DIVISION OF REVENUE BILL HEARING 2005 - PowerPoint PPT Presentation

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DIVISION OF REVENUE BILL HEARING 2005

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Adequate housing in all provinces is in national interest (HN), addressing poverty (HH) ... OF UNITS COMPLETED OR UNDER CONSTRUCTION FROM APRIL 2004 UP TO ... – PowerPoint PPT presentation

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Title: DIVISION OF REVENUE BILL HEARING 2005


1
DIVISION OF REVENUE BILL HEARING 2005
  • DEPARTMENT OF HOUSING PRESENTATION TO PUBLIC
    HEARINGS ON CONDITIONAL GRANTS
  • 17 FEBRUARY 2005

2
OVERVIEW
  • INTRODUCTION
  • PURPOSE OF GRANTS
  • HOUSING ALLOCATION FORMULA
  • HOUSING SUBSIDY GRANT
  • HUMAN SETTLEMENT REDEVELOPMENT PROGRAMME
  • MONITORING OF PERFORMANCE
  • MOTIVATION FOR RETENTION AS CONDITIONAL GRANTS
  • END

3
INTRODUCTION
  • Housing administers two conditional grants in
    2004/05 financial year
  • Housing Subsidy Grant
  • Human Settlement Redevelopment Grant

4
PURPOSE OF GRANTS
  • Housing Subsidy Grant is to finance housing
    subsidies under the national housing programme.
  • Human Settlement Redevelopment Grant is to fund
    projects which are meant to improve the quality
    of urban environment by addressing the legacy of
    dysfunctionality.

5
ALLOCATION FORMULA
  • By and large the formula is consistent with the
    relevant principles and provisions contained in
    Section 214 of the Constitution.
  • Provincial allocations are currently made
    according to a formula determined by MINMEC and
    approved by Cabinet.

6
ALLOCATION FORMULA cont.
  • For 2004/05 the Census 1996 was applied as funds
    were already allocated over the MTEF period and
    are committed when 2001 Census figures were
    published (to comply with requirement on
    predictability of allocations)
  • For 2005/06 the allocation is based on the 2001
    Census figures.
  • Formula is currently under review for 2006/07 to
    reflect factors in accordance with the current
    developments.

7
ALLOCATION FORMULA cont.
  • The formula recognizes the following factors
  • A population indicator, weighted at 20 percent,
    as a measure of each provinces share of total
    population
  • The formula provides for weighting in order of
    the priority of the elements that define
    homelessness and poverty as defined below-
  • A P(20) HH(30) HN(50) where
  • A Allocation
  • P Population.
  • HH Households earning less than R3 500 per
    month (affordability indicator)
  • HN Housing Need

8
ALLOCATION FORMULA cont.
Statistics used in formula based on 1996 census.
P
HH
HN
9
ALLOCATION FORMULA cont.
  • Housing need used in the formula is defined on a
    weighted formula that takes into account the
    following
  • HN RBY(0.5) SBY(1.0) SE(1.2) FR(0.5)
    TC(1.0) HL(1.25) where
  • HN Housing Need
  • RBY Flat/room in backyard
  • SBY Shacks backyard
  • SE Shacks Elsewhere
  • FR Flat/room on shared property
  • TC Tents and Caravans
  • HL Homeless People

10
ALLOCATION FORMULA cont.
Statistics used in formula based on 1996 census.
RBY
SBY
SE
FR
TC
HL
11
ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (P).
12
ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (HH).
13
ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (RBY).
14
ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (SBY).
15
ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (SE).
16
ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (FR).
17
ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (TC).
18
ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (HL).
19
ALLOCATION FORMULA cont.
  • Compliance to the criteria of Section 214(2) (a)
    to (j) of the constitution

20
ALLOCATION FORMULA cont.
  • Compliance to the criteria of Section 214(2) (a)
    to (j) of the constitution

21
Housing Subsidy Grant
  • Purpose is to finance housing subsidies under the
    national housing programme.

22
PER CAPITA ALLOCATIONS BASED ON POPULATION FIGURES
23
PER CAPITA ALLOCATIONS BASED ON HOUSEHOLDS
EARNING LESS THAN R3 500
24
CURRENT PERFORMANCE HOUSING SUBSIDY GRANT
25
CURRENT PERFORMANCE cont.
26
CURRENT PERFORMANCE cont.
27
CURRENT PERFORMANCE cont.
28
CURRENT PERFORMANCE cont.
29
CURRENT PERFORMANCE cont.
30
CURRENT PERFORMANCE cont.
31
CURRENT PERFORMANCE cont.
32
CURRENT PERFORMANCE cont.
33
CURRENT PERFORMANCE cont.
34
ADDITIONAL COMMENTS ON SPENDING TRENDS
  • Overall spending is at 65 (against planned
    levels of 72) of allocation
  • Northern Cape, Mpumalanga and Free state spending
    above cash flow and thus expected to be in excess
    of 95 of funds available
  • North West and Western cape lagged behind at end
    of 3rd quarter but Western Cape is expected to be
    within 90 of funds available.
  • Western Cape particularly will be able to spend
    considerably well once the N2 project
    implimentation reaches its optimum level

