In response to US funding cuts for South African health services and research projects, National Treasury has provided the National Department of Health with hundreds of millions of rands in emergency funds, writes Jesse Copleyn. Spotlight and GroundUp look at how the government intends to spend this money.
Health Minister Dr Aaron Motsoaledi recently announced that National Treasury had released roughly R753m to help plug the gap left by US funding cuts. Another R268m is also being released in the next two years for researchers who lost their US grants.
But this may only constitute the first round of emergency funds from government, according to sources. The Health Department plans to submit a bid for an additional allocation later on, which will be considered by Treasury. But this will probably only be approved if the first tranche of funding is properly used.
So how is the money supposed to be used? We spoke to officials from Treasury, the NDoH, and the South African Medical Research Council (SAMRC).
Money for provinces – to save clinic jobs
The current tranche of money comes from Treasury’s contingency reserve, which exists partially to deal with unforeseen funding shortfalls. It was released under Section 16 of the Public Finance Management Act.
Of the R753m earmarked for this year, Motsoaledi said R590m would go to provincial Health Departments via the District Health Programme Grant – a conditional grant for funding public health efforts, particularly HIV, TB and other communicable diseases.
Such conditional grants typically give the department more say over how provincial departments spend money than with most other health funding in provinces.
To explain how government officials arrived at this figure, here’s what the US previously supported within provinces.
Previously (before Donald Trump was re-elected on 20 January), the US Agency for International Development (USAID) had financed health programmes in specific districts with high rates of HIV, in all provinces except the Northern Cape.
The funds were typically channelled by USAID to NGOs, which used the money to assist the districts in two ways: hiring and deploying health workers at government clinics, and running independent mobile clinics and drop-in centres, assisting key populations (men who have sex with men, sex workers, transgender people and drug users).
But after the funding cuts, when thousands of staff lost their jobs and many of these centres were forced to close, the department began negotiations with Treasury to get emergency funding to restore some of these services.
As part of its application, the department submitted proposals for each province, specifying how much money was needed and how it would be used. (Though this only took place after significant delay and confusion).
Since Treasury couldn’t afford to plug the entire gap left by the cuts, the provincial-level proposals only requested money for some of the services that had been terminated. For instance, funding was not requested for the key population health centres. Instead, the priority was to secure the jobs that had been lost at government health facilities.
As such, the total amount requested from Treasury for each province was largely calculated by taking the total number of staff that NGOs had hired at clinics and working out how much it would cost to rehire them for 12 months.
Rather than paying the NGOs a grant to deploy these workers, as was done by USAID, the department proposed hiring them directly. This meant that they calculated their wages according to standard government pay scales, which is less than what these workers would have earned from the NGOs.
The total came to just under R1.2bn for all the provinces combined.
Treasury awarded roughly half of this on the basis that the money would be used to finance these wages for six months, rather than 12. This amounts to the R590m for provinces, as announced by Motsoaledi.
If all goes smoothly and this money is used effectively to hire these staff over the next six months, then a new tranche of Section 16 funding could be released to continue hiring them. Funds might also be released to fund the key populations health sites.
A concern, however, is that the money may just be used by provinces to augment their ordinary budgets. If the funds aren’t actually used to respond to the US cuts, then it is much less likely that more emergency funding will be released.
At this stage, it is too early to tell how provinces will use the money, particularly given that it appears that at least some of them haven’t even received it yet.
Spotlight and GroundUp sent questions to several provincial Health Departments. Only the Western Cape responded. The province’s MEC for Health & Wellness, Mireille Wenger, said that the funds have not yet been received by her department, but that once they were, they would be directed to several key priority areas, including digitisation of health records, and the strengthening of the primary healthcare system.
It’s thus not clear whether the province will be using any of the funds to employ health staff axed by US-funded NGOs. In response to a question about this, Wenger stated that “further clarity is still required from the National Department of Health and National Treasury regarding the precise provincial allocations and conditions tied to the additional funding”.
What about research?
Of the R753m that’s been released for this year, R132m has been allocated to mitigate the funding cuts for research by US federal institutions, primarily the National Institutes for Health (NIH). Unlike USAID, the NIH is not an aid body. It provides grants to researchers who are testing new treatments and medical interventions that ultimately benefit everyone.
