Published by the National Treasury in terms of Section 32 of the Public Finance Management Act, 1999 (PFMA) on 29 October 2010, the provincial budget statement of receipts and payments covers spending for the first six months (April-September 2010) of the 2010/11 financial year. The statement is available on the treasury website at www.treasury.gov.za.
The information is sourced from the Section 40(4) PFMA reports submitted by the heads of provincial departments to provincial treasuries, who, in turn, had to submit the information to the National Treasury by 22 October 2010. Queries on spending or budget numbers should therefore, in the first instance, be referred to the head of the relevant provincial department, and in the second instance, to the head of the relevant provincial treasury. Queries on conditional grants may be referred to the head of the administering national department.
Higher than budgeted for personnel remuneration increases, including the increased housing allowance.
Occupation Specific Dispensation payments for the provincial health sector.
Expenditure for the Devolution of Property Rate Funds grant in provinces.
Expenditure for the Comprehensive HIV and Aids programme to meet the increased demand for male circumcision.
Expenses relating to disasters and other emergencies in KwaZulu-Natal and the Western Cape.
To cover the shortfalls mentioned above, the 2010 Adjusted Estimates of National Expenditure and the 2010 Medium Term Budget Policy Statement tabled on 27 October 2010, proposed additional adjustments to the allocations made to provinces in the 2010 Budget. These documents are available on the treasury website at www.treasury.gov.za.
The additional adjustments will be concluded after the provinces table their 2010 adjusted estimates during November 2010.
In aggregate, provinces spent R152.6 billion, or 46.3 per cent, of their main budgets of R329.8 billion for the first half of the 2010/11 financial year. This represents a spending increase of 4.9 per cent or R7.1 billion compared to the same period last year when provinces had spent R145.5 billion.
Education expenditure totalled R65.5 billion, or 47.6 per cent, of the R137.
(41.7 per cent). This is an increase of 11.1 per cent, or R6.5 billion, on the same period last year.
Health expenditure totalled R46.3 billion, or 47.1 per cent, of the R98.4 billion combined health budgets and is the second largest item on provincial budgets (29.8 per cent). This is an increase of 9.1 per cent or R3.9 billion on the same period last year.
Social development spending is recorded at R4.3 billion, or 42.3 per cent, of the R10.2 billion social development budgets.
Personnel expenditure, in aggregate, is at R91.6 billion, or 49.3 per cent, of the budgeted R185.7 billion.
In aggregate, provinces spent R8.4 billion, or 33.1 per cent, of their R25.4 billion combined capital budgets. This is a decline of 23.5 per cent when compared to the same period in 2009/10.
Provincial education departments spent R2.1 billion, or 29.4 per cent, of the budgeted R7.2 billion for capital expenditure. This is 33.3 per cent or R1 billion less than what was spent the previous financial year.
Provincial health departments spent R3 billion, or 33.6 per cent, of the budgeted R8.8 billion for capital expenditure, which is R253.1 million, or 7.9 per cent, less than the same period for 2009/10.
The second biggest share (29 percent) of provincial capital budgets after health, is for public works, roads and transport departments which spent R2.8 billion, or 37.9 per cent, of the total capital budget of R7.4 billion.
Provincial own revenue collected thus far is at R4.8 billion, or 50.3 per cent, of the budgeted own revenue of R9.5 billion. At the half-year mark, national government had transferred to provinces R130.5 billion of the equitable share and R31.3 billion of conditional grants to provinces.
A detailed analysis of the expenditure outcome as at 30 September 2010 is set out in Annexure A, which also includes a comparative analysis of spending for the same period over the 2009/10 financial year.
The budgeted figures for provinces are based on the 2010/11 estimates of provincial revenue and expenditure documents (main budgets) tabled in the provincial legislatures during February and March 2010.
Table 1 indicates that provinces have spent R152.6 billion, or 46.3 per cent, of the budgeted expenditure of R329.8 billion for the first six months of the current financial year. Spending against budgets is lower in percentage terms compared to the same period for the 2009/10 financial year when it stood at 50.2 per cent. However, spending in nominal terms, is 4.9 per cent, or R7.1 billion, higher than last year, when provinces spent R145.5 billion.
Among provinces, spending is lowest in the Free State (43 percent of the budget) and North West (43.3 per cent) and highest in the Eastern Cape at 48.8 per cent and Gauteng at 48.7 per cent.
Eastern Cape 38 703 055 5 871 753 3 648 987 - 48 223 795 19 561 046 2 772 459 1 188 833 97 23 522 435 48.
Free State 15 990 595 3 379 994 2 010 425 - 21 381 014 7 380 292 1 347 598 458 474 3 116 9 189 480 43.
