Strategic Plan for MTEF Cycle 2003/4 to 2005/6

1. Strategic Plan for MTEF Cycle 2003/4 to 2005/6 Presentation to the Public Works Portfolio Committee on 21 May 2003 by James Maseko, Director-General: National Department of Public Works (NDPW)

2. Strategic Planning for MTEF Cycle 2003/4 to 2005/6 Presentation Outline: • Introduction: Government’s Planning Cycle • Key Challenges facing the NDPW • Strategic Overview • Significant Shift in Strategic Direction • Current Restructuring & Transformation • Key Policy Developments • Budget and Programmes • Conclusion

3. Introduction • Since my first such presentation to the Portfolio Committee some background on Government’s Planning Cycle is given to contextualise the presentation • In 1999 Government moved to strengthen strategic planning process by adoption of the MTSF/ MTEF • The President instructed FOSAD MANCO to develop a multi-year planning cycle which includes a strategic planning framework • The planning process consists of 9 steps

4. Government Planning Framework

5. Step 1: • Departments begin in September/October – identify 3 or 4 new MTS priorities with measurable indicators • These priorities must be in line with 5 priority areas for Government • Be informed by MTSPs Cabinet approved in preceding year (first list of priorities is approved at January Cabinet lekgotla, reviewed and finally approved at July lekgotla) for operationalisation

6. Step 1 cont’d..: • Be located at strategic level and state where coordination with other agencies will occur • Identify partnerships with other stakeholders • Priorities should be presented in a report indicating: strategic objectives, policy priorities, indicators, programmes, available budget resources (or if additional funds are required) with supporting explanations and skills required and/or motivation for additional skills • Submitted to the Presidency by 16 October annually

7. Step 2: • DG Clusters assess departmental submissions • Develop Cluster-relevant priorities and indicators that emphasise integration and coordination • Submit to FOSAD MANCO by 16 November in same format departments use

8. Step 3: During December FOSAD MANCO and G & A DG Cluster assess cluster-level strategic priorities – review, synthesise and amend inputs • Produce draft MTSF with support of the Central Coordinating Committee by 15 December

9. Step 4: Draft MTSF submitted to January Cabinet lekgotla for debate, review and approval • Priorities and indicators finally integrated and synthesised • Thereafter the MTSF is included in the President’s State of the Nation Address in February and cascaded downwards to Clusters and departments

10. Step 5: • The MTSF is explicitly geared towards achieving increased transparency and accountability – sets Government’s goals and indicators by which success and failures will be measured • It includes a review of the past year and a thorough analysis of success and failures • The State of the Nation Address (SONA) communicates the main thrust of the MTSF and the Programme for the year to the nation at large

11. Steps 6 & 7: Step 6: • GCIS is responsible for initiating and managing a high-profile campaign to inform the public about the contents of the MTSF Step 7: • During February –March MinComBud, the PCC, the Budget Council and Budget Forum have joint responsibility for MTSF consultation with local and provincial spheres of Government

12. Step 8: Step 8: • Once the MTSF is distributed Ministers and DGs are responsible to ensure that their staff is familiar with it and the direction that it provides for the various programmes • Spending agencies undertake a detailed planning and budgeting exercise to align their programmes and projects with the priorities in the MTSF by way of their business plans

13. Step 9: Step 9: Monitoring, evaluation and reporting: • Reviews of Government’s corporate strategy occur at mid-financial year programmes and expenditure), financial year-end (evaluation of annual business plans and service delivery performance) and mid-term Policy priorities of Government) – (departmental strategic and operational plans for first year of next MTEF cycle submitted 15 workings after annual budget speech –which was 26 February 2003 this year)

14. July Cabinet Lekgotla • July Cabinet lekgotla provides opportunity to incorporate new and unforeseen needs or events and feed it into next MTSF planning cycle

15. Government’s current Strategic Priorities or Policy Thrusts • Growth, Investment and Employment • Human Resource Development • Prioritising the Poor and Disadvantaged • Fighting Crime and Corruption • Effective and Efficient Government • Nation Building • A Better Africa In A Better World

