VOTE 16: HIGHER EDUCATION AND TRAINING Presentation on: Expenditure progress 2010/11 2010 MTEF: 2011/12 Allocations 2011 MTEF 12 October 2010

Presentation Structure Budget versus expenditure 1 April 2010 to 30 September 2010 2010 MTEF Allocations: Projections up to 31 March 2012 2011 MTEF Process

PART 1 BUDGET VERSUS EXPENDITURE 1 APRIL 2010 TO 30 SEPTEMBER 2010 The Department’s total budget of R32.145 billion includes a large amount of direct charges and transfers. The budget versus expenditure to 30 September 2010 is as follows R’000 : Budget Expenditure Total voted funds 32 144 926 21 953 503 Less: Direct charges (SETA funding and NSF) 8 424 228 4 661 121 Balance of voted funds 23 720 698 17 292 382 Less Transfers: Universities 17 516 740 13 581 999 NSF (Contribution by Exchequer) 51 731 34 488 Public Entities 1 986 740 1 550 210 FET Conditional Grant 3 772 661 1 966 951 Other ( such as SETA) 569 392 Less Compensation of Employees 228 901 121 905 Balance available/spent on operational expenditure and project costs 163 356 36 437

EXPENDITURE PER PROGRAMME (EXCLUDING DIRECT CHARGES) 2010/11 Total per programme  ENE (R’000) EXP (R’000)  % SPENT P1: Administration 100 545 35 745 35.6 P2: Human Resource Development, Planning and Monitoring Coordination 26 004 9 355 36.0 P3: University Education 19 493 353 15 147 507 77.7 P4: Vocational and Continuing Education and Training 3 932 518 2 029 113 51.6 P5: Skills Development 168 278 70 662 42.0 Total Allocation 23 720 698 17 292 382 72.9

Economic Classification (R’000) 2010/11 (R’000) Expenditure % Spent (%) Compensation of employees 228 901 121 905 53 .3   Goods and services 153 523 35 467 23.1 Transfers and subsidies 23 328 441 17 134 040 73.4 Machinery and equipment 9 833 970 9.9 Total 23 720 698 17 292 382 72.9

Detail of earmarked allocations/transfers (R’000) 2010/11 ENE (R’000) EXP % SPENT Transfers to Universities 17 516 740 13 581 999 77.5   Transfers to Public Entities 1 986 740 1 550 210 78.0 NSFAS 1 909 359 1 511 519 79.2 CHE 36 046 18 023 50.0 SAQA 41 335 20 668 Other Transfers 3 824 961 2 001 831 52.3 SETA 141 125 88.7 India-Brazil-South Africa Trilateral Commission 428 - 0.0 National Skills Fund 51 731 34 488 66.7 FET Conditional Grant 3 772 661 1 966 951 52.1 Households  - 267 Earmarked Funds 25 551 1 988 7.8 Office Accommodation

Projections for Adjustments Estimate (Not yet finalised) (R’000) 2010/11 (R’000) Amount allocated in the ENE (Excluding Direct Charges) 23 720 698  Plus:   Amount requested to be rolled over 16 306 Inflation adjustment for salary increases 6 000 Amount to be suspended from Basic Education for Commonwealth of Learning 1 901  TOTAL PROJECTED ADJUSTMENTS  24 207 TOTAL PROJECTED REVISED ALLOCATION 23 744 905 Expectations are that additional funds will not be received for the Examinations Function for this financial year Virement will be applied to address projected over-expenditure on the examinations function and projects such as the FET intervention project.

