SELECT COMMITTEE ON FINANCE PUBLIC HEARINGS ON CONDITIONAL GRANT 20 MAY 2008 Presented by: MEC: MALEFETSANE MAFEREKA DEPARTMENT OF LOCAL GOVERNMENT AND HOUSING FREE STATE PROVINCE

Table of Contents Budget Allocation 2007/08: Grant Expenditure outcomes 2007/08 financial year: Grant Housing Delivery Expenditure outcomes 2007/08 financial year: Operational Budget 5. Cash flow 2007/2008 6. Service delivery challenges 7. New Approach

Budget Allocation 2007/08: Grant Amount Annual Appropriation R 653 293 000 Plus: Roll over funds R 215 000 Total Budget Allocation R 653 508 000 Less: Amount withheld R 100 000 000 Total Annual Budget R 553 508 000

Expenditure Outcomes 2007/08 Financial Year: Grant   Budget Spending Balance % Spending Maintenance R 4,350,000.00 R 0.00 0.00% Human Settlement R 4,300,000.00 100.00% Individual Support R 9,459,000.00 R 2,571,250.35 R 6,887,749.65 27.18% Project Linked Support R 436,129,000.00 R 414,946,209.13 R 21,182,790.87 95.14% Institutional Subsidies R 10,000,000.00 Emergency Housing Assistance Rural Housing Support Affordable State Rental (Hostel) Discount Scheme R 1,000,000.00 R 71,750.00 R 928,250.00 7.18% Peoples Housing Process R 69,570,000.00 R 51,270,736.29 R 18,299,263.71 73.70% Total R 553,508,000.00 R 473,159,945.77 R 80,348,054.23 85.48%

Housing Delivery The actual expenditure for 2007/08 delivered 12 501 completed housing units and R17 million thereof for land.

Expenditure Outcomes 2007/08 Financial Year: Operational Budget PROGRAMME 2: HOUSING Budget Expenditure Variance % Spending Compensation of employee 22,685 19,951 2,734 88% Goods and services 25,724 18,575 7,149 72% Transfer payments 4,163 3,678 485 Capital payments 2,028 842 1,186 42% Total 54,600 43,046 11,554 79%

Cash Flow 2007/08

Service Delivery Challenges Natural Causes e.g. Incessant Rains Shortage of staff e.g. Shortage of housing inspectors, program specific units like FLISP, Land restitution and exclusionary housing (compensation of employees vs housing grant 3%) Shortage of Building Material Incorrect information regarding the availability of land Re location of allocated projects by Municipalities from ready areas to areas that are not ready

Service Delivery Challenges cont… None sufficient supply of qualifying beneficiaries by Municipalities Housing Consumer Education Inconsistent application of policies and procedures Contract Management Project Management

New Approach Planning Regime Established an integrated planning and implementation Committee made up of all the relevant role players In the financial year 2008/2009 the department has ensured that the following activities are done by the Department as opposed to delegating them to third parties: Entering into Land Availability Agreements with Municipalities Appointing Service Providers to do Geo Technical Assessments reports on each project

New Approach cont… Paying Building Plans and other Municipal fees direct to Municipalities. Procuring land parcels for future housing developments There are 71 housing projects spread all over the Province expected to build 23500 housing units. Already 68 land availability agreements have been signed with Municipalities

New Approach cont… De-linking of Beneficiaries from Sites In terms of the policy on Integrated Residential Development Program (IRDP) from now henceforth as a Department we can build houses on approved sites that do not have approved beneficiaries at the time of construction This approach is going to increase the pace and speed of housing delivery

THANK YOU