SELECT COMMITTEE ON APPROPRIATION

HEARING ON DIVISION OF REVENUE BILL B4-2011

2011-03-23

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Introduction

• During the Medium Term Framework ( MTEF) budget process, the Health Department requested additional funding for both National and Provincial departments for the amount of R19,9 billion for the three year MTEF period.

• Cabinet and National Treasury approved an amount of R18 billion made up of R3,4billion for National Health and R14,6 billion for the provincial health departments for earmarked funds additional to the equitable share baseline.

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Expenditure Trends • The Department’s expenditure grew from R13.6 billion in

2007/08 to R23.1 billion in 2010/11 at an average annual rate of 19.4 percent.

• Over the Medium Term period, expenditure is expected to grow to R30.1 billion, at an average annual rate of 9.2 percent.

• The increase in both periods is driven largely by transfers to provinces for the conditional grants, with the main increase being on the HIV and AIDS and the Revitalization of Hospitals grants, while the National Tertiary Services grant (NTSG) increased significantly in the MTEF period.

• The Forensic Pathology Services grant will be phased out in the 2012/13 financial year and has therefore been included in the provincial equitable share allocations.

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Medium Term Allocation for 2011/12 – 2013/14

• The Budget includes new allocations of R442 million for 2011/12, R692 million for 2012/13 and R2.2 billion for 2013/14.

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Programme Allocations for 2011/12-2013/14 PROGRAMMES R’ million 10/12 11/12 12/13 13/14

Administration

282 326 325 344

Health Planning and Systems Enablement

125 161 178 190

HIV&AIDS, TB and Maternal, Child and Women’s Health

6,669 8,027 9,377 11,188

Primary Health Care Services

700 730 143 150

Hospital Tertiary Services and Workforce Development

13,947 15,963 17,016 17,664

Regulations and Compliance Management

496 525 572 601

Total Budget Allocated

22,219 25,732 27,611 30,137 5

Economic Classifications Allocations for 2012/13 to 2013/14

Economic Classification 10/11 11/12 12/13 13/14

Compensation of Employees

385 424 465 492

Goods and Services

755 785 795 830

Total Transfers & Subsidies

21,034 24,489 26,316 28,778

Payment of Capital Assets

45 33 35 37

Payment of Financial Assets

- - - -

Total 22,219 25,732 27,611 30,137 6

Conditional Grants Purposes for 2011-12

The Department of Health of consists of the following grants:• Comprehensive HIV and Aids Grant

To enable the health sector to develop an effective response to HIV and Aids including universal access to HIV Counselling and Testing (HCT).

To support the implementation of the National Operational Plan for comprehensive HIV and Aids treatment and care.To subsidise in-part funding for antiretroviral treatment programme.

• Forensic Pathology Services GrantTo continue the development and provision of adequate forensic pathology services in all provinces.

• Health Infrastructure GrantTo supplement provincial funding of health infrastructure to accelerate the provision of health facilities and ensure proper maintenance of provincial health infrastructure.

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Conditional Grants Purposes for 2011-12 Cont….

• Health Professions Training and Development GrantSupport provinces to fund service costs associated with training of health professionals. Development and recruitment of medical specialists in under-served provinces (Eastern Cape, Limpopo, Mpumalanga, Northern Cape and North West). Support and strengthen undergraduate and postgraduate training processes in health facilities.

• Hospital Revitalisation GrantTo provide funding to enable provinces to plan, manage, modernise, rationalise and transform health infrastructure, health technology, monitoring and evaluation of the health facilities in line with national policy objectives.

Supplement expenditure on health infrastructure delivered through public-private partnerships.

• National Tertiary Services GrantTo compensate tertiary facilities for the additional costs associated with spill over effects.

Ensure adequate provision of tertiary health services for all South African citizens.

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Conditional Grants Allocations 2011/12-2013/14

Grant Schedule2011/12

R'000 2012/13

R'0002013/14

R'000Total R'000

Health Infrastructure Grant 4

1,701,856

1,820,981

1,921,134 5,443,971

Health professions and Development Training 4

1,977,310

2,076,176

2,190,366 6,243,852

National Tertiary Services 4

8,048,878

8,688,822

9,389,207 26,126,907

Comprehensive HIV and Aids 5

7,492,962

8,824,610

10,606,664 26,924,236

Forensic Pathology Services 5

590,380

-

- 590,380

Hospital Revitalization Grant 5

4,136,290

4,335,908

4,067,859 12,540,057

Total

23,947,676

25,746,497

28,175,230 77,869,403 9

Health Infrastructure Grant

Provinces 2011/12

R'000 2012/13

R'000 2013/14

R'000 Eastern Cape 299,754 327,673 345,695 Free State 129,621 141,911 149,716 Gauteng 142,694 157,434 166,093 KwaZulu-Natal 358,471 393,367 415,002 Limpopo 270,802 267,888 282,622 Mpumalanga 146,368 143,383 151,269 Northern Cape 89,501 98,258 103,662 North West 145,466 159,656 168,437 Western Cape 119,179 131,411 138,638 TOTAL 1,701,856 1,820,981 1,921,134

