Ministerial Committee for the Review of the Funding of Universities

ReportoftheMinisterial Committee for the Review of the Funding of Universities October 2013 Published by the Department of Higher Education and Training Physical Address: 123 Francis Baard Street Pretoria 0001 Postal Address: Private Bag x174 Pretoria 0001 Website Address: www.dhet.gov.za Telephone Details: Call Centre: 0800 872 222 Tel: 012 312 5911 Fax: 012 321 6770 Email: [email protected] Copyright @ Department of Higher Education and Training, Pretoria, South Africa, February 2014 ISBN: 978-1-77018-709-2 Contents Acronyms (general)...............................................................................................viii Acronyms (universities)...........................................................................................x Minister’s Foreword .................................................................................................1 Chairperson’s Introduction .....................................................................................6 Executive summary................................................................................................12 1. Background to the review ...............................................................................56 1.1 Introduction...........................................................................................................................56 1.2 Background to the need for the review of the funding framework ........................58 1.3 Terms of reference for the funding review Committee and work streams...........59 1.4 The principles that should be served by the funding framework...........................60 1.5 Members of the main Committee and work streams, and secretarial support ...63 1.6 Work streams........................................................................................................................64 i. Work stream one – Experiential learning, community engagement, distance education and African languages ...................................................................................64 ii. Work stream two – Block and earmarked grants........................................................65 iii. Work stream three – Historically disadvantaged institutions, rural universities and merged universities with multi-campuses............................................................65 iv. Work stream four – Funding grid ....................................................................................66 1.7 Methodology applied ..........................................................................................................66 1.8 Consultation of interest groupings in the review .......................................................67 1.9 Structure of the report........................................................................................................67 2. The role of higher education in development................................................70 2.1 Introduction...........................................................................................................................70 2.2 Higher education, innovation, and socio-economic and technological development .........................................................................................................................71 2.3 Conclusion ............................................................................................................................75 3. Vision and goals for higher education, and differentiation of the university system...............................................................................................................77 3.1 Vision and goals for higher education...........................................................................77 i. Introduction...........................................................................................................................77 ii. Vision for higher education, 2030 ...................................................................................78 iii. Targets set by the NDP 2030 for higher education, science and technology .....79 i iv. Challenges for achieving these goals............................................................................80 v. Strategies to overcome these challenges.....................................................................81 vi. Conclusion ............................................................................................................................85 3.2 Differentiation of the university system, and funding implications.......................86 i. Introduction...........................................................................................................................86 ii. Inputs received from role-players ...................................................................................86 iii. Recommendations ..............................................................................................................92 4. Overview of the effectiveness and shortcomings of the current funding framework.........................................................................................................94 4.1 Background...........................................................................................................................94 4.2 Policy framework.................................................................................................................95 4.3 Review of the performance of public universities ......................................................96 4.4 Conclusion ..........................................................................................................................114 5. Higher education funding approaches and the current funding framework implemented in South Africa.........................................................................117 5.1 Introduction.........................................................................................................................117 5.2 International higher education funding approaches................................................117 i. Incremental funding..........................................................................................................117 ii. Formula-based funding....................................................................................................118 iii. Performance-based funding ...........................................................................................119 5.3 The South African higher education funding framework........................................120 i. Assumptions and principles of the SAPSE funding framework and the current funding framework ............................................................................................................120 ii. Steering mechanisms.......................................................................................................122 iii. The planning process and government funding allocation to universities .......123 5.4 The overall architecture of the funding framework ..................................................138 i. Introduction.........................................................................................................................138 ii. Overview of inputs received from role-players .........................................................139 iii. Conclusion ..........................................................................................................................142 iv. Recommendations ............................................................................................................143 5.5 The level of government spending on higher education in South Africa in relation to the country’s GDP.........................................................................................143 i. Introduction.........................................................................................................................143 ii. Income sources of public universities.........................................................................144 iii. Level of government spending on higher education in South Africa..................147 ii iv. Overview of inputs received from role-players .........................................................152 v. Recommendations ............................................................................................................153 5.6 Accountability.....................................................................................................................154 i. Introduction.........................................................................................................................154 ii. Accountability and governance strengthened ..........................................................154 iii. Recommendations ............................................................................................................155 5.7 Enrolment planning and over- and under-enrolment...............................................157 i. Introduction.........................................................................................................................157 ii. Volume-of-activity increases and current MTEF allocations .................................158 iii Comparison of the projected versus actual TIU:FTE ratio .....................................159 iv. Impact of over- and under-enrolments per university .............................................160 v. Extent of over- and under-enrolment/over- and under-funding for the 2011

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