2010 MTEF ALLOCATIONS: PROJECTIONS UP TO 31 MARCH 2012 PART 2 2010 MTEF ALLOCATIONS: PROJECTIONS UP TO 31 MARCH 2012 TREASURY ALLOCATIONS   2010/11 2011/12 R'000 Baseline allocation 19 758 642 21 615 071 Additions to baseline: 3 793 778 4 303 290 Higher Education Subsidies - 300 000 Student Loans: Inflation adjustment Funding for newly established department 20 000 30 000 Compensation of Employees adjustment 1 117 1 301 Further Education and Training (Shift from Provinces)* 3 372 661 3 541 989 Further Education and Training (College educators) 400 000 430 000 Adjustments to Baseline 8 592 506 9 336 195 Skills Function Shift from Department of Labour 166 077 184 915 Skills Function Shift: Compensation of Employees adjustment from Department of Labour 2 201 2 568 Function Shift: Direct Charges 8 424 228 9 148 712 Sector Education and Training Authorities 6 739 382 7 318 967 National Skills Fund 1 684 846 1 829 745 Less: ( 1 246) Baseline Efficiency Savings 2010 ENE ALLOCATIONS 32 144 926 35 253 310 Excluding Direct Charges 23 720 698  26 104 598  8

Allocation per programme  2010/11 (R’000) 2011/12 (R’000)  P1: Administration 100 545 106 086 P2: Human Resource Development, Planning and Monitoring Coordination 26 004 28 794 P3: University Education 19 493 353 21 681 852 P4: Vocational and Continuing Education and Training 3 932 518 4 100 383 P5: Skills Development 168 278 187 483 Total Allocation 23 720 698 26 104 598 9

Allocation per Economic Classification 2010/11 (R’000) 2011/12 Compensation of employees 228 901 245 795   Goods and services 153 523 173 286 Transfers and subsidies 23 328 441 25 679 510 Machinery and equipment 9 833 6 007 Total 23 720 698 26 104 598 10

PART 3 2011 MTEF PROCESS The Department submitted bids for additional funding to improve access for post-school education and training through a Ministerial letter as part of the 2011 MTEF budgeting process Discussions took place with the Department in the Medium Term Expenditure Committee Workgroup for Education, responsible for the whole Education Sector, including Basic Education and provincial education From discussions in the workgroup, it is anticipated that some funding will be made available for the Higher Education and Training Sector, although very limited Any additional funding will be submitted as a proposal by National Treasury to the Medium Term Expenditure Committee (MTEC) for final recommendations to be presented to the Minister’s Committee on the Budget (MinComBud) MinComBud will after consideration of the proposals by the MTEC, submit recommendations to Cabinet A summary of the bids for additional funding submitted to National Treasury follows in the next slide

Total Funding Proposal over the 2011 MTEF PRIORITY AREA 2011/12 2012/13 2013/14 Total   R'000 Cost of Establishing Full Functionality of DHET 107,949 102,310 107,884 318,143 Cost of Establishing DHET Regional offices 15,000 9,000 33,000 Expansion of Subsidies to Fully Fund NSFAS Grant Holders 1,738,000 2,069,000 2,476,000 6,283,000 University Block Grant 770,000 910,000 1,075,000 2,755,000 Establishment of Universities in Mpumalanga and Northern Cape 155,000 275,000 384,000 814,000 Infrastructure and Output Efficiency Grant 187,000 1,344,000 1,540,000 3,071,000 HEAIDS 49,000 53,000 58,000 160,000 Support for the Additional Enrolment Projections in the public FET Colleges 3,448,000 4,040,000 5,938,000 13,426,000 FET Colleges NSFAS 502,000 728,000 1,026,000 2,256,000 FET Colleges Examination 85,000 119,000 262,000 Implementation of the Newly Established Quality Council for Trade and Occupations 22,500 31,800 31,300 85,600 TOTAL MTEF FUNDING REQUIREMENT (3-years) 7,052,449 9,647,110 12,764,184 29,463,743 12 12

Other steps taken include a request to National Treasury for a review of the equitable share to address the enrolments at FET Colleges The Minister of Higher Education and Training will also be meeting the Minister of Finance to discuss key areas including: - The need for additional resources in the current MTEF for existing programmes - Steps that are considered to allocate resources from the NSF and skills levy funding to address the provision of critical and scarce skills - The requirement to increase the investment in education and training over time - THANK YOU -