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Financial Budget Speech 1998/99
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Speeches and Media Releases
 Education

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EASTERN CAPE PROVINCIAL GOVERNMENT
THE EDUCATION FINANCIAL BUDGET SPEECH FOR 1998/99
 PRESENTED BY THE MEC OF EDUCATION  MR S. SIZANI



Mr. Speaker
 Hon. Premier
 Hon. Members of the House
 Invited Guests and
Members of the Media

It is with a sense of great relief that I stand in front of you today to present my second budget. It is a known fact that my 1998/99 
policy speech presented a gloomy picture and caused many people sleepless nights. This was understandable, as my department is central to 
upliftment and development of our province. With a number of key programmes allocated no funds such as ABET, Technical Colleges, and 
Teacher Education, it was clear that we were heading for a major disaster. Education being a Human Rights issue it became clear that 
intervention would be necessary.

Standing here today I do not regret the candid and frank way in which I presented my budget in 1998, for the following reasons: -

(i) It has shown very clearly, to the province and country, how the Executive Council, lead by the premier, and the legislature, lead by Mr 
Speaker, are committed to the success of our government. The support I received from my colleagues is commendable.

(ii) Our stakeholders showed their commitment to Education by understanding our plight and maintaining our educational programmes.

(iii) The National departments assistance through the education development support unit has helped us improve our financial and personnel 
management systems.

(iv) I also need to commend our schools and colleges, for &#145;keeping the home fires burning in our institutions.

(v) The support and dedication shown by the officials of my Department is unbelievable.

I, once more want to thank the Premier, the Executive Council, the Standing Committee and Members of the Legislature for your support. 
Together we have made it. The &#145;prophets of doom have been disappointed. I am sure that we shall continue to confound our detractors.

Having said that, Mr Speaker allow me to present my 1999/2000 budget which I consider a tool that will take us into the new millennium

When I took office as Member of the Executive Council for Education, I alluded to inadequacies regarding financial management, incompatible 
management systems and historical backlogs as areas that need immediate attention. The situation has further been compounded by a number of 
natural disasters like tornadoes, which have flattened some of our mud structures. These variables have to be addressed within the limited 
budget of the department and be balanced with peoples expectations.

Mr Speaker, in order for one to address these challenges the following priority areas emerged for further deliberation, that is:

1. PRIORITY AREAS  Re-alignment of the departments organisational structure

 ensuring prevalence of budget discipline

 rationalisation and redeployment of personnel in our institutions

 the school construction programme including reconstruction of schools destroyed by tornadoes

 the conduct of provincial matriculation examinations

 addressing the needs of learners with special educational needs (LSEN)

 Technical education

 Transformation of Colleges of Education

 Adult Basic Education

1.1 Re-alignment of the departments organisational structure

Having analysed the magnitude of the work to be done by the department and the budget allocated to it a proper management structure was of 
great importance. This resulted in the approval of the post of a Superintendent-General by the Executive Council. This will have 
implications on the immediate management level below the post of the S.G., which the department is negotiating, with the office of the 
Director General. I believe that a stable and adequate management structure would bring stability to the department and that will surely 
have a multiplier effect to all other levels of our organisational structure. The Post of the Deputy Permanent Secretary for Finance has 
been advertised to ensure proper management of our budget. The other three DPS posts have been filled that is, Human Resource Management; 
Policy and Research; Education Provisioning.

1.2 Ensuring prevalence of budget discipline

The Needs Survey of 1996 which exposed the skewed allocation of resources in our country and the lack of basic facilities like properly 
built schools, poor infrastructure for communication and scarcity of water are a reality that is facing the department. The need therefore 
for the department to be equal to the task is increasing by the day. It is therefore the responsibility of the department to address these 
basic needs of our communities within the parameters of a shrinking budget. We cannot afford to fail, but we need to tone down the peoples 
expectations, whilst delivery of basic essentials is always ensured.

In order to ensure that our systems are well managed and properly functioning we had to equip and update the skills and capacity of our 
officials through three distinct National Department of Education programmes under the auspices of Educational Development Support Unit. 
They are run by the following consulting firms:

Fanie Visser and Associates for the following aspects;

* management and labour issues
* organogram
* registry and leave updates
Bridging Executives for the following;

* management
* dealing with backlogs on service conditions, for example, correction of leave records
Deloitte and Touche

* to deal with all aspects of financial management
The tender for provisioning management has not yet been finalised. The National Departments Education Development Support Unit (EDSU) has 
also considered it for approval.

This indicates the commitment of the department to turn things around and ensure maximum output with the limited resources we have. The 
support of the national Department through the EDSU is a very positive move that will leave a firm foundation for the financial management 
of my Department.

1.3. Rationalisation and Redeployment of personnel in our institutions

Mr Speaker let me touch the aspect of rationalisation which is presently affecting all our institutions. The department is engaged in a 
process of redeploying our educators so as to reduce our high teacher: learner ratio, which sometimes is 1:80. This process will result 
into creation of proper staff establishments in all our schools. The end result of this process will be the reduction of the workload for 
our educators and providing our institutions with realistic and affordable management structures. This is as a result of close co-operation 
between the Unions and the Department working within the framework of National agreements.

In the process of creating proper staff establishment for all our institutions we have greatly improved our information management systems. 
The department expects to complete the first phase of redeployment by the end of the second term.

I should add, Mr Speaker, that redeployment is not leading to retrenchment. Teachers will be categorised as &#145;in excess through the 
redeployment exercise, that is the number of teachers above the establishment given to that institution. These teachers will not be made 
redundant but will be redeployed. If teachers refuse to take the posts that they are offered however then they will be deemed to have 
retrenched themselves.

