Province	Funding to NPOs working with OVC (R)	Funding to NPOs working in HIV and AIDS (R)
Eastern Cape	195 000 000	64 700 000
Free State	137 000 000	14 300 000
Gauteng	319 000 000	138 600 000
KwaZulu-Natal	301 000 000	24 500 000
Limpopo	90 200 000	45 000 000
Mpumalanga	110 000 000	42 300 000
Northern Cape	53 200 000	10 200 000
Western Cape	286 000 000	19 300 000

This information was provided by the National Treasury; figures for the North West province were unavailable at the time.

An analysis of provincial government subsidies for NPOs

All provinces rely heavily on NPOs to deliver essential social services on the government’s behalf. The average percentage of the total social welfare programme budget (DSD) that is to be transferred to NPOs during 2009/10 is expected to amount to 53%. This percentage is lower than that for 2008/09 (55%) and the overall percentage has declined from 61% in 2005/06. It is, however, expected to rise to 57% in 2011/12.

Eastern Cape, KwaZulu-Natal and Northern Cape are all provinces that exhibit worrying trends regarding NPO subsidies. For the 2009/10 budget the Eastern Cape has shifted subsidies away from NPOs (a reduction of R45 million) in order to fund the filling of vacant government posts. Large NPOs, like Loaves and Fishes in East London that are feeding 1000s of orphans and vulnerable children every month, have therefore lost their government funding and may be forced to close. Reducing subsidies to effective NPOs seems to be a counter-productive strategy given the government’s substantial reliance on them to help provide many essential social services. In addition, NPOs often have a greater capacity to expand and adapt their services to reach more children than government departments.

KwaZulu-Natal has increased NPO subsidies by 5% ‘to strengthen compliance with the applicable mandates’. Yet, at present inflation rates, this effectively represents a decrease.  In the Northern Cape the increase in the allocation to NPOs between 2008/09 and 2009/10 stands at only 1%, well under inflation rates. The North West, by way of contrast, shows a 26% increase in subsidies to NPOs, counteracting, in some measure, an inadequate allocation in previous years.

DSD budget summary 2009/10 

• Child Care and Protection: R2,163 million (approximately R2.2 billion)
  
• Family Care and Support: R161 million 
• HIV and AIDS: R599 million

These sub-programmes account for 35%, 3% and 10% respectively of the allocations for social welfare programmes across the nine provinces. According to the Children’s Institute they are also the sub-programmes that most closely align with the essential services listed in the Children’s Act. In a recent analysis of the 2009/10 budget by the Institute the following important findings emerged:

Child Care and Protection Programme
Over the last three years this sub-programme has accounted for between 30-40% of the total social welfare programme and the allocations have steadily increased and kept pace with inflation. However in 2009/10, Limpopo, KwaZulu-Natal and Eastern Cape, three provinces with high rates of poverty and large numbers of children, all currently record per capita allocations lower than the national average.

Family Care and Support Programme
For this sub-programme the average annual allocation increase over the last three years has not kept pace with inflation and therefore represents a real decrease. These decreases are worrying because this sub-programme should contain many of the family support programmes that are listed in the Prevention Section of the Children’s Act.

HIV and AIDS Programme
For this sub-programme overall, the provinces have an average annual increase in of 14%, which means a real increase. However, taking into account HIV prevalence rates in the different provinces, the Free State, Eastern Cape and KwaZulu-Natal all look problematic. Both the Free State and Eastern Cape show a decrease in their allocations to this sub-programme despite having the second and sixth highest HIV prevalence rates respectively. KwaZulu-Natal shows severe under-spending in 2008/09 despite being the province with the highest HIV prevalence rate.

Under-spending problems
The Institute also analysed the under-spending patterns across the provinces and found that this was no longer a major problem in the sub-programmes that cover children and HIV and AIDS and had improved over time but could be improved further. Even if 92% of the budget is spent this still means that a month’s allocation remains unspent, which can have significant consequences for the delivery of services. For Mpumalanga there is relatively serious under-spending (23% of the original 2008 appropriation was not spent), but other provinces were all forecasting that they would spend 94% or more of their budgets with regard to Child Care and Protection.

However, with regard to HIV and AIDS, KwaZulu-Natal is exposed as a serious under-performer (49% of the original 2008 appropriation was not spent). This is disastrous in a province that has the highest HIV prevalence rate. The Northern Cape is also an under-spender, spending only three quarters of its allocation. For all other provinces, the forecast was for 97% or more of the original allocation to be spent in 2009/10 on HIV and AIDS sub-programmes.

Early Childhood Development (ECD) programmes

The majority of ECD centres and programmes are run by NPOs throughout the nine different provinces. In 2008 several provinces reported that they planned to increase or standardise subsidies to NPOs in respect of ECD. While increases in these subsidies are essential and welcome, the reports show continuing disparities across provinces. In addition, the continued emphasis on a per capita subsidy funding ignores the need for greater recognition and support of non-centre-based ECD programmes that have the potential to reach many more vulnerable children.

The full report and executive summary by the Children's Institute are available for download:

• Analysis of the 2009/10 budgets of the nine provincial departments of Social Development: Are the budgets adequate to implement the Children’s Act?
• Executive Summary of the above report
• Detailed analyses of the DSD budgets for the Eastern Cape, Gauteng and KwaZulu-Natal

The Children’s Institute, University of Cape Town, aims to contribute to policies, laws and interventions that promote equality and help to realise the rights and improve the conditions of all children in South Africa. This is achieved through research, advocacy, education and technical support.