STRUCTURE OF THE PRESENTATION

1. PRESENTATION TO THESELECT COMMITTEE ON PUBLIC SERVICES ANNUAL REPORT 2009-10 OF THE DEPARTMENT OF HUMAN SETTLEMENTS

2. STRUCTURE OF THE PRESENTATION • Aim, Vision and Mission of the Department • Our Mandates • Refined models for service delivery • Key Challenges and Trends • Highlights of Achievements 2009/10 • Programme Achievements 2009/10 • Financial Performance 2009/10 • Provincial Transfers

3. Aims, Vision and Mission • Aim The aim of the Department of Human Settlements is to determine, finance, promote, coordinate, communicate and monitor policy in respect of housing and human settlement. • Vision A nation housed in sustainable human settlements • Mission To facilitate an environment that provides sustainable Human Settlements.

4. STRATEGIC PILLARS Strategic Pillar 1: Mandated outcomes Strategic Pillar 2: Coordination and alignment in Human Settlements Development Strategic Pillar 3: Urbanisation and Spatial Management Strategic Pillar 4(a): Key service delivery (Shelter development) priorities Strategic Pillar 4(b): Shelter development governance Strategic Pillar 4(c): Shelter development reforms Strategic Pillar 5: Transformation and paradigm shift Strategic Pillar 6: Institutional realignment

5. OUTCOME 8 • Improved access to household water from 92% to 100% • Improved access to household sanitation from 69% to 100% • Improved access to household refuse removal from 64% to 75% • Improved access to household electricity from 81% to 92% • The accreditation of a minimum of 27 municipalities, to carry out and plan, budget, support and implement housing programmes for the development of human settlements; and • The release of 6250 hectares of public land for the development of human settlements, including provinces and municipalities.

6. HIGHLIGHTS OF ACHIEVEMENTS 2009/10 • A conceptual document on the implication of the name change from Housing to Human Settlements was developed during the period under review. • A Beneficiary Occupancy Audit, in seven of the nine Provinces was completed during the reporting period. • The Department undertook three Impact Evaluation Studies to determine the impact of various housing programmes on the lives of Beneficiaries. • The targeted programmes were the Rural housing Programme, the Social and Rental Housing Programme and the Upgrading of Informal Settlements.

7. The Department conducted the project-level monitoring process to verify and confirm delivery as reported by Provincial Human Settlements Departments. • The Department initiated a process to develop a Human Settlement Index for SA in collaboration with UN Habitat. • The Department has entered into agreements with, the Platinum Mines for possible roll out of projects in Limpopo and North West, Intersite for joint developments of land in and around railway stations, and the DBSA for technical support on priority and blocked projects. • Department negotiated the signing of the agreement with the Department of Public Works that gives the Human Settlements department first right of refusal on any land being considered for disposal by DPW.

8. The National Upgrading Support Programme has been established and will provide support to municipalities in the in situ upgrading of informal settlements. • A project process guide has been developed to guide implementers of projects in the housing process and would also serve as a project management and monitoring tool for project managers. • The newly established Housing Development Agency (HDA), following the promulgation of the Housing Development Act, 2008 (Act. 23 of 2008) was made operational in the 2009/10 financial year. • The Department in collaboration with the Rural Housing Loan Fund has finalised the development of an individual housing subsidy voucher scheme for persons who enjoy functional tenure rights to the land they occupy.

9. A process to develop standard and uniform business processes based on documented housing delivery processes has been initiated. • The municipal accreditation programme has been activated by the assessment of the six Metropolitan Municipalities and four District Councils. • In the international arena, South Africa was given a voice in the debate on human settlements through the African Ministerial Conference on Housing and Urban Development and the World Urban Forum.

10. A strategic risk assessment exercise was undertaken during November 2009 and January 2010 which incorporated IT, Fraud and strategic risk assessment through which the department identified, evaluated and allocated responsibility for managing and controlling the risks inherent to the Department. • The composition of the Risk Management Committee has been reviewed in line with National Treasury Framework to include the branch heads as members of the committee. Furthermore an independent non- executive member has been appointed to Chair of the Risk Management Committee. • The Chief Directorate has managed to execute work as per the approved operational internal audit plan wherein it was found that the department has adequate systems of internal control, risk management and governance processes; however these systems were found not always to be effective.

11. Monitored external cases being investigated by Special Investigating Unit (SIU) in terms of the Presidential Proclamation R.7/2007.

12. The Sectional Titles Schemes Management Bill and the Community Schemes Ombuds Service Bill were approved by Cabinet for public comment. • A number of individual and organisational inputs on the two Bills were received. • The Draft Rental Housing Regulations were finalised to support the effective and efficient administration of the Rental Housing Act. • The Draft Social Housing Regulations were finalised to support the application of the Social Housing Act. • The Unit also undertook relevant tasks and duties in respect of legal services.

13. The Draft Legal Compliance Manual/Policy was finalised and the process of identifying a suitable software service provide to assist in the conducting of legal compliance was carried-out.

14. The new National Housing Code, which has aligned housing policy and programmes with the Comprehensive Plan for the Development of Sustainable Human Settlements (“Breaking New Ground”), was approved by MINMEC and the Minister in February 2009. • The Farm Residents Housing Assistance Programme was approved by MINMEC and incorporated into the new National Housing Code, 2009. • The policy framework for the Housing programme for persons with special housing needs was completed but still has to be deliberated with the Department of Social Development, because the placement of children with caregivers and the appointment of care-givers fall within the ambit of that department.