1.4 The School Construction Programme.

Progress

The following projects have been completed or are under construction:

318 new schools, 2004 emergency classrooms, 1020 toilets, 57 sportsfields, 10 new Technical Colleges, 224 school renovations, 15 Education 
College renovations, 87 schools fenced, 861 MECs classrooms, 4 Technical College renovations and 14 In-service Training Centres. Of the 
above, a number are still under construction and are between 60% and 90%complete:

99 new schools, 243 emergency classrooms, 6 new Technical Colleges, 240 Toilets, 44 sports fields, 67 school renovations, 20 fencing, 5 
Education College renovations, 11 In-service Training Centres, 210 MECs classrooms.

In the absence of a budget for new works, we have obtained donor funds from the European Union (R56 m) and the Japanese government (R75 m). 
These donors will provide 50 schools in the South Eastern and Northern Region and 44 schools in the Eastern Region respectively. The 
Eastern Cape Education Development Trust is also playing a pivotal role to secure donor funding and we are approaching local donors for 
assistance. I especially wish to thank Zenex, Billiton and Transnet for providing the seed capital to establish the trust.

Problems

A number of complex problems have resulted in delays in completion of building projects, which has resulted in a serious escalation of 
costs. These include problems that we do not have direct control over, such as lack of capacity of some contractors, non-enforcement of 
contracts, and disputes between consultants and contractors. We have proposed that such problems relating to construction delays will be 
dealt with by a Task Team drawn from Education, Public Works and Finance. One problem we do bear part of the responsibility for is the late 
payments of contractors. The problem of late payments was in turn compounded by the department not having a budget for capital works to 
spend against in the 1998 /1999 financial year. In the 1999/2000 financial year again no amount has been set aside for completion of 
projects although R135 million is required to ensure the completion of all capital projects by the end of 1999. This is a very serious 
situation and the province must ensure that the funds are found to complete the programme. This will result in a further escalation of 
costs unless additional funds are forthcoming.

1.5. Provincial Matriculation Examinations

The Eastern Cape Matric exam was an unqualified success with the results being both valid and reliable. The security of papers and the 
scripts was outstanding, the quality of the typed and printed papers was excellent, and the distribution system and the monitoring of the 
exam centres were very good. The out-sourcing of the mark capturing was well done, as was the out-sourcing of 80% of the exam paper 
printing.

Brief synopsis of the Oct / Nov 1998 Examination: Eastern Cape  Full Time students

Number who wrote: 82 517 full time and 44 932 part-time

Number who passed Senior Certificate : 30 673 (37.2%)

Number who obtained University Endorsement : 6 533 ( 7.9%)

Total passed : 37 206

% Passed (full time students only): 45.1% (down from 46.2% in 1997 and 49.7% in 1996). National average pass rate was 50.7% in 1998.

The province has now prioritised this area of Grade 12 learners as the main theme of the Culture of Learning Teaching and Service (COLTS) 
campaign for 1999.

Further more Mr Speaker, the department has embarked on a Matric Improvement Project, which aims to motivate teachers to conduct extra 
classes on Saturdays for students on some of the key problematic subjects such as Mathematics, Science, History in order to improve results 
by 5-10%. Winter and Spring schools will be conducted during the holiday periods in June and September. Guidance programmes will also be 
conducted on differentiation, effective study skills and subject choice and grades. Through such guidance programmes it is important to 
direct learners to subjects best suited to their aptitudes. Too many learners are taking matric at higher grade and failing when, with 
support and guidance, they could pass at standard grade.

Mr Speaker, one lesson learnt from the last two years of our Province-based matriculation examinations is that there is a lot of motivation 
that is going to have to come from the Department. It is on that score that we have thought it expedient to host a Departmental 
congratulatory function for all our Matriculation schools that have:

* Achieved a 100% pass (43 schools)
* Achieved a 90% pass and above (48 schools), and
* Those schools that have made a significant improvement on last years results, for example schools that have improved by 30% or more.
The department is to present such schools with Merit Certificates, as a gesture of appreciation for the efforts put in by both the teachers 
and the learners.

In addition, we have considered the issue of awarding achievement certificates for those schools and learners who have made special 
achievements, like, the mixed group of learners from Kaffrarian Girls High School, and Hector Petersen who represented the province in the 
UNESCO debate, and Gwabeni Primary School in Peddie which won a medal for Environmental Awareness.

For this years Matriculation class, we are presently discussing with USAID the concept of having a competition for achievers, both 
learners and schools. It is our hope that when this idea has been crystallised, USAID would be funding such a venture. The department will 
then publicise this venture before the end of the first semester of this year.

1.6. Education for Learners with Special Needs.

This directorate was established to ensure that adequate and appropriate attention is given to children who experience barriers to learning 
through Education Support Services viz. guidance and counselling, remedial education, psychological and therapeutic assistance. If these 
are strengthened this could result in reduction of repeaters, dropouts, violence, suicide, substance abuse, truancy and demotivation. This 
directorate is also charged with the provision of education to all our disabled children; in both, mainstream and special schools.

The policy direction for these children is towards their integration in mainstream schools. The department embraces that but, it also has a 
responsibility to make sure that teachers have been empowered enough to handle these learners. The learning sites should be user-friendly. 
With the budget allocated it is impossible to provide the necessary support and empowerment for our mainstream schools. It should also be 
remembered that most of our disadvantaged schools lack these support services whilst they are the ones that have most of these children in 
mainstream.

Mr Speaker, the department is faced with a problem of sending our multi-handicapped learners to other provinces for grades 10 and 12 at 
high costs. This arrangement has led to instances of dropouts amongst this group. The department has for the first time accommodated these 
learners at Efata where they have an opportunity to proceed to the higher grades. This is a definite step towards phasing in these grades 
on a permanent arrangement which will result into some form of saving for the department.

On top of this Mr Speaker, we have accepted the notion of establishing Education Support Centres in our regions and districts as delivery 
points of Education Services. The department is geared to establish 3 education support centres in each of the following regions: 
SouthEastern, Eastern and NorthEastern regions. We are also exploring the possibility of utilising the IN-Service Education and Training 
Centres built by Development Bank of Southern Africa (DBSA), as satellite centres. Our priority is areas that have violence, where most of 
our children and teachers are traumatised.

HIV/AIDS programme under LSEN.

