1. Presentation to Standing Committee on Appropriations on the readiness to administer grants allocations for the 2014/15 Financial Year 07 March 2014 DIRECTOR- GENERAL: T. ZULU 1Confidential

2. 1. Overview of the MTSF 2.HSDG 2014 MTEF Allocations 3.Readiness of Provinces to implement 2014 MTEF grant allocations 4.Progress on the devolution of housing function and municipal accreditation 5.Alignment & Coordination of the upgrade of sanitation including the revisions of HSDG 6.Efforts at improving spending performance in the roll- out of human settlements 7.Conclusion Confidential2 PRESENTATION OUTLINE

3. MTSF OVERVIEW Outcome: Sustainable Human Settlements and Improved Quality of Household Life Sub outcomes: – Adequate housing and improved quality living environments – A functionally equitable residential property market – Enhanced Institutional capability for effective coordination of spatial investment decisions 3 Confidential

4. 4 From Housing to Human Settlements Creation of Sustainable & Whole Settlements, that provide : – Safe & secure environments; – Access to economic opportunities; – Mix of housing & tenure options; – Reliable basic services; – Reliable public amenities: Education, health, recreation, etc. Confidential

5. National Development Plan 5 Rethink: Human Settlements Proximity to Public Services & Amenities Increased Densities & Thresholds Spatial Integration & Efficiencies Confidential

6. Pres. Infra. Co-ord. Comm. SIP 7 Ensure better integration between human settlements planning, public transport infrastructure, & bulk infrastructure provision. Strategic objective begin to transform racial apartheid geography, & address economic dysfunctional challenges of urban sprawl. 6 Confidential

7. Key Priorities In giving traction to accelerated human settlements delivery, the following, among others, will be prioritised: – Informal Settlements Upgrading – Sanitation & Bucket Eradication – Mining Towns – Affordable Rental & PHP – Military Veterans – Affordable Housing Finance 7Confidential

8. From Outputs to Outcomes For the coming term, a shift in emphasis: – Reflect on more than mere outputs and delivery numbers as has previously been the case, but also reflect on the outcomes and implications of the said delivery. – Thus aspects such as density, informality, sprawl, access & efficiency to become integral to human settlement vocabulary. – To this end, particular emphasis to be placed on better integration of human settlement delivery with that of bulk infrastructure. This is inclusive of public amenities and goods; – In order to better address economic and social challenges of especially urban spaces. 8Confidential

9. Readiness of Provinces to Implement 2014 MTEF Grant Allocations Towards disbursement of HSDG Allocations to Provinces: – Provinces currently in the process of completing 2014/15 Business Plans. – Due on 07 March 2014 – Approval of 9 Provincial Plans and National HSDG Business Plan by 31 March 2014. Department, therefore, stands ready to present detailed Plans by mid-April 2014. 9Confidential

10. HSDG 2014 MTEF allocations 10Confidential

11. Allocations with Priorities 11Confidential

12. Decisions taken to eradicate Buckets systems A decision was taken at several meetings of Ministers of Human Settlements, COGTA and Water Affairs to eradicate buckets system The decision was also been ratified by the Presidential Coordinating Council that took place on 17 October 2013 The Bucket Eradication Programme (BEP) is currently not funded Discussions were held with National Treasury regarding funding on this programme 12Confidential

13. Decisions taken to eradicate Buckets systems Continues A decision has been taken to top slice 5% of the HSDG to fund this programme A new grant (Schedule 6A) has been gazetted Funds have been divided among provinces in proportion to the number of households that reported using buckets This grant is allocated for two years and will end in 2015/16 13Confidential

14. Impact of bucket eradication on total allocation 14Confidential

15. Effects of 5% Top Slicing on normal projects 15Confidential

16. Alignment & Co ordination of the Upgrade of Sanitation Infrastructure Planning: The Department is actively involved at the planning stages of municipal infrastructure provision through the IDP/ Water Services Development Plan processes Assessment of Technical Reports: Municipal Technical Reports for sanitation are assessed and recommended for MIG funding by the Department 16Confidential

17. Alignment & Co ordination of the Upgrade of Sanitation Infrastructure In the Bucket Eradication Programme, the Department ensures that Regional Bulk Infrastructure Grant (RBIG) and the Municipal Infrastructure Grant (MIG) fund the bulk infrastructure while the HSDG funds connector and reticulation services to eradicate bucket sanitation. Confidential17

18. Coordination The three Ministries of Water Affairs, Cooperative Governance and Human Settlements have formed a partnership to coordinate and accelerate delivery of basic water services. ( Political and Technical Troika meetings take place at least twice a month) The above three Ministries and Provincial Premiers have signed MoUs to formalize the partnerships 18Confidential

