1. POLICY-PLAN-BUDGET ALIGNMENT
DPME
Presentation to Portfolio Committee on Public Service and Administration, Planning, Monitoring and Evaluation
30 May 2018

2. Questions from Portfolio Committee
Are government policy and mandates adequately catered for in the budget?
Is a new approach in allocation feasible?

3. CABINET/FOSAD CLUSTERS
Policy-Plan-Budget
SA Constitution
Policy (legislation)
Plans
Budget
CABINET/FOSAD CLUSTERS
ECONOMIC
SOCIAL
INTEGRATED JUSTICE
GOVERNANCE
INTERNATIONAL

4. CABINET/FOSAD CLUSTERS
From long-term planning to delivery
NDP
MTSF/ NSDF
Priorities Framework
MTBPS / MTEF
CABINET/FOSAD CLUSTERS
ECONOMIC
SOCIAL
INTEGRATED JUSTICE
GOVERNANCE
INTERNATIONAL
“BUDGET”

5. A brief answer on alignment and approaches
There is significant alignment between government policy and mandates are adequately catered for in the budget :
The budget spends substantially on Constitutional mandates and NDP priorities
Key areas have seen an improvement in delivery/impact/outcomes.
However, gaps and risks are mounting in certain areas.
In some cases these risks relate to how much we are spending but also to how we are distributing spending, value for money (efficiency) and policy blockages.
We have introduced much reform to build our planning and allocation approaches but further strengthening is needed.
There is continued reform to strengthen our approach

6. Spending alignment (proportion of total)
Allocation 2018/19
Levers
Intermediate objectives
NDP targets
ECONOMIC SERVICES – Opportunities & cost of business
R396 billion 26,5%
Jobs, Incomes and Livelihoods for
Inclusive Growth
Prosperity (No poverty)
SOCIAL SERVICES – Capabilities & cost of living
R816 billion 55,5%
Equality (Reduce inequality)
GOV & ADMIN - Capable state, active citizens, cost of business/living
R265 billion 17,6%
But how do we figure demand? Our brand ew Dg asked us – what do you forecast? So you have to understand gaps in service delivery now and potential gaps in the future – and for that you have to forecast, which sits on models which depend on data and analysis. At any rate – the conclusion was then, if we really want to priortise and plan we will have to have much better forecasting and foresighting. But what to forecast? That led us to develop a bit of a framework that we have shared with you and want to discus. We are not married to this framework but we think it may be important as a government and a country that we start having a similar picture/a shared language about what we are trying to do and where things fit in (it may lead us out of the tower of Bable - Or it may be horribly totalitarian. But we suffer I think form not speaking the same language. So you have seen it and I will talk you thorugh it
R180 billion 10,8%
DEBT COST

7. Spending alignment (proportion of total)
Allocation 2018/19
Levers
Function Groups
18/19 %
R396 billion 26,5%
Economic Development
R200 b
12%
ECONOMIC SERVICES – Opportunities & cost of business
Community Development
R196 b
11,7%
R816 billion 55,5%
Learning & Culture
R351 b
21 %
SOCIAL SERVICES – Capabilities & cost of living
Health
R205 b
12,3%
R265 billion 17,6%
Social Development
R259 b
15,5%
GOV & ADMIN - Capable state, active citizens, cost of business/living
General Public Services
R71 b
3,8%
R180 billion 10,8%
But how do we figure demand? Our brand ew Dg asked us – what do you forecast? So you have to understand gaps in service delivery now and potential gaps in the future – and for that you have to forecast, which sits on models which depend on data and analysis. At any rate – the conclusion was then, if we really want to priortise and plan we will have to have much better forecasting and foresighting. But what to forecast? That led us to develop a bit of a framework that we have shared with you and want to discus. We are not married to this framework but we think it may be important as a government and a country that we start having a similar picture/a shared language about what we are trying to do and where things fit in (it may lead us out of the tower of Bable - Or it may be horribly totalitarian. But we suffer I think form not speaking the same language. So you have seen it and I will talk you thorugh it
Peace and security
R71 b
12 %
DEBT COST
R1 671 b Total