16. Process for Strategic & Business Planning in the NDPW • Three high level strategic goals/priorities were adopted at TMC’s strategic retreat held from 3 –6 Oct 2002 for submission to The Presidency • Ten strategic drivers were also formulated • NDPW’s Ten-Year Review & Planning and SONA submission to The Presidency made in Nov 2002 • Our final Estimates of National Expenditure (ENE) for MTEF 2003/4 to 2005/6 to National Treasury on 6 Dec 2002 and finalised mid-January 2003

17. NDPW’S Strategic Goals Three high level strategic goals/priorities: a) Contributing to economic growth, investment and employment by effectively transforming the Construction and Property Sectors • Key Performance Indicators: • Job creation through labour based technologies • Establishment of a Centre of Innovation and Best Practice • Intensification of BEE • Facilitation of infrastructure investment

18. NDPW’S Strategic Goals Cont’d b) In ensuring a concerted attack on poverty the NDPW will, as part of a comprehensive Government-Wide Expanded Public Works Programme, implement Community-Based Public Works initiatives. • Key Performance Indicators : • Poverty Alleviation • Job Creation • Increased infrastructure investment • Development of Government wide Policy and Best Practice guidelines for the CBPWPs. • Implementation of Community Development Programme initiatives

19. NDPW’S Strategic Goals Cont’d c) Transforming the NDPW to be strategically positioned for optimising the value of the State’s immovable asset portfolio for effective service delivery. • Key Performance Indicators • Ensuring functional, economic and social returns for the State • Development of Government wide Immovable Immovable Asset Management Policy Framework and Legislation • Consolidated State Immovable Asset Register • Transformed Organisation for effective service delivery.

20. 10 Strategic Drivers of the NDPW • Drive Government’s Expanded Public Works Programme (EPWP) • Reinforce and highlight our immovable asset Custodianship/Ownership role • Establish a clear separation of our immovable asset Custodianship/Ownership and Service Provision roles • Reinforce our role as Policy Maker for the Construction and Property Industries • Refocus the NDPW for its effective contribution to Government-wide priorities, incl. Regional and International initiatives

21. Strategic Drivers cont’d • To be the Centre of Innovation for the built environment, infrastructure and property skills • Intensify the transformation of the Construction Industry, whilst initiating the transformation of the Property Industry • Develop Government-wide policy and best practice guidelines that deepens the impact of the CBPWPs • Ensure an integrated human resource strategy • Turn around financial management in all its facets, including clean Auditor-General reports and effective migration towards a Trading Entity

22. Key Challenges facing the NDPW • Lack of uniform guidelines regarding various aspects of public immovable asset management in all organs of the State. • Inadequate maintenance budgets that negatively impact on the environments where various public services are delivered. • Absence of an integrated information systems and appropriate skills to deliver on the Department’s mandate. • Industry-wide challenges like: • Capacity constraints within the Construction industry ; • Shortage of skills:- inability to attract new skills; • Skewed ownership within the construction and property industries; • Transform the physical environment to improve service delivery.

23. Strategic Overview & Key Policy Developments: 1999/2000 to 2005/6 • Main emphasis during 1999/2000 to 2002/3 on providing services to Client Departments • Initially the various Client Departments/ Institutions negotiated funds for projects with National Treasury (NT) who then allocated it to NDPW’s Vote • In last 2 years NT allocated funds to Client Department/Institutions’ Votes – they therefore had direct control over such funds, but NDPW is still executing projects

24. Significant Shift in NDPW’s Strategic Direction… • A significant shift in NDPW’s strategic direction to take place during 2003/4 to 2005/6 MTEF Cycle – clear separation between 2 main roles e.g - Being custodian of the State’s immovable properties, policy maker & regulator of the Construction & Property Industries as well as the National Public Works Program (NPWP) - Provider of accommodation & asset management services to National Departments/ Institutions

