PERFORMANCE REVIEW PERFORMANCE REVIEW Outlook for 2005/06 Financial YearOutlook for 2005/06 Financial YearPerformance/Expenditure Performance/Expenditure Expenditure review 2001/02 – Expenditure review 2001/02 – 2007/082007/08

Department of Local Government & Housing

Provincial Government Western Cape

October 2005

OVERVIEWOVERVIEW

B : Expenditure review 2001 - 2008

C : Budget planning : challenges

D : Performance April - September

E : Improved capacity

F : Impact of new programmes

A : Outlook 2005/2006

A : OUTLOOK 2005/06A : OUTLOOK 2005/06

Department has R532m available for2005/06 (R456m grant + R76m N2 ring fenced funds) R180m spent April to September 7,008 houses were built and 10,477 sites

serviced by end September. Expenditure is in line with projections to end

of 2nd quarter.National department deviated from the transfer schedule and transferred extra funding in April/May

Anticipated that 16,000 houses will be built and 18,000 sites will be serviced by March 2006

B: EXPENDITURE REVIEW B: EXPENDITURE REVIEW 2001/02 – 2007/08 2001/02 – 2007/08

TRENDS 1994 to 2005 :

Houses built & under construction - 1994 – 1999 : 103,730 Houses built & under construction - 1999 – 2004 : 89,090 - 2004/05 : 16,965 sites were serviced, 15,921

houses provided. R511m spent. More than of 200,000 houses have been

provided in the Western Cape since 1994

Trends continuedTrends continued In 2001 there was a shift towards a higher quality

product at an increased unit cost In 1994 the unit cost for allowed for in the

subsidy was R12,500. The current unit cost is almost R40,000. The unit cost has trebled since 1994

Over the same period the Housing grant to the Western Cape has less than doubled, from R283m in 1994 to R456m in 2005/06

It is therefore clear that a lower number of units are able to be produced currently due to the conditional grant not keeping pace with inflation and the improved specifications required.

New policy frameworkNew policy framework Integrated housing and human settlement

development grant introduced in 2005/06 Paradigm shift, introducing innovative new

programmes which allow for varied forms of tenure. Unfortunately all new programmes need to be funded from the same grant

Number and quality of houses built will remain the primary indicator of performance, but is not the only output that will be measured in future. This will more accurately reflect the more varied nature of housing delivery options now available

Greatest challenge – housing delivery is being held back by insufficient funding

C : BUDGET PLANNINGC : BUDGET PLANNING

300,000 + Western Cape backlog – Approximately 15,000 units p/a can be built within R456m allocation

Funds allocated according to needs survey in Provincial Housing Plan

Municipal need as % of Provincial need determines funds allocation

Expenditure monitored per municipality

Management of housing grant involves the following :

D: PERFORMANCE D: PERFORMANCE APRIL to SEPTEMBER APRIL to SEPTEMBERR 180m of the R 456m Grant was

spent from April to September.Upturn expected as new projects

come on stream in 2nd half of year.10,477 sites serviced and 7,008

houses built to end Sept

-

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

Apr-05

May-05

Jun-05

Jul-05

Aug-05

Sep-05

Oct-05

Nov-05

Dec-05

Jan-06

Feb-06

Mar-06

ACTUAL EXPENDITURE vs BUDGET

RAND

VALU

E

Actual expenditureActual expenditure

Projected expenditureProjected expenditure

-100,000,000200,000,000300,000,000400,000,000500,000,000600,000,000

Apr-05

May-05

Jun-05

Jul-05

Aug-05

Sep-05

Oct-05

Nov-05

Dec-05

Jan-06

Feb-06

Mar-06

PROJECTED EXPENDITURE vs BUDGET

RAND

VAL

UE

E : IMPROVED CAPACITY IN E : IMPROVED CAPACITY IN

MONITORING MONITORING PERFORMANCE PERFORMANCE Department has engineers, project

managers and inspectors who assesses performance of projects on a monthly basis

3 project managers have been appointed by the department recently to boost the capacity of the team of 7 Engineers/Monitors. Cuban professionals are complementing capacity

At municipal level project managers and implementing agents have been appointed

F : IMPACT OF NEW F : IMPACT OF NEW PROGRAMMESPROGRAMMES

UISP : (Upgrade of Informal Settlements Programme) New project applications withheld till 1st April, existing projects held back until conversion

Social Housing : New policy not finalised, funds only available from April 2006

Subsidy increase effective date and implementation of new programmes leads to delivery delays.

New programs introduced with funding only available in subsequent year.

New programmes cont’d

Delays due to lengthy community consultation processes

Municipal capacity (as developer)

- lack of capacity especially project management

Planning

- Insufficient planning in past

- Province assisting in planning process

Solutions : Interventions implemented Solutions : Interventions implemented and plannedand planned

Municipal capacity – Project managers appointed to assist in delivery. Capacity building programmes to up-skill staff

Planning greatly improved – Project managers and task teams within municipalities will improve this further

Response to challengesResponse to challenges

To alleviate the holding back of projects to the beginning of the financial year, the Western Cape has an approach of approving projects in phases, per financial year.

Increasing the quantum of the grant, to allow more than 15,000 houses to be built per annum, needs to be taken up at national level

Innovative ways to leverage more funding for housing are being explored.

LOOKING AHEAD : LOOKING AHEAD : SUSTAINABLE HUMAN SUSTAINABLE HUMAN SETTLEMENT SUMMITSETTLEMENT SUMMIT The summit will take place 24th-25th

November in Stellenbosch. The objective is to facilitate a forum for

dialogue for all stakeholders related to the development of Integrated Human Settlements in alignment with the Breaking New Ground policy and Ikapa Elihlumayo.

The Summit outcome is the finalization of the strategic and implementation plan in line with new policies

Pilot projects will be launched to implement plans

THANK YOUTHANK YOU