Presentation on the 2015 Appropriation Bill Director- General: TW Zulu 15 May 2015 Director- General: TW Zulu Confidential

Purpose The Presentation is to Brief the Standing Committee on the 2015 Appropriation Bill including matters as requested in the letter of invite including inter alia: Medium Term Strategic Framework of the Department (MTEF) and Strategic Plan 2015 - 2019 Annual Performance Plan 2015-16 MTEF

TABLE OF CONTENT Background Departmental Strategic Plan Macro Performance Indicators Strategic Goals by Programme Departmental Annual Performance Plan Delivery Agreements Budget Delivery Targets Challenges and Mitigation Measures

Background The National Development Plan (NDP) in Chapter 8 outlines a vision for human settlements and housing towards 2030. The emphasis in the NDP is on a government-led strategy to fast-track the development of housing and human settlements whilst at the same time improving the quality of life of citizens. The Department Medium Term Strategic Framework for 2014-19 prioritises the delivery 1,460 million housing opportunities in partnership with the private sector, all stakeholders and communities. The human settlements development programme must in the next five years act as a catalyst for radically transforming the national space economy in order to achieve measurable results by 2030.

Background The radical spatial transformation must ensure that poverty, unemployment and inequality must be addressed in the programmes and funding applied by the human settlements sector. The delivery approach will focus on mega projects of integrated housing mix to cater for different incomes levels and needs and includes housing opportunities for: the indigent, affordable housing sector, rental units, social housing and serviced stands and will ensure integration of different income groups, different races and lead to the building of a South Africa that truly belongs to all.

Outcome 8 Delivery Agreement Background The objective of the Outcome 8 Delivery Agreement is to ensure the implementation of the comprehensive human settlements programme with multiple projects that covers extensive geographical spread aiming to improve the workings of the space economy. This will be achieved by realization of the following outcomes: Providing poor households with adequate housing in better living environments; Supporting the development of functionally and equitable residential property market; Improving the institutional capacity & coordination for better spatial targeting Confidential

Outcome 8 Delivery Agreement Housing Delivery: In terms of the Outcome 8 MTSF for Human Settlements, a total number of 1,46 million housing opportunities will be delivered over the MTSF period of five years. The 1,46 million housing opportunities will consist of: 750 000 households in informal settlements upgraded; 563 000 individual units for subsidy market; 110 000 loans (70 000 FLISP plus 40 000 DFIs) 27 000 social housing; 10 000 CRU; 35 000 affordable rental Other targets 2 200 informal settlements will be assessed, 10 000 ha of well-located land will be rezoned and released for new developments targeting poor and lower to middle income households, Confidential

Outcome 8 Delivery Agreement 50 catalytic projects will be implemented, 563 000 title deeds will be issued to new homeowners in the subsidy market; and The title deeds backlog of 900 000 will be eradicated. For purposes of the Delivery Agreements, the targets of each Provincial Department in terms of the various objectives will have to be formally agreed and approved by Human Settlements MINMEC; The Provincial Departments have been requested to revise their business plans to focus on the priorities as set out in the MTSF; 30% housing opportunities to be delivered by Women contractors 1956 Houses per Province for delivery in Womens’ Month 10% Housing opportunities delivered by Youth in terms of the Youth Brigade Programme 5000 Housing Units for Military Vets Hosting Provincial Social Contracts Forums Hosting of Provincial Govan Mbeki Awards Establishing Inter-Sectoral structures and supporting other sector Departments structures Confidential

Human Settlements MTSF Outcomes and Targets Background Human Settlements MTSF Outcomes and Targets The 2014 - 2019 Human Settlements Development Medium Team Strategic Framework focuses on achieving the following outcomes: Ensuring that poor households have adequate housing in better living environments; Delivering settlements that are spatially, socially and economically integrated; Supporting the development of a functionally and equitable residential property market; and Improving institutional capacity and coordination for better spatial targeting. Qualitative targets to be achieved through policy reforms Quantitative targets to be achieved through the HSDG

