1. KZN DEPARTMENT OF HUMAN SETTLEMENTS
PRESENTATIONS TO HUMAN SETTLEMENTS PORTFOLIO COMMITTEE – PARLIAMENT
KZN DEPARTMENT OF HUMAN SETTLEMENTS
2010/11 BUDGET AND PLANS
25 MARCH 2010

2. CONTENTS Vision Mission Strategic objectives Departmental Programmes
Budget 2010/11 MTEF
Service Delivery Targets
Middle-income Property Market Intervention
Key Assumptions
Risks

3. Departmental Vision and Mission
Innovative champions of change in the housing sector to improve the quality of life for all in KwaZulu Natal
MISSION
To create an enabling environment for the development of sustainable human settlements in partnership with stakeholders to improve the quality of life for all in KwaZulu-Natal 3

4. Strategic Objectives Accelerating Rural Housing Development;
Eradication of slums in KwaZulu-Natal;
Strengthening governance and service delivery;
Ensuring job creation through delivery of sustainable human settlements;
Accelerating the hostel redevelopment and upgrade programme;
Creating rental / social housing opportunities;
Building the capacity of Housing stakeholders;
Promotion of homeownership;
Provision of housing for vulnerable groups including those affected by HIV/AIDS;
Provision of housing for military veterans belonging to the non-statutory forces; and
Fighting fraud and corruption in order to eliminate wastage and enhance effective service delivery.
Facilitation of access to affordable housing for the gap/middle-income group 4 4

5. ALIGNMENT WITH PROVINCIAL/NATIONAL PRIORITIES5 5

6. Departmental Programmes
The services rendered by this department are categorised under
4 programmes, which conforms to the generic structure for the
Housing Sector, namely:
Programme 1 – Administration
Programme 2 – Housing Needs, Research and Planning
Programme 3 – Housing Development
Programme 4 – Housing Asset Management, Property Management 6 6

7. PROGRAMME 1: ADMINISTRATION
The objectives of this programme are to:
Identify and eliminate bottle-necks, as well as continuously improve the flow of financial, administrative and management information.
Strengthen governance and service delivery, address institutional and systematic constraints and identify and address risks in the housing delivery process.
Fighting fraud and corruption.
The programme has one sub-programme, namely corporate services (Office of the Head of Department; Office of the Chief Financial Officer; Officer of the Chief Operations Officer;
Strategic Housing Support; Corporate Services; Human
Resource Management) 7 7

8. PROGRAMME 2: HOUSING PLANNING & RESEARCH
The objective of this programme are to:
Facilitate integrated planning for the creation of sustainable human settlements, including geographic information system (GIS) support.
Capacitate stakeholders within the housing sector, with particular reference to local government sphere.
Develop, implement and maintain housing policies and strategies, and conduct research to enhance the delivery of sustainable human settlements in the province.
Manage and implement broad based black economic empowerment aimed at targeted groups (women, youth, vulnerable groups, emerging contractors, military veterans belonging to the non-statutory forces).
Provide municipal support and consumer education. 8 8 8 8

9. PROGRAMME 3: HOUSING DEVELOPMENT
The objectives of this programme are:
To provide subsidies to qualifying beneficiaries;
To provide support for disaster relief;
To facilitate installation of internal services;
To facilitate construction of houses;
To provide housing for military veterans;
To ensure that disabled people have access to Breaking New Ground (BNG) housing;
To ensure that the Finance-Linked Individual Subsidy Programme (FLISP) is implemented;
To facilitate the access to affordable housing for the gap/middle-income group. 9 9

10. PROGRAMME 4: HOUSING PROPERTY MANAGEMENT, ASSET MANAGEMENT
The objectives of this programme are:
To ensure housing assets are maintained.
To ensure efficient and effective transfer and sale of Housing Assets.
To promote, facilitate and regulate rental housing within the province.
To manage devolution of housing assets to municipalities.
To contribute towards the upgrade of hostels. 10 10 10 10

