Outline

1. Expanded Public Works Programme (EPWP)Phase 3 Presentationto thePortfolio Committee on Public WorksTuesday, 05 March 2014

2. Outline • BACKGROUND OF EPWP • Origin of EPWP • EPWP Phase 1 (2004 – 2009) • EPWP Phase 2 (2009 – 2014) • South Africa a Global Innovator in Public Employment Programmes (PEPs) • Key Lessons from EPWP Phases 1 & 2 • The “Trilemma” Facing EPWP • DESIGN OF EPWP PHASE 3 • Policy Context for EPWP Phase 3 • Paradigm Shifts in EPWP (Phase 1 – Phase 3)

3. Outline … continued • EPWP PHASE 3 • Training and Graduation in EPWP Phase 3 • Convergence and Synergies • EPWP Phase 3 Employment Targets • Focus of EPWP Phase 3 • Institutional Arrangements for EPWP Phase 3 • Key Changes in EPWP Phase 3

4. BACKGROUND OF EPWP

5. Origin of EPWP • The Reconstruction and Development Programme (RDP) (1994) called for “a coordinated national public works programme to provide much needed infrastructure, to repair environmental damage, and to link back into…the industrial and agricultural base…”, coordinated by “a national coordinating agency located in the implementing office of the RDP.” • The idea of a “national coordinating agency” got side-lined with the closing of the RDP Office in 1996. Government’s focus shifted to rapidly creating formal sector employment through macroeconomic-facilitated growth (GEAR 1996 envisaged 1 million new formal, largely private sector jobs over 5 years). • Nonetheless, there were important early PEP initiatives led by the Department of Public Works (DPW) (labour intensity in construction), the Department of Water Affairs (Working for Water – launched 1995), and some provincial roads departments (notably KwaZulu–Natal (KZN) with household-based maintenance of allocated stretches of rural roads). • Notwithstanding sustained Gross Domestic Product (GDP) growth touching 5% in the first decade after 1994, structural poverty, inequality and unemployment remained stubbornly high (the latter never coming under 20%).

6. EPWP Phase 1 (2004-2009) • In this context, following the 2003 Growth and Development Summit, Government agreed on a massification of the public works programme – EPWP phase 1 with a 5-year target of 1 million work opportunities. • The key assumption (at the time) was economic growth in the “first economy” was not impacting upon the “second economy” – hence the need for targeted developmental programmes (SMME Development, Taxi Recapitalization Project and EPWP) as once-off ladders to “graduate” “second economy” activities into “formal economy”. • Phase 1 achieved its 1 million work opportunities target one-year ahead (2008) of schedule – but unemployment remained stubbornly high, and worsened from 2008 – with onset of global economic crisis.

7. EPWP Phase 2 – (2009-2014) • Encouraged by success of massification in Phase 1 (1 million work opportunities in 4 years), and responding to local job-loss crisis linked to global economic crisis – Phase 2 set an ambitious 4,5 million work opportunities target. • We are on track to meet the work opportunities target by the end of March 2014. • Phase 2 has also seen new developments – including: introduction of the Non-State sector, which has two programmes, namely Community Work Programme and Non-Profit Organisation programme, and the National, Provincialand Municipal EPWP Incentive. • Government’s New Growth Path policy (2010) clearly broke with “first” and “second” economy paradigm – it’s the MAINSTREAM economy that has systemic challenges.

8. South Africa a Global Innovator in PEPs • With chronic unemployment, even in many developed economies, the scale and innovative achievements of SA’s PEPs have attracted international interest. However, we have not sufficiently communicated these achievements at home! • Uniquely, our PEPs cut across several sectors. They are championed through different line departments, provinces and municipalities and they have both a rural and urban focus. • Labour intensive methods are mainstreamed into Government infrastructure contracting rather than having PEPs operating in separate silos.

9. South Africa a Global Innovator in PEPs … continued SA has been a global pioneer in applying PEPs on scale to environmental services – Working for Water (WfW), Working on Fire, Working for Wetlands, etc. • The WfWprogramme has possibly saved as much as R400 billion (CSIR), cleared over 2 million hectares of alien invasive plants, and prevented loss of 71% of grazing. • Working on Fire in 2007/2008 saved the forestry industry alone R3,7 billion – on a budget of R123 million.

