PERFORMANCE REVIEW Outlook for 2005/06 Financial Year Performance/Expenditure Expenditure review 2001/02

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PERFORMANCE REVIEW Outlook for 2005/06 Financial
YearPerformance/Expenditure Expenditure review
2001/02 2007/08

• Department of Local Government Housing
• Provincial Government Western Cape
• January 2006

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OVERVIEW
A Outlook 2005/2006

• B Expenditure review 2001 - 2005
• C Budget planning challenges
• D Performance April - December
• E Improved capacity
• F Impact of new programmes

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A OUTLOOK 2005/06

• Department has R532m available for
• 2005/06
• (R456m grant R76m N2 ring fenced funds)
• R357m spent April to December
• 9,394 houses were built and 13,161 sites serviced
  by end December.
• Expenditure exceeds projections to end of 3rd
  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

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B EXPENDITURE REVIEW 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

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Trends continued

• In 2001 there was a shift towards a higher
  quality product at an increased unit cost
• In 1994 the unit cost 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.

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New 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

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C BUDGET PLANNING
Management of housing grant involves the
following

• 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

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D PERFORMANCE APRIL to DECEMBER

• R 357m of the R 456m Grant was spent from April
  to December.
• Many new projects starting in January 2006, surge
  in delivery expected in 2006 as these projects
  come on stream.
• 13,161 sites serviced and 9,394 houses built to
  end December

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IMPROVED PERFORMANCE COMPARISON TO PREVIOUS YEARS

• Quarter 1st 2nd 3rd 4th
• 2002/03 68m 77m 131m 71m (348m)
• 2003/04 42m 44m 70m 126m(281m)
• 2004/05 73m 92m 153m 192m(511m)
• 2005/06 51m 126m 179m 176m(532m)

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Actual expenditure
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Projected expenditure
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E IMPROVED CAPACITY IN MONITORING
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

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F IMPACT OF NEW PROGRAMMES

• 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.

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New programmes contd

• Delays due to lengthy consultation processes with
  all stakeholders
• Municipal capacity (as developer)
• - lack of capacity especially project management
• Planning
• - Insufficient planning in past, vast
  improvement in last year.
• - Province directly assisting municipalities
  in planning process

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Solutions Interventions implemented and 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

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Response 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.

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LOOKING AHEAD SUSTAINABLE HUMAN SETTLEMENT
STRATEGY

• A summit was held on 24th-25th November in
  Stellenbosch.
• Dialogue with all stakeholders related to the
  development of Integrated Human Settlements in
  alignment with the Breaking New Ground policy and
  Ikapa Elihlumayo.
• The Summit provided a basis for the formulation
  of the strategic and implementation plan in line
  with new policies
• Pilot projects have been launched to implement
  plans

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THANK YOU