19. Improvement of Spending To improve spending, the Department has established a Professional Response Team (PRT) that will be deployed to provinces and municipalities to identify service delivery challenges and propose solutions in order to improve the rate of delivery of services. 19Confidential

20. 2014/15 Indirect HSDG Allocation 20Confidential

21. PROGRESS ON ASSIGNMENT – Significant progress has been made in ensuring the readiness of the six metros for the formal transfer of the housing function by 2014. – Council Resolutions to support assignment were issued by the Metropolitan Municipalities. – Metros have redesigned the organisational structures to accommodate the new functions. – Joint provincial and metro assignment task teams are fully established to negotiate the transitional and transfers arrangements and manage the associated risks. 21Confidential

22. PROCESS FOR ASSIGNMENT 1 Political consultation between MEC for Human Settlements, finance, SALGA & Local Government must still be concluded 2 Agreements on transitional arrangements on Projects, Staff, Assets, Liabilities and risks in order to enable assignment All 4 Provinces/ 6 Metros need to sign Executive Assignments 3 Premiers issue Proclamations to give effect to a shift in function 22Confidential

23. PROGRAM OF ACTION Minister Actions DG’S & Officials Actions Panel Actions Municipal Actions Provincial Actions 23Confidential

24. PROGRESS ACCREDITATION To date there are 27 municipalities accredited at level 1 & 2. This includes the six metros earmarked for assignment namely: City of Cape Town, Ethekwini Metro, Ekurhuleni Metro, City of Jo’burg, Tshwane Metro, and Nelson Mandela Bay Metro. 24Confidential

25. FINANCIAL IMPLICATIONS The estimated Human Settlements Development Grant allocations to the six metros is about R21.7 billion over the 2014 MTEF Period. The assignment of functions implies that the above capital grant allocations will flow directly to the 6 Metros. The HSDG funds will only flow in 2015/16 financial year. 25Confidential

26. Funds from the HSDG going to Metros 26Confidential

27. FINANCIAL IMPLICATIONS..Cont The National Treasury has made available a budget of R 900 million over 2014 MTEF Period for operational capacitation of the 6 (six) metros. The 2013 Division of Revenue Act has prepared the provinces and metros for the change in funding flows to support assignment. 27Confidential

28. 2014 MTEF Allocations: Municipal Human Settlements Capacity Grant 28Confidential

29. READINESS Capacity building on Business Plans for : – Operational/ Capacitation Grant – Human Settlement Grant Training on Human Subsidy System (HSS) & Needs Register systems Toolkit with Business Processes, Housing Policies, Housing value Chain and Housing Sector Plan is underway. Provinces have been capacitating Metros on reconciliation and redemption Processes 29Confidential

30. READINESS (Cont…) The Metros and Provinces are expected to finalize their negotiations on transitional arrangements for the transfer of projects, staff, assets and liabilities using the two phased approach. A due date of March 2014 has been set for the signing of executive assignment agreements and May 2014 has been set as a due date for Premiers to issue the Proclamations. 30Confidential

31. Efforts to improve spending performance Capacity Building on projects readiness matrix Practice notes for procurement to start as early as November every financial year Devolving Housing function to Metros Use of HSS by Provinces to record all the projects Quarterly performance reviews and visits 31Confidential

32. ADDITIONAL MEASURES TO IMPROVE ALIGNMENT AND COORDINATION  PROFESSIONAL RESOURCE TEAMS (PRT) What are PRT’ – this are multidisciplinary teams of professionals in the built environment Key assignment – to provide assistance with regards to development, reviewing and packaging of innovative approaches to meeting identified human settlements needs across the country, influencing planning, provision and development of sustainable human settlements opportunities in line with Government policy and strategies. And also assist the department with planning and implementation support to the Provincial and Municipal Human Settlements. Confidential32

33. ADDITIONAL MEASURES TO IMPROVE ALIGNMENT AND COORDINATION (Cont…  PROGRAMME AND PROJECT MANAGEMENT SYSTEM (PPMS) Why the PPMS – to effectively and efficiently monitor projects of the entire Human Settlements sector in SA, by tracking and reporting on the various activities and programmes contributing towards successful implementation and achievement of the mandate. What is it all about: implementation of standardized PPMS and methodology for all Provincial and Municipal Human Settlements departments Key benefits: improve planning and multi-year projects, cash flow estimates and alignment, more accountability, enhanced performance, better governance and transparency and quality reporting. Confidential33

34. THANK YOU “We have come a long way – Celebrating 20 Years of Freedom!” 34Confidential