10. South Africa a Global Innovator in PEPs … continued • SA is still the only country in the world with a range of PEPs in the social sector – including adult education, early childhood care, school-feeding schemes, school safety and homework supervision programmes. Home-based care programmes have been a major response to the HIV/AIDS pandemic. • Through the EPWP Non-State Sector programmes, namely the Community Work Programme (CWP) and Non-Profit Organisations (NPOs), we are working closely with NPOs, which are inclusive of non-governmental organisations, faith based organisations and community based organisations – an important counter-weight to the dangers of excessive bureaucratisation of PEPs .

11. Innovation in PEPs Case Study – Gauteng Extra School Support Background Gauteng Department of Education identified a series of challenges in schools: • Lack of support for learners on homework – socio-economic conditions at home, parents’ levels of literacy, child headed families , etc. • Lack of safety at schools, targeted by drug dealers, school assets (computers) vulnerable. • Many learners not physically or creatively active after school hours. EPWP response – rolled out from 2011 • Homework and Sport Supervisors (for Grades 1-3; 4-6; and 7-12) – half day basis – 8 200 supervisors work opportunities at 911 schools. • Safety and security personnel – 5 052 work opportunities at 1 263 schools.

12. Case Study – Impact of Working for Water • SA’s water loss because of alien invasive plants = est. R6.5 billion, p.a. • Without WfWthis figure would be in the region of R41.7 billion • The net present value of all control operations up to the end of 2011 would be in the order of R453 billion. Leandre Arends - WfW team member in De Hoop

13. Key Lessons from EPWP Phases 1 & 2

14. Lesson 1: Clarify Key Objective of a Particular Programme The “Trilemma” of PEPs PEP’s development potential lies in providing all three of these outcomes- but there are trade-offs between them in practice For different programmes, sectors and contexts optimal balance between these 3 will vary Increasing one output… is likely to result in decreases in the others

15. Different strengths of different programmes • Working on Fire – skilled work and training, relatively long term involvement, excellent graduation prospects – but low numbers (5000 fire-fighters p.a.) • Community Work Programme – less training but possibilities to scale-up rapidly to over 1m w/o’s p.a. – contributes to local community cohesion and ownership

16. Key Lessons from EPWP Phases 1 & 2 … continued Lesson 2: Achieve better balance between work opportunity headcountsand other outcomes Work opportunity targets are very important – but we need to balance these with other indicators, including: • Full-time equivalents • Evaluation of post-participation outcomes for beneficiaries • Evaluation of assets and services produced • Impact on communities This will require refining our Monitoring and Evaluation (M&E) capacities

17. Key Lessons from EPWP Phases 1 & 2 … continued Lesson 3: Challenges with Infrastructure PEPs Short-term nature of many infrastructure construction projects • Average work opportunity duration in infrastructure construction and maintenance EPWPs = 65 Days. • Need to place greater emphasis on infrastructure MAINTENANCE – ongoing, local work - Road maintenance programmes like Zibambele and Siyatentela have an average work opportunity duration of 108 days. Reluctance of private construction sector to use labour intensive approaches • Engage with sector • Ensure training of professionals in labour intensive approaches • Stipulate labour intensive methods more effectively in public sector contracts

18. Key Lessons from EPWP Phases 1 & 2 … continued Lesson 4: Perception of risk for public bodies taking on EPWP projects Three major factors accounting for perception of risk • Concern that labour-intensive methods are slow and the quality is poor. We need to: • Include labour-intensive methods in the training curriculum of the engineering profession • Concern over compliance challenges – reporting and supply chain requirements. We need to: • stream-line reporting mechanisms; and • proactively assist provincial departments and municipalities, etc. • Concern over expectations of participants for full-time employment at completion of project • need to clarify and communicate nature of particular project more effectively • develop realistic exit strategies that are linked to the programme, resource these with appropriate training and ensure the participation of the responsible Departments

19. Key Lessons from EPWP Phases 1 & 2 … continued Lesson 5: Mitigate risk of projects being captured for patronage purposes • There are community accusations that the selection of EPWP participants is hijacked by politicians for patronage purposes • Can undermine key developmental outcome forging of community cohesion through collective productive work • Community co-ownership, including community oversight of PEP projects, is the key to averting the risk of clientelism/patronage • The role of community based organisations and other NPOs is proving useful in this regard, in both the CWP and in the EPWP NGO sector

