale for previous budget cuts impacting negatively on the ability of the Statistics South Africa to continue providing the country with quality statistics.
- The Department of Cooperative Governance and Traditional Affairs and SALGA should be approached to request local government municipalities to cooperate with Stats SA, to assist the Department with information to better compile statistics.
- The Minister in the Presidency and the National Treasury should attend to the inability of Stats SA not being able to collect and release data on Income and Expenditure Household Survey, due to financial constraints during this global crisis of COVID-19 pandemic, which exacerbates the impact of poverty, unemployment and inequality in the country.
- Statistics South Africa should through its legislative amendments regulate the production of administrative data, as most of such data are commissioned by policy makers and might compromise the quality of official statistics, if Stats SA would in the future rely on such data and not strengthen its in-house data collection.
Statistics South Africa continues to produce and disseminate official statistics of the country, despite experiencing budget constraints in the institution. Stats SA has reprioritised certain activities due to budget cuts to fund COVID-19 priorities. The Committee was pleased that both Strategic Plan and Annual Performance Plan will remain unchanged, except for certain targets. Stats SA remains resolute to continue providing the country with official statistics to assist organs of state, businesses, other organisations and the public in planning, decision-making, and monitoring or assessment of policies.
The Committee would also like to bring this to the attention of Statistics South Africa that special adjustments report does not stop Stats SA from implementing recommendations of the May 2020 budget report.
The Portfolio Committee recommends as follows:
That the House adopts and approve the special adjustment budget of Budget Vote 14 of the Statistics South Africa.
Report to be considered.
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