Outline of Presentation

1. Standing Committee On AppropriationsReadiness To Administer Grants Allocations For The 2013/14 Financial Year Mr. T. ZuluDirector-General

2. Outline of Presentation • Applicable Legislation; • 2013 MTEF Grant Allocation; • Human Settlements Development Grant (HSDG); • Urban Settlements Development Grant (USDG); • Rural Households Infrastructure Grant (RHIP).

3. Applicable Legislation • Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996) • Housing Act No.107 of 1997 • The Housing Consumers Protection Measures Act, 1998 (Act No. 19 of 1998) • The Housing Development Agency Act, 2008 (Act No. 23 of 2008) • Public Finance Management Act, 1999 -Act No 1 of 1999 (As amended by Act 29 of 1999) • The Social Housing Act, 2008 (Act No.16 of 2008) • The Division of Revenue Act • The Rental Housing Act, 1999 (Act No. 50 of 1999) • Home Loan and Mortgage Disclosure Act, 2000 (Act No. 63 of 2000)

4. 2013 MTEF Allocations

6. Transfer Payments

7. Human Settlements Development Grant • Goal - The creation of sustainable human settlements that enables an improved quality of household life • Purpose - To provide funding for the creation of sustainable human settlements • Outcome 8- Facilitation and Provision of Access to Basic Infrastructure, Top Structures and Basic Socio Economic Amenities that contribute to the creation of sustainable human settlements • Improved rates of employment and skills development in the delivery of infrastructure

8. Human Settlements Development Grant Provincial Allocations

9. National Priority Programme Allocations

10. 20% Allocation to Specific Outcome Targets

11. HSDG Allocations to Metropolitan Councils

12. Provincial Business Plan Programmes Allocations

15. Credit Linked Individual Subsidy Programme: • Free State, North West and Western Cape to implement the programme; • Financed Linked Individual Subsidy Programme: • R239 million to be spent on the FLISP programme in Provinces and 2 500 beneficiaries to benefit; • Rectification Programme • Plans to spend R686 million in all Provinces in 2013/14; • Accreditation support to municipalities: • R93 million to be spent on this Programme in Provinces except for Gauteng and Western Cape;

16. Blocked projects: • R184 million planned to be spent to unblock projects in Eastern Cape, Free State and North West; • Land Parcels; • Provinces to procure land to the value of R278 million; • Rental and Social Housing: • Provinces plan to delivery 7 552 units amounting to R1.6 billion;

17. Incremental Housing Programmes: • Includes Informal Settlements Upgrading and Provinces plan to deliver 86 027 housing units and 60 922 serviced sites valued at R8.6 billion; • Rural Housing Programme: • The Programme has been allocated R2.7 billion by Eastern Cape, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape and North West.

18. Current Challenges • Lack of bulk and link infrastructure and related funding to implement projects; • Delays in the planning of supply chain management; • Lack of technical capacity at provinces and municipalities; • Poor in the alignment, cooperation and coordination of strategic objectives and programmes of Provinces, Municipalities and Entities • Inadequate medium and long term pipeline planning for programmes and projects; • Deficiencies in data management and integrity.

19. Interventions • Provinces and Municipalities to align all grants to ensure bulk infrastructure is in place before implementation of programmes and projects; • Provinces and Municipalities must develop and align programme and procurement plans • Feasibilties to ensure programme and project readiness. • Programme Management Units to be established and prioritised. • Provinces to utilise the HSS to administer and report on all human settlements delivery programme and processes.

20. Measures Undertaken by DHS • Provincial Business plans for 2013/14 have been received and analysed by the DHS. • The 2013/14 Allocation letters sent to Provinces to allow for programme and project planning • From 28 February to 1 March – 3rd Quarter Mid Term reviews were conducted with Provinces and Council on Performance, Spending and Planning for 2013/14 • DHS commented on 2013 DoRA Bill including Grant Frameworks.

