1 DEPARTMENT OF SOCIAL DEVELOPMENT PRESENTATION TO THE SELECT COMMITTEE ON FINANCE ON THE PROVINCIAL BUDGETS & EXPENDITURE REVIEW 14 NOVEMBER 2006.

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DEPARTMENT OF SOCIAL DEVELOPMENT

PRESENTATION TO THE SELECT COMMITTEE ON FINANCE ON THE PROVINCIAL BUDGETS &

EXPENDITURE REVIEW

14 NOVEMBER 2006

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SOCIAL DEVELOPMENT MEDIUM TERM BUDGET PRIORITIES

1. Institutional reform of the social security service delivery system:

– Establishment of Social Security Agency • Head Office fully functional & capacitating regional offices• Service delivery improvement & systems integration• Implementation of norms & standards• Implementation of Fraud Prevention & Eradication Strategy

2. Sector Institutional Reform – Business System Re-engineering– Strengthening the Strategy, Oversight and M&E function

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SOCIAL DEVELOPMENT MEDIUM TERM BUDGET PRIORITIES

3. Expansion and consolidation of welfare and community development programmes & services:

– Welfare programmes• Services to older persons and people with disabilities• Prevention and Treatment of Substance Abuse• Expansion of services to fulfill the rights of children• Implementation of new policies including Victim Empowerment

Policy, Family Policy & Disability Policy– Community development

• Community –based care and support programmes• Development of norms and standards

– Capacity building for our implementation partners• NGO funding• Compliance with non-profit organizations Act 71 of 1997

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SOCIAL DEVELOPMENT MEDIUM TERM BUDGET PRIORITIES

4. Human Capital Development. – Social workers– Auxillary social workers– Community development practitioners– Child and youth workers

5. Expanded Public Works Programme– Expansion of services

• Home/Community Based Care• Early Childhood Development

– Challenges for DSD as co-ordinating department – M&E

6. Review of Social Assistance Act to address– Social Relief of Distress – Disability – new definition

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NEW FISCAL ARRANGEMENT

• The social assistance function shifted to the national sphere of government with effect from the 2005/06 financial year.– The funding for the social assistance function no longer form

part of the equitable share allocations to provinces; and

– Funding were allocated as two conditional grants:• social assistance administration; and

• social assistance transfers to provinces.

• With effect from the 2006/07 financial year the budget for social assistance have been Voted to the national Department of Social Development

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SPENDING TRENDS IN SOCIAL DEVELOPMENT BUDGETS [Cont.]

• A large portion of social welfare services is dependent on social workers.

• Spending on compensation of employees increased by 12,5% per year from R949 million in 2002/03 to R1,4 billion in 2005/06.

• Further growth is estimated at an average annual rate of 21,7% per year over the MTEF to R2,4 billion by 2008/09.

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SPENDING TRENDS IN SOCIAL DEVELOPMENT BUDGETS [Cont.]

• Spending on other social development services has been growing at an annual average rate of 16,4% (R2,3 billion in 2001/02 to R3,6 billion in 2004/05)

• Historically social welfare services have not been adequately funded due to:– Pressure exerted by growth in social assistance expenditure– Lack of costed norms and standards for welfare services

• The social welfare service programme makes up the largest share of the total provincial social development spending at 61,3% in 2006/07.

• Social Welfare services expenditure will grow by 22,0% p.a. from R2,6 billion in 2005/06 to nearly R4,8 billion in 2008/09.

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SPENDING TRENDS IN SOCIAL DEVELOPMENT BUDGETS [Cont.]

• Excluding Programme 1: Administration, the overall per capita spending on social welfare services grows from R51 per person in 2002/03 to R104 in 2008/09 in real terms.

• There are still spending inequalities across provinces:- Limpopo spend the lowest at R50 per person in 2005/06 compared to R144 per person in

Northern Cape

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SPENDING TRENDS IN SOCIAL DEVELOPMENT BUDGETS [Cont.]

Table 4.3 Real per capita expenditure on Welfare services

Rand2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09

Eastern Cape 43 57 43 58 79 97 127

Free State 60 80 73 94 98 94 100

Gauteng 71 57 66 68 71 80 96

KwaZulu-Natal 35 43 44 57 68 69 69

Limpopo 23 40 40 50 55 57 76

Mpumalanga 43 44 52 62 99 104 132

Northern Cape 96 110 115 144 168 202 234

North West 51 64 51 64 80 108 116

Western Cape 86 91 94 111 106 120 137

Total 51 58 57 69 79 89 104

Source: National Treasury provincial database

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Provincial Expenditure Outcomes:2005/2006 FY

• Provinces collectively underspent by R416 million or 9% of total budget, excluding social security expenditure.

• Most underspending was in FS (10,6%); KZN (17,3%); NW (10,8%); LP (10,0%).

• Underspending is largely on conditional grants, specifically on the integrated social development grant.

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SPENDING TRENDS IN SOCIAL DEVELOPMENT BUDGETS

Table 4.2 Provincial social development preliminary expenditure outcome, 2005/06R million %

Adjustedappropriation

Preliminaryoutcome

Under(+) / over(-)expenditure

Eastern Cape 543 513 30 5,6%

Free State 428 383 46 10,6%

Gauteng 860 816 43 5,0%

KwaZulu-Natal 903 746 157 17,3%

Limpopo 398 358 40 10,0%

Mpumalanga 255 250 5 2,1%

Northern Cape 191 175 15 8,0%

North West 364 324 39 10,8%

Western Cape 695 654 41 5,9%

Total 4 636 4 220 416 9,0%

Source: National Treasury provincial database

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REASONS FOR UNDERSPENDING

Free State• Under expenditure on the Integrated Social Development Services

Grant, due to delays in the finalisation of business plans. • Under expenditure on capital expenditure related to social welfare

services due to space limitation.

KwaZulu-Natal• Non-filling of vacant posts as a result of scarcity of social workers.• Underspending on the Food Emergency Relief grant due to a pending

court case and the late approval of the business plans for the Integrated Social Development Services Grant.

• Incomplete research project which will continue during the 2006/07 financial year.

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REASONS FOR UNDERSPENDING

Limpopo• Under spending on the Integrated Social

Development Grant due to delays in the approval of the business plan for this conditional grant owing to changes within the conditions of grant.

• Delayed awarding of the tenders for food parcels distribution.

North West• Underspending on the capital projects for the

erection of the secure care centre.

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MEASURES TO IMPROVE SPENDING & QUALITY OF SERVICE DELIVERY

• Implementation of the new integrated service delivery model – Development & Implementation of norms and

standards

– Increase numbers & strengthen capacity of social service professionals

• Recruitment & retention strategy

• Improvement of conditions of service

– Capacity building for our implementation partners• Implementation of new policy on financial awards

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MEASURES TO IMPROVE SPENDING & QUALITY OF SERVICE DELIVERY

• Implementation plans to redress disparities in services delivery among provinces, e.g.-– Early Childhood Development will be uniform and the amount of

R9 per child per day will be paid in provinces.– Children’s homes will be increased to R1 500.00 per child per

month.

• Disparities in funding social welfare services rendered by NGO’s will also be addressed and statutory services will be fully funded.

• Implementation of an effective national information management and monitoring system.

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Measures to improve co-ordination in the sector

• The national and provincial departments are all undergoing restructuring to re-position themselves towards delivering social development services

• DSD sector reform DSD Macro plan & Sector Strategy Norms and Standards Integrated Information Management system HR Plan Mobilise resources based on the macro plan and sector strategy Effective and Integrated M&E System Plan for establishment, management and maintenance of sector

facilities and institutions

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THANK YOU