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.

HEALTH

Technical Spending Reviews

Health departments spent R 6.9 bn on commuted overtime in 2021, which was 4.6% of total provincial health CoE in 2021. The strongest contributor to commuted overtime expenditure growth between 2010 and 2021 was the expansion of the number of doctors in the health system. The coverage of doctors after hours seems to be low as 1 doctor is representing 14 doctors after hours. This needs to be compared with the actual workload during overtime periods to ascertain whether the expenditure on commuted overtime is realistic. Commuted overtime expenditure growth is directly related to growth in the basic salaries of the recipients. Lower annual COLA and fewer progressions and promotions will slow down commuted overtime expenditure growth.  No evidence of excessive individual claims was detected in the 2021 PERSAL data.

Hospitals charge non-poor patients for some services, using a sliding scale based on income. In 2016/17, South Africa’s public hospitals collected R1.54 billion in patient fees — about 8% of the costs of providing hospital services — but they have risen at less than 1.5% a year between 2012 and 2016/17. Two-thirds of patient revenues are received from medical aids and the RAF, 11% from other departments, and nearly 15% from individuals whose incomes exceed various thresholds. Revenues per bed vary considerably: in the Western Cape, every hospital bed generated, on average, about R47 000, against a national average of less than R18 000 per bed and R10 000 or less in three provinces. The costs associated with collecting this revenue are not always readily identifiable, but it is estimated that these activities cost R271 million in 2016/17, a figure that has been rising at a rate of about 8% a year since 2012/13. Using both revenue and cost data, it appears that about R6 of revenue is generated for every R1 of spending on revenue collection, but there is wide variation among provinces, with the Western Cape collecting about R20 per rand spent and the Northern Cape’s revenues barely covering the costs of collection.

Laundry services: It is estimated that R1.8 billion was spent on laundry services in public hospitals in 2016/17, a figure that increased by 4.6% a year since 2014/15, but by 8.2% since 2012/13. The average cost per item was R17.39 in 2016/17, but it ranged between nearly R26 in the Free State and R12.15 in North West. It is estimated that in 2018/19, the cost of using departmentally owned laundries off-site will be over R30 per item compared to R10 per item of using contractors on-site. Security services: In total, these services cost R1.2 billion in 2016/17, a figure that had risen by an annual average of 9% a year since 2012/13. Security services can b provided by security officers employed by departments of health or contracted out to private security companies. The national average cost of security service is about R13 500 per bed in 2016/17, and six provinces spent between R10 000 and R16 000. On average, security provided by external providers is more expensive than security provided internally, but much depends on the nature of the hospital being serviced, with insourced costs for large hospitals – urban and rural – being lower than the costs of outsourcing. Catering services: These services are estimated to have cost provincial departments of health R2.1 billion in 2016/17, a figure that has risen by an annual average of 5.8% a year since 2012/13. The average catering costs per PDE in 2016/17 was about R67, but the range reasonably wide across provinces – from R59 in Limpopo to R79 in Mpumalanga. The PER estimates that in 2018/19, on average, the costs of outsourced catering per PDE (R82) would be about 11% lower than the costs of providing catering services using public servants (R92 per PDE).

The spending review focused on the roll out of the HPV vaccine to schools. It argues that the HPV grant should be incorporated into the provincial equitable share as this will allow for greater integration with other health programmes and enable provinces to permanently appoint the staff that work on the programme. This should improve the programme’s effectiveness and lead to cost savings as annual training costs can be reduced. Consideration should be given to expanding the vaccine to boys to further prevent the spread of the virus.

Student Spending Reviews

Spending Review Report

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Spending Review Report

Spending Review Report

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Spending Review Report

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