Robust year-on-year comparative spending analysis growth over the same period for the 2007/08 financial year is notable.
At the time of tabling their budgets, provinces were asked to provide for salary adjustments of 7.5 per cent in 2008/09, but actual increases of 10.
Costs associated with inflation higher than expected for textbooks, medicine and medical equipment, school meals and fuel.
However, the 2008 Adjusted Estimates of National Expenditure and the 2008 Medium Term Budget Policy Statement tabled on 21 October 2008, proposed additional adjustments to the allocations made to provinces for the 2008 Budget to cover for these shortfalls mentioned above. These documents are available on the treasury website at www.treasury.gov.za.
The additional adjustments can only be concluded once provinces have tabled their 2008 adjusted estimates during November 2008.
In aggregate, provinces have spent 51.8 per cent or R128.6 billion of their main budgets of R248.4 billion for the period ended 30 September 2008. These figures include the earlier announced improvements in conditions of service (ICS), which were effected from 01 July 2008.
In aggregate, provinces spent 41.9 per cent or R9.3 billion of their R22.2 billion combined capital budgets. This is a significant improvement of 30.4 per cent over the previous financial year, exceeding the R7.1 billion spent over the same period in 2007/08 by R2.2 billion.
Provincial education departments spent 41.7 per cent or R2 billion of their R4.8 billion education capital budgets. However, this is higher by 37.4 per cent or R547.1 million more than spending over the same period of the previous financial year.
Provincial health departments also improved on capital spending.
40.3 per cent or R2. This represents an increase of 30.1 per cent or R888.3 million compared to the same period last year.
Provincial own revenue collected thus far is at 45.7 per cent or R4.2 billion of the total own revenue budget of R9.2 billion. National government has transferred R99.7 billion of the equitable share and R21 billion in conditional grants to provinces, during the first six months of the 2008/09 financial year.
A more detail analysis of the expenditure outcome as at 30 September 2008 is set out in Annexure A, which also includes a comparative spending analysis for the same period over the 2007/08 financial year.
Table 1 indicates that provinces have spent 51.8 per cent or R128.6 billion of budgeted expenditure for the first six months into the current financial year. Spending to date is at a higher level in percentage terms compared to spending against annual budgets over the same period in the 2007/08 financial year (44.9 per cent).
However, in nominal terms, spending is 32.8 per cent or R31.8 billion higher than for the same period last year when provinces had spent R96.9 billion. Between provinces, spending ranges from the lowest share of 46.
48.5 per cent in North West, to the highest at 55.8 per cent in Gauteng and 54.2 per cent in Northern Cape.
Eastern Cape 29 723 932 5 128 765 3 232 033 38 084 730 14 878 177 2 730 831 1 612 916 19 221 924 50.
Free State 11 760 168 2 025 488 1 899 247 15 684 903 6 201 304 1 084 994 874 003 8 160 301 52. Spending on social services is recorded at R94.1 billion or 51.7 per cent of the total provincial social services budgets in 2008/09.
Education budgets of R104.2 billion comprise 41.9 per cent of total provincial budgets. Table 3 indicates that education expenditure is at 50.9 per cent or R53 billion of the total education budget, an increase of 24.7 per cent or R10.5 billion compared to the R42.5 billion spent over the same period in 2007/08.
58.2 per cent and KwaZulu-Natal at 54.5 per cent.
Eastern Cape 17 810 197 8 567 448 48.1% 44.6% 6 515 443 31.
Free State 6 598 569 3 385 644 51.3% 41.5% 2 720 661 24.
Northern Cape 2 601 238 1 514 385 58.2% 41.8% 1 114 246 35.
Spending by provinces ranges from the lowest in Eastern Cape at 47.2 per cent and North West at 49.
56.9 per cent and 54.4 per cent respectively.
Eastern Cape 13 843 318 6 535 790 47.2% 59.2% 5 696 218 14.
Free State 4 910 055 2 620 432 53.4% 55.1% 2 197 936 19.
Northern Cape 1 953 794 1 110 907 56.9% 57.9% 851 686 30.
Education capital expenditure is at 41.7 per cent or R2 billion of the R4.8 billion budget. However, this is 37.4 per cent or R547.1 million more than the R1.5 billion spent on capital over the same period last year.
Spending by provinces ranges from the lowest in Gauteng at only 24 per cent and North West at 24.7 per cent to the highest in Northern Cape at 77.5 per cent and Mpumalanga at 60.6 per cent.
Health budgets totalling R69.4 billion comprise 27.9 per cent of total provincial budgets. Table 6 indicates that health expenditure is at 53.6 per cent or R37.2 billion of the total health budget, representing a significant increase of 31 per cent or R8.8 billion compared to spending over the same period in 2007/08.
Western Cape and Limpopo health have spent the lowest share of their budgets at 47 per cent and 50.4 per cent respectively. The highest shares are recorded in KwaZulu-Natal at 57.6 per cent and Eastern Cape at 56.2 per cent.
Table 7 indicates that health personnel expenditure is R21 billion or 54.8 per cent of the health personnel budget, a significant increase of R5.2 billion or 32.9 per cent compared to the R15.8 billion spent over the same period in 2007/08.
Eastern Cape 5 480 717 3 031 921 55.3% 27.5% 2 096 497 44.
Free State 2 599 600 1 446 613 55.6% 30.4% 1 114 133 29.
Northern Cape 915 369 443 376 48.4% 23.1% 367 460 20.
North West 2 268 883 1 241 411 54.7% 25.8% 903 369 37.
Western Cape 4 771 834 2 386 698 50.0% 36.4% 1 876 736 27.
