Education

My department has informed me of the following:

3.       (1)     (a)    The reference to the R537 million relates to the first year of the three-year 2024 Medium Term Economic Framework (MTEF) at the time when the budget speech was delivered.

(b)    The R537 million shortfall increased to R687.5 million for 2024/25 financial year due to systemic growth, thereafter it increases to R1.19 billion in the 2025/26 financial year and R1.92 billion in the 2026/27 financial year.

          This is a total of R3.8 billion over the 2024 MTEF period.

(c)     The updated R3.8 billion shortfall figure was calculated at the start of the 2025 Basket of Posts process in July 2024.

          However, the provincial minister has since November 2023 warned of an expected budget shortfall, following the announcement that the National Treasury would not fully fund the 2023 multi-year wage agreement

          The extensive media statements and speeches made by the provincial minister since November 2023 on the impact of the fiscal emergency are available here:

          We are fighting to place learners despite massive blow to our budget –  https://www.westerncape.gov.za/gc-news/408/60376

          Debate on Vote 5: Education Adjustment Budget – https://www.westerncape.gov.za/gc-news/408/60410

          Western Cape schools are full – https://www.westerncape.gov.za/gc-news/408/60422

          We are fighting to place learners despite massive budget cut – https://www.westerncape.gov.za/gc-news/408/60456

          3 579 extremely late applications for Grade 1 and Grade 8 learners received – https://www.westerncape.gov.za/gc-news/408/60551

          Debate on Vote 5: Education –

          https://www.westerncape.gov.za/gc-news/408/60677

          We are doing everything to support our schools following major budget cuts – https://www.westerncape.gov.za/gc-news/408/60706

          We are doing everything we can to protect our schools from budget cuts – https://www.westerncape.gov.za/gc-news/408/60710

          We will fight for our teachers – https://www.westerncape.gov.za/gc-news/408/61113

          We are fighting against budget cuts across all education departments – https://www.westerncape.gov.za/gc-news/408/61123

          We urge unions to fight alongside us, rather than against us – https://www.westerncape.gov.za/gc-news/408/61136

          Critical learner support programmes under threat due to unfunded wage agreement – https://www.westerncape.gov.za/gc-news/408/61162

2)      (a)    R537 million, which was revised to R687.5 million, relates to the first year of the 2024 MTEF, where the R3.8 billion represents the budget shortfall over the three-year 2024 MTEF.

(b)    The member is reminded that the determination of the Basket of Posts for a school year takes place in the preceding year. The 2024 Basket of Posts process took place in 2023.

          The medium-term budget cuts, which occurred after the 2024 Basket of Posts process, represented a new challenge which the WCED has fought to overcome through cuts to other directorates and programmes.

(c)     The provincial minister’s budget speech in March 2024 preceded the 2025 Basket of Post process, which took place in July 2024, and thus preceded the decision to reduce posts made during that process.

          Nonetheless, the Education Budget Speech in March 2024 did indeed warn of the impact of the budget cuts:

“5.   Budget cuts: impact and response

At the end of last year, we suffered a devastating R716.4 million blow to our budget for education in the Western Cape.

Our conditional grants, including the Education Infrastructure Grant, were cut by R179.4 million.

In addition, the national government only provide 64% of the wage agreement funding due to us, which means we were short-changed by R537 million.

This forced us to implement cost containment measures, including building fewer schools and employing fewer relief teachers.

This will put more pressure on our schools and more pressure on our teachers.’

          Moreover, in the Education Adjustment Budget Speech delivered in December 2023, the provincial minister outlined in detail the steps that the WCED was taking to reduce the shortfall:

“1. Adjustment budget cut and impact on service delivery

But in June, we began to hear whispers in the corridors that something was seriously wrong, and that the national government was in trouble.

We heard rumours that national government couldn’t afford the wage deal, and that a full-blown fiscal emergency was looming.

And once the national Minister of Finance announced the mid-term budget on 1 November 2023, the sheer scale of the national fiscal emergency hit us.

