Title: DIVISION OF REVENUE BILL HEARING 2005
1DIVISION OF REVENUE BILL HEARING 2005
- DEPARTMENT OF HOUSING PRESENTATION TO PUBLIC
HEARINGS ON CONDITIONAL GRANTS - 17 FEBRUARY 2005
2OVERVIEW
- INTRODUCTION
- PURPOSE OF GRANTS
- HOUSING ALLOCATION FORMULA
- HOUSING SUBSIDY GRANT
- HUMAN SETTLEMENT REDEVELOPMENT PROGRAMME
- MONITORING OF PERFORMANCE
- MOTIVATION FOR RETENTION AS CONDITIONAL GRANTS
- END
3INTRODUCTION
- Housing administers two conditional grants in
2004/05 financial year - Housing Subsidy Grant
- Human Settlement Redevelopment Grant
4PURPOSE 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.
5ALLOCATION 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.
6ALLOCATION 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.
7ALLOCATION 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
8ALLOCATION FORMULA cont.
Statistics used in formula based on 1996 census.
P
HH
HN
9ALLOCATION 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
10ALLOCATION FORMULA cont.
Statistics used in formula based on 1996 census.
RBY
SBY
SE
FR
TC
HL
11ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (P).
12ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (HH).
13ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (RBY).
14ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (SBY).
15ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (SE).
16ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (FR).
17ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (TC).
18ALLOCATION FORMULA cont.
Variance between 1996 and 2001 census (HL).
19ALLOCATION FORMULA cont.
- Compliance to the criteria of Section 214(2) (a)
to (j) of the constitution
20ALLOCATION FORMULA cont.
- Compliance to the criteria of Section 214(2) (a)
to (j) of the constitution
21Housing Subsidy Grant
- Purpose is to finance housing subsidies under the
national housing programme.
22PER CAPITA ALLOCATIONS BASED ON POPULATION FIGURES
23PER CAPITA ALLOCATIONS BASED ON HOUSEHOLDS
EARNING LESS THAN R3 500
24CURRENT PERFORMANCE HOUSING SUBSIDY GRANT
25CURRENT PERFORMANCE cont.
26CURRENT PERFORMANCE cont.
27CURRENT PERFORMANCE cont.
28CURRENT PERFORMANCE cont.
29CURRENT PERFORMANCE cont.
30CURRENT PERFORMANCE cont.
31CURRENT PERFORMANCE cont.
32CURRENT PERFORMANCE cont.
33CURRENT PERFORMANCE cont.
34ADDITIONAL 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
35ADDITIONAL 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
36HOUSING 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.
37MONITORING 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.
38MONITORING 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.
39Human 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.
40PER CAPITA ALLOCATIONS BASED ON HOUSEHOLDS
EARNING LESS THAN R3 500
41CURRENT PERFORMANCE
42CURRENT PERFORMANCE
43HSRP 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.
44HSRP 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.
45MONITORING 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.
46MONITORING 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.
47Common 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
48Common 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 50Expenditure trends by province as at 31 December
2005
51Eastern Cape
52Free State