Through this directorate the department seeks to address the problem of HIV/AIDS and Human Rights in our schools. It has been reported that 
there is a 65% infection rate for teenagers and young adults between the age of 18-23. Most of these are found in schools, technikons and 
universities. We have set aside R1, 5 m for prevention programmes and teacher empowerment.

Members of the legislature let me express in figures the extent of the increase in the spread of this dreadful disease:

LATEST STATISTICS

* 1 600 people are infected everyday
* 9 000 children are born HIV positive everyday
* 130 000 people died of AIDS in 1998
* 250 000 people are expected to die annually in the next three years
* 500 000 people are expected to die annually by year 2007
* 100 000 AIDS orphans to date
* 590 000 AIDS orphans by the year 2003
* 1,6 million AIDS orphans by the year 2008
* 3.2 million people are already infected
The results of this will be a decrease in the life expectancy from 60 years to 40 years. This crisis is far more serious than tornadoes. We 
need to end the refusal in our culture to talk about sex. We need to end male abuse of women. In our rural areas it is evident that women 
go for testing for HIV. Men need to be tested and to use condoms.

Mr Speaker, this situation calls on all of us in the house and within our constituencies to make it our responsibility to campaign against 
this silent killer.

1.7 Technical Education

The outcomes of technical education are inter alia to produce job-providers instead of job seekers. As far back as 1995 there has been a 
national outcry for technical education to provide skills training to learners both at pre- tertiary and tertiary institutions. Provision 
had to be made for our out of school youth to reduce the rate of unemployment. By shifting to technical education the Department aspired 
for a society that is self - sustainable, in other words to transform the education system which in the past offered a "traditional" 
curriculum, i.e. academic, to education for self- reliance.

Stock- taking of the South African workforce showed a glut of academics and a shortage of technicians. For that reason students were 
encouraged to shift from academic education (i.e. Universities) to technical education.

Colleges of education had to reduce their student intake, the reason being the Department could not (and cannot) employ more teachers due 
to many teachers who are already in the system. Students were thus encouraged to pursue other careers and "other careers" simply meant 
technical education. Technical colleges offer career opportunities for builders, carpenters, plumbers, electricians, entrepreneurs, and 
auditors, to mention a few.

Technical colleges in the province were given the huge workload without provision in terms of human resources. Due to budget cuts in the 
previous financial year the department has been unable to allocate grants to technical colleges. It is needless to mention that this places 
a strain to the historically deprived colleges

1.8. Colleges of Education

The Department has approved the recommendation of the College Rationalisation Task Team that nine of the provinces nineteen education 
colleges amalgamate to form four multi-campus colleges that will seek entry to the higher education sector. These colleges must have at 
least 2 000 students. They are as follows:

1. Algoa and Dower

2. Cape College, Dr Rubasana, Masibulele

3. Transkei College of Education & Cicira

4. Umzimkulu and Lusikisiki

The remaining eleven colleges are recommended to pursue other possibilities such as, community colleges and/or in-service centres.

I want the Legislature to note the thoroughly consultative process that has been undertaken to bring about this reform, which has the 
agreement of all stakeholders.

The directorate of Teacher Education is currently leading the development of an operational plan for the amalgamation of the colleges with 
the support of the Imbewu project.

1.9 Adult Basic Education

The whole success of the ABET programme depends on adequate training and support for practitioners. ABET Provincial and Regional Offices 
are well placed to provide on-going support, but they need adequate resources to enable them to fulfil their function.

Advocacy and learner mobilisation targeting unemployed women and out-of-school youth in the rural and settlement areas will not be 
effectively conducted due to budgetary constraints. The goal is to ensure that unemployed women and out-of-school youth become functionally 
literate and self-sufficient.

The ABET Sub-Directorate also provides for Grade 12 dropouts who cannot be readmitted in the formal education due to lack of accommodation. 
These learners also need to be provided with stationery and textbooks, which the budget does not cover. There is a shortfall of about R2 
million, which would help ease, the position of these learners.

2. FINANCIAL FRAMEWORK

Mr Speaker, I now wish to turn to the strict financial framework within which the Department of Education has been forced to operate during 
1998/99. I will especially highlight the very serious problem of debt repayment severely reducing the available funds for service delivery.

2.1 Expenditure against budget 1998/99

During 1998/99 the Treasury pursued a financial management policy of centralising control of expenditure while suspending funds from the 
budgets of departments to create a provincial debt reserve. The suspensions and additional appropriations made to the budget of the 
Department of Education during this financial year are set out in Table 1 below and compared to projected expenditure for 1998/99.

Table 1: Department of Education budget and expenditure 1998/99

Standard Item    1998/99 Budget R000    1998/1999 projected expenditure R000 (including debt repayment)
Initial Budget   Budget after suspensions (Blue book)    Plus ICS        Plus adjustments estimate       Final Budget
Personnel        5 834 400       5 713 938       276 295         299 941         6 245 926       6 330 176
Administration   62 501  62 501          (19 422)        43 079  54 351
Stores   182 369         182 369                 (1 546)         180 823         184 335
Equipment        32 956  17 956          1 028   18 984  39 925
Land & Buildings         2 200   2 200           (927)   1 273   16 874
Professional Services    131 862         101 862                 139 183         285 293         256 994
Transfer payments        39 203  39 203          0       39 203  39 203
Miscellaneous    100 658         91 558          4 668   96 226  74 075
Total    6 386 587       6 211 587       276 295         422 925         6 910 807       6 995 933
Suspensions during the year were made primarily from personnel while in the adjustments estimate funds were added to personnel and 
professional services. A number of points are apparent from the progress of expenditure against the adjusted budget after suspensions.

* The Department has succeeded in controlling personnel expenditure, which had dramatically exceeded budget in the previous three years. If 
funds had not been suspended from personnel during the year, personnel expenditure would be within budget. Even after suspensions the 
Department projects personnel over-expenditure of R62, 1 million (including miscellaneous expenditure), which is as nothing compared to 
R828, 4 million over expenditure on personnel in 1997/98.

