1. VOTE 16: HIGHER EDUCATION AND TRAINING  Presentation on: Expenditure progress 2010/11 2010 MTEF: 2011/12 Allocations 2011 MTEF  12 October 2010

2. Presentation Structure 1.Budget versus expenditure 1 April 2010 to 30 September 2010 2.2010 MTEF Allocations: Projections up to 31 March 2012 3.2011 MTEF Process 2

3. The Department’s total budget of R32.145 billion includes a large amount of direct charges and transfers. The budget versus expenditure to 30 September 2010 is as follows R’000 : Budget Expenditure Total voted funds32 144 92621 953 503 Less: Direct charges (SETA funding and NSF) 8 424 228 4 661 121 Balance of voted funds23 720 69817 292 382 Less Transfers:Universities17 516 74013 581 999 NSF (Contribution by Exchequer) 51 731 34 488 Public Entities 1 986 740 1 550 210 FET Conditional Grant 3 772 661 1 966 951 Other ( such as SETA) 569 392 Less Compensation of Employees 228 901 121 905 Balance available/spent on operational expenditure and project costs 163 356 36 437 3 PART 1 BUDGET VERSUS EXPENDITURE 1 APRIL 2010 TO 30 SEPTEMBER 2010

4. EXPENDITURE PER PROGRAMME (EXCLUDING DIRECT CHARGES) 2010/11 Total per programme ENE (R’000) EXP (R’000) % SPENT (R’000) P1: Administration 100 54535 74535.6 P2: Human Resource Development, Planning and Monitoring Coordination 26 0049 35536.0 P3: University Education19 493 35315 147 50777.7 P4: Vocational and Continuing Education and Training3 932 5182 029 11351.6 P5: Skills Development 168 27870 66242.0 Total Allocation23 720 69817 292 38272.9 4

5. Economic Classification (R’000) 2010/11 (R’000) Expenditure (R’000) % Spent (%) Compensation of employees228 901121 90553.3 Goods and services153 52335 46723.1 Transfers and subsidies23 328 44117 134 04073.4 Machinery and equipment9 8339709.9 Total23 720 69817 292 38272.9 5

6. Detail of earmarked allocations/transfers (R’000) 2010/11 ENE (R’000) EXP (R’000)% SPENT Transfers to Universities17 516 74013 581 99977.5 Transfers to Public Entities1 986 7401 550 21078.0 NSFAS1 909 3591 511 51979.2 CHE 36 04618 02350.0 SAQA 41 33520 66850.0 Other Transfers3 824 9612 001 83152.3 SETA 14112588.7 India-Brazil-South Africa Trilateral Commission 428-0.0 National Skills Fund 51 73134 48866.7 FET Conditional Grant3 772 6611 966 95152.1 Households -267- Earmarked Funds 25 5511 9887.8 Office Accommodation 25 5511 9887.8 6

7. Projections for Adjustments Estimate (Not yet finalised) (R’000) 2010/11 (R’000) Amount allocated in the ENE (Excluding Direct Charges)23 720 698 Plus: Amount requested to be rolled over16 306 Inflation adjustment for salary increases6 000 Amount to be suspended from Basic Education for Commonwealth of Learning1 901 TOTAL PROJECTED ADJUSTMENTS 24 207 TOTAL PROJECTED REVISED ALLOCATION23 744 905 Expectations are that additional funds will not be received for the Examinations Function for this financial year Virement will be applied to address projected over-expenditure on the examinations function and projects such as the FET intervention project. 7

8. TREASURY ALLOCATIONS 2010/112011/12 R'000 Baseline allocation 19 758 642 21 615 071 Additions to baseline: 3 793 778 4 303 290 Higher Education Subsidies - 300 000 Student Loans: Inflation adjustment - - Funding for newly established department 20 000 30 000 Compensation of Employees adjustment 1 117 1 301 Further Education and Training (Shift from Provinces)* 3 372 661 3 541 989 Further Education and Training (College educators) 400 000 430 000 Adjustments to Baseline 8 592 506 9 336 195 Skills Function Shift from Department of Labour 166 077 184 915 Skills Function Shift: Compensation of Employees adjustment from Department of Labour 2 201 2 568 Function Shift: Direct Charges 8 424 228 9 148 712 Sector Education and Training Authorities 6 739 382 7 318 967 National Skills Fund 1 684 846 1 829 745 Less: - ( 1 246) Baseline Efficiency Savings - ( 1 246) 2010 ENE ALLOCATIONS 32 144 926 35 253 310 Excluding Direct Charges23 720 698 26 104 598 8 PART 2 2010 MTEF ALLOCATIONS: PROJECTIONS UP TO 31 MARCH 2012

9. 9 Allocation per programme 2010/11 (R’000) 2011/12 (R’000) P1: Administration 100 545106 086 P2: Human Resource Development, Planning and Monitoring Coordination 26 00428 794 P3: University Education19 493 35321 681 852 P4: Vocational and Continuing Education and Training3 932 5184 100 383 P5: Skills Development 168 278187 483 Total Allocation23 720 69826 104 598

10. 10 Allocation per Economic Classification2010/11 (R’000) 2011/12 (R’000) Compensation of employees228 901245 795 Goods and services153 523173 286 Transfers and subsidies23 328 44125 679 510 Machinery and equipment9 8336 007 Total23 720 69826 104 598

11. The Department submitted bids for additional funding to improve access for post-school education and training through a Ministerial letter as part of the 2011 MTEF budgeting process Discussions took place with the Department in the Medium Term Expenditure Committee Workgroup for Education, responsible for the whole Education Sector, including Basic Education and provincial education From discussions in the workgroup, it is anticipated that some funding will be made available for the Higher Education and Training Sector, although very limited Any additional funding will be submitted as a proposal by National Treasury to the Medium Term Expenditure Committee (MTEC) for final recommendations to be presented to the Minister’s Committee on the Budget (MinComBud) MinComBud will after consideration of the proposals by the MTEC, submit recommendations to Cabinet A summary of the bids for additional funding submitted to National Treasury follows in the next slide 11 PART 3 2011 MTEF PROCESS

12. Total Funding Proposal over the 2011 MTEF PRIORITY AREA2011/122012/132013/14Total R'000 Cost of Establishing Full Functionality of DHET107,949102,310107,884318,143 Cost of Establishing DHET Regional offices15,0009,000 33,000 Expansion of Subsidies to Fully Fund NSFAS Grant Holders1,738,0002,069,0002,476,0006,283,000 University Block Grant770,000910,0001,075,0002,755,000 Establishment of Universities in Mpumalanga and Northern Cape155,000275,000384,000814,000 Infrastructure and Output Efficiency Grant187,0001,344,0001,540,0003,071,000 HEAIDS49,00053,00058,000160,000 Support for the Additional Enrolment Projections in the public FET Colleges3,448,0004,040,0005,938,00013,426,000 FET Colleges NSFAS502,000728,0001,026,0002,256,000 FET Colleges Examination58,00085,000119,000262,000 Implementation of the Newly Established Quality Council for Trade and Occupations22,50031,80031,30085,600 TOTAL MTEF FUNDING REQUIREMENT (3-years)7,052,4499,647,11012,764,18429,463,743 12

13. Other steps taken include a request to National Treasury for a review of the equitable share to address the enrolments at FET Colleges The Minister of Higher Education and Training will also be meeting the Minister of Finance to discuss key areas including: -The need for additional resources in the current MTEF for existing programmes -Steps that are considered to allocate resources from the NSF and skills levy funding to address the provision of critical and scarce skills -The requirement to increase the investment in education and training over time - THANK YOU - 13