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13 February 2009

PROVINCES AND LOCAL GOVERNMENT

Health and education score



By Thebe Mabanga

The middle tier of government proves its importance to delivery

For entities that have to continually justify their existence, SA's provinces shoulder a large portion of service delivery responsibilities. This year's budget confers more, not fewer, resources and responsibility on these unloved children.

Provinces are responsible for public education and health infrastructure, housing delivery and social welfare. The administration of grants was taken away from them several years ago after mounting evidence of inefficiency and corruption.

WHAT IT MEANS
Provinces unlikely to be scrapped soon
Soccer World Cup host cities get R718m

Deputy finance minister Nhlanhla Nene told a media briefing that treasury's focus was not on whether provinces should be scrapped, but on searching for the best funding model for government and on improving efficiencies in the inter governmental fiscal-relations framework.

The budget allocates an additional R24,8bn to provinces over the next three years, mainly for improving health and education facilities.

Provinces are set to receive R284bn, or 42% of nationally raised revenue. Of this, R231bn is equitable share, while R53bn is made up of conditional grants.

Equitable share is a constitutionally guaranteed transfer that covers operational and capital expenditure. It is determined by factors such as population size and economic influence.

Total spending by provinces this financial year will be R293bn, up from a revised estimate of R267bn last year. This is set to rise to R344bn by 2011/2012, which is double the level of five years ago.

Last year, provinces were allocated a new grant, Ilima/Letsema, to help poor farmers adopt modern methods. This budget steps up that commitment by allocating R650m over the next three years - though only R50m will be made available this financial year.

There are several new conditional grants, including the public transport operation grant of R11,5bn over the next three years for a commuter bus service subsidy. There is also R280m to improve facilities in specialised technical schools.

Provinces have to share delivery responsibilities with municipalities, their more delinquent cousins. Municipalities, too, receive a combination of equitable share and grants - this year, the allocation totals R49bn.

The 2010 soccer World Cup has also focused minds at provincial level and, through host cities, municipalities.

The stadium development grant stands at R261m for this year, followed by R202m in 2010/2011, while host-city operating support totals R718m over the next two years.





Home stretch - Provinces and municipalities share delivery responsibilities



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