The National Treasury then promised us 78% of the cost of the wage agreement for education and health, but in fact only gave our department 64% of the cost, which means we are being short-changed by the national government to the tune of R537 million.

At the same time, the Department of Basic Education cut our conditional grants by R179.4 million:

• The Education Infrastructure Grant has been cut by R156.9 million;
• The Maintenance Component of the Early Child Development Grant been cut by R14.0 million;
• The Maths, Science and Technology Grant has been cut by R4.3 million;
• The HIV Grant been cut by R3.1 million;
• The Expanded Public Works Programme Grant has been cut by R207 000.

In other words, the national government has dealt a massive R716.4 million blow to our ability to build and maintain schools, and pay teachers.

Now, to fund the shortfall created by this massive blow, we have had to:

• Cut back on our #BackOnTrack plans,
• Cut back on our Rapid School Build plans, and
• Reduce spending on staffing in our department.

We will have to cut R143.5 million from the #BackOnTrack budget this year, which unfortunately will put an end to our plans to expand the number of and resources for learners in Grades 8 and 10, and the parent programme.

The cuts we face to infrastructure spending are twofold.

Firstly, the national government has slashed our conditional grants related to infrastructure, which has the obvious impact of reducing our infrastructure budget directly.

Secondly, having been short-changed by National Treasury in terms of the wage agreement negotiated without us, we have to find the R527 million somewhere else, including from our infrastructure budget.

The net impact is a R248 million cut to our spending on school infrastructure, which very obviously will limit our ability to deliver new schools and maintain existing ones.

And the cut to our wage agreement funding requires cost containment measures in terms of staffing.

With effect from 18 October, National Treasury centrally froze a variety of categories of vacant posts, including senior and middle management but excluding frontline staff.

In addition, from 1 April 2024, which is the start of the next financial year, we will have to do the following in order to avoid cutting staff:

• Stop the provision of substitute teachers, except to cover teachers on maternity leave;
• Stop the provision of post level 1 contract teachers in place of those acting in vacant School Management Team promotion post, excluding for vacant Principal posts;
• Any vacant post level 1 posts must be advertised in a Vacancy Bulletin, and cannot be filled with a contract appointment; and
• Vacant public service posts at schools must be advertised in a Vacancy Bulletin, and cannot be filled with a contract appointment

The upshot of this is that filling of posts is going to take longer, and staff may need to take on extra work.

2. What makes these cuts unusual

Aside from the sheer scale of the blow from the National Treasury, the mid-term adjustment has had two unusual features:

• The entire budget period has been characterised by extreme uncertainty; and
• For the first time ever, the cuts are an immediate, in-year blow to our budget, at the exact time when demand for placement is highest.

The warnings that National Treasury would leave us in the lurch on the wage agreement meant that we had no choice but to pull the handbrake on spending from June this year, until further clarity was provided.

We were essentially placed in a holding pattern by the national government for five months!

This environment of extreme uncertainty had an immediate impact on our plans for infrastructure, as we could not enter into contractor agreements without having certainty that we would have the funds to pay them.

And with the National Treasury having effectively put the brakes on all spending between June and October, we essentially have two months to complete the work for the start of the school year.

Moreover, we have absolutely no indication of what the medium term holds, which makes it extremely hard to plan for the next three years.

There is no way to sugarcoat this: the national budget process has completely collapsed.

And as my colleague the provincial Minister of Finance put it, we no longer have a three-year budget process. We don’t even have a one-year budget process. The National Treasury is quite simply operating a pay-as-you-go budget process.

This is particularly damaging for the education sector, because our service delivery calendar does not align to the financial year.

Schools open in January, not at the end of March, so we have a delivery deadline that is a mere two months after the announcement of the national mid-term budget.

The wage agreement comes into effect automatically, and we must fund it immediately, so we have absolutely no choice but to find the money somewhere, somehow”.

(d)    As noted, the 2024 Basket of Posts process which took place in 2023 preceded the budget cuts.