1. Overview of the the New Funding Framework Presented by Prof Emile Horak Thanks and recognition to Prof Pieter Vermeulen who supplied the information

2. Latest Initiative of the Government New acrynom: Asgisa Yahoo Search results in : Check your spelling, Try more generic words, Try different words that mean the same Accelerated and shared growth initiative for SA (Asgisa)

3. Mlambo-Ngcuka to focus on skills shortage Business Report 11 May 2006 MLambo- Ngcuka is the political head of the government ‘s accelerated and shared growth initiative for SA (Asgisa) To address the critical shortage of skills and spread wealth more evenly Skills, infrastructure and logistics are the key priorities of Asgisa The government is planning to spend R 370 billion on infrastructure development, but the shortage of key skills to run these projects is threatening their roll-out. Will speed up the issuing of work permits to foreigners

4. Mlambo-Ngcuka to focus on skills shortage Business Report 11 May 2006 Government has also launched the joint Initiative on Priority Skills Acquisition (Jipsa) to attract much needed skills back to the country to help achieve 6 percent economic growth. Mlambo-Ngcuka is worried that companies could not accommodate new graduates who were looking for opportunities “ We are going to put some of these graduates in sanitation programmes- to to give them an opportunity”

5. GDP, Total State Finance and State Finance on Education for 2003/2004 (estimate) 1GDPR1 234 600 million 2Total State BudgetR 333 965 million = 27,5% of GDP 3Total Education BudgetR 68 781 million = 20,6% of State Budget = 5,57% of GDP 3.1Dept of EducationR 312 million = 0,45% of Educ Budget 3.2Higher Education SectorR 8 381 million = 12,2% of Educ Budget 3.3College/School SectorR 58 898 million = 85,6% of Educ Budget 3.4Other Educational functionsR 645 million = 0,94% of Educ Budget 3.5NSFAS (Higher Education)R545 million = 0,79% of Educ Budget National Student Financial Aid Scheme

6. The MTEF Process Medium Term Expenditure Framework – 3 year rolling estimates Department of Education (DoE) interacts with Higher Education (HE) Institutions (3 year rolling plans) and educational environment DoE interacts with national Treasury Treasury make allocation to HE, taking into account national policy and fiscal conditions DoE divides allocation amongst HE institutions

7. Distribution of Budget Totals for 2004/05, 2005/06 and 2006/07 Provisional distribution of MTEF budgets 2004/05 (R’million) 2005/06 (R’million) 2006/07 (R’million) 1 Block grants8 56886,7%9 14486,7%9 71686,6% 1.1 Teaching inputs5 49655,6%5 86655,6%6 23355,5% 1.2 Teaching outputs1 37413,9%1 46613,9%1 55813,9% 1.3 Research outputs1 12511,4%1 20011,4%1 27611,4% 1.4 Institutional factors5735,8%6115,8%6495,8% 2 Earmarked grants8098,2%8608,1%9388,4% 2.1 NSFAS5785,8%6386,0%7266,5% 2.2 Interest & redemption on loans1461,5%1311,2%1151,0% 2.3 Teaching development Foundation programms850,8%910,86%970,86% 2.6 New capital projects00%0 TOTAL: BLOCK & EARMARKED9 879100%10 554100%11 222100% 3 Special allocation for institutional restructuring 5025,1%5505,2%5685,1% This total allocation was about R9 385 million in 2003/4

8. Example of Division of Government Budget between Grant Categories (2005/06) National budget for higher education institutions 100% [R10 554m] Earmarked 13,3% [R1 410m] NSFAS 6% [R638m] Institutional restructuring 5,2% [R550m] Foundation Year Interest & Redemption 2% [R231m] Block grants 86,6% [R9 144m] Teaching Input grants 55,6% [R5 866m] Approved FTE student places Non-research graduates & diplomates Research masters & doctorates & publications (a) Enrolment size (b) Disadvantaged students Teaching output grants 13,9% [R1 466m] Research output grants 11,4% [R1200m] Institutional factor grants 5,8% [R611m] generated by

9. Ministerial prerogative The division of funds between the grant categories is determined by the Minister of Education The division may vary between years, subject to the MTEF three year projections

10. Teaching Input Grants Based on approved FTE student places as determined in the Programme and Qualification Mix (PQM) process: (a)Four funding groups (b)Four study levels (c)Weighted according to funding group and study level Previously this was only two groups/levels

11. Four Funding Groups Funding groupCESM categories included in funding group 1 07education 13law 14librarianship 20psychology 21social services/public administration 2 04business/commerce 05communication 06computer science 12languages 18philosophy/religion 22social sciences 3 02architecture/planning 08engineering 10home economics 11industrial arts 16mathematical sciences 19physical education 4 01argriculture 03fine and performing arts 09health sciences 15life and physical sciences