20. Avoiding the Perils of Clientelismin Participant Selection Case Study: Western Cape Department of Transport and Public Works • Provincial Department’s EPWP Unit works with Municipality to ensure Community Forum established • Forum = NGOs, religious leaders, business associations, relevant government authorities and a Community Liaison Officer • Responsibility of Forum is to create community awareness re. project and opportunities flowing from it • Contractor required to establish Project Steering Committee = Contractor, Implementing Agent, Client Department and representatives nominated from Community Forum; and to employ specified quota of EPWP jobs and other local labour • One of functions of Project Steering Committee = facilitate recruitment of EPWP and other local labour

21. Avoiding the Perils of Clientelismin Participant SelectionCase Study: Western Cape Department of Transport and Public Works … continued • Recruitment and selection of local labour • The WC Department of Transport and Public Works stipulates in the contracts with sub-contractors the following as mandatory: • Well advertised public meeting, nature of opportunities explained, job application forms distributed to all present • Completed forms placed in sealed box • Steering Committee draws double number of applications required in full view of meeting – one list for number of opportunities, another for reserve • A data base of all applicants (successful and unsuccessful) kept for future reference

22. Key Lessons from EPWP Phases 1 & 2 … continued Lesson 6: The need for much greater co-ordination The scale, diversity and innovative nature of SA’s PEP programmes = a major achievement…but also a challenge: • More work needs to be done in relation to common branding • Poorly coordinated public communication on achievements across PEP programmes; • insufficient sharing of lessons across programmes; and • insufficient co-ordination between PEPs and other potentially related Government policies, strategies and initiatives – adult education and training; SMME and Co-ops development; sustainable livelihoods; and food security programmes, etc. This is the key lesson from the past 10 years, and prime reason for the November 2013 Cabinet decision to establish a Presidential Coordinating Commission for PEPs in the new administration

23. EPWP Enterprise Development: Provides small business support to all EPWP sectors in order to enhance service delivery and beneficiary well-being • Programmes Supported • (External to NDPW) • -Working for Water: Support to Contractors (Environment and Culture (E&C) Sector) • Working for Wetlands: Support to Contractors (E&C Sector) • Investing in Culture: (E&C Sector) • School Nutrition Cooperatives (Social Sector) • Programme Support to Graduate EPWP Beneficiaries • (Internal to NDPW) • -Vuk’uphile Civils • National Youth Service (NYS) • Vuk’uphile Buildings • Programme Driver • (Internal to NDPW) • NDPW Cooperatives, e.g. gardening and cleaning services. EPWP Enterprise and Cooperative Development

24. DESIGN OF EPWP PHASE 3

25. Policy Context for EPWP Phase 3 • The National Development Plan (NDP) calls for the expansion of EPWP and outlines two key objectives: • Contribute to reducing unemployment by creating temporary employment by being responsive to the number of unemployed. “The Public Employment Programmes should target the creation of 2 million work opportunities annually by 2020, or earlier, if possible…” “The main opportunities will lie in community based services and the roll out of social sector initiatives.” (NDP Chapter 3) • Contribute to social protection for the unemployed by providing them with income support (Chapter 11). • In the New Growth Path, EPWP is seen as an important contributor in Jobs Driver 1 (Infrastructure Development) through increasing the labour intensity of Government infrastructure investments and Jobs Driver 4 (Social Capital) through expansion of the Community Work Programme.

26. Paradigm Shifts in EPWP (Phase 1 – Phase 3) PHASE II PHASE III PHASE I Greater coordination across range of PEPs, and between PEPs and other developmental initiatives (training, SMME and coop development). Better Monitoring and Evaluation of what happens post-participation, and on impact of services and assets created especially in poor communities. Increase scope of infrastructure maintenance. During the period of EPWP Phase 1, economic growth was between 5 – 6%. However , almost 1 million jobs were lost in the economy. Realisation that unemployment is not only cyclical, but more fundamentally structural. EPWP needs to be integrated into strategies to address the systemic nature of unemployment and poverty in SA. EPWP designed to bridge gap between so–called 1st and 2nd economy. Too many expectations created for the Programme, such as maximising the spread and skilling all beneficiaries to be exited into the mainstream economy.

