Expanded Public Works Programme Current Status

1. Expanded Public Works ProgrammeCurrent Status PORTFOLIO COMMITTEE ON PUBLIC WORKS SEPT 2009 Period (1 April 2009 – 30 June 2009)

2. The Employment Challenge • SA has a severe unemployment and poverty challenge • Approx ¼ of labour force unemployed • Approx 40% of population below the poverty line • High rates of “working poverty” – low pay relative to cost of living means that finding a job does not necessarily pull a family out of poverty. • Govt has adopted targets to halve unemployment and poverty between 2004 & 2014. This can be seen as interim target only.

3. The Recent Employment Experience • Formal employment began growing from 1997, at a health pace relative to GDP growth. • Unemployment fell from 28% in 2004 to 23% in 2008. • The formal economy needs to generate an average 500,000 net new jobs annually to halve unemployment. This was achieved in recent years – not to be confused with EPWP Work Opportunities. • The impact of the global economic crisis, combined with electricity rationing and until recently rising interest rates, reduced the rate of employment growth. Employment and unemployment did not change from Q1 2008 to Q1 2009.

4. Goal of EPWP Phase 2 To create Equivalent 4, 5 million work opportunities in 5 years (i.e. 2 million Full Time Equivalent - FTEs) for poor and unemployed people in South Africa so as to contribute to halving unemployment by 2014, through the delivery of public and community services. (Scale up from 210 000 FTEs in Y1 to 610 000 FTEs in Y5; Equivalent 4, 5 million 100-day work opportunities in 5 years ) • “The expanded public works programme (EPWP) is an important part of government’s capacity to provide employment to those who are not absorbed into the labour market” (from FRAMEWORK FOR SOUTH AFRICA’S RESPONSE TO THE INTERNATIONAL ECONOMIC CRISIS, p. 16) 4

5. The Meaning of “Decent Work” Paraphrased from ILO website • There is a high probability of earning sufficient income, whether through one job or multiple economic opportunities. The economy increasingly generates employment with a bias towards the creation of decent work opportunities and sustainable livelihoods – DoL currently amending Ministerial Determination re employment conditions. Current minimum between R50 and R100. • The majority of working people can achieve a sustainable and acceptable standard of living through the combination of earnings from work, private entitlements, and social protection. • Human rights are respected in the process. This requires freedom for people to express their concerns, organize and participate in the decisions that affect their lives

6. EPWP Phase 2 Sectors • Infrastructure Sector: aims to create work opportunities through the use of labour-intensive methods during the construction and maintenance of Public funded projects • Environment and Culture Sector: aims to create work opportunities in public funded environmental programmes. Sector has also significant potential to keep expanding both its existing programmes and create new programmes that would provide environment-related services • Social Sector: aims to create work opportunities through the provision of social services. Sector is estimated to have the largest potential for expansion over the next five years • Non-State Sector: aims to create work opportunities through Non-Governmental Organisations, Community-Based Organisations and other Not-for-Profit Organisations (NPOs) • “The role of communities in developing their own local employment schemes and the role of NGOs, trade unions and CBOs in offering advice on priorities and in administering resources for and in running them will be promoted through Community Work Programmes” (from FRAMEWORK FOR SOUTH AFRICA’S RESPONSE TO THE INTERNATIONAL ECONOMIC CRISIS, pp. 16-17)

7. 5 Year Work Opportunities Targets

8. Key Characteristics of EPWP Projects • They are highly labour intensive: a large percentage of the overall project costs are paid out in wages to the target group • They employ large numbers of the EPWP target group • The EPWP target group is paid wages between R50 and R100 per day. • The EPWP target group is employed under the Special Public Works Programme conditions of work • Vulnerable group targets: 55% women; 40% youth and 2% people with disabilities

9. Funding of EPWP Programmes • Funds for EPWP programmes are within the allocated budgets of national departments, provinces and municipalities through the normal budgeting process • Over and above these budgets, those public bodies that are performing well will be able to access additional funds through the EPWP wage incentive, for which R 4.1 billion has been made available over the MTEF

10. Incentive Grant • Over the MTEF, two incentive or performance-based conditional grants as well as an allocation for non-state sector participant employer organisations have been created on Public Works’ vote • EPWP Incentive Grant provincial Infrastructure Sector departments will provide: • R151.419 million in 2009/10 • R400 million in 2010/11 • R800 million in 2011/12 • EPWP Incentive Grant to municipalities will provide: • R201.748 million in 2009/10 • R554 million in 2010/11 • R1.108 billion in 2011/12 • EPWP Incentive Grant allocation to Non-State Sector (primarily for paying wages to EPWP workers): • R80.5 million in 2009/10 • R359.621 million in 2010/1 • R308.740 million 2011/12

11. Dec 2009 Target • Programme expected to create 500 000 work opportunities between March 2009/10 and December 2009/10. • All public bodies from all spheres of government (i.e. national and provincial departments, as well as municipalities) and the Non-State Sector (supported by government incentives), required to deliberately optimise creation of labour-intensive work opportunities for unemployed and poor people through delivery of public and community services • Public bodies should create work opportunities in terms of their normal mandates and budgets, e.g. according to allocations as per the Estimates of National Expenditure and grants falling under the Division of Revenue Act • Training and enterprise development will be implemented in sector specific programmes to enhance service delivery, beneficiary well-being and skills development.

12. First Quarter Results … 1 • Period April to June 2009 (see Annexures A-E) indicate that more than 83 900 work opportunities have thus far been reported • Figure is very conservative and reflects: • poor reporting • under-reporting • in some cases no reporting on active projects across all three spheres of government.

13. Progress against 2009-2010 targets – OverallEPWP Net jobs for Q2 was as follows: • Infra = 34% • Env = 86% • Social=17% • Econ = 54%

14. NET jobs per sector against total target for 2009-10 (1 Apr 2009 – 30 June 2009)

15. Job opportunities per sector and province (Overall) (1 April – 30 June 2009)

16. Full Time Equivalent performance: Provincial Gov Dept (1 April – 30 June 2009)

17. Full Time Equivalent performance: Provincial Gov Dept (1 April – 30 June 2009)

18. Full Time Equivalent performance: Municipalities (1 April – 30 June 2009)

19. Full Time Equivalent performance: Municipalities (1 April – 30 June 2009)

20. Actions Taken to Ensure Delivery • Minister engaged and signed protocols that confirm 500 000 December 2009 targets, as well as five year targets for provinces and municipalities, with Premiers and MECs of 7 out of 9 provinces • DPW technical teams give support to provinces and municipalities to ensure that creation of work opportunities is prioritised in design and implementation of projects across government