Northern Cape 7 098 874 1 021 776 1 041 856 - 9 162 506 3 288 300 511 157 389 875 4 4 189 336 45.
North West 16 586 756 3 906 870 1 620 731 21 22 114 378 7 549 218 1 449 758 580 351 - 9 579 327 43.
Western Cape 24 889 882 5 868 902 2 478 975 3 733 33 241 492 11 518 493 2 701 163 1 023 364 1 756 15 244 776 45.
Total 255 339 966 48 708 211 25 426 101 336 192 329 810 470 120 697 477 23 298 614 8 415 819 200 209 152 612 119 46.
Provinces have budgeted R246.1 billion for social services, including education, health and social development.
Spending on social services is recorded at R116.1 billion, or 47.2 per cent, of the total provincial social services budgets for the first six months of 2010/11.
Education budgets of R137.4 billion comprise 41.7 per cent of total provincial budgets. Table 3 indicates that education expenditure is at 47.6 per cent or R65.5 billion of the total education budget, an increase of 11.1 per cent, or R6.5 billion, on the R59 billion spent over the same period in 2009/10.
Spending by provinces on education ranges from the lowest rate, 43.8 per cent in North West, Free State at 46.1 per cent, to the highest in KwaZulu-Natal at 49.8 per cent, followed by the Eastern Cape at 48.5 per cent.
Spending on goods and services (including learner and teacher support materials) in education is recorded at R4.7 billion, or 31.8 per cent, of the budgeted amount of R14.7 billion. Current spending on education personnel amounts to R52.4 billion, or 50.1 per cent, of the R104.6 billion budgeted for personnel (table 4).
47.5 percent in Western Cape, to the highest in Eastern Cape at 52.5 percent of the budget for the year.
Education capital expenditure is at R2.1 billion, or 29.4 per cent, of the R7.2 billion budget. This is significantly lower than the spending over the same period of the previous financial year.
Spending on education capital expenditure ranges from the lowest, 12.6 percent in the Free State, to the highest, 47.4 percent, in the Northern Cape.
Table 6 indicates that, at R46.3 billion, or 47.1 per cent, of the total health budget, health expenditure increased 9.1 per cent, or R3.9 billion, on the same period in 2009/10.
42.9 per cent and 43.5 per cent respectively. The highest shares are recorded by the Eastern Cape at 51.2 per cent and Gauteng at 49.7 per cent.
Table 7 indicates that health personnel expenditure is R27.4 billion, or 49.3 per cent, of the total health personnel budget, an increase of R4.6 billion, or 20.2 per cent, on the R22.8 billion spent over the same period in 2009/10.
Spending on non-personnel non-capital items in health, which includes medicines, drugs and other current expenditure, is at R15.9 billion, or 46.9 per cent, of the R33.9 billion budget.
Capital expenditure in the health sector is at R3 billion, or 33.6 per cent, a decrease of R253.1 million, or 7.9 per cent, on the R3.2 billion spent over the same period last year.
Spending by provinces varied, with the lowest rate of health capital expenditure being in the Free State at 15 per cent, KwaZulu-Natal at 29.8 per cent, and the highest being the North West and Western Cape at 54.9 per cent and 41.7 per cent respectively.
At R10.2 billion, the social development budget comprises 3.1 per cent of total provincial budgets.
Provinces registered spending of R4.3 billion, or 42.3 per cent, of the total R10.2 billion budget. This represents an increase of R207.3 million, or 5 per cent, on the R4.1 billion spent over the same period last year.
There are varying degrees of spending among provinces , the lowest being KwaZulu-Natal at 36.5 per cent and Gauteng at 37.8 per cent while the highest are Limpopo at 52 per cent and Northern Cape at 47.6 per cent.
Human settlements and local government budgets at R20.8 billion comprise 6.3 per cent of total provincial budgets.
Spending by human settlements and local government was R8 billion, or 38.6 per cent, of the R20.8 billion budget. This represents a decrease of R1.4 billion, or 14.9 per cent, on the R9.4 billion spent over the same period last year.
Spending levels by provinces varied, the lowest being the Free State at 26.
Eastern Cape 2 533 676 1 129 828 44.6% 4.8% 61.7% 1 166 547 -3.
Free State 1 684 961 449 440 26.7% 4.9% 54.2% 709 696 -36.
54.2 per cent and Limpopo at 46.8 per cent.
Most of the human settlements and local government expenditure is from the Human Settlements Development conditional grant. Table 11 indicates that provinces spent R5.5 billion, or 36.7 per cent, of the R15 billion Human Settlements Development grant budget. These spending figures are R1.5 billion, or 21.5 per cent, lower than the same period last year.
