BACKGROUND TO EPWP

1. Expanded Public Works Programme (EPWP) Phase 3Portfolio Committee on Public Works09 September 2014

2. BACKGROUND TO EPWP

3. Origin of EPWP • Post the second democratic election, key socio-economic challenges facing Government were: unemployment; poverty; low skills base; and poor social services. • At the Growth and Development Summit (GDS) in June 2003, Government, Business and Labour committed to a range of interventions, including ensuring that planned Government expenditure be targeted for employment-intensive programmes through the EPWP. • Cabinet approved the conceptual framework for EPWP in November 2003. The Programme aimed at drawing significant numbers of the unemployed into productive work and expecting that these workers would gain skills and thus take an important step to get out of the pool of those who were marginalised.

4. Public Employment Programmes (PEPs) PEPs have a long history of being utilised to address such labour market disruptions and recession. It aims to draw significant numbers of unemployed people into productive work accompanied by training. Internationally, PEPs are seen as part of on-going employment and social protection policies used to create short to medium term employment opportunities for vulnerable groups in society. The EPWP is a nation-wide Programme covering all spheres of government and State-Owned Enterprises. The Programme involves re-orientating line function budgets and conditional grants for Government expenditure to result in creation of work opportunities. The Growth and Development Summit (GDS) agreed that EPWP must not displace existing permanent jobs and opportunities must be on real demand for services. EPWP was introduced in 2003 as one of Government’s major Public Employment Programmes under the Anti-Proverty Strategy.

5. 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.

6. 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, People & Parks • 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. Also connected to Eco-Furniture Programme – using wood from alien invasives – 500,000 school desks for disadvantaged schools by end of 14/15 financial year • Working on Fire in 2007/2008 saved the forestry industry alone R3,7 billion – on a budget of R123 million.

7. 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 .

8. 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.

9. 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 could be up R400 billion. Leandre Arends - WfW team member in De Hoop

10. Background: EPWP Phases 1 and 2 • The objective of EPWP Phase 1 was to create one million work opportunities by 2008/09 and to provide training to all beneficiaries to be exited into the mainstream economy. • During Phase 1, the Programme achieved its targeted 1 million work opportunities a year ahead of schedule. • Due to the realisation that unemployment in the country was still high at the end of EPWP Phase 1, an approval for continuation of EPWP into Phase 2 was granted. • EPWP Phase 2 was launched in 2009 with a target of 4. 5 million work opportunities to be created across all EPWP sectors in all spheres of government and Non-state entities.

11. Integrating EPWP requirements into line function budgets can increase perception of risk for public bodies Inadequate funding for training and delays in release of funds constrained training interventions Key learnings from EPWP Phase I & Effects • Programme achieved its targets a year ahead of schedule. However, there was scope to increase the average duration of employment. • Labour intensity was low and stagnant, undermining potential to scale up the Programme without placing an excessive fiscal burden. • In areas where there was a high need for work, opportunities were relatively few leading to “job rotation” and smaller impact per beneficiary (shorter employment, less income). • The assumption that there was a “1st Economy” and a “2nd Economy” was problematic. Too many objectives and pressure to go to scale Increasing labour intensity in infrastructure requires a long-term perspective

12. Lack of legislative framework to enforce compliance with EPWP Key learnings from EPWP Phase 2 and Effects • Impact of EPWP employment beyond numbers under- reported. • Labour intensity is improving and there is potential for further improvement. • Potential synergies existing within the Programme could not be realised. • Inadequate resource deployment by public bodies. • Duplication of efforts by implementing bodies/sectors. • Inconsistent compliance to Ministerial Determination. Too much focus on employment targets Inconsistent understanding of EPWP requirements Inadequate funding to skill all EPWP participants

13. The “Trilemma” facing EPWP EPWP’s development contribution comes through providing all three of these outcomes, but there are trade-offs involved when one tries to maximize one For different sub-programmes and sectors the balance between these three outcomes varies quite considerably Increasing one output results in decreases in the other- the nature of these trade-offs differ between sectors and sub-programmes

14. Continued Relevance of EPWP • Despite numerous efforts undertaken by Government, unemployment in South Africa has remained stubbornly high. • The on-going global economic downturn has made this even worse and has increased the number of unemployed in South Africa even further. • This increases the need for the EPWP even further as it provides a unique policy instrument for Government to create work opportunities and alleviate unemployment.

15. DESIGN OF EPWP PHASE 3

16. Policy Context for EPWP Phase 3 • The National Development Plan (NDP) outlines two key objectives for EPWP in that context namely: • 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 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” (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 (CWP).