Total 38 396 504 21 039 317 54.8% 29.8% 15 826 238 32.
Between provinces, with a varying degree of spending, the lowest rate of health capital spending is in Western Cape at 26.8 per cent and Mpumalanga at 29.
48.7 per cent respectively.
Provinces registered spending of 46.3 per cent or R3.8 billion of their R8.3 billion budget. This represents a significant increase of 43.1 per cent or R1.2 billion above the R2.7 billion spent over the same period last year.
Between provinces, there are varying degrees of spending with the lowest being in North West at only 37.9 per cent and Limpopo at 39.9 per cent while the highest are KwaZulu-Natal at 52.2 per cent and Mpumalanga at 49.1 per cent.
Housing and local government spending at the end of the first six months is at 46 per cent or R6.5 billion of the R14.2 billion budget (table 10). This represents a significant increase of 47 per cent or R2.1 billion more than the R4.4 billion spent over the same period last year.
34.1 per cent and KwaZulu-Natal at 38.
60.7 per cent and Northern Cape at 57.1 per cent.
Most of the housing and local government expenditure is on the Integrated Housing and Human Settlement Development conditional grant. Table 11 indicates that provinces spent 45 per cent or R4.4 billion of their R9.9 billion housing conditional grant. These spending figures are higher by 53 per cent or R1.5 billion over the same period last year.
Eastern Cape 1 968 111 672 099 34.1% 3.5% 384 710 74.
Free State 1 022 024 571 732 55.9% 7.0% 267 392 113.
Personnel expenditure ("compensation of employees") is at 51.9 per cent or R70.6 billion of the R136.1 billion budget. Spending to date is 24.1 per cent or R13.7 billion higher than the R56.9 billion spent over the same period last year.
49.6 per cent and 50.4 per cent respectively while Mpumalanga and KwaZulu-Natal recorded the highest rates at 53.4 per cent and 53.2 per cent respectively.
By the end of the first six months, provinces have spent 41.9 per cent or R9.3 billion of their R22.2 billion capital budgets ("payments for capital assets"). This is significantly higher (30.4 per cent or R2.2 billion) than the R7.1 billion spent over the same period last year.
Eastern Cape 3 232 033 1 612 916 49.9% 8.4% 893 760 80.
Table 13 provides capital spending information by province, which indicates low rates of spending in Gauteng at 27.9 per cent and Western Cape at 33.2 per cent and high rates in Northern Cape at 53.2 per cent and Eastern Cape at 49.9 per cent. However, in absolute terms, KwaZulu-Natal has spent the most at R2.5 billion followed by Eastern Cape at R1.6 billion and Gauteng at R966.8 million.
The biggest capital budgets in provinces are in public works, roads and transport departments at 37.6 per cent or R8.4 billion of the total provincial capital budget of R22.2 billion. Spending by these departments is at 45.9 per cent or R3.8 billion which is an increase of 30.1 per cent or R888.3 million more than the R2.9 billion spent last year over the same period.
Between provinces, the lowest rate of spending is recorded in Gauteng at 10.4 per cent and Limpopo at 26.5 per cent, while Northern Cape and Eastern Cape recorded the highest rates of spending at 68 per cent and 67 per cent respectively.
Total excluding Schedule 4 grants and Gautrain 19 900 108 10 178 214 8 709 447 43.
Table 15 reflects spending on conditional grant allocations as at 30 September 2008 for all provinces. It excludes expected conditional grant roll-overs from the 2007/08 financial year and spending on general purpose conditional grants (Schedule 4 grants) like National Tertiary Services, Health Professions Training and Development and the Infrastructure grant to provinces, as reporting against these grants cannot be separated from the provinces' health and capital budgets.
Against the total allocation of R23.2 billion, this excludes Schedule 4 grants, the rate of conditional grants spending amounts to 50.8 per cent or R11.8 billion. However, when excluding the Gautrain Rapid Rail Link grant, the conditional grant expenditure amounts to R8.7 billion or 43.8 per cent against a total allocation of R19.9 billion.
Specific grants that show low rates of spending include Devolution of Property Rate Funds (2.3 per cent), Community Library Services (32.2 per cent), Land Care Programme (33.3 per cent), Hospital Revitalisation (33.8 per cent) and Mass Sport and Recreation Participation Programme (35.1 per cent).
Spending on the Further Education and Training College Sector Recapitalisation grant is at 77.1 per cent or R613.2 million and reflects actual transfers from the provincial education departments to the FET colleges.
Table 16 indicates selected conditional grant spending rates as at 30 September 2008. It further indicates that four or more provinces have spent less than 40 per cent of their grants budgets after the first six months for the following grants: Land Care Programme, Community Library Services, Hospital Revitalisation, Integrated Housing and Human Settlement Development, and Mass Sport and Recreation Participation Programme.
The table also indicates the number of provinces spending at slightly higher levels between 40 and 50 per cent and greater than 50 per cent of their conditional grant budgets.
Although the conditional grant rate of spending is encouraging and reflects an improvement over previous financial years, overall conditional grants spending still lies below the total provincial spending average of 51.8 per cent.
54.2 per cent or R21 billion in conditional grants, to provinces after the first six months of the current financial year.
After the first six months, provinces have collected 45.7 per cent or R4.2 billion of the budgeted own revenue of R9.2 billion which is R164.9 million less than what was collected by the end of September for the previous financial year.
The collection rate varies from 29.5 per cent in KwaZulu-Natal and 38 per cent in Gauteng, to a high of 66.9 per cent in Mpumalanga and 57.7 per cent in Western Cape.