MTSF in Numbers MTSF In Numbers Primary MTSF Target Secondary Target 5-Year Target Annual Target 750 000 households in informal settlements upgraded to level 2 services Households located in 2 200 Informal Settlements 750 000 150 000 563 000 individual subsidy units 5 854 units for Military Veterans included 5 854* 1 951 557 146 111 230 110 000 Gap Housing 70 000 FLISP 70 000 14 000 40 000 DFIs 40 000 10 000 35 000 Affordable rental through the private sector 10 000 Mineworker housing 2 000 25 000 Affordable Private Rental 25 000 5 000 27 000 state led social housing - 27 000 5 400 10 000 CRU 900 000 Title Deeds backlog eradicated 900 000 180 000 Total number of housing opportunities created by the state* (excl private rental and title deeds backlog)   1 460 000 293 801

Funding Requirements To Meet MTSF Targets Funding Requirements Against Available MTEF Funding Funding Requirements To Meet MTSF Targets MTSF Priority per programme Stand or unit costs Annual Target Annual Costs 5-Year Target Total Cost* UISP phase 2 (with interim services) R 34,426.49 150,000 R 5,163,973,500.00 750,000 R 25,819,867,500.00 557 146 new subsidies R 170,573.00 111,429 R 19,006,812,931.60 557,146 R 95,034,064,658.00 5 854 Units for Military Veterans R1 60, 573.00 1,951 R 313,277,923 5,854 R 939,994,342 70 000 FLISP R 52,500.00 14,000 R 735,000,000.00 70,000 R 3,675,000,000.00 40 000 DFI   8,000 40,000 27 000 Social Housing (Institutional subsidy) R 110,947.00 5,400 R 599,113,800.00 27,000 R 2,995,569,000.00 10 000 CRU (50 complexes comprising 40 units each per 1000m2 complex R 180,061.79 2,000 R 360,123,580.00 10,000 R 1,800,617,900.00 TOTALS 292,781 R 26,178,301,734.60 1,460,000 R 130,265,113,400.00 MTEF Allocation 2015/16 2016/17 2017/18 USDG: R 10,554,345,000.00 R 11,075,877,000.00 R 11,708,123,000.00 HSDG Portion R 16,929,975,000.00 R 18,594,187,000.00 R 19,776,499,000.00 Total R27,484,315,000.00 R29,670,064,000.00 R31,484,622,000.00 *Required funding R26, 178,301.734.60

STRATEGIC AND ANNUAL PERFROAMNCE PLAN

Macro Performance Indicators Macro Indicators Strategic Goal or Programme Most Closely Linked to the Achievement Indicator Target Estimates 2015/16 2016/17 2017/18 Clean Audit Programme 1: Administration   Purpose: Provide strategic leadership, governance oversight and essential support and promote a compliant and well-functioning department & agencies 1 Revised Housing Act and Housing Code Programme 2: Human Settlements Strategy, Policy and Planning Purpose Manage the development of human settlement policies, strategies & planning

Macro Performance Indicators Macro Indicators Strategic Goal or Programme Most Closely Linked to the Achievement Indicator Target Estimates 2015/16 2016/17 2017/18 Programme 3: Programme Management Unit   Purpose Build, oversee, support & monitor the sector institutional capability & capacity to deliver human settlement programmes & projects .3 mill opportunities Programme 4: Housing Development Finance Provide funding for the delivery of all human settlements programmes in line with approved policies, planning and strategies R30.9 bill R33.2 bill R35.2 bill

Strategic Goals By Programmes Programme & Purpose Programme 1: Administration Purpose: Provide strategic leadership, governance oversight and essential support and promote a compliant and well-functioning department & agencies Strategic Goal Provide strategic leadership, governance oversight and essential support and promote a compliant and well-functioning department & agencies Strategic objectives 1. To provide Human Resources services to the Department 2. Provide effective and efficient communication services to ensure the understanding of the MTSF objectives 3. Information Management System and Information Technology 4. Effective and efficient legal support 5. Provide advice on risk management internal controls and governance issues 6. To provide Corporate Support Services 7. To the Department Oversee the enhancement of human settlements operations through effective enterprise architecture service 8. To provide financial management services 9. Provide advisory services to the Department on matters relating to Parliamentary oversight committee services, project quality assurance and integration 10. Provide executive support to Ministry 11. Provide executive support to the office of the Director General