* A total of R175 million was suspended from the Departments budget in June 1998. The adjustment appropriation of R422, 9 million voted in 
March 1999 consisted of a further suspension of R40, 9 million, offsetting funds of R463, 8 million voted for debt repayment.

* These funds of R463, 8 million have been made available to the Department to repay outstanding debt. They have however been grossly 
insufficient in the face of a debt assessed at R1 045,1 million in September 1998.

* The expenditure projections above assume that all additional appropriations intended for debt relief are spent before the end of the 
financial year. In practice this is highly unlikely to happen. Debt repayment has been slowed down due to the verification process. Unspent 
appropriations at the end of March 1999 will need to be retained and used to continue the process of debt repayment.
2.2 The control of personnel expenditure

Personnel expenditure has been controlled during the year by the strict measures implemented by the Department, notably compulsory 
retirement at 65, limiting the use of substitute teachers and the moratorium on appointments as a result of the stalled rationalisation 
process. Table 2 below compares the numbers of personnel at the end of 1997 and 1998, drawn from the Departments Persal data.

Table 2: Personnel numbers, December 1997 and 1998

Type of appointment      Numbers (Dec 1997)      Numbers (Dec 1998)
1) Administration & Management
Officer permanent (including probation)  9 619   8 460
Officer temporary        325     205
Sub-total administration and management         9 944    8 665
2) Educators
Teachers permanent (including on probation)      68 163  65 129
Teachers temporary (including relief & part time)        6 117   5 153
Periodic remuneration & abnormal appointments    4 265   1 753
Sub-total educators      78 545  72 121
TOTAL PERSONNEL  88 489  80 786
N. B. Periodic remuneration and abnormal appointments consist mostly of part-time ABET lecturers and exam markers.

Personnel expenditure has been controlled however primarily by not replacing employees leaving the system. As the figures above show the 
number of employees fell by 8,7% from December 1997 to 1998. Some of this reduction was by restriction of the ABET programme during 1998. 
The number of administration employees fell heavily by 12,9%. The number of permanent and temporary educators however fell by nearly 4 000 
as teachers retired and left the education system.

2.3 The continuing pressure on non-personnel expenditure

In my policy and budget speech last year I stated the vital importance of maintaining substantial non-personnel expenditure to provide 
materials and educational resources in schools and to ensure effective education delivery in the province.

The R463, 8 million in additional appropriations are to be used for debt repayment. Assuming that these funds are made available and spent 
on debt repayment by the end of March 1999 leads to the conclusion that expenditure on non-personnel expenditure will have been crowded out 
by debt repayment and budget limitations in 1998/99. Table 3 below compares recent personnel and non-personnel expenditure.

Table 3: Personnel and non-personnel expenditure 1996/97 to 1998/99



Year     Personnel expenditure

R &#145;000      Non-personnel expenditure R &#145;000   Debt repayment R &#145;000      Total expenditure

R &#145;000
1996/97  5 309 202       874 027         0       6 183 229
1997/98  5 936 044       905 284         0       6 841 328
1998/99 (projected)      6 099 642       432 530         463 761         6 995 933
N.B. Personnel includes miscellaneous expenditure, which is used for the Stabilisation Fund. Total 1998/99 personnel expenditure in Table 1 
is reduced by funds suspended for the repayment of personnel debts

Non-personnel expenditure this year has been halved in comparison to previous years. In April 1998 I told the Legislature that a non-
personnel budget of this magnitude would be &#145;insufficient to provide proper education delivery in the province. The experience of 
this past year as a result has been continuous pressure on schools in the province from insufficient funds. This Legislature has seen the 
result of this pressure in delegations from schools pleading for adequate funding.

Past experience and the analysis of my Department and the national Department of Education support the conclusion that a minimum non-
personnel budget of R900 million is needed to provide delivery in the classroom. One can see the implications of cutting non-personnel 
expenditure to around R500 million. Personnel over-expenditure in past years has reduced spending on non-personnel items. Despite the 
control we have achieved over the personnel budget, the pressures of debt repayment now continue to cut expenditure in the vital areas of 
educational materials and infrastructure.

2.4. Slow progress on debt repayment

In addition to the pressure that debt has placed on non-personnel spending on education this year, actual progress in debt repayment has 
been slow. Net additional resources voted for debt repayment for the Department in the 1998/99 financial year have been only R247, 9 
million, after taking into account the R215, 9 million suspended from the budget.

During my budget speech in April last year I drew the attention of this Legislature to R500 million in outstanding commitments, payments 
and debts at the end of 1997/98. During this financial year further outstanding payments were identified totalling R663, 8 million. All of 
these outstanding commitments were unpaid pension contributions and personnel payments such as leave gratuities and voluntary severance 
packages dating from 1997/98. Outstanding pension payments alone, mostly from the former Transkei pension fund, totalled R638, 9 million.

To the end of February 1999 only an estimated R145 million of these outstanding payments and debts have been paid. Remaining funds for debt 
repayment (R318, 8 million) will be retained in Treasury at the end of the 1998/99-year for the payment of debt, mostly relating to the 
outstanding pension contributions.

End-of-year outstanding commitments at the end of 1998/99 are expected to be R86, 7 million. My Department therefore expects to start 
1999/2000 financial year with R613, 3 million outstanding in payments and debt from 1997/98 and earlier years. It is clear that the process 
of authenticating and paying debt needs to be improved and speeded up. During this year my Department will be working closely with Treasury 
to identify and rectify the weak points in the financial system causing slow debt repayment.

2.5 Continued pressure of debt repayment on the education system

The carry forward into 1999/2000 of an estimated R613,3 million in outstanding payments and debt will create continued and long term 
pressure on the education system. Table 4 below sets out the consequences of repayment of the debt over the next three years of the Medium 
Term Revenue and Expenditure Framework (MTREF) compared to the projected expenditure and budget for 1998/99. This is without calculating 
the effect of interest added to the debt from outstanding payments to suppliers.