These grants can be awarded to researchers in the US or abroad as part of a highly competitive application process.
Researchers in South Africa are awarded a few billion rands of grants from the NIH each year, largely due to their expertise in HIV and TB. But over the past few months, much of this funding has been terminated or left in limbo.
The R132m issued by Treasury is supposed to assist some of these researchers. It will be followed by another R268m over the next two years. The Gates Foundation and Wellcome Trust are chipping in an additional R100m each – though in their case, the funds are being provided upfront.
All of this money – R600m in total – is being channelled to the SAMRC, which will release it to researchers via a competitive grant allocation system.
According to SAMRC spokesperson Tendani Tsedu, they have already received the R132m from Treasury, though they are still “finalising the processes with the Gates Foundation and Wellcome Trust for receipt of (their donations)”.
The SAMRC is also in negotiation with a French research body about securing more funds, though these talks are ongoing.
In the meantime, the SAMRC has sent out a request for grant applications from researchers who have lost their US money. The memo states: “Applicants may apply for funding support for up to 12 months to continue, wind down or complete critical research activities and sustain the projects until US funding is resumed or alternative funds are sourced.”
“The plan,” Tsedu said, “is to award these grants as soon as possible this year.”
Professor Linda-Gail Bekker, CEO of the Desmond Tutu Health Foundation, told us the hope is that the grants could fill some of the gaps. “This is a bridge and it is certainly going to save some people’s jobs, and some research,” she said, “but it isn’t going to completely fill the gap.”
Indeed, the SAMRC has made it clear that its grants aren’t intended to replace the US funding awards entirely. This is unsurprising, given that the money being made available is a tiny fraction of the total grant funding awarded by the NIH.
It’s unlikely that research projects will continue to operate as before, and will instead be pared down, said Bekker.
“It’s going to be about getting the absolute minimum done so you either save the outcome, or get an outcome rather than no outcome,” she said.
In other cases, the funds may simply “allow you to more ethically close down (the research project)”, she added.
For some, this funding may also have come too late. Many researchers have already had to lay off staff. Additionally, patients who had been on experimental treatments may have already been transitioned back into routine care. It’s unclear how such projects could be resumed months later.
In response, Tsedu stated: “For projects that have already closed as a result of the funding cuts, the principal investigator will need to motivate whether the study can be appropriately resurrected if new funds are secured.”
The SAMRC has established a steering committee to adjudicate bids. This will be considering a range of criteria, Tsedu said, including how beneficial the research might be for the South African health system, and how heavily the project was affected by the US funding cuts. The committee will also consider how an SAMRC grant could “be leveraged for future sustainability of the project, personnel or unit”.
Endless back and forth
The job of the SAMRC steering committee will probably be made more complicated by the erratic policy changes within the NIH.
On 25 March, the body sent a memo to staff, leaked to Nature and Bhekisisa, instructing them to hold all funding awards to researchers in South Africa. After this, numerous researchers in the country said they couldn’t renew their grants.
However, last month, Science reported that a new memo had been sent to NIH staff which said that while South African researchers still couldn’t get new grants, active awards could be resumed.
Since then, some funds appear to be trickling back into the country, but certainly not all. For instance, Spotlight and GroundUp spoke to one researcher who had two active NIH awards before the cuts. He said one of these was resumed last month, while the other was still paused.
Bekker also told us that she had heard of one or two research grants being resumed in the past week, though she said the bulk of active awards to South Africa are still pending.
“Where people are the prime recipients (of an NIH grant) without a sub awardee, there seems to be a queue and backlog but some (of those awards) are coming through,” she said. “But how long this is going to take and when it might come through, we’re waiting to hear.”
A strategy might be to apply for the SAMRC bridging funding and “if by some miracle the [NIH funding is resumed]”, then researchers could then presumably retract their SAMRC application, Bekker added.
Meanwhile, health researchers will have to continue working out how to respond to the abrupt and increasingly confusing changes to funding guidelines that have dogged them since Trump assumed office.
“It’s such a dreadful waste of energy,” said Bekker. “If we were just getting on with the research, it would be so much better.”
This article was jointly produced by Spotlight and GroundUp.
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