CARDIOVASCULAR JOURNAL OF AFRICA • Vol 23, No 8, September 2012
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AFRICA
subsidy formula was the efficiency of outputs and outcomes,
given that 50% of the formula was input driven.
8
In 2004, the new funding formula (NFF) was implemented.
As one of the ideas behind the NFF was to recognise the
importance of research output,
8
the NFF was intended to try and
reverse the trend for a decline in research productivity. Indeed,
research productivity by higher educational institutions was
noted to have declined by 20% from 1997 to 2003.
15
The SAPSE subsidy formula
Using the SAPSE subsidy formula, the extent of subsidy
payments to a higher educational institution was determined
on a 50:50 weighting between inputs (predicted costs of
student training and research) and outputs (student graduations,
publications).
16
The government subsidy was based on the
determination of the actual costs of a reasonably efficient higher
educational institution and decisions were made on which of
these costs should be covered by government subsidies. The
values attributed to the various cost units changed each year
in accordance with inflation and changing cost patterns. For
example, total actual government funding to higher educational
institutions increased from R7 532 million in 2001/2 to R7 969
million in 2002/3.
8
The NFF subsidy formula
Using the NFF, the extent of subsidy consists of four block
grants:
8
•
Teaching input grant (planned full-time equivalent student
enrollments)
––
Includes provision for research training
•
Teaching output grant (non-research graduates produced)
––
Includes provision for research training
•
Research output grant (publications and postgraduates
produced)
•
Grant for other institutional factors (development).
Although the NFF was intended to be based on outputs to
a greater extent than the SAPSE, this is not the case. If one
considers the four block grants upon which the NFF is based,
then indeed outputs contribute more than inputs. However, the
percentage of the grant which makes up each of these blocks
differs substantially. For example, in 2006 the percentages were:
teaching input grant 65%; teaching output grant 15%; research
output grant 13%; and grant for other institutional factors 7%.
16
Furthermore, when one considers that both the teaching output
grant and the research output grant include subsidies for poor
performance, then a proportion of these already relatively small
output grants are actually input grants.
16
Hence, the NFF is to a
larger extent than the SAPSE driven by input factors.
19
The research output grant is based on units, whereby a
publication in an accredited journal (see section titled ‘What
constitutes an accredited journal’) is one unit; graduation of a
student with an MSc by research is one unit; graduation of a
student with an MSc by course work and short report is 0.5 unit
(
if the research component contributes 50%); and graduation of
a student with a PhD is three units.
8,20
A basis of the NFF is that the government first decides how
much it can afford to spend on higher education and then it
allocates funds according to its needs and priorities.
8
Hence, in
the NFF, it was initially proposed that the value per unit output
was determined by the total funds available, divided by the total
unit output. However, it was recognised that if the total funds
available were set in advance, then an increase in total unit output
would result in a decrease in the rand value per unit; hence the
NFF would create a disincentive to increase research outputs.
8
The proposal was therefore revised such that the value per
unit is determined by:
8
•
setting a benchmark of weighted research output units per
full-time permanent academic/research staff [weighted 1.2
for universities (recently increased to 1.4125) and 0.5 for
universities of technology] (termed weighted research output)
•
generating normative data of total outputs per year by relat-
ing above benchmarks per year to staff complements per year
(
termed normed research output)
•
dividing the total government funds available for research
outputs by normative total outputs.
In other words, each institution’s ‘delivery’ is determined by
expressing their weighted research output as a percentage of
their normed research output.
20
The actual subsidy earned by an
institution is equal to the institution’s weighted research output
multiplied by the total government funds available for research
outputs and divided by the average normed research output for
all institutions.
20
Of concern is that an institution with a delivery of less than
100%
earns a developmental grant that is linearly related to
the extent of their failure to deliver.
20
Although, this idea of a
developmental grant has its merits (encouraging institutions to
develop a stronger research ethos), it is also a potential perverse
incentive, in that institutes are rewarded more for doing less.
If the government determines the total of public funds that
should be spent in a given year on higher education,
8
then in
essence the total government funds available for research outputs
is set in advance. Therefore as research outputs increase, the
value of the unit declines. Hence, although the NFF recognises
the budget constraints of the country (it is driven by the
availability of public resources for funding higher education),
8
this formula is more likely to act as a disincentive than an
incentive to increase research outputs.
In other words, given that the funds available for dispersal are
finite, if all higher educational institutions increase their research
outputs, then the monetary value of a research output unit will
decline, a criticism which has been called the ‘zero-sum game’.
21
Given that the basis of the NFF is to encourage future research
output by means of rewards for past research outputs, a decrease
in the monetary value of a research output unit is likely to create
a disincentive to increase research outputs nationally.
21
What constitutes an accredited journal?
Worldwide most institutions base their research outputs on
publications in journals that are listed in the Institute for
Scientific Information’s (ISI) Science Citation Index, Social
Sciences Citation Index and Arts and Humanities Citation
Index.
3
In South Africa, publications in those journals listed in
the above three ISI indices qualify for subsidy, and in addition,
publications in journals listed in the International Bibliography
of Social Sciences (IBSS) index, or in the Department of Higher
Education and Training-approved South African journals list
qualify for subsidy.
To be eligible for inclusion in the list of SouthAfrican journals
