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Extra R5bn for universities and colleges in Pravin's budget

By Faeza
22 February 2017

The policy changes in higher education, such as a decision to have a zero-fee increase in 2015, has had a ripple effect on a number of government departments, causing unanticipated budget cuts to critical programmes.

In his 2017 Budget Overview, Finance Minister Pravin Gordhan said an additional R5bn is earmarked for higher education over the next three years. That is over and above the R32bn in extra funds that had been allocated previously.

Gordhan said post-school education is the second fastest-growing spending category in the 2017/18 budget. Spending on higher education is expected to reach R89.8bn by 2019/20, growing at an average annual rate of 9.2% over the medium term.

Of this amount, 42.7% is for university subsidies, 21.9% for the National Student Financial Aid Scheme (NSFAS), and 9.7% for technical and vocational education and training.

“Over the next three-year period, R21.1bn has been added to the spending envelope for the post-school education and training sector,” Gordhan said.

“This includes the R5bn provisional allocation as well as R7.3bn to compensate universities and technical and vocational education and training colleges for the shortfall caused by the 0% fee increase for students from households earning up to R600 000 per year in the 2017 academic year.”

A total of 615 000 university students will receive NSFAS loans and bursaries over the next three years. The scheme receives additional allocations of R7.7bn over this period to help unfunded NSFAS university students from the 2016 academic year continue their studies.

Transfers to NSFAS are expected to rise from R11.4bn in 2016/17 to R13.9bn in 2019/20.

During a media conference ahead of Gordhan’s 2017 Budget Speech, National Treasury director-general Lungisa Fuzile said government has pumped an enormous amount of money into the higher education sector that has been financed through cuts from other areas.

“We can quibble about whether it goes far enough,” Fuzile said, but it’s also important not to only focus our attention on one part of the education system.

“There are other equally important blocks, such as early childhood development and basic education.”  Basic education spending is expected to increase from R216.9bn in 2016/17 to R268.8bn in 2019/20, accounting for 17.5% of government expenditure.

Growth in basic education spending is largely driven by employee compensation, particularly in provinces, Gordhan said.

Government has allocated an additional R1.1bn over the next three years for early childhood development, which will provide subsidies for 113 889 more children.

Source: Fin24