About
Spending Reviews bring to light the links between policy development and implementation, through providing a better understanding of the institutional landscape, policy, cost and budgetary implications. A better understanding of departments’ baselines assists in finding savings in existing expenditure, as well as proposing savings and efficiencies in medium term budgets. By analysing and understanding how money is spent in institutions or facilities, as well as on existing implementation programmes, a strong empirical base for clear recommendations to decision-makers is developed.
The resources listed below will assist you to quickly access examples of previous national and provincial spending reviews, as well as infographics summarising the review in one page.
ECONOMIC DEVELOPMENT
Technical Spending Reviews
Technical Report
Costing
InfographicsThe IDZ model entailed large upfront government spending on infrastructure; they have sizeable landholdings and exceptionally high operating costs, including high salaries and large staff numbers. However, government investment has not been matched by private sector interest and the IDZs attract few new manufacturers or exporters (with the exception of the pre-existing Tata Steel in Richards Bay IDZ). The IDZ model is premised on a high-risk approach that depends on their ability to attract large anchor clients. They provide basic infrastructure and build factories, warehouses, call-centres and the like on risk, which results in very high co-funding ratios. However, given their track record, the realism of this approach needs to be questioned. While this study does not review the approach to industrial policy, it provides interesting markers on managing for greater efficiency. The new SEZ policy needs to manage costs and risks better, with a clearer value proposition. Any upfront infrastructure expenditure should be scaled to match business interest. In the new SEZs, operating entities will no longer be permanent and new operating entities will be appointed on a five-year contract. This would require the performance of the new entities to be monitored very closely, with even tighter oversight than for IDZs. In addition, the co-funding regime has been replaced by investment incentives; while this moves the costs off the dti budget, the tax implications would need to be closely monitored and transparently reported.
Summary
LogframeFundamentally, the Stp incubation programme is well conceived and addresses all aspects of global best practice for SMME development, technology adoption and long-term sustainability and growth. In particular, it includes market linkages, with access to inputs, potential partners and buyers. The costs per incubatee vary widely between the sectors, ranging from R800 000–R1 million in the chemical and metal industries to R25 000 per successful SMME in construction. Manufacturing is exceptionally expensive, with an average cost of R8 million per SMME. The costs directly associated with incubation comprise the majority of total expenditure by the incubators – this is positive, showing that funds at the incubator level achieve results. There is a significant drop-off from the number of incubatees entering the programme to the number of SMMEs graduating from the programme, and again to the number still in business three years later. The incubation programme and the individual incubators should attempt to reduce drop-off rates in each phase. In recent years, the focus on technology has been diluted from a performance targeting and monitoring perspective. The newly established Department of Small Businesses Development is likely to absorb existing agencies and functions of the dti. This analysis highlights the role of the institutional location of a programme in shaping its mandate; the change in departmental structure should not compromise the technology focus of the Stp.
Student Spending Reviews
Spending Review Report
Logframe
Spending Review Report
