HIV and AIDS Funding for the Health Sector in Budget 2002: Comparison of funds allocated and funds requested in the Department of Health’s "Enhanced Response" Budget Submission

Introduction

This document provides a concise summary of HIV and AIDS funds allocated by National Treasury in Budget 2002 to National and Provincial Health Departments, and compares these allocations to the amounts requested in the Department of Health’s original budget submission, "An Enhanced Response to HIV and AIDS and Tuberculosis in the Public Health Sector – Key Components and Funding Requirements, 2002/03-2004/05". It is designed to accompany the "Enhanced Response" document, so that readers may better understand:

• The degree to which the "Enhanced Response" succeeded in mobilising additional public funding for the health sector response to HIV and AIDS

• Those areas which fared better or worse in attracting additional funds

All figures for allocated funds are taken from "Budget Review 2002" (National Treasury), where they are summarised on page 141. The comparison focuses upon additional funds requested for conditional grants to provinces and targeted increases to the Equitable Share revenue fund for provinces.

HIV and AIDS Health Conditional Grants

Tables 1 and 2 below summarise the amounts requested and allocated for Health HIV and AIDS conditional grants to provinces, by item:

Table 1: Conditional Grants, Funds Requested

Table 2: Conditional Grants, Funds Agreed by Treasury

It is immediately clear that VCT, Step Down Care, and Provincial Management have been funded in full or very nearly in full. Home Based Care has received only a fraction of the amount requested, primarily reflecting Treasury’s concerns over past under-spending in this area. National Treasury therefore require National and Provincial Health Departments to demonstrate improved spending and management of current allocations before major increases for Home Based Care can be entertained. Smaller allocations than requested for Prevention of Mother to Child roll-out reflect i) the use by Treasury of a model based upon recurrent costs only (i.e. excluding possible infrastructure set-up costs), and ii) genuine uncertainty over the true costs of PMTCT pending completion of costing studies as part of the PMTCT research programme.

Targeted Increase in Equitable Share Allocation

The Department of Health produced its request for a targeted increase in the Equitable Share based on the estimated impact of HIV and AIDS on several specific health care activities and cost drivers. Quite correctly, the National Treasury’s ultimate enhanced allocation is a single figure, which does not attempt to reflect any specific activity or programme (in line with the general approach to use of the Equitable Share). Table 3 compares funds requested with the final enhanced allocation.

Table 3: Additional Equitable Share funds requested and allocated (relative to 2001/02 expenditure)

Items and Programmes Wholly Rejected

A number of items and activities for which funds were requested were rejected outright, and hence receive no funding. They represent a mix of activities, some of which would have been included in conditional grants to provinces, and others which would have have been undertaken by the National Department.

Table 4: Items and Programmes Rejected Outright

None of the rejected items formed part of the Department of Health’s "core" request, as it was accepted that these items represented interventions for which there was less certainty of effectiveness, and that they therefore represented lower priority activities.

Overall Assessment

Table 5 summarises the preceding sections, to show actual allocations as a percentage of the sums originally requested:

Table 5: Funds allocated as % of funds requested

Treasury’s concerns over the ability of the health sector to roll out Community & Home Based Care rapidly and effectively meant that the proportion of funds secured for conditional grants was relatively low, especially in the outer years. The National Department of Health accepts these concerns as valid, but is still committed to accelerating the expansion of Community & Home Based Care, in partnership with the Department of Social Development. The primary focus during 2002/03 will therefore be upon improving the effectiveness of conditional grant expenditure; once improved performance has been demonstrated, the issue of funding for CHBC will be reopened with Treasury for future years. Allocation of funds to the targeted increase in the Equitable Share was much more successful. The success of this component now lies entirely in the hands of provinces, who must ensure that this increment does indeed feed through into health care budgets.

Directorate: Health Financing & Economics
26^th March 2002