8. Spending re- alignment (real change 1)
To 17/18:
Economic services declined by 0,5% p.a.
Administrative/protection services grew by less than 2% p.a.
Social services grew at 3,4% per year
Debt service costs rose by nearly 7% per year
To 20/21:
Economic services recover, 1,5% p.a.
Administrative/protection declines by nearly 2% p.a
Social services grew at nearly 2% p.a.
Debt service costs increase slowing to about 4% per year
But how do we figure demand? Our brand ew Dg asked us – what do you forecast? So you have to understand gaps in service delivery now and potential gaps in the future – and for that you have to forecast, which sits on models which depend on data and analysis. At any rate – the conclusion was then, if we really want to priortise and plan we will have to have much better forecasting and foresighting. But what to forecast? That led us to develop a bit of a framework that we have shared with you and want to discus. We are not married to this framework but we think it may be important as a government and a country that we start having a similar picture/a shared language about what we are trying to do and where things fit in (it may lead us out of the tower of Bable - Or it may be horribly totalitarian. But we suffer I think form not speaking the same language. So you have seen it and I will talk you thorugh it

9. Spending re- alignment (real change 2)
But how do we figure demand? Our brand ew Dg asked us – what do you forecast? So you have to understand gaps in service delivery now and potential gaps in the future – and for that you have to forecast, which sits on models which depend on data and analysis. At any rate – the conclusion was then, if we really want to priortise and plan we will have to have much better forecasting and foresighting. But what to forecast? That led us to develop a bit of a framework that we have shared with you and want to discus. We are not married to this framework but we think it may be important as a government and a country that we start having a similar picture/a shared language about what we are trying to do and where things fit in (it may lead us out of the tower of Bable - Or it may be horribly totalitarian. But we suffer I think form not speaking the same language. So you have seen it and I will talk you thorugh it

10. Spending re- alignment (% of total 1)
In terms of proportion of spending:
Spending on Economic and Admin/Protection is declining relatively. Social and Debt Service Costs are increasing.
The decline is proportionally the biggest for Administrative Services and Protection Services
But how do we figure demand? Our brand ew Dg asked us – what do you forecast? So you have to understand gaps in service delivery now and potential gaps in the future – and for that you have to forecast, which sits on models which depend on data and analysis. At any rate – the conclusion was then, if we really want to priortise and plan we will have to have much better forecasting and foresighting. But what to forecast? That led us to develop a bit of a framework that we have shared with you and want to discus. We are not married to this framework but we think it may be important as a government and a country that we start having a similar picture/a shared language about what we are trying to do and where things fit in (it may lead us out of the tower of Bable - Or it may be horribly totalitarian. But we suffer I think form not speaking the same language. So you have seen it and I will talk you thorugh it

11. Spending re- alignment (% of total 2)
The proportional decline in:
Economic and community services
Defence, public order and general public services
Balanced by increase in:
Debt service costs
Social Services
But how do we figure demand? Our brand ew Dg asked us – what do you forecast? So you have to understand gaps in service delivery now and potential gaps in the future – and for that you have to forecast, which sits on models which depend on data and analysis. At any rate – the conclusion was then, if we really want to priortise and plan we will have to have much better forecasting and foresighting. But what to forecast? That led us to develop a bit of a framework that we have shared with you and want to discus. We are not married to this framework but we think it may be important as a government and a country that we start having a similar picture/a shared language about what we are trying to do and where things fit in (it may lead us out of the tower of Bable - Or it may be horribly totalitarian. But we suffer I think form not speaking the same language. So you have seen it and I will talk you thorugh it

12. Delivery taking place
Households (HHs) connected to grid since 2014 (58% of 2019 target of 1.25 million) and HHs connected to non-grid (50% of 2019 target of HHS)
Over 1 million HHs given access to refuse removal between General Household Survey (GHS) 2013 and GHS 2016 against the 2019 target of 1.3 million HHs
1.12 million HHs given access to decent sanitation since 2014 (45% of 2019 target).
HHs given access to a reliable water service since 2014 (12% of 2019 target of 2.3 million). Overall only 69.9% of those with access to an operational infrastructure experience a reliable service

13. Delivery taking place
Access to electricity increased from 77% in 2002 to 84.1% in 2016
Formal dwellings increased from 73.7% in 2002 to 79.3% in 2016
Access to sanitation increased from 80% in 2002 to 85% in 2016
Access to water increased from 80% in 2002 to 85% in 2016
Statistics South Africa, General Household Survey (Various )