15. The Draft Framework for the Inclusionary Housing Policy was reviewed during the financial year, especially in view of the changes in the market and the impact that the envisaged programme might have on the already fragile middle- to higher-income segments of the housing market. At the request of the Minister a further consultation was held in September 2009 and stakeholders were once again given an opportunity to table comments, objections and views. The findings of this consultation process and suggestions are being consolidated and alternative options will be presented to the Minister for guidance during 2010.

16. The FLISP programme was revisited during 2009 with a view to refining it to promote its implementation. Comprehensive changes to the programme were formulated and tabled for consideration. However, the draft proposals for the revised programme were rejected owing to their substantial financial implications. The NHFC was then requested to investigate the implementation of the existing programme in collaboration with the Banking Association of South Africa (BASA). The report by the NHFC will be deliberated on by the Department’s Financial Sector Task Team early in the new financial year.

17. Promoting the National Housing Code and policy advice to stakeholders. Regional workshops on the code were held with all provinces and their respective municipalities, and workshops were also held with other stakeholders. Stakeholders engaged in the past financial year include the various provinces and municipalities, housing institutions and the South African Local Government Association (SALGA),

18. ANNUAL PERFORMANCEREPORT 2009/10

21. FINANCIAL PERFORMANCE 2009/10

22. PROGRAMME PERFORMANCE

23. REASONS FOR UNDER SPENDING • Cost saving measures resulted in savings on goods and services. • The majority of the savings were realized by reducing the travel and subsistence expenditure and expenditure on advertisements. • Under spending in the programme was as a result of a delay by the Special Investigation Unit to produce and submit the last invoices for the year. • Another factor that contributed to the under spending is the delay in securing additional building, which resulted in the funds provided for leasing, refurbishment of offices, the moving of staff and the acquiring of furniture not being utilised. • The non availability of additional office space resulted in the non filling of vacancies and expenditure associated with posts could also not be achieved.

24. Cost saving measures resulted in savings on goods and services. • Majority of the savings were realized by reducing the travel and subsistence expenditure and other administrative costs. • Under spending in the programme can also be attributed to the delay in printing of the National Housing code. • Vacancies that could not be filled or filled in the last quarter of the financial year impacted on the operational costs as the budget related to expenditure associated with those vacant positions could not be spent.

25. The main reason for under spending in the Programme is as a result of R50 million which was provided for the community outreach programme from savings within the department and allocated in October during the adjustment estimate process and of which no funds were utilised. • Another contributing factor is cost associated with the non filled posts. • Under spending was due to the non appointment of Office of Disclosure members. • Another contributing factor to under spending is an amount of R34,9 million that could not be transferred to the Social Housing Regulatory Authority as the process of establishing the institution could not be finalised by year end.

26. Another contributing factor is that the department could not make payments to SITA on the Business Information Systems. This was due to the fact that SITA was experiencing challenges in printing invoices as their debtor’s management system crashed in March.

27. TRANSFERS TO PROVINCES

28. DELIVERY STATISTICS

29. CHALLENGES TO HUMAN SETTLEMENTS The following human settlements challenges remain: Systems Challenges: • Quality of Human Settlements created – lack of services • Land availability/market dynamics – 2.2 million backlog – requires R102 billion • Relegating the poor to the urban periphery • Subsidy constraints • Building material and inflationary pressures • Misalignment of funding streams – bulk, MDG targets • Human Settlements functions and their locations

30. CHALLENGES (CONTINUED) Human Settlements Programme Challenges Natural and macroeconomic variables: • Mushrooming of informal settlements • Disasters – floods/fires • Skills and capacity constraints – engineers/project managers • Building material inflationary pressures

31. CHALLENGES (CONTINUED) Beneficiary management challenges: • Poor quality of houses • Blocked projects • Waiting lists management • Title deeds transfers – discount benefit scheme • Reporting on housing delivery to the HSS • Fraud and corruption in housing delivery

32. CHALLENGES (CONTINUED)CURRENT HUMAN SETTLEMENT CONDITIONS • Rapid urbanisation and migration (rural to urban) • Population growth • household formation and diminishing size • Informal settlement growth • Lack of access to Basic Services • Unbalanced property markets • Un-sustainable development choices

33. CHALLENGES (CONTINUED)BASIC SERVICES • Household Access to water • Remaining needs = 3.95mill Households • Household access to Sanitation • Current needs = 3,2mill households • Household access to Electricity (energy) • Current needs =2,6mill households • Refuse Removal (once a week) • Current need= 4,56 mill households unserved

34. CHALLENGES (CONTINUED)URBANIZATION AND DEMOGRAPHIC TRENDS … • The “dual residence” of some households (who maintain a rural base while sojourning in urban areas) is a deeply entrenched feature of many households • Urbanisation is irreversible and GROWING • Urban consolidation since the 1960s • Informal settlements residents are largely address-less: this is another shackle in the residents’ exclusion NOTE: Phenomenon of “shifting target” in the delivery of services

35. CHALLENGES (CONTINUED)MACRO CONDITIONS IMPACTINGON HUMAN SETTLEMENTS • Structural unemployment and informality • Economic down-turn: diminishing access to housing finance (credit) • Diminishing bulk infrastructure spare capacity • Social and geographical disparities – inequality • Inputs: costs / construction materials / capacity • Built environment governance nexus…

36. THANK YOU