17. Paradigm Shift in EPWP (Phase 1 – Phase 3) PHASE 2 PHASE 3 PHASE 1 Increased community Participation for more visibility and ownership in poor communities. Increase scope of infrastructure maintenance. Place more emphasis on quality of implementation and developmental impact. 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 cyclical, but structural. Therefore EPWP not designed to address the systemic nature of unemployment in the country. 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.

18. Objective of EPWP Phase 3 • For the EPWP to be effective and achieve the vision set out in the NDP it is proposed that the EPWP has a clear and limited mandate. • “To provide work opportunities and income support to poor and unemployed people through the labour-intensive delivery of public and community assets and services, thereby contributing to development.”

19. EPWP PHASE 3 BUSINESS PLAN

20. EPWP Phase 3 Universal Principles

21. Targeting in the EPWP Phase 3 • Targeting of vulnerable groups The 2013 National Youth Employment Accord advocates for a Youth Target of 80% for Public Employment Programmes. The EPWP Phase 3 Youth Target is 55%. This will be progressively increased towards 80% for new entrants into the EPWP.

22. Targeting of Beneficiaries/Participants in EPWP Phase 3 • The EPWP will target the poor and unemployed through a combination of geographical and community-based targeting, as well as self-targeting (through the wage rate). • Targeting to be done through a combination of: • Geographical Targeting: Focus on poor communities and those with high number of unemployed. • Self-Targeting: Through the EPWP Minimum wage rate. • Community Targeting: Community selects those most in need based on transparent criteria and process.

23. 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 distinct 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. • Where possible, the graduation of EPWP beneficiaries into formal employment will be promoted through various initiatives, including cooperatives and small enterprise development.

24. EPWP Phase 3 Employment Targets

25. 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 that these concerns are addressed, as these concerns would only increase otherwise. • 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, it is recommended that an important objective for Phase 3 is to build greater convergence between the CWP and other Sector programmes, so that instead of duplication, they are complementarity - with the whole adding up to more than the sum of the parts. • Where duplication remains a concern - establishing clearer boundaries between all the Sectors in EPWP, but in particular the Social Sector and NPO.

26. Monitoring and Evaluation (M&E)Framework

27. Enforce compliance with legislation 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 M&E of qualitative aspects Strengthen collaboration and synergies amongst Sectors

28. Institutional Arrangements for EPWP Phase 3 To achieve better synergy between a wide range of PEPs and other poverty alleviation, employment, enterprise development and skills development initiatives, it is recommended that: • A Presidential Public Employment Inter-Ministerial Committee (PPE-IMC) to address strategic issues re job creation and poverty has been approved. • The PPE-IMC will also assist to ensure greater harmonisation and compliance across PEPs and also to resolve challenges such as: • A lack of enforcement in the requirements specified in the Division of Revenue Act (DoRA) regarding expenditure through the Provincial and Municipal Infrastructure Grants. • A lack of harmonization and coherence in the execution of the Programme by implementing stakeholders. • The PPE-IMC will be supported by a Technical Secretariat made up of senior officials from the existing lead EPWP sector departments, i.e. the Department of Public Works (DPW), Environmental Affairs (DEA), Cooperative Governance and Traditional Affairs (COGTA) and Social Development), working closely with all other relevant line department branches. The Technical Secretariat will be convened by the Director-General: DPW.

29. EPWP PHASE 3 ROLL-OUT AND LAUNCH

30. EPWP PHASE 3 ROLL-OUT PLAN

31. DRAFT PLAN FOR THE PHASE 3 LAUNCH • Objective of the Launch: • To raise understanding of EPWP Phase 3 • To generate support for the Programmeamong key stakeholders, i.e. Government, community, business, civil society, NGOs and media. • To mobilize stakeholders to take ownership of the Programme. • Proposed Date: 03 October 2014 • Proposed Venue: Eastern Cape Province • Nature of event: It is proposed that the President or Deputy President of the country be the Keynote Speaker. • Task Team has been established.

32. TASK TEAM • An internal dedicated task team comprising of EPWP officials, to work on the roll out of the EPWP Phase 3, has been established. • Overall task team will consist of members from the host Province, as well as the following key stakeholders: • Provincial Departments Coordinating EPWP • EPWP Lead Sector Departments • District/Local Municipalities • Department of Cooperative Governance and Traditional Affairs • The Independent Development Trust (IDT) • DPW Intergovernmental Relations • Office of the Premier • Government Communication Information System (GCIS) • DPW Regional Office • The Presidency

33. Thank You