Table 4: Debt repayment and the MTREF, 1998/99 to 2001/2

         1998/99 R000   1999/2000 R000         2000/01 R000   2001/02 R000
Budget   6 910 807       7 001 520       7 374 758       7 683 563
% change                 1,3%    5,3%    4,2%
Personnel expenditure    6 099 642       6 307 627       6 620 653       6 906 558
Non-personnel expenditure        432 530         489 460         549 672         572 572
Debt repayment   463 761         204 433         204 433         204 433
N.B. Including improvements in conditions of service throughout

If the debt expected to remaining at the end of 1998/99 is repaid equally over the three years of the MTREF, and assuming that personnel 
expenditure continues over the period at the rate set out in the provincial estimates for 1999/2000, then the conclusion must be that non-
personnel spending on education is set to continue at similar levels in real terms to this past year.

I make no apologies to the Legislature for repeating myself when I state that schools and other institutions in this province cannot 
continue operating under these levels of funding. Applying the pressure of the past financial year for a further three will destroy the 
fabric of the education system in the province.

Treasury proposes to continue with the debt reserve fund for 1999/2000. In figures presented to the Standing Committee on Public Accounts 
of this Legislature they propose to suspend a total of R368 million from the Education budget in 1999/2000, R134 million of which is to be 
suspended due to over-expenditure in 1998/99. We support the strategy of the debt reserve fund. I have however already pointed out to the 
Legislature that additional appropriations from the debt reserve during 1998/99 have been both too little and too late to significantly 
reduce the debt my department faces. Any suspensions from the Education budget need to be matched by early additional appropriations to 
reduce pressure on the 1999/2000 budget. These additional appropriations will need to cover at least the R204,4 million projected for debt 
repayment in 1999/2000, assuming that payment can be spread over 3 years.

A solution must be found to the problem of repaying the debts of my Department that will not reduce the 1999/2000 budget to levels that 
paralyse the Department. The strategy for repaying debt must also safeguard providing learning materials in the schools. Debt repayment 
cannot be the millstone hung around the education and the future of our children.

2.6 Revenue raising

Mr Speaker, I wish to conclude my discussion of our financial framework by addressing the question of revenue. The Department of Education 
expects to realise R5,8 million in revenue in 1999/2000.

My Departments main source of revenue is hostel fees. In harmonising the rates of hostel fees we have set a rate of R2 200 per learner at 
all institutions. It is worth mentioning that there is some resistance from some communities who refuse to pay the new rate. My officials 
are visiting the relevant communities to convince them to pay the new rates.

As highlighted in my policy speech last year the policy on the reintroduction of exam fees for matriculation is being considered at 
national level and will not be implemented for the 1999 exams.



3. PROGRAMME ALLOCATION OF THE BUDGET

Mr Speaker, I now wish to look forward to the new financial year and set out the activities that my Department will be able to undertake 
within the budget allocated to each programme.

Programme 1 : Administration R420 835 000

This programme covers the running and administration of the office of the MEC, the head office, the six regional offices and the forty one 
district offices.

The 1999/2000 budget allocation is divided into R358,3 million for personnel costs (including stabilisation fund contributions) and R62,6 
million for non-personnel costs. These allocations will be able to cover the basic costs of management and administration.

Programme 2: Public Ordinary School Education R5 549 119 000

This programme covers the cost of schooling from Grades R  12, including schooling support and control and subject advisory services. 
Grade R, or reception grade, has been defined as the year before grade 1 and is part of the compulsory phase of education. Although the 
responsibility of the Department therefore only starts at grade R, I want to highlight to the legislature the importance of pre-school 
facilities and the gross imbalance in provision between rural and urban areas. We should not wear city spectacles when we make policy. Many 
rural primary schools provide the only meal a day that some children receive, which is partly why under-age children attend grade 1.

The 1999/2000 personnel budget allocation of R5,2 billion will be able to cover the cost of permanent and temporary educators, principals 
in schools and support staff and schooling development personnel.

The 1999/2000 non-personnel budget allocation for public schools is R344,1 million. These funds have to provide teaching and learning 
materials, school running costs, and building, maintenance and upgrading of schools. This budget will be able to cover the following 
activities.

* The Department will spend a total of R82 million on workbooks, readers and teachers handbooks for Curriculum 2005 in grades 1 to 3. The 
Legislature should be aware that Curriculum 2005 will be extended to grade 3 in January 2000.

* R6,7 million is budgeted to replace redundant and worn textbooks in grades 8 to 12. This allocation is grossly insufficient bearing in 
mind that textbooks have not been replaced since 1996. Full replacement of textbooks for grade 12 learners alone, for example, would cost 
R25 million.

* The introduction of OBE training and materials to the Grade 3 learners and their teachers in 1999/2000 will however be funded directly by 
the national Department of Education.

* The piloting of Curriculum 2005 for grade 7 will also be funded by the national Department. The purchase of workbooks and readers at an 
estimated cost of R15 million for introduction to grade 7 in January 2000 is however unfunded.

* The provision of stationery and classroom support materials will have to be kept to the most basic requirements. An amount of R35,9 
million has been made available, sufficient to provide a minimum package of materials for grades R to 9 at the same funding level of R15 
per learner as in 1998/99. Stationery for grades 10 to 12 will not be funded.

* Despite lack of funds within the budget the Department will spend nearly R12 million in 1999/2000 on primary teaching and learning 
resources in 520 schools through the British funded Imbewu project.

* The 3 year piloting of the Early Childhood Development Reception class programmes in 246 sites across the Province will be funded from 
the Provincial budget to the tune of R4.9 million.

* Specialised equipment and materials for technical and agricultural schools, and school furniture for new schools will be funded to the 
tune of R43,7 million, sufficient only to maintain current status rather than address the acute shortages of equipment, furniture and 
materials

* Specialised projects such as the Computer Assisted Education Project (CAEP) and the Technology 2005 Project will receive R2.5 million.