21. Urban Settlements Development Grant Grant Purpose: • To improve the efficiency and coordination of investments in the built environment through: • Providing large municipalities with appropriate resources and control over the selection and pursuit of investment programmes in the built environment; • USDG is an instrument for Metropolitan Council to address linkages between public housing and economic growth to simultaneously and contribute to Human Settlements Outcomes

22. USDG - Objectives • USDG intends to integrate the release of well located land to the function of planning and funding of the built environment; • Encourage cities to be proactive developers of infrastructure on well located land by mobilizing domestic capital; • Compel improvement in development planning and also improve inter-governmental co-ordination (all 3 spheres) of development.

23. USDG - Objectives Introduced to address: • Problems of inadequate control and management of investment in the built environment; • Inadequate coordination of planning and weak accountability of all role players; and • Focus on the development of urban land and infrastructure that is intended to the lay the foundation for local municipalities to gradually assume a greater role in managing built environment investments

24. USDG Allocations to Metropolitan Councils

25. USDG DELIVERY PERFORMANCE 25

26. Challenges • Lack of Coordination and alignment experienced within Metros that causes poor service delivery coordination for USDG; • Lack of capacity to carry out programme plans; • Critical vacancies and consistency of personnel managing the USDG; • Land acquisition challenges and limited land in close proximity to the city centre;

27. Multi-year projects are budgeted for in one financial year due to inadequate planning of projects; • Lengthy procurement processes; • Legal challenges - Tenders being contested in court for major projects; • Management and governance of informal settlements;

28. Interventions • Improving the alignment and coordination in implementation of the USDG; • Capacity constraints to be addressed through the Cities Support Programme established by National Treasury; • Metropolitan Municipalities encouraged to appoint officials on a full time; • Land acquisition management to be improved with the assistance of the Housing Development Agency;

29. Conducting of project readiness and attached list of projects as addendum to Performance Matrix; • Councils to develop a programme plans aligned to procurement plans • National and Provincial support for land acquisition, informal settlement upgrading and policy formulation to support council implementation

30. Support Processes In Place • The Department has developed and presented a turnaround strategy to improve spending for the Councils’ and presented to Technical MinMec, Portfolio Committee on Human Settlements etc. • Performance Matrix developed that addresses human settlements related issues • Consulted with National Treasury to incorporate the matrix in the Service Delivery Business and Implementation Plan (SDBIP) reporting template so as to have one single reporting template • Support to be provided through the National City Support Programme (CSP) to the Metros with capacity constraints.

31. Support Processes In Place • The Department has the following systems in place for monitoring the implementation of the USDG: • Quarterly oversight visits are planned with all Councils to monitor progress and to address challenges. • Quarterly reviews are conducted with Metros. • Monthly Expenditure Analysis and Quarterly feedback to individual metros. • Regular reviews and programme and policy support with Sector Department to Councils – City Budget Forum, Outcome 9, NUSP and Accreditation .

32. Rural Households Infrastructure Grant • The purpose of the Grant is to provide capital funding for the reduction of rural water and sanitation backlogs and to target existing households where bulk dependent services are not available. • The grant was initiated as a schedule 7 grant in the 2010/11 financial year and amounted to R1.2 billion. • The grant has allowed for 50 065 Household to have been served with basic sanitation since its inception in 2010.

33. The schedule of the grant has changed from schedule 7 to 5b with effect from 2013/14. • The Grant will be implemented by municipalities with the support of the Department • For the next three years the grant allocation is as follows: 2013/14: R106 million 2014/15: R113 million and 2015/16: R118 million.

34. RHIG Allocation per Municipality

35. RHIG Allocation per Municipality

36. RHIG Allocation per Municipality .

37. RHIG Allocation per Municipality

38. Departmental Support To Municipalities The Department will support municipalities in the following manner: • approve the business plans submitted by municipalities; • Continuously monitor implementation and provide support to municipalities; • Submit monthly financial and quarterly non- financial reports to National Treasury; • Submit an annual evaluation report after the end of the financial year; and • Prepare a payment schedule for the transfer of the grant to municipalities.

39. The Department is in the process of filling vacant posts at regional offices in order to provide support. • Monitoring and reporting processes and schedules are being developed to report on financial and non-financial progress

40. Thank you