Strategic Goals By Programmes Programme & Purpose Programme 2: Human Settlements Strategy, Policy and Planning Purpose Manage the development of human settlement policies, strategies & planning Strategic Goal Development of human settlements policies, strategies & planning towards promoting adequate housing and improved quality living environments Strategic objectives 1. Evaluate, review and improve existing housing instruments and subsidy regime to better direct housing and human settlement investments, fast track delivery and ensure affordability and diversity of the product and finance options 2. Develop policy and administrative systems that support individual transactions in the affordable secondary housing market 3. Strengthen programme for the accreditation of municipalities 4. Develop a monitoring and support programme for municipalities that have been accredited 5. Increase the supply of housing opportunities using different tenure types to ensure the diversity necessary to address social, economic and cultural needs 6. Increase Participation of stakeholders in housing development 7. Strengthen current mechanism to mobilise private sector to contribute to human settlements development 8. Develop horizontal and vertical consultative mechanisms among spheres of government 9. Review Planning System to achieve better spatial targeting 10. Issuing of title deeds form part of housing development process

Strategic Goals By Programmes Programme & Purpose Programme 3: Programme Management Unit Purpose Build, oversee, support & monitor the sector institutional capability & capacity to deliver human settlement programmes& projects Strategic Goal Ensure that human settlement programmes and projects are executed in a manner that provide access to adequate housing in improved living environments for all Strategic objectives 1. Build & ensure institutional capabilities and capacity for execution & delivery of transformed human settlements & better spatial targeting 2. Develop bolder measures to execute & implement sustainable human settlements provide access to adequate housing in improved living environments for all 3. Monitor & evaluate the execution & delivery of human settlement projects & programmes to assess and report on the extent of access to adequate housing in improved living environments for all 4. Intensify homeownership education programmes for the affordable housing market 5. Implement projects that ensures spatial, social and economic integration 6. Analysis of new housing units constructed in the entire residential property market 7. Effective support and monitoring of entities 8. Fast track release of well-located land for housing and human settlements targeting poor and lower middle income household

Strategic Goals By Programmes Programme & Purpose Programme 4: Housing Development Finance Purpose Provide funding for the delivery of all human settlements programmes in line with approved policies, planning and strategies Strategic Goal Strategic objectives 1. Develop minimum standards and finance options for investment in public spaces 2. Diversify finance options and products for the affordable gap market in particular 3. Increase in the number of properties in the subsidy housing submarket entering the municipal rates roll 4. To manage and provide overall grants management services; administer the Home Loan and Mortgage Disclosure Act and promote investments 5. Collect, analyse and disseminate information on property trends and values in the affordable housing market 6. Establish transactional support for affordable housing market 7. Monitor and reporting transactions in the secondary housing subsidy submarket

Allocations 2015 MTEF Allocations Net Effect on Departmental Budget MTEF Total R`000 2015/16 2016/17 2017/18 Departmental Baseline from 2014/15 MTEF 32 842 362 34 452 580 36 181 009 103 475 951 Plus Additional Allocation (Consolidated) 261 000 200 000 250 000 711 000 Minus Reduction in Allocation (Consolidated) (2 159 981) (1 446 616) (1 184 399) (4 790 996) Revised Baseline 30 943 381 33 205 964 35 246 610 99 395 955

Consolidated Additional Allocations 2015/16 R`000 2016/17 2017/18 Total MTEF Housing Development Agency 100 000 300 000 National Urban Reconstruction and Housing Agency 61 000 - Rural Housing Loan Fund 50 000 National Housing Finance Corporation 261 000 200 000 250 000 711 000

Consolidated Reduction Per Allocation Reduction in Allocation (Consolidated) 2015/16 R`000 2016/17 2017/18 Total Departmental Operational (81 244) (99 982) (108 102) (289 328) Compensation of employees (54 726) (58 052) (63 947) (176 725) Goods and services (6 398) (21 605) (23 797) (51 800) Payment for Capital assets (120) (325) (358) (803) National Upgrading Support Programme (Moved to HDA) (20 000) (60 000)   Grants (630 329) (881 560) (655 033) (2 166 922) Urban Settlements Development Grant (100 428) (155 984) (85 331) (341 743) Municipal Human Settlements Capacity Grant (200 000) (600 000) Human Settlements Development Grant (329 901) (525 576) (369 702) (1 225 179)