* The special promotion of Maths and Science programmes will not be funded from the budget. Schools involved in projects funded by donors 
working in partnership with the Department will however be reached. I wish to pay special tribute to the many non-governmental 
organisations (NGOs) supporting the Department.

* R1,5 million has been allocated for the HIV/AIDS education programme in our schools.

* R72 million of the 1999/2000 budget will be spent on school based services such as scholar transport, telephones, catering and boarding 
subsidies in hostels, security and electricity and other municipal services.

* R25,5 million is available for the costs of redeployment of educators after the post provisioning process has been completed

* The completion of the existing school building programme is unfunded within the 1999/2000 budget. The programme has been delayed during 
1998/99 due to lack of funds. R134,7 million is needed to complete all 111 projects by the end of 1999. This is a very serious situation 
that we must rectify as a matter of urgency. As this is a long outstanding commitment, the projects initially being contracted in 1996, we 
ask for these additional funds to be made available to the Department to complete the programme.

* Repairs and maintenance of schools and colleges will be funded to the tune of R23.6m.

* Approximately 169 schools were extensively damaged by the recent tornadoes. The Department has only R3,3 million available from the 
Provincial Disaster fund and an additional 1,2 million from funds held with the national Department of Education. It will require a further 
R 24 million to repair or replace these schools and an additional R60 million to deal with schools destroyed or damaged in earlier 
1997/1998 disasters, both of which are unfunded.
Programme 3: Private Ordinary School Education R8 873 000

The programme covers subsidies to Independent / Private Schools in the Province. Presently there are 9 334 primary learners, 4 896 
secondary learners in 79 independent and private schools. Payment of these subsidies is on per capita basis and is determined by the 
financial climate in the Department.

Programme 4: Special Needs in Education R179 061 000

The personnel allocation is R142 499 million, which covers the costs of special school educators, non-teaching staff and support staff.

* R23,9 million will be provided for transfer payments to 42 special schools

* the establishment of learner support teams for special and mainstream schools will be funded to the tune of R2,5 million.
Programme 5: Teacher Training R198 176 000

The programme covers funding for teacher education through teacher training, currently in 20 colleges of education with 770 educators.

The 1999/00 personnel allocation of R160,0 million will cover the costs of colleges of education lecturers and support staff.

The non-personnel allocation of R38,2 million will cover office and administrative expenses, stationery and equipment, telephones, 
electricity and services, and catering and hostels.

As a result of the recommendations on college rationalisation, a portion of the teacher training budget will be used for the costs of 
transformation and amalgamation of colleges.

* Financial assistance for students in the colleges of education has been budgeted at R300 for all levels of study.

* Teacher in-service training will be minimally funded in this financial year. Programmes for teacher and principal in-service development 
will however be provided by the Department through donor funding from the British, American and Swiss governments. These are the Imbewu, 
Isithole and Ikwezi projects. The UK funded Imbewu project alone will spend over R5 million in 1999/2000 on in-service training in 500 
primary schools.
Programme 6: Technical Colleges R151 827 000

The budget caters for 26 technical colleges and four (4) satellite campuses.

R117,8m will cover personnel costs of lecturers and administrative staff at technical colleges. The remaining R34,0 million will be 
insufficient to cover non-personnel costs. There has been a rise in 1998/99 intake due to non-admission of first year students at some 
colleges of education. This has contributed to an increase in the numbers of students attending technical colleges, with a consequent 
anticipated increase in costs.

Under the redeployment process technical colleges are due to gain 338 posts. Unfortunately about 90% of these posts cannot be filled from 
the redeployment list due to the technical requirements for lecturers. Technical colleges tend to recruit their lecturers from industry. An 
additional R 25,5m will be required to address under staffing at technical colleges.

Programme 7: Adult Basic Education and Training R104 175 000

The programme covers adult education and training under the National Qualifications Framework (NQF) Band 1, otherwise known as the General 
Education and Training Certificate, ABET Levels 1-4. ABET was withdrawn from level 5, the matriculation level, during 1998.

114 full-time and 5680 part-time practitioners are spread throughout the province, although the number of part time practitioners is 
falling for the reasons I have just given. The largest share of the budget goes to personnel expenditure with an allocation of R94,4 
million.

The non-personnel budget allocation of R9,8 million covers essential services such as curriculum and materials design. The allocation will 
be sufficient only to pursue a minimal programme of revising the curriculum. Regular workshops and monitoring of ABET centers to ensure 
their effectiveness and sustainability will not be possible with the funds available.

The R60 000 training allocation will be insufficient to meet retraining and empowering needs of the 5 200 educators, 480 center heads and 
41 District Coordinators who face the challenges of implementing the new curriculum. Cascade training workshops in the new curriculum will 
be inadequately funded, requiring access to donor funds for special programs.

Programme 8: Auxiliary and Associated Services R150 928 000

The programme covers funding for physical and education planning, policy and research, examinations, management information systems (EMIS), 
curriculum and policy development.

Personnel costs in all the above directorates will be covered at a cost of R97,0 million. I especially want to highlight the need to fund 
posts in the Directorate for Policy, Planning and Research included in the new organogram but which are unfunded at present.

A large Department such as Education must have the research and planning expertise needed to integrate planning and budgeting and to drive 
improved planning processes throughout the Department.

* Planning includes the integration of departmental planning with budgeting, strategic planning and programme planning by directorates and 
regions
* Research has the objectives of identifying research areas to improve operation, collaborate with Universities on research, and to drive 
quality assurance.
The heads of these sub-directorates will have to be filled by specialists from outside the system. This is a financially sound decision, as 
proper planning, research and the use of information are essential if we are to have a cost effective system. Other posts in the new sub-
directorates will be filled from within the system but additional funds for possible promotions must be found. A sum of R2,2 million is 
required to cover these personnel costs.

Non-personnel funding of R53,9 million will cover the cost of running the 1999 matriculation examinations, of improving the capacity of 
EMIS and of providing a limited amount of internal training to managers and administrators. We are thankful for a sum of R300 000 which has 
been recently granted by the national Department of Education to improve EMIS capacity.

