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Inequalities remain in provinces' spending
by Nasreen Seria
2003-04-10

Provincial spending on social services, such as education, health and social welfare has remained stable in recent years, but substantial inequalities still exist amongst provinces, according to the latest intergovernmental fiscal review. Provinces that have had to incorporate former homeland administrations, such as Limpopo, Eastern Cape and KwaZulu- Natal, typically spend more on high wage bills, leaving less of their budgets for service delivery. Provincial inequalities also exist in the health sector, hampering service delivery mainly in poorer provinces. Although the provincial health budget is meant to increase from R33,2bn in 2002-03 to R36,9bn in 2003-04, expenditure per capita varies widely amongst provinces. Limpopo spent R586 an uninsured person, North West spent R628, while Gauteng's expenditure per capita was R1580. Expenditure on staff costs in the health sector has fallen steadily in recent years, from 64,2% of the provincial health budget in 1999-00 to 58,1% in 2002-03, but is expected to increase in the next few years as government tries to improve the distribution and retention of health personnel. Scarcity of health professionals is a serious problem in mainly rural provinces. For example, one dentist in Eastern Cape is required to service 190117 people who use the public health service, compared to 25458 in Gauteng. In Limpopo, one pharmacist services 48067 people, compared to 18994 in Gauteng. The higher growth in poorer provinces confirmed the trend towards improvement in interprovincial equity and towards equalisation of access to grants, the review said. (Source: Nasreen Seria, Business Day, Apr 09 2003) The Intergovernmental Fiscal Review can be accessed at http://www.treasury.gov.za/ (see left-hand side for IFR link, then open 2003 version or go directly to http://www.treasury.gov.za/documents/ifr/2003/chp05.pdf)

Provincial spending on social services, such as education, health and social welfare has remained stable in recent years, but substantial inequalities still exist amongst provinces, according to the latest intergovernmental fiscal review. 

Provinces that have had to incorporate former homeland administrations, such as Limpopo, Eastern Cape and KwaZulu- Natal, typically spend more on high wage bills, leaving less of their budgets for service delivery. 

For education, expenditure a learner has increased substantially from R3234 in 1999-00 to R4437 in 2002-03, but some provinces are lagging far behind. 

KwaZulu-Natal, with the biggest provincial education budget of R10,4bn has the lowest expenditure a learner at R3762 in 2002-03, followed by Limpopo with R4015. 

On average, provinces have been successful in curtailing personnel costs, which declined to 86,7% of the R53,1bn education budget in 2002-03 from more than 90% in 1999-00. However, poorer provinces, such as Limpopo, North West, KwaZulu-Natal and Eastern Cape still pay more than 88% of their education budgets on salaries. 

With more resources freed up in education budgets, spending has mainly gone to capital projects, such as new buildings, rather than education inputs, such as textbooks. 

Expenditure on inputs has only risen slightly from R210 a learner in 1999-00 to R259 a learner in 2002-03. 

This does not bode well for education prospects, since low spending on inputs is linked with lower senior certificate pass rates, according to the review. 

Provincial inequalities also exist in the health sector, hampering service delivery mainly in poorer provinces. 

Although the provincial health budget is meant to increase from R33,2bn in 2002-03 to R36,9bn in 2003-04, expenditure per capita varies widely amongst provinces. 

Limpopo spent R586 an uninsured person, North West spent R628, while Gauteng's expenditure per capita was R1580. 

Expenditure on staff costs in the health sector has fallen steadily in recent years, from 64,2% of the provincial health budget in 1999-00 to 58,1% in 2002-03, but is expected to increase in the next few years as government tries to improve the distribution and retention of health personnel. 

Scarcity of health professionals is a serious problem in mainly rural provinces. For example, one dentist in Eastern Cape is required to service 190117 people who use the public health service, compared to 25458 in Gauteng. 

In Limpopo, one pharmacist services 48067 people, compared to 18994 in Gauteng. 

Social development budgets have increased sharply in recent years, from R19,4bn in 1999-00 to R31,2bn in 2002-03 including the R2bn budgeted in 2002-03 for the extension of the child welfare grant for those up to age 14. 

Strong growth was recorded in social development budgets of all provinces, with poorer provinces far outpacing the growth in budgets of wealthier provinces. 

The higher growth in poorer provinces confirmed the trend towards improvement in interprovincial equity and towards equalisation of access to grants, the review said. (Source: Business Day, Apr 09 2003)

The Intergovernmental Fiscal Review can be accessed at http://www.treasury.gov.za/ (see left-hand side for IFR link, then open 2003 version or go directly to http://www.treasury.gov.za/documents/ifr/2003/chp05.pdf)

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