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Comprehensive HIV and Aids Grant

Provinces 2011/12

R'000 2012/13

R'000 2013/14

R'000

Eastern Cape 844,390 993,094 1,193,915 Free State 478,007 563,331 677,016

Gauteng 1,622,894 1,912,719 2,298,693 KwaZulu-Natal 1,977,035 2,329,362 2,799,561

Limpopo 539,022 634,700 762,896 Mpumalanga 543,502 641,742 771,003

Northern Cape 258,802 305,124 366,675 North West 493,595 580,964 698,356

Western Cape 735,715 863,574 1,038,549 TOTAL 7,492,962 8,824,610 10,606,664

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Forensic Pathology Services

Provinces 2011/12

R'000 2012/13 R'000

2013/14 R'000

Eastern Cape 73,506 - -

Free State 39,451 - -

Gauteng 97,966 - -

KwaZulu-Natal 161,550 - -

Limpopo 42,308 - -

Mpumalanga 53,114 - -

Northern Cape 24,240 - -

North West 28,019 - -

Western Cape 70,226 - -

TOTAL 590,380 - - 12

Hospital Revitalization Grant

Provinces 2011/12

R'000 2012/13

R'000 2013/14

R'000

Eastern Cape 382,048 402,678 387,104

Free State 417,883 438,140 412,172

Gauteng 801,965 828,552 760,206

KwaZulu-Natal 547,698 566,605 533,432

Limpopo 371,672 392,410 369,152

Mpumalanga 356,557 378,014 355,081

Northern Cape 406,892 427,263 401,940

North West 370,074 401,150 377,375

Western Cape 481,501 501,096 471,397

TOTAL 4,136,290 4,335,908 4,067,859 13

Health Professions Training and Development Grant

Provinces 2011/12

R'000 2012/13 R'000

2013/14 R'000

Eastern Cape 170,071 178,730 188,560 Free State 124,444 130,930 138,131

Gauteng 690,803 725,310 765,202 KwaZulu-Natal 249,917 261,860 276,262

Limpopo 99,730 103,913 109,628 Mpumalanga 80,718 85,208 89,894

Northern Cape 65,510 68,583 72,355 North West 88,323 93,522 98,666

Western Cape 407,794 428,120 451,667 TOTAL 1,977,310 2,076,176 2,190,366

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National Tertiary Services

Provinces 2011/12

R'000 2012/13

R'000 2013/14

R'000

Eastern Cape 609,327 660,693 698,110

Free State 715,204 769,964 800,000

Gauteng 2,759,968 2,933,361 3,100,895

KwaZulu-Natal 1,201,831 1,303,824 1,408,053

Limpopo 267,314 277,314 287,314

Mpumalanga 91,879 105,970 120,270

Northern Cape 235,948 245,948 255,948

North West 194,280 209,280 224,280

Western Cape 1,973,127 2,182,468 2,494,337

TOTAL 8,048,878 8,688,822 9,389,207 15

Conditional Grants Allocations 2011/12-2013/14

• Schedule 4 grants: specifying allocations to provinces to supplement the funding of programmes or functions funded from provincial budgets;

• Transfer payments cannot be withheld based on non performance or compliance, however, the new Division of Revenue Grant allows a 5% withholding while interventions are put in place.

• Grants included are: - National Tertiary Services, - Health Professions Training and Development - Forensic Pathology Services.

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Conditional Grants Allocations 2011/12 - 2013/14

• Schedule 5 : specifying specific-purpose allocations to provinces.

• Grants included are: - HIV and AIDS grant and the Revitalization of Hospital grant.• Schedule 5 grants may be withheld for non

performance and or compliance. Interventions must also be put in place for compliance.

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Additional Priority focus areas (Earmarked Funds) Allocated directly to Provinces.

R million 11/12 12/13 13/14

Health technology 20 30 40

Nursing colleges upgrading and maintenance 32 32 32

OSD doctor Annexure A top-up 110 119 126

OSD therapeutic top-up 363 426 449

Maternal and child health 228 501 700

Personnel and goods stabilization 522 1,073 1,444

HIV: ARV 350 threshold - 500 500 18

Additional Priority focus areas (Earmarked Funds) Allocated directly to Provinces.

R million 11/12 12/13 13/14

Registrars esp paed, obs and critical posts 100 200 300

Family health team pilots/models 100 400 700

Public hospital norms and standards 240 486 532

Policy priorities subtotal 1,715 3,767 4,823

Improvements in conditions of service 1,556 1,556 1,556

Forensic pathology shift into PES 620 654

Total 3,271 5,943 7,033 19