Total costs of running the examinations section, including the 1999 matriculation exam, will be R45,9 million. In 1998 SAFCERT complimented 
the Department on being one of the best prepared organisationally for the examinations.



4. OPTIONS FOR THE WAY FORWARD

Mr Speaker, in 1998 the Department of Education undoubtedly went through its hardest year since the advent of democracy. I think that it is 
clear that we have moved forward in comparison to this time last year. I have already drawn attention to the inherited backlogs and severe 
financial constraints that my Department continues to face. It is therefore all the more vital to chart the path out of the crisis. I now 
wish to turn to the strategies that my Department will be pursuing in the coming financial year.

4.1 Building a decentralised capacity

It is understandable that during this last financial year financial management has been heavily centralised in the province in order to 
control expenditure. The effect of centralisation in my Department however has been to slow down necessary operations to the point of near 
paralysis of the education system. This situation can not be allowed to continue. It is now time to turn to building an effective 
decentralised capacity to ensure that programmes can be properly planned and budgeted and expenditure controlled in our districts and 
regions, where delivery takes place. In the long term financial planning and control should go up to school level for schools to operate as 
their own managers.

Improving capacity in the district is especially crucial as this is the first point of contact with the schools. District offices need to 
become centres for supporting the management of schools and the professional development of educators and principals. A number of 
initiatives will focus on building district and regional capacity:



* The District Improvement Project, funded by the national Department of Education, will provide training and resources in 8 of the most 
disadvantaged districts in the province;
* Weaknesses and poor linkages in the finance and provisioning systems at school, district regional and head office level will be 
investigated and addressed;
* Departmental staff will be trained as facilitators under the Imbewu Professional Development Programme to provide ongoing support to 
teachers and principals.
4.2. Improving Financial Management

I have already drawn attention to the progress that has been made in improving financial management systems in 1998/99. My Department will 
be continuing to improve its management and control systems, working in close co-operation with the provincial Treasury.

Support is being provided to the directorates of Finance and Provisioning from the national Department of Education through the Education 
Development Support Unit (EDSU) and from the UK funded Imbewu project in the areas of financial management, control and training in 
systems.

Special emphasis will be placed upon the following areas:

* Improving budget allocation and clarifying the budget responsibilities of programme managers;
* Training staff in the finance directorate in the Financial Management System (FMS) and in budgeting systems;
* Integrating budgeting with the planning of programmes and providing training in budget preparation;
* Decentralising budget responsibilities to regions and districts in conjunction with training and systems development;
* Rectifying problems in the payments and provisioning systems in close co-operation with the Department of Finance;
* Completing the cleaning of the Persal and FMS databases to ensure correct allocations of budget and expenditure;
* Improving expenditure reporting to managers and providing monthly expenditure reports against budget allocations.
4.3 Reducing Personnel Costs and improving administration

The control over the personnel budget that my Department has achieved will be maintained by the following measures.

4.3.1. Personnel Controls

* Substitutions for CS Educators are only being granted in respect of sick and maternity leave exceeding 30 days.

* Substitutes appointed for a period of less than 6 months must now choose whether they want to contribute to the government pension fund, 
so reducing employer contributions.

* Where posts are vacated due to natural attrition they are presently being left unfilled due to the moratorium on appointments. Now that 
the redeployment process is underway, these posts will only be filled within the budget limits of the Department.

* Presently no educators are appointed from outside the present system, except in critical situations.
4.3.2 Improving administration

The national Department of Education, also through the Education Development Support Unit (EDSU) has appointed consultants to attend to the 
backlog on personnel administration and to provide training in procedures.

To improve working procedures, personnel staff have been divided into sections dealing with only one specific task e.g. Pensions. This 
enables staff to deal with queries speedily and to accurately complete forms, resulting in rapid processing of gratuities and pension 
payments.

4.4 Tackling systemic inefficiencies

As I highlighted in my budget speech last April, inefficiency within the education system continues to create substantial pressure on the 
budget. Some trends have however stabilised sufficiently to give hope that the pressure on the budget will reduce in the long term.

4.3.1 Enrolment

The total number of learners in the system was 2,358 million at the end of 1998, compared to 2,405 million in 1997. These figures indicate 
that the rapid growth in enrolment from 1994 to 1996 has stabilised, with a decline in the numbers in the lowest grades being offset by the 
rise in numbers in the higher grades.

4.3.2. Efficiency

* The increase in the number of Grade 12s over several years is positive in that it indicates that the dropout rate is continuing to 
decline.
* Poor progression through repetition of grades is however still a serious problem, with over 200 000 learners repeating a grade for the 
first time and over 40 000 for the second time. This is a key performance indicator that we expect will respond to measures we are taking 
to improve the quality of delivery, such as the District Improvement Programme and Imbewu projects. In addition, we will be implementing 
national policy of not allowing learners to repeat more than once per phase.
* In spite of some encouraging trends, progression and dropout rates continue to be among the worst in the country. This adds considerably 
to the pressure on the budget and resources.
4.5 Redressing inequity

A major thrust of policy during 1999/2000 will be to achieve more equitable resourcing of schools through both the redeployment of 
educators and the implementation of norms and standards for schools funding. These two processes together will significantly transfer both 
personnel and non-personnel resources into the poorest schools in the province.

4.5.1 Redeployment of educators

Through negotiations with the educator unions in the Post Provisioning and Redeployment process the number of affordable educator posts was 
declared as 68 661, based on the available budget allocation for educators. This gives a learner-educator ratio of 34,3 to 1, which 
represents a great advance from the ratio of over 40 to 1 that existed in 1995. The average of 34,3 is, however, very misleading, with very 
serious inequities in provision between the former Ciskei and Transkei regions and the rest of the province, and between urban and rural 
schools in general. For example, in 1997 the learner: educator ratio in the provinces education districts ranged from 29,9:1 in Port 
Elizabeth to 50,7:1 in Tabankulu. The provision of promotion posts, that is deputy heads and heads of department, is similarly skewed.

