1. 1 Overview The Expanded Public Works Programme (EPWP) 17 Aug 2010 EPWP incentive update for Select Committee on Public Services

2. 2 Outline Introduction 5 Year Targets Progress up to March 2010 Sector Achievements and Challenges Fiscal Incentive Technical Support to Municipalities Conclusion

3. 3 3 Goal: to create 4.5m work opportunities for poor and unemployed people in South Africa To contribute towards halving unemployment by 2014, through the delivery of public and community services Scale up from 210 000 FTEs in Y1 to 610 000 FTEs in Y5 Equivalent of 4, 5 million work 100-day work opportunities in 5 years EPWP to enable government to act as an Employer of Last Resort as part of the Anti-Poverty Strategy Introduction

4. 4 4 YearInfrastructureEnvironment & CultureSocialNon-stateTotal 09/10300,000150,00080,00020,000550,000 10/11342,000156,00096,00048,000642,000 11/12440,000200,000132,00096,000868,000 12/13572,000275,000187,000176,0001,210,000 13/14720,000375,000255,000300,0001,650,000 Total2,374,0001,156,000750,000640,0004,920,000 Phase II Targets per sector & per year YearInfrastructureEnvironment & Culture SocialNon-stateTotal 09/10108,69632,60960,8708,696210,870 10/11130,43541,73967,82620,870268,870 11/12170,43559,13090,43541,739361,739 12/13220,00081,304124,34876,522502,174 13/14273,913110,870169,565130,435684,783 Total903,478325,652513,043278,2612,020,435 FULL TIME EQUIVALENT TARGETS WORK OPPORTUNITY TARGETS

5. 5 Q4: Work opportunities per sector against total targets for 2009-10 (Overall) (1 Apr 2009 – 31 March 2010)

6. 6 Achievements Across Sectors Several new programmes being added, such as Khari Gude, School Nutrition and Mass Participation Programmes The Food for Waste Programme will add 4 municipalities in 2010/11.The programme will cover 10 municipalities 900 new Vuk’uphile Learnerships Infrastructure incentive grant beginning to have intended effect of encouraging Public bodies to exceed FTE targets From 2010/11 Environment and Culture Sector will also have an incentive allocation

7. 7 Challenges Across Sectors Labour-intensity of projects implemented not being optimized by Provincial Departments and Municipalities. Lack of technical capacity in public bodies to implement projects No institutionalized human resources to drive development interventions Lack of data capturing capacity to report properly on implemented projects Management and coordination across 3 spheres of government Lack of non-wage funding to kick-start key programmes across all sectors

8. 8 Responses to Overcome Challenges Technical support continue and intensified to improve labour-intensity in implementation of projects Key partnerships exist and new ones developed to piggy-back on existing support initiatives Replication of highly labour-intensive programmes is being encouraged Continued training of municipal officials in Labour-Intensive methodologies Teams of data capturers assisted in cases where capacity lacks and will be intensified in short term Minister’s drive for greater political buy-in have been boosted through signing of target agreements with Premiers New funding proposals developed to assist implementing bodies to start new programmes

9. 9 1.0 Introduction The EPWP incentive has now been introduced to all sectors of the EPWP from the 10/11 financial year. The Infrastructure sector incentive is applicable to Provincial Departments and Municipalities. The Environmental sector incentive is applicable to National Departments through their appropriations from National Treasury. The Non-state sector grant is paid to Non- Government Organisations ( NGOs) and Non-Profit Organisations through the Independent Development Trust ( IDT) which was appointed as the intermediary. The Social sector grant has been paid as a schedule 5 grant to Provincial Departments of Social Development and Education.

10. 10 2.0 Progress of the Infrastructure sector incentive in the 10/11 financial year For Provincial Departments, the incentive has been paid to 8 of the eligible departments in 5 provinces. R85.943 million will be paid out of the R330.67 million available for the 10/11 financial year considering 1 st quarter reporting. This represents 26% of the Provincial allocation. For Municipalities, 56 of the eligible Municipalities have been paid the incentive in all the Provinces. R 85.943 million of the R 622.996 million will be paid considering 1 st quarter reporting. This represents 32% of the Municipal allocation for the 10/11 financial year. Provincial Departments in Gauteng, Mpumalanga, Western Cape, Northern Cape and North West reported in the 1 st quarter 10/11 but did not exceed the threshold for incentive payment.