25. Current Restructuring & Transformation… • Restructuring & transformation currently under- way to result in establishment of 3 separate Branches, namely: - A Branch within NDPW that is owner/custodian of the State’s immovable assets, responsible for policy-making, regulation of Construction & Property Sectors and NPWP - Accommodation and - Asset management services to Clients Departments and Institutions

26. Key Policy Developments & Initiatives Some of the key policy developments & initiatives NDPW will embark on: • A policy framework & legislation to strategically reposition NDPW as owner/ custodian of the State’s immovable assets, and to enable it to optimise the value of these assets for more effective service delivery • Parliament will hopefully approve the Government-wide Immovable Asset Management Bill early in 2004

27. Good Governance Legislation… • It is good governance legislation for acquisition, management & disposal of immovable assets in order to: - Enable better allocation of limited resources for Government as a whole; - Ensure alignment of immovable assets with service delivery objectives; - Ensure more effective & efficient use of existing immovable assets; - eventually lead to greener buildings

28. Addressing efficiencies, inconsistencies & duplication… - Address the inefficiencies, inconsistencies & duplication of efforts in management of immovable assets, including infrastructure at a Government-wide level; and - Optimise functionality,economic and social returns from the State property portfolio - Ensure it enhances and supports service delivery, mindful that it is a very costly resource, finite and has a huge impact on the macro-economic & physical landscapes • Expansion of the Repair & Maintenance Programme to address the maintenance backlog in other departments than Correctional Services

29. Budgets to be devolved… • Budgets to be devolved are that of: - Leasing; - Maintenance; - Municipal services; and - Rates & Taxes • Will encourage improved accountability for Accounting Officers and more economical, effective & efficient utilisation of available scarce financial resources by NDPW and User Departments/Institutions

30. Issues for the next Budget Year • In general it is apparent that the Department’s budgetary allocation is far inadequate to fund the Department’s critical programmes. • The Department has demonstrated capacity to spend its allocated budget, as evidenced by the R34million over-expenditure in the 2001/02 financial year as well as the current expenditure trends that indicate a potential over-expenditure of R40 million • The serious negative implications of under-funding are in the next forthcoming slides

31. Comparison of Requested and Approved Budgets at Programme level AMOUNT PROPOSEDDIFFERENCE REQUESTEDALLOCATION R millionsR millionsR millions 1 Programme 1: Administration 304 277 27 2 Programme 2: Provision of Land & Accommodation: 4,321 3,851 470 3 Programme 3: NPWP 420 322 98 4 Programme 4: Aux.& Assoc’d 12 12 0 TOTAL 5,057 4,465 592

32. Under-funding Implications • The implications of under-funding as they relate to the main cost Items are: • Leasing: The failure to honour lease commitments will result in the affected client departments being evicted from the offices they occupy. • Rates & Taxes: The municipal Services will be terminated with catastrophic results to public facilities like hospitals etc. In addition, this sphere of Government’s service delivery efforts will be greatly compromised

33. Course of Action • In view of the under-funding, service delivery by the Department will be compromised. There however exists a window of opportunity in that additional funding may still be found around October during the consideration of Adjustment Estimates Appropriation Bill. • To this end, the Department appeals to the Committee to provide whatever support it has to ensure that additional funding is received as indeed, the cut back on expenditure is not a realistic solution to the problem.

34. Under-funding Implications cont’d • Maintenance: May result to non compliance with Occupational Health and Safety Act as some buildings are already in dilapidated state. • Transfer Payments: The shortfall in the main is in CBPWP. The department will therefore be unable to provide as many public assets as it had wished to provide. A number of potential temporary jobs opportunities have therefore been lost.

35. Conclusion cont’d • In conclusion, the Department wishes to highlight the positive impact and achievements that its programmes continue to contribute to Government’s overall objectives and priorities in areas of: - Employment creation • Black economic empowerment • Infrastructure investment • Land reform initiatives and • Poverty alleviation.

36. Conclusion cont’d • The Department requests the Committee to assist the Department in its endeavours to solicit additional funding in future appropriations as the service delivery will be severely compromised due to inadequate funding.