The redeployment process that I have described earlier is designed to tackle this gross imbalance of resources while protecting the needs 
of small and poorly resourced farm schools through a weighting in the formula. Upon completion of the process, anticipated for June 1999, 
we will then advertise and fill posts and educator posts will be allocated equitably across the province. The practical result will be a 
major redress of the apartheid inheritance of insufficient teaching posts in the poorest areas of the province. This is not just an issue 
of creating post establishments in schools, it is an issue of justice in a democratic country.

4.5.2 Norms and Standards for Schools Funding

The norms and standards for schools funding are gazetted under the South African Schools Act to guide all non-personnel funding in public 
and independent schools, and to guide schools in setting the level of fees and exemptions from fees. Special schools funding norms will be 
prepared as part of the forthcoming green paper on specialised education. The norms will be progressively implemented during 1999/2000 and 
will be used to guide schools funding from January 2000.

In this year schools will be categorised into five quintiles, depending on their level of resources as assessed by their infrastructure and 
the level of poverty of the surrounding community. Implementation of the norms will target non-personnel funding to the poorest schools in 
the province. 60% of funding should be targeted to schools serving the poorest 40% of the population. If the available budget is 
insufficient then resources should be targeted preferentially to the poorest schools.

Effective implementation of the norms requires a considerable strengthening and integration of my Departments planning and budgeting 
capacities. EMIS data will need to be accessible to managers for forecasting and costing. Regional and district staff will need to be 
trained in budgeting skills in order to both plan the budget and support schools. Effective implementation of the norms and standards will 
require greatly strengthened financial systems in the district office. All of these tasks will take much time and hard choices on 
implementation. My Department is committed to the thrust of this policy, which will prioritise resources in the poorest schools where it is 
most needed.

4.6. Accessing Additional Resources

I have asked the Legislature to note resources that are being provided by donor funding throughout my presentation. My Department is 
fortunate to have access to significant donor resources. In my policy and budget speech last year I set out the donor funds that could be 
expected up to the end of the year 2000.

I am pleased to report that during the last year these projects have begun to realise significant benefits for the Department. Training of 
teachers and principals through the UK funded Imbewu project started in August 1998 and will widen to cover 520 primary schools in the 
province in May 1999. With similar funding for school development provided through the US funded Isithole project and Swiss funded Ikwezi 
project, nearly all education districts in the province will be receiving support.

The European Union programme for school upgrading has proceeded to implementation and schools are now being constructed and upgraded in the 
south-east and northern regions. An agreement has also been signed with the Japanese government for school upgrading to start in April 
1999.

The Department also continues to work actively with the private sector in the province through the Eastern Cape Education Development Trust 
to secure further donor assistance.

4.7 Funding from the national Department of Education

The national Department of Education will continue to provide grants in 1999/2000 to improve management capacity, improve systems and 
provide professional support to principals and teachers. R20,5 million has been set aside for 1999/2000 at present. We expect further funds 
will be programmed as the initiatives set out below develop momentum.

* Capacity building in financial and personnel management through consultancies funded by the Education Development Support Unit (EDSU)
* Improving the operations of 8 district offices through the District Improvement Project
* Funding to provide training and professional support to principals, and to improve EMIS capacity under the Education Management 
Development programme
* Support to the introduction of Curriculum 2005, including the provision of materials and training for educators.



5. CONCLUSION

Mr. Speaker, Honourable Members, the amount of work that has been done to further unearth our systemic deficiencies and address them is 
progressing well. There is a concerted effort by all programme managers and their teams to make a success of our mission that of providing 
qualitative education and service delivery that puts people first. Evaluation of our systems has become an on-going part of our endeavors 
in turning the system around. We do realise that the budget constraints we are operating under are to remain a feature of our educational 
engagements with our stakeholders but the consequences of this arrangement puts a strain on relations with our clients and compromises the 
values of providing qualitative education and service to our clients.

In exercising budget discipline, the department has unfortunately trampled on the toes of our service providers and beneficiaries; for 
example, contractors, unpaid study leave for our un-qualified and under-qualified educators and being unable to spread our scholar 
transport to the Eastern part of the province. Providing school transport only in the more wealthy areas of the province is highly 
discriminatory when thousands of children have to walk long distances to school. Providing our schools with support materials for practical 
subjects and topping up of textbooks has become impossible. Upgrading the skills of our personnel has been greatly compromised by this 
budget. Much as I have presented a gloomy picture, the department is committed to the principle of fiscal discipline but would like to see 
a balance between this principle and that of fair and equitable distribution of resources.

Therefore Mr Speaker the support of this house remains a valuable one in ensuring that communities understand the budget limitations facing 
the department and a need for everybody to re-adjust their needs to be in line with what the house will ultimately pass as the budget of 
the department. Fulfillment of our educational mandate, which is that of providing qualitative education and service, remains a focal point 
of the department and any squeeze to our shrinking pocket would suffocate our rural communities.

Closing comments

Mr Speaker, I am advised that this is my last policy speech in this Honourable House. I would like to take this time to thank the Members 
of the Standing Committees for their critical but positive assessment, evaluation and guidance of the Department. The leadership of 
different organisations such as the Teacher Unions, Student Organisations, Independent and Private Schools and NGOs for their co-
operation. Both Local and International donors who graced our offices expressing their willingness to assist in whatever way they can. The 
communities generally including our creditors and school governing bodies for their understanding when things did not go as expected. The 
officials of the Department from the smallest school to the biggest institution, the circuit to district, the region to the province for 
their devotion and commitment to their tasks sometimes in trying and life-threatening situations. I especially want to mention the spirit 
present in communities that suffered damage from tornadoes. I thank each and everyone of you for your understanding.

At a distance, it always seems that things are not that good in the Eastern Cape but once you put all the provinces in one room, the 
Eastern Cape always comes on tops. We do not have a reverse gear we can only move forward!

TOGETHER WE CAN MAKE IT!!

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