Reduction in Allocation (Consolidated) cont. 2015/16 R`000 2016/17 2017/18 Total Entities (263 528) (257 185) (202 398) (723 111) Social Housing Regulatory Authority: Restructuring Capital Grant (200 000) (600 000) Social Housing Regulatory Authority: Operational (21 617) (10 457) (2 398) (34 472) Community Schemes Ombuds Services (13 479) (4 080) - (17 559) Housing Development agency (28 432) (42 648) (71 080)   Sanitation moving to Department of Water and Sanitation (1 184 880) (207 889) (218 866) (1 611 635) Sanitation Operational (91 153) (83 290) (88 037) (262 480) Human Settlements Development Grant: Indirect (975 399) Rural Households Infrastructure Development: Indirect Grant (67 328) Rural Households Infrastructure Development: Direct Grant (51 000) (124 599) (130 829) (306 428) (2 159 981) (1 446 616) (1 184 399) (4 790 996)

Impact Of Budget Reductions Over MTEF Net Impact 2015/16 R`000 2016/17 2017/18 Total MTEF Departmental Baseline 2014/15 MTEF 32 842 362 34 452 592 36 181 011 103 475 965 Revised Baseline 2015/16 MTEF 30 943 381 33 205 964 35 246 610 99 395 955 Increase/(Reduction) (1 898 981) (1 246 628) (934 401) (4 080 010)

Allocation Per Programme 2015/16 R`000 2016/17 2017/18 Total MTEF 1. Administration 435 115 462 786 490 131 1 388 032 2. Human Settlements Policy, Strategy and Planning 74 337 79 252 83 760 237 349 3. Programme Delivery Support 169 800 176 252 182 239 528 291 4. Housing Development Finance 30 264 128 32 487 674 34 490 481 97 242 283 Total 30 943 380 33 205 964 35 246 611 99 395 955

Allocation By Economic Classification Total allocation 2015/16 R`000 2016/17 2017/18 Total MTEF Departmental Operational 690 941 731 068 769 721 2 191 730 Compensation of employees 322 239 344 790 365 662 1 032 691 Goods and services 364 719 382 085 399 659 1 146 463 Payment for Capital assets 3 983 4 193 4 400 12 576 Payments for financial assets   Grants and transfer payments 30 252 440 32 474 896 34 476 889 97 204 225 Grants 28 857 020 31 059 868 32 883 466 92 800 354 Human Settlements Development Grant 18 202 675 19 883 991 21 060 343 59 147 009 Urban Settlements Development Grant 10 554 345 11 075 877 11 708 123 33 338 345 Municipal Human Settlements Capacity Grant 100 000 115 000 315 000 Entities 1 385 507 1 404 416 1 582 283 4 372 206 Social Housing Regulatory Authority: Operational 34 560 36 392 38 212 109 164 SHRA: Capital Restructuring Grant 932 307 1 036 409 1 110 513 3 079 229 Housing Development Agency 176 183 167 512 215 668 559 363 Community Schemes Ombuds Services 39 521 23 920 29 400 92 841 National Housing Finance Corporation 300 000 Rural Housing Loan Fund - 50 000 National Urban Reconstruction and Housing Agency 61 000 SHRA: Institutional Investment Grant 41 936 40 183 38 490 120 609 Departmental Transfers 9 913 10 612 11 140 31 665 Bursaries Scheme 8 719 9 355 9 822 27 896 UnHabitat 1 150 1 211 1 272 3 633 Transfer to Households 44 46 136 Total 30 943 381 33 205 964 35 246 610 99 395 955

Human Settlements Development Grant Provinces 2015/16 R`000 2016/17 2017/18   EASTERN CAPE 1 962 372 2 167 156 2 332 862 FREE STATE 1 057 284 1 210 630 1 285 972 GAUTENG 4 979 843 5 473 336 5 769 301 KWAZULU-NATAL 3 235 475 3 414 957 3 632 106 LIMPOPO 1 283 877 1 311 709 1 362 651 MPUMALANGA 1 265 162 1 419 973 1 488 961 NORTHERN CAPE 380 408 402 276 427 374 NORTH WEST 2 063 132 2 297 286 2 435 403 WESTERN CAPE 1 975 122 2 186 668 2 325 713 Total 18 202 675 19 883 991 21 060 343