27. EPWP PHASE 3

28. Training and Graduation in EPWP Phase 3 • For all the EPWP sectors, project based training aimed at capacitating EPWP participants remains an important part of EPWP. • At the same time, it is recognized that the role and importance of training varies considerably from sector to sector, and sub-programme to sub-programme, and each sector will have to develop its own appropriate training policy and strategy. • Strong collaboration with the National Skills Fund and Skills Education and Training Agencies (SETA’s) will be continued to source funding for training of participants. Sectors will also be encouraged to dedicate a portion of their implementation budgets for training of beneficiaries. There is also important potential for synergising PEPs and the Department of Higher Educations proposed Community Colleges. • Where possible the graduation of EPWP beneficiaries into formal employment will be promoted through various initiatives, including cooperatives and small enterprise development.

29. National Youth Service: Aims and Objectives • To create work and training opportunities for the unemployed youth while addressing the shortage of artisan skills within built environment. • Involvement of youth in community service delivery and thereby instilling the spirit of patriotism in young South Africans. • Ensure that youth develop skills, understanding and aspirations for working within the built environment.

30. NYS Implementation stages • The EPWP NYS is implemented through the following stages: • Phase 1 - Initiation • Phase 2 – Pre-implementation Phase • Phase 2 A - Recruitment • Phase 2 B - Induction training • Phase 2 C - Technical training • Phase 3 – implementation • Phase 3 A - Tender process (parallel to recruitment and training) • Phase 3 B – on work training during construction phase • Phase 4 – Beneficiary exit workshop

31. National Youth Service: Phase 3 • The NYS programme will continue to focus on training youth in artisan trades in the built environment on projects implemented by the National Department of Public Works and Provincial Departments of Public Works • There will focus on moving more towards accredited training. • Phase 3 costs on NDPW projects will continue to be covered from the current 5% allocation on the project funds however the NSF funds can also be accessed to increase the number of beneficiaries. • The estimated NYS training cost is R30,000 per beneficiary.

32. Table 8: NYS EPWP Phase 3 targets – NDPW and Provincial NYS

33. Convergence and Synergies • As the EPWP keeps growing, both in terms of overall scale and the number of sub-programmes, concerns of possible areas of overlap and duplication have increased. • Given the plans for further growth, it is important these concerns are addressed. • The concerns for duplication and overlap are most prominent between CWP and Sector Programmes, and the Social Sector and NPO Programmes. • Creating synergies between all EPWP Sectors - rather than merely managing overlap and duplication. An important objective for Phase 3 is to build greater convergence between the CWP and other sector programmes, so that instead of duplication, these are complementarity, e.g. using Working for Water to train CWP projects in clearing invasive aliens in their particular locality. • Likewise, there are many possibilities for enhanced synergies between EPWP programmes in the Social and NPO sectors.

34. EPWP Phase 3 Employment Targets

35. Build a common EPWP brand Focus of EPWP Phase 3 Improve the strategic and operational aspects of the EPWP, aiming to improve implementation Improve targeting of participants through community participation Increase EPWP Contribution to Development Introduce a greater degree of uniformity and standardization across the various EPWP Programmes through the introduction of universal principles Improve the monitoring & evaluation of qualitative aspects Strengthen collaboration and synergies amongst lead departments and other stakeholders – sharing best practice and lessons

36. Institutional Arrangements for EPWP Phase 3 To achieve better synergy between our wide range of PEPs and other poverty alleviation, employment, enterprise development and skills development initiatives, Cabinet (November 2013) has agreed: • That a Presidential Public Employment Coordinating Commission be established. • The Commission should be chaired by the President or Deputy President and should meet quarterly. • It should be composed of relevant Ministers, the nine Premiers and the South African Local Government Association SALGA. • It should be supported by a Political Management Committee of relevant Ministers, and a Political Secretariat of relevant Ministers and Deputy Ministers. • The Commission should have two major work streams - PEPs and Employment, and PEPs and Sustainable Livelihoods. • Its technical secretariat should be the DPW’s current EPWP Branch, working closely with other relevant line department branches.

37. Key Changes in Phase 3 • PPECC will enhance coordination across range of PEPs, and between PEPs and other developmental initiatives (training, SMME and coop development). • Fostering compliance with core universal principles to be progressively realised. • Adherence to the EPWP minimum wage and employment conditions under the Ministerial Determination. • Selection of workers based on a clearly defined process and defined criteria. • Work provides or enhances public goods and community services. • Minimum labour intensity appropriate to sector. • Increased community participation for more visibility and ownership in poor communities enhancing social cohesion. • Increase scope of infrastructure maintenance which provides longer duration work opportunities. • More emphasis on monitoring and evaluation of assets created and their impact on communities and beneficiaries (post-participation). Parliament will also have an important monitoring and evaluation role to play.