Slower growth in subsidies and grants for the higher education and training sector will require a review of student enrolment increases and bursary allowances, says the Treasury.
The Budget Review, tabled in parliament on Wednesday, shows that allocations to the higher education and basic education sectors will hardly increase in the medium term as government struggles to stabilise its finances.
In the medium term expenditure framework (MTEF), spending on basic education will rise from R272bn in 2021 to about R280bn in 2023/2024. Spending in the higher education sector will increase from about R120bn in 2021 to R124bn in 2023/2024.
Programmes in both sectors will, however, face cuts. This includes the school infrastructure backlog grant, learning and teaching support materials and university subsidies.
The grant on school infrastructure backlogs of R1.9bn in 2021 will decrease almost 4% over the medium term, according to the review while learning and teaching support materials will drop 3% to R5.4bn in 2023/2024.
In the higher education and training sector, university subsidies will increase 3.5% on average in the medium term from R45bn in 2021 to almost R48bn in 2023. Allocations to the National Student Financial Aid Scheme (NSFAS) — the government’s bursary programme for poor students — will increase from about R37bn in 2021 to R38.6bn in the medium term or at an average of 1.7% over the period which is well below the inflation rate of about 3.3%.
NSFAS said previously that it expects to fund 1-million university students and 870,000 TVET college students in the medium term, but this is unlikely to happen now.
“In the post-school education and training sector, slower growth in subsidies and grants for universities, technical and vocational education and training colleges, and the National Student Financial Aid Scheme will require a review of student enrolment growth and bursary allowances,” the Budget Review says. Institutions will need to contain costs, including staff numbers and salaries, and develop more effective ways to use information and communication technology to enhance blended learning.
The higher education and training sector has been struggling due to funding constraints in recent times after former president Jacob Zuma effectively overruled the Heher commission report on the feasibility of free higher education by unilaterally announcing at the ANC national conference in 2017 that the government would introduce free higher education for poor and working-class students.
In the medium term budget policy statement tabled in October, it was suggested that a possible review of the scheme to provide financial support to students in post-school education could be on the cards.
The government’s total consolidated spending amounts to R2-trillion every year in the medium term. The bulk of the spending is allocated to learning and culture (R402.9bn), social development (R335.2bn) and health (R248.8bn) in 2021/2022.
Basic education is allocated R272bn which will increase to about R277bn in 2022 and R280bn in 2023. Post-school education and training receives R111bn rising to R119bn in 2022, R123bn in 2023 and R125bn the year after.
In the medium term, the learning and culture function accounts for R1.23-trillion or 23.5% consolidated expenditure. Expenditure in this function is driven by basic education. In this sector, compensation of employees in provincial education departments remains the largest spending category, representing 51.2% of total functional expenditure. Low compensation growth of 0.8% over the MTEF period, combined with early retirements, will reduce the number of available teachers, according to the Budget Review.
“This, coupled with a rising number of learners, implies larger class sizes, especially in no-fee schools, which is expected to negatively affect learning outcomes,” the review states.
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