Urban Settlements Development Grant Provinces Metros 2015/16 R`000 2016/17 2017/18 EASTERN CAPE Buffalo City 713 132 748 370 791 090   Nelson Mandela 846 480 888 308 939 015 Sub Total 1 559 612 1 636 678 1 730 105 FREE STATE Mangaung 693 847 728 133 769 697 GAUTENG Ekurhuleni 1 842 887 1 933 951 2 044 347 Jo'burg 1 731 220 1 816 766 1 920 473 Tshwane 1 500 683 1 574 838 1 664 734 5 074 789 5 325 554 5 629 554 KWAZULU-NATAL eThekwini 1 838 336 1 929 176 2 039 299 WESTERN CAPE Cape Town 1 387 761 1 456 336 1 539 468 Grant Total 10 554 345 11 075 877 11 708 123

Municipal Human Settlements Capacity Grant Provinces Metros 2015/16 R`000 2016/17 2017/18 EASTERN CAPE Buffalo City 9 253 10 640 Nelson Mandela 9 847 11 324 Sub Total   19 100 21 964 FREE STATE Mangaung 9 206 10 587 GAUTENG Ekurhuleni 14 313 16 460 Jo'burg 16 505 18 981 Tshwane 12 831 14 755 43 649 50 196 KWAZULU-NATAL eThekwini 14 342 16 493 WESTERN CAPE Cape Town 13 703 15 758 Total 100 000 115 000

Departmental MTEF Allocation The budget allocation of the Department was negatively impacted upon by National Treasury budget reductions as a result of the economic downturn. The total allocation to the Department for the 2015/16 financial year amounts to R30.9 billion a decrease of R1.9 billion from the previous baseline of R32.8 billion. The allocation is projected to grow over the 2015 MTEF period to R35.2 billion in 2017/18.

Summary The Operational Budget of the National Department constitutes 2% of the Capital allocation of the Department – This is below the current good practice norm applicable which is 3%. The Human Settlements Grants constitute 93% of the total allocation made available for actual programmes and projects. Transfer payments to public entities constitute 5% of the total allocation – These transfer payments contribute towards the MTSF targets and outcomes .

Budget Impact The net impact over the MTEF on the Departmental Budget is a reduction of R4 billion which is mainly made up of the following: R1.6 billion is due to the transfer of sanitation to Department of Water and Sanitation. R2.1 billion reduction on grants allocation. R722 million reduction on the transfer to Departmental Entities’ allocation. R289.3 million reduction on operational budget.

Proposed Targets For the 2015/16 Financial Year including Challenges and Opportunities

Planned Provincial Delivery Per Programme Sub-Programme Rectification/repairs Other Sites Budget (000") Units Total Annual Budget (000") Financial Interventions 4 790 11 632 2 191 R 460 749 459 4636 R 2 354 926 375 R 2 815 675 834 Incremental Housing Programmes   10227 47 102 R 2 401 445 618 60 852 R 7 359 251 806 R 9 760 697 424 Social & Rental Housing 1209 281 R 90 293 122 5602 R 1 603 205 245 R 1 693 498 367 Rural Housing 6148 R 30 066 500 25504 R 2 517 272 351 R 2 547 338 851 Priority Projects 2250 2430 R 258 824 032 4 057 R 569 314 292 R 828 138 324 Provincial Specific Projects 3500 105 R 45 659 000 2 025 R 511 667 201 R 557 326 201 GRAND TOTAL 28 818 58 257 R 3 287 037 731 102 676 R 14 915 637 270 R 18 202 675 001

Planned Delivery in Mining Towns Gauteng Towns Sites Budget R’m Unit Overall Budget Westonaria 1 120 57 188 Randfontein 400 316 63 248 Merafong 615 54 923 TOTAL 1 520 931 175 359 Mpumalanga Towns Sites Budget R’m Units Overall Budget Emalahleni 3 000 130 878 823 114 445 245 323 Steve Tshwete 732 50 482 76 10 431 60 913 Thaba Chweu 1 000 43 626 220 32 408 76 034 TOTAL 4 732 224 986 1 119 157 284 382 270 Northern Cape Towns Sites Budget R’m Units Overall Budget Tsantsabane 8 630 Gasegonyana 100 4 500 13 635 18 135 Gamagara 9 805 TOTAL 13 130 23 440 36 570