14. Delivery taking place
Basic education system is on an upward trend – quality of matric passes improving
TIMSS and SACMEC scores are also on the increase. Bachelor passes increased to in 2016 from in 2014 and more from poor schools
Overall, the health of South Africans is improving. Life Expectancy (LE) increased by 6 years and reached 63.3 years in Population-based Maternal Mortality Ratio has decreased from 158 deaths per in 2015 to 154/100,00 live births in 2014
Institutional maternal mortality ratio has decreased to 119 per 100,000. Child Mortality Rate (Under 5) has improved from 41 deaths/1000 live births in 2014 to 37/1 000 live births in Over 3.9 million people living with HIV receiving lifelong Antiretroviral Therapy.

15. Real growth and relative importance
In spite of low growth and fiscal constraints, most spending areas are still growing in real terms.
PSET shows the strongest real growth and increase in relative importance
Significant cuts in General Public Services over the MTEF
Points to importance of improving allocation process to strengthen other aspects of prioritisation
Looking at efficiency
Looing at transformative impact
Looking at policy blockages and growth inhibitors

16. Alignment and outcomes
A broad comparison of NDP levers and the Budget shows that at a high level the NDP levers are in the budget. However, there are challenges.
Too little impact on the central NDP targets.
2.8 million jobs were needed between 2011 and 2015 but only 2 million created and the unemployment rate is up.
Only 2.1% per year was achieved against a required growth of 5.4%
The most recent StatsSA poverty and inequality data show that the level of poverty and the number of people in poverty, and inequality have worsened.
Cabinet instructed a more detailed annualised prioritisation and alignment exercise, that is, the Budget Priorities Framework/Mandate Paper and process.

17. Strengthening alignment
Range of budget reforms over the last 2 decades to strengthen alignment:
Programme budgets & outcome orientation (PFMAs “measurable objectives”)
Three-year budgets (MTEF) & MTBPS
Ministers Committee on the Budget (MINCOMBUD) & Medium-term Expenditure Committee (MTEC) process
Strong performance in international transparency rankings
Refinement of role of Parliament and Parliamentary Budget Office
Cabinet taking it forward (2016 Mid-year Lekgotla) and asking for a strong prioritisation process (managed by DPME & National Treasury)
Further distillation of priorities in current context (focus)
Assess allocations against these priorities

18. Mechanisms for strengthening/aligning planning
Institutionalise through clarifying mandates, powers and processes in legislation, regulations and directives
Integrated Planning Framework Bill released for consultation
Strengthening monitoring: outcomes, frontline
Evaluation and data systems
Strengthen mandating/prioritisation process
Stronger role for forecasts (analysis and assessing key trends and expectations)
More rigorous criteria for review or assessment of sectors and departments in order to focus on core, performing programmes:
More consultation on priorities: within government, organised groups and citizens

19. DPME Structure Minister in the Presidency/ Director-General
National Planning Commission
Minister in the Presidency/ Director-General
Nat Planning Coordination
Sector Planning Coord
Spatial Planning
Resource Planning
Planning Alignments
Sector Monitoring
Public Sector Monitoring & Capacity Dev
Evaluation, Evidence & Knowledge Systems
Corporate Services
National Youth Development Programme
National Planning Commission Secretariat
StatsSA
Medium- & Long-term Plans
National Spatial Development Framework
Budget Priorities Framework (Mandate Paper)
Dept Strat Plans & Annual Perf Plans (Corporate Plans)

20. Key aspects of prioritisation
Have we got the right approach or are there key policy decisions required/outstanding?
Road infrastructure and tolling
Broadband allocation and ICT strategy
Are we spending efficiently? Can we save or improve value for money?
Basic education/Universities and skills funding
Procurement
Can we improve the transformative impact of spending?
Human settlements and transport subsidies
Are there areas where funding is inadequate for what we have to achieve?
Post-Secondary education and training – TVET enrolment targets
Health and Early Childhood Development- ensuring universal access to quality ECD is in danger
Climate, continental and technological risks and opportunities

21. Ngiyabonga Ndiyabulela
Ke a leboha Ke ya leboga
Ke a leboga
Ngiyabonga Ndiyabulela
Ngiyathokoza
Thank you Dankie
Ngiyabonga Inkoma
Ndi khou livhuha
SECRET