12. Weightings according to Funding Group and Study Level Level Funding group Undergraduate & equivalent Honours & equivalent Masters & equivalent Doctoral & equivalent 11.0 (0.5)2.0 (1.0)3.0 (3.0)4.0 (4.0) 21.5 (0.75)3.0 (1.5)4.5 (4.5)6.0 (6.0) 32.5 (1.25)5.0 (2.5)7.5 (7.5)10.0 (10.0) 43.5 (1.75)7.0 (3.5)10.5(10.5)14.0 (14.0) (i) Contact Students (Distance Students)

13. Determining Teaching Input ‘price’ Passing institution’s adjusted FTE enrolled student total through funding grid weighted teaching input Equivalent figure for sector Available funds for teaching input Institution’s portions Proportionate allocation; not ‘price’ in the economic sense. Estimated TI Unit “price” ±R6 600

14. Example of Teaching Input Grid University of Pretoria Level Total Weighted Total Funding group1234 14 8268103231786 1388 129 27 5201 4034101949 52618 498 33 2191 063243634 58715 813 43 7131 2685801785 74030 465 Total19 2784 5441 55661325 99172 905 Weighted Total37 15020 00810 7415 00672 905 (Contact)

15. Teaching Output Grant (a) Non-research output measured by non-research graduates and diplomates and weighted And (b) Measured against output norms (benchmarks) (a)Weighting factors for teaching outputs: universities & technikons 1 st certificates and diplomas of 2 years or less0.5 1 st diplomas and bachelors degrees: 3 years1.0 Professional 1 st bachelors degrees: 4 years and more1.5 Postgraduate and postdiploma diplomas0.5 Postgraduate bachelors degrees1.0 Honours degrees/higher diplomas0.5 Non-research masters degrees0.5

16. Teaching Output Grant (continued) ContactDistance 2004/05 Undergraduate: up to three years22.5%13.5% Undergraduate: four years and more18%9% Postgraduate: up to honours54%27% Postgraduate: up to masters (non-Research)30%22.5% (b) Graduation benchmarks for contact and distance programmes (Graduates as % of head count enrolments)

17. Teaching output allocation Calculate institution’s actual weighted total graduates/diplomates Actual weighted total teaching output for system Normative total teaching output for the institution (using benchmarks) Normative total teaching output for system Available funds for teaching outputs Institutional allocation, Estimated TO Unit “price” ±R11 700

18. Research Outputs (a) Research outputs measured by publications in accredited journals, research masters and doctoral graduates (weighted) And (b) Measured against a research output norm benchmark 3Doctoral graduates 1Research masters graduates 1Publication units (a) Weightings for research outputs 0.5Technikons 1.25Universities (b) Ratios of weighted research output units to permanently appointed instruction/research staff

19. Research Output Allocation Determine institution’s actual total weighted research output Calculate the institution’s normative total weighted research output (applying the benchmarks) Normative weighted total research output for system Available funds for research output Proportional Institution’s research output allocation, Estimated RO Unit “price” ±R77 000

20. Institutional Factor Grants 2.1 Measured by the proportion of disadvantaged students [Contact African & Coloured students who are SA citizens] IFG (DS) = % X TIG

21. Institutional Factor Grants 3.2 Size of the institution IFG (Size) = % X TIG 0.00% 2.50% 5.00% 7.50% 10.00% 12.50% 15.00% 40008000 12000160002000025000 NUMBER OF FTE CONTACT AND DISTANCE STUDENTS PERCENTAGE

22. Earmarked funding National Student Financial Aid Scheme (NSFAS) Interest and redemption on loans approved before 1999 New capital projects Institutional restructuring

23. INTERVENTION  Discussion Document of DoE “Student Enrolment Planning: March 2005”  Ministerial Statement of Higher Education Funding: 2005/06 to 2007/08 (July 2005)

24. Teaching Input Capping InstitutionActual 2003Capped for 2005/06Capped for 2006 – 2009 Cape Peninsula4.52%4.49% Cape Town5.07%5.24% Central1.67%1.64% Durban Institute3.71%3.83% Fort Hare1.19%1.15% Free State4.38%4.45% Johannesburg7.03%6.91% Kwazulu Natal7.88%7.70% Limpopo3.47%3.41% Mangosuthu1.34%1.17% Nelson Mandela3.67%3.80% North West5.28%5.01% Pretoria8.89%9.19% Rhodes1.14%1.18% South Africa9.63%9.96% Stellenbosch4.93%5.09% Tshwane8.45%8.57% Vaal Triangle2.36%2.44% Venda1.55%1.34% Walter Sisulu3.38%3.04% Western Cape2.87%2.86% Witwatersrand6.07%6.09% Zululand1.54%1.45%

25. Internal wrangles Protected Species Star DogCash cow Low High FTE/ Staff member High Low Research output per Staff member

26. Internal wrangles Protected Species Star DogCash cow Low High FTE/ resources taken up High Low Research output per resources required

27. FINIS