Planned Delivery in Mining Towns Limpopo Towns Sites Budget RM Units Overall Budget Lephalale 26 006 922 188 619 214625 Burgersfort / Steelpoort 390 9 634 450 34 070 100 259 Fetakgomo 200 4 920 92 9 811 14 731 Elias Motsoaledi 800 19 680 294 26 547 46 227 Thabazimbi 32 665* 195 20 663 53 328 TOTAL 1390 60 240 1 953 279 710 429170 * Rectification North West Towns Sites Budget RM Units Overall Budget Kgetleng 866 119 957 118 642 Madibeng 1 042 194 353 Rustenburg 402 17 537 1129 241 882 259 420 Moses Kotane 484 131 950 130 633 TOTAL 3521 688 142 703 048

Ensuring Improved Entities Performance The financial and non-financial performance of the public entities are monitored by the Department on a quarterly basis through performance review sessions and through an analysis of quarterly reports; The public entities are required to motivate deviations from the planned performance targets and expenditure projections and to implement remedial actions to achieve the planned targets and expenditure projections in the subsequent quarters, in order to achieve the annual targets;

Ensuring Improved Entities Performance All virement applications where requested and appropriate, are evaluated against strategic and annual performance plans to optimize expenditure performance by the public entities; The Department has planned to conduct administrative and project visits of the public entities to discuss challenges that may be experienced by the public entities that may affect performance and to verify the integrity of the information that is being presented in the quarterly reports, and sampled on the basis through the project visits; and Funding requested by public entities are submitted to the Department on a quarterly basis for payment to them.

Ensuring Improved Entities Performance

Inter-Spherical Planning and Funding Alignment The National and Provincial Human Settlements Development Grant business plans are aligned as the annual national business plan is based on the nine provincial business plans; Municipal plans are aligned on the basis of reference to the HSDG, the Built Environment Performance Plans and the Integrated Development Plans of municipalities; and The Department holds quarterly performance review sessions to determine performance and alignment on delivery and spending by Provinces and Metropolitan Municipalities.

Inter-Spherical Planning and Funding Alignment and Monitoring The National Department through its Monitoring and Evaluation and Planning undertakes monthly data and reports on expenditure, outputs, targets and outcomes, which is interrogated in order to ensure compliance with legislation as well as the approved policies and plans; Through an active Technical MinMec and MinMec reports are tabled on performance and both administrative and political principle interrogation occurs on the reports tabled and corrective and mitigation measures taken. The DPME undertakes active and robust monitoring and evaluation of performance of policy and programme and project funding.

Impact of Increased Costs for Subsidised Houses Versus the Capital Subsidy The new building regulations of 2011 determine that houses have to be installed with ceilings and isolation material on top, inside walls be plastered and outside walls be finished off smoothly. Window size standards are also applicable to subsidized housing and the type of glass used is more expensive which all increases the cost of subsidized houses; The cost of providing housing to military veterans housing requires a top up from the Department of Military Veterans of R88 000 and the Human Settlements Development Grant allocation covers the subsidy portion of these houses; Housing for disabled beneficiaries increases the cost due to their specific needs; and The subsidy quantum of R160 573 per house will remain unchanged in 2015/16.

Macro Human Settlements Drivers South Africa’s urban population is currently at 59.3% and will grow to 79.6% by 2030; The National Development Plan estimates that by 2030 South Africa’s urban population will grow by 7.8 million; This will result in huge demand for housing, socio-economic services, employment opportunities and infrastructure; The human settlements and housing programmes/instruments through the Human Settlements Development Grant and USDG has been able to facilitate access to cities to ensure sustainable development;

Macro Human Settlements Drivers Various programmes including the Informal Settlements Upgrading Programme, the Integrated Residential Development Programme , the Finance Linked Individual Subsidy Programme and Social and Rental Housing Programme are the main interventions used in housing and human settlements sector to ensure poor urban South Africans are provided with sustainable livelihoods; The Urban Settlements Development Grant is used by Metropolitan Municipalities to provide bulk infrastructure and land development to support the national human settlements development programme by focusing on poor households; An evaluation was carried out of the USDG and the recommendations are in the process of being implemented including the adoption of an appropriate policy framework.

Macro Human Settlements Drivers The Department will implement a partnership process with various metos to revitalise inner cities; and this includes activating subsidies available with the social and rental housing programme. The Minister has and continues to have regular consultations with the Metropolitan Mayors and this includes a thorough process which led to the finalisation of the USDG policy by the Department. As part of the process unused buildings will be expropriated and assigned for the purposes of building social housing adjacent to places of employment.