11. 11 2.1 Performance on the EPWP infrastructure incentive by Provinces after the 1 st Quarter of the 10/11 financial year reporting ProvinceInfrastructure Incentive allocation for the 10/11 National financial year (R’000) 1 st Quarter incentive payment for the 10-11 financial year (R’000) Total incentive disbursed In the 10/11 financial year (R’000) Percentage of the 10/11 incentive disbursed Eastern Cape60,3545,64019,01131 Free State13,767817 6 Gauteng38,82102,4986 Kwa-Zulu Natal169,47028,89659,30035 Limpopo2,90302,61790 Mpumalanga18,074000 Northern Cape1,167000 North West2,897000 Western Cape23,21801,7007 Total330,67135,35285,94326 4

12. 12 2.1 Performance on the EPWP infrastructure incentive by Municipalities after 1 st quarter 10-11 reporting 5 ProvinceInfrastructure Incentive allocation for the 10/11 National financial year (R’000) 1 st Quarter incentive payment for the 10-11 financial year (R’000) Total incentive disbursed In the 10/11 financial year (R’000) Percentage of the 10/11 incentive disbursed Eastern Cape97,8066,84416,18217 Free State34,4001,4021,5394 Gauteng165,04869,984110,47667 Kwa-Zulu Natal123,61318,05642,52634 Limpopo55,3554,95516,19529 Mpumalanga37,2885686022 Northern Cape50,3991,8891,9314 North West36,0491,8879,40026 Western Cape26,0388231,4085 Total622,996106,119200,25932

13. 13 3.0 Non State Sector (NSS) Progress for the 2009/10 financial year The final budget allocation for the NSS was R 204.5 m. This was the result of an additional allocation of R114.5m for the Community Works Programme (CWP) in the adjustment budget on the original budget ofR90m. Included in the NSS allocation is a transfer of R14.5m to the Independent Development Trust (IDT) as the appointed intermediary to manage the NSS on behalf of DPW. The allocation for the CWP was made up of wage costs and non- wage costs. The non-wage costs amount to R58.5m and the wage costs R91m By the end of the 2009/10 financial year DPW had transferred the full allocation to the two programmes.

14. 14 3.1 Community Works Programme Budget performance for the 2009/10 financial year Table : Site level expenditure, 2009/10

15. 15 3.2 Non Governmental Organizations (NGOs) performance for the 09/10 financial year The full allocation of R40.1 million was transferred to NGO’s participating in the institution based programme. The full allocation is for wages at a rate of R50 per person per day.

16. 16 4.0 Measures put in place to improve performance on EPWP incentive draw down Public bodies ( Provincial Departments and Municipalities) are being provided with support to report on EPWP. The 90 data capturers employed are helping in this regard. A partnership with DBSA through the Siyenza Manje programme has been put in place to support municipalities jointly. Training of officials in Municipalities in Labour-intensive methods of construction is being planned with LG-SETA. Training on reporting is also being done to Public body officials to enable them to report better on EPWP. Technical support being provided to Public bodies to implement their projects more labour-intensively so as to create more work opportunities and Full Time Equivalents that will increase the incentive drawn down.

17. 17 5.0 Proposals being considered for the 11/12 financial year in terms of the incentive Increasing the Minimum FTE payment to R60 for Provincial Departments and Metropolitan municipalities. Increasing the FTE payment for Rural Municipalities from R60 to R70. Introducing a provision that 10% of the incentive earned can be used for project management capacity on EPWP incentive. Introducing an integrated incentive at Provincial and Municipal spheres that combines the Infrastructure and Environmental Sectors. Increasing the nominal amount for eligible Public bodies from R500,000 to R2 Million. Introducing a Non-wage component for the Non-state sector.

18. 18 Conclusion On-going communication drives brought more public bodies on board Drive for political champions across three spheres of government starting to have desired effect on implementation and reporting, but needs to be intensified Collective responsibility to deliver on EPWP have to be tied in through Delivery Forums and Delivery Agreements to achieve up-scaled targets for outer years of Phase 2

19. 19 Thank you! Stanley.Henderson@dpw.gov.za Office: +2712 310 5110 Mobile: +2783 676 5119 Website: www.epwp.gov.zawww.epwp.gov.za