Eastern Cape 1 598 646 696 692 43.6% 3.0% 12.6% 715 934 -2.
Personnel expenditure (compensation of employees) for the first six months of the 2010/11 financial year is at R91.6 billion, or 49.3 per cent, of the budgeted R185.7 billion..
Spending to date is R15 billion, or 19.5 per cent, higher than the R76.7 billion spent over the same period last year.
47.4 per cent, while Gauteng and Eastern Cape recorded the highest at 51.5 per cent and 51.3 per cent respectively.
By the end of September 2010, provinces had spent R8.4 billion, or 33.1 per cent, of their R25.4 billion capital budgets ("payments for capital assets").
23.5 per cent compared to the same period in 2009/10.
Eastern Cape 3 648 987 1 188 833 32.6% 5.1% 14.1% 1 717 187 -30.
Free State 2 010 425 458 474 22.8% 5.0% 5.4% 824 360 -44.
Table 13 provides capital spending information by province and shows low rates of spending in the Free State at 22.8 per cent and Limpopo at 26.2 per cent, and high rates in the Western Cape at 41.3 per cent and Mpumalanga at 38 per cent. However, in absolute terms, KwaZulu-Natal spent the most, with total spending of R2.4 billion followed by Eastern Cape at R1.2 billion and Western Cape at R1 billion.
Provincial education departments spent R2.1 billion, or 29.4 per cent, of their R7.2 billion education capital budgets. This is R1 billion, or 33.3 per cent, less than spending over the same period in previous financial year.
Provincial health departments spent R3 billion or 33.6 per cent of their R8.8 billion health capital budgets, which is R253.1 million, or 7.9 per cent, less than the same period for 2009/10.
At 29 per cent, public works, roads and transport departments has, after health, the second highest share of provincial capital budgets. The sector spent R2.8 billion, or 37.9 per cent, against its combined capital budgets of R7.4 billion.
The total conditional grant allocation is R61.9 billion (including Schedule 4 and 8 grants), with health making up the bulk at R19.9 billion.
Table 14 reflects spending by all provinces on conditional grant allocations as at 30 September 2010. It excludes expected conditional grant roll-overs from the 2009/10 financial year and spending on Schedule 4 grants. Schedule 4 grants specify allocations to provinces to supplement the funding of programmes or functions funded from provincial budgets. The Expanded Public Works Programme (EPWP) Incentive grant for the infrastructure sector (Schedule 8 grant) specifies incentives to provinces to meet targets for priority government programmes.
Revenue Act, 2010 Act No.
Total excluding Schedules 4,8 grants & Gautrain 32 038 734 16 506 022 12 209 140 38.
Against the total allocation of R32.5 billion (which excludes Schedules 4 and 8 grants) the rate of conditional grants spending amounts to R12.6 billion, or 38.9 per cent. Excluding the Gautrain Rapid Rail Link grant, the conditional grant expenditure amounts to R12.2 billion, or 38.1 per cent, of the total allocation of R32 billion.
EPWP grant for the Social Sector (3.
Technical Secondary Schools Recapitalisation (7.
Housing Disaster Relief (14.
HIV and Aids (Life Skills Education) (22.
Ilima/Letsema Projects (26.6 per cent) and Land Care Programme (28.8 per cent).
Table 15 indicates selected conditional grant spending rates as at 30 September 2010. It further indicates that at the half-way mark, five or more provinces had spent less than 35 per cent of the following grants: Land Care Programme, Community Library Services, HIV and Aids (Life Skills Education) and Hospital Revitalisation.
The table also indicates the number of provinces where spending of conditional grant budgets is at between 35 and 45 per cent, and where it is greater than 45 per cent.
Percentages represent actual expenditure of main budgets as published in the Division of Revenue Act, 2010 (Act No.1 of 2010).
Provincial revenue includes budgeted equitable share allocations of R261 billion, conditional grants of R61.9 billion and own revenue of R9.5 billion. The total provincial revenue received and collected to date is recorded at R166.5 billion, or 50.1 per cent, of total budgeted revenue of R332.3 billion.
National government transferred R130.5 billion, or 50 per cent, of the equitable share and R31.3 billion, or 50.6 per cent, in conditional grants to provinces within the first six months of the current financial year.
After six months, provinces have collected R4.8 billion, or 50.3 per cent, of the budgeted own revenue of R9.5 billion, which is 12 per cent or R509.3 million more than what was collected by the end of September for the previous financial year.
The collection rate varies from 37.9 per cent in North West and 42 per cent in Mpumalanga, to a high of 60.4 per cent in the Eastern Cape and 55.6 per cent in KwaZulu-Natal.