35
ADDITIONAL COMMENTS ON SPENDING TRENDS
  • Lack of skills as a result of senior and higher
    skills levels turnover particularly project
    management skills
  • There is therefore an impact on the quality of
    project planning assessment , monitoring and
    quality of the cashflows management
  • Project managers have been appointed to assist
    and a business plan has been prepared
  • Quite a lot of the current projects are new
    reflecting a wide/long lag in the phasing of
    project approvals Of the 227 projects running as
    31 December 2004 63 were recently approved
    therefore significant spending expected in 2005
    when top structures are constructed
  • 164 are over 80 complete

36
HOUSING SUBSIDY GRANT (CONT.)
  • To date the programme has achieved a 49.65 to
    50.34 split allocation between male and female
    headed households.
  • Since 1994 the programme represents an investment
    of R29,4 billion into low income communities.

37
MONITORING MECHANISMS
  • Monitoring is performed in accordance with
    requirements of the DORA on a monthly basis
  • The Department has developed specific and
    targeted monitoring framework for monitoring the
    grant
  • National requires that the provincial departments
    focus particular on the submission of
    comprehensive non financial information
  • Detail project performance reports from provinces
    are used to determine projects that are inter
    alia stalling and underlying reasons.

38
MONITORING MECHANISMS CONT.
  • Department has installed a Transversal system
    which has been rolled out to provinces (HSS)
  • Use is made of HSS to determine the extent of
    progress in regard to projects implemented
  • Provincial reports are presented to MinMec and
    HOD meetings on a quarterly basis
  • Structured Provincial visits take place targeting
    all provinces.
  • Letters are addressed to provinces if it is
    observed that underspending could occur and
    request that problem be addressed.
  • In cases of persistent underspending a various
    intervention are made based on analysis of
    underlying reasons and discussions.

39
Human Settlement and Redevelopment Grant (HSRP)
  • Purpose is to fund projects which are meant to
    improve the quality of urban environment by
    addressing the legacy of dysfunctionality.

40
PER CAPITA ALLOCATIONS BASED ON HOUSEHOLDS
EARNING LESS THAN R3 500
41
CURRENT PERFORMANCE
42
CURRENT PERFORMANCE
43
HSRP cont.
  • Introduced in 1999/2000 as pilot programme
    started very slowly at R20 million p.a. and grew
    to current levels of over R100 million.
  • Expected to accelerate delivery as guidelines are
    developed taking into account experiences learnt
    in the last two years.

44
HSRP cont.
  • Currently there are 156 projects approved
    throughout 9 provinces on a multi year basis with
    a gross commitment value of R348m.
  • Of the 156 projects, 19 projects are located in
    Rural Development Nodes and 57 projects are
    located in Urban Development Nodes.

45
MONITORING MECHANISMS
  • Monitoring is performed in accordance with
    requirements of the DORA on a monthly basis
  • The Department has developed specific and
    targeted monitoring framework for monitoring the
    grants
  • National requires that the provincial departments
    focus particular on the submission of
    comprehensive non financial information
  • Project performance reports are used to determine
    projects that are stalling and underlying reasons.

46
MONITORING MECHANISMS CONT.
  • Provincial reports are presented to MinMec and
    HOD meetings on a quarterly basis
  • Structured Provincial visits take place targeting
    all provinces.
  • Monthly letters are written to provinces pointing
    out problem areas and also address underspending
    aspects.

47
Common reasons for under spending
  • Process of securing agreements with local
    authorities
  • Tender evaluations and recommendations in terms
    are time-consuming and result in project
    implementation delays
  • Local authorities are in some instances not
    complying with the conditions of the HSRP as it
    was originally set
  • Provinces also report that implementing agents
    have disputes with the contractors appointed to
    implement the projects

48
Common reasons for under spending
  • Lack of capacity in municipalities and in some
    provincial departments
  • Liaisons with community structures and
    consultative project planning to ensure wide
    community support for projects being implemented
    are time consuming
  • Successful implementation of projects is also in
    some instances dependent on the removal of people
    from these locations.

49
  • END

50
Expenditure trends by province as at 31 December
2005
51
Eastern Cape
52
Free State
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