Departmental Cost Containment Measures Travel and subsistence: Officials that travel to the same venue should arrange that bulk transport is utilized to travel together. Planning of trips is enforced ensuring officials utilize the most economic means of travelling. Trips must be closely scrutinized by managers.  Consultants and special services: The utilization of consultants should be limited to the minimum. Only in cases where the Department does not have the required skills and specialized services as well as services of a technical nature are needed should consultants be appointed.

Departmental Cost Containment Measures Inventory: Stationary and printing: The photocopying of documents for management structure meetings can be eliminated by making documents electronically available to participants.  Inventory: Other consumables: Electricity could be saved by switching off the lights and air conditioning units between 18:00 to 6:00 every day and switched off completely over weekends and public holidays. Coordination of provincial visits: When visits are planned to provinces and metros by various Chief Directorates it is important that they be coordinated.  Advertising: Advertising of posts below level 13 should only be done in the Government circular which is free of charge.

Challenges The current challenges include: Slow procurement processes within the Provinces and Municipalities; Poor cash flow management by both Provinces and Municipalities; Poor programme and project planning and alignment between the Provinces and Municipalities; Non-approval of beneficiaries by banks due to credit records and affordability; Poor or slow performance by contractors; and Slow delivery due to protracted community consultation and inclement and adverse weather conditions.

Challenges Reduction in the Departmental Operational Budget; Increased pressures on the National Department to improve monitoring, oversight and evaluation ; Increased and intergovernmental coordination and alignment responsibilities for the national sphere ; Non-approval of beneficiaries by banks due to credit records and affordability affecting the FLiSP programmes; The lack of municipal medium and long term planning for bulk and link services The lack of clear and decisive action within Provinces and Municipalities to proactively respond to the effects and impacts of urban migration

Current Measures To Improve Departmental Performance The Departmental organisational structure is being revised to ensure that the s government strategy and related planned outcomes is achieved. The Department has reviewed its outputs and targets matrix and is now reporting on: 36 Strategic Objectives, that has 96 Indicators The rationalisation allows for improved and will bring much needed efficiencies in performance and Monitoring. A much extensive strategic and planning process will be undertaken during the period leading up the approval of the budgeting to align budgets against strategy. Improved alignment of strategies of the entities of the Department with the Departmental and Government mandates and strategies. Confidential

Current Measures To Improve Departmental Performance The Department is currently undertaking a process to develop a White Paper on Human Settlements and related legislation and regulations attached thereto. The Department is in the process of undertaking an process to review and revise the application of the supply chain management process to improve value for money but also eradicate collusion and corruption which may exist in the systems and this includes with human settlement delivery chain including the municipal and provincial spheres. A comprehensive study is being undertaken to analyze the current subsidy quantum in order to improve short, medium and long term financial as well as socio-economic sustainability of funding being made available. The Minister has issued a directive that the consolidation of the Human Settlements Development Finance Institutions be expedited, in order to allow for improved leveraging and extension of the current funding sources for housing and human settlements Confidential

Mitigation Measures Appointment of appropriate built environment professionals and technical expertise to assist and improve provincial and municipal programme and project performance, in conjunction with entities; Project facilitation task team established to fast track planning issues; Active and response national oversight and intervention in planning, programme and project planning; and Ensuring appropriate project readiness assessments and programme and project pipeline planning over the medium to long term – 10 to 15 year time frame planning

Mitigation Measures The Department is in the process to discussing with the National Treasury to allow for redirection of funding within the current human settlements and housing envelope to allow for the Department to meet its operational and administrative responsibilities; The Department has requested a redirection of approximately R100m within the current financial year to allow for the supplementing the capacity and technical human resources of the Department. The approval within the frameworks within the Mining Town allocation to allow for application for bulk and link infrastructure as well as inter-town and city movement based on performance

Mitigation Measures The Department is in the process to improve alignment of outputs, funding and outcomes between the Affordable Rental Programme and the Community Residential Unit Programme to ensure that eradication of the current hostels; A key issue is the improvement between funding streams to allow for integration and mainstreaming of hostel eradication into particularly the integrated residential programme and the social and rental housing programme.

End