11. 2010/11 MTEF BUDGET 11 11

12. Summary of receipts & Payments

13. Summary of payments & estimates by programme

14. Summary of payments & estimates by economic classification

15. Equitable share allocation per programme15

16. Conditional grant allocation per subsidy instrument

17. BUDGETARY COMMENTS (1)
The annual growth rate in equitable share funding (2006/ /11) has been 6.8% while that of the conditional grant funding grew annually by 29% .
The equitable share budget of the Department was further cut by (4.2%) over the 2009/10 MTEF period.
A further cut of R9m effected in both 2010/11 and 2011/12 – this being a first charge prior years over-expenditure of R18m.
Of the Department’s operational budget R173m (68%) is committed to personnel expenditure. 17

18. BUDGETARY COMMENTS (2)
Capacity challenges within the Department may not be addressed, unless other funding avenues are explored.
Department has had to stop/delay implementation of a number of programmes (stakeholder capacity building programmes) due to financial constraints within the Province/Department.
Allocation per subsidy instrument informed by the priority programmes of the department.
This makes it extremely difficult for the Province to be able to service its conditional grant and therefore Operational Capital Budget Programme (OPSCAP) policy is being reviewed to allow more flexibility in allowing provinces to use it to support conditional grant spending. 18

19. SERVICE DELIVERY TARGETS19 19

20. Alignment of Service Delivery Targets with other departmental plans.
The Service Delivery Targets presented have been aligned with the final 2010/11 Conditional Grant Business Plan as well as the Multi-Year Housing Development Plan (APP) of the Department .
The SDI contained in the Budget Statements for the 2010/11 MTEF is based on the second draft conditional grant business plan and MYHDP and are therefore not aligned with the final plans as result of the following:
Misalignment of planning processes between the National Department of Human Settlements and that of the Treasury.
Late additional budget allocation.
Late finalization of the subsidy quantum at the National level.
Provincial Treasury is aware of this misalignment which will be adjusted in the 2010/11 Adjustments Estimate. 20 20

21. Programme 2: Service Delivery Targets

22. Summary of Service Delivery Targets
Programme 3 & 4:
Summary of Service Delivery Targets 22

23. Programme 3 & 4: Service delivery targets

24. Programme 3 & 4: Service delivery targets

25. Programme 3 & 4: Service delivery targets

26. Middle-income Property Market Intervention
The Department has signed Memoranda of Understanding with the following Financial Institutions:
ABSA in 2007
FNB in 2009 and
Standard Bank in 2010
Currently the Department is finalising Finance Linked Individual Subsidies with ABSA for 48 individuals amounting to R , and with FNB for 136 individuals amounting to R
Going forward, the Department envisages signing the MOU with Nedbank this year. Nedbank is financing part of a Project  in Empangeni  called Imbali Ingwelezane with 150 units reserved for the middle income group. FNB is also involved in this project and is financing 500 units in the middle income bracket. 26 26

27. Middle-income Property Market Intervention (2)
FNB has further confirmed the following projects:
A project in Umgungundlovu which has 1200 units reserved for the middle income group;
An integrated housing project in Hayfields in the Msunduzi Municipality comprising of 5000 units;
A project in Thornhill comprising of 2000 affordable housing units;
A project in Driefontein comprising approximately 6000 affordable housing units;
A project in Mbozamo comprising approximately 425 affordable housing units;
A project in Kwadukuza comprising approximately 2500 affordable housing units;
A project in Umhlatuze comprising approximately 450 affordable housing units; 27 27

28. Middle-income Property Market Intervention (3)
Standard Bank has recently launched the Woodmead project which is a fully integrated project, of which 40% is reserved for the middle income bracket. In addition, there is a project planned in Sunnyside Park, Amanzimtoti, consisting of 1100 units, of which 40% will be reserved for the middle income bracket. Standard Bank has also been appointed by Ethekwini Municipality to develop affordable housing on 3 land parcels in Kwa Mashu consisting of 2500 units and 4 land parcels in Chatsworth. 
The Department will partner with the financial institutions to ensure that the planned projects are successfully executed for the affordable housing market in line with the President's programme to assist this market with the National Guarantee Fund.  28 28

29. KEY ASSUMPTIONS
The key assumptions that underpin the plans of the Department are summarised below:
The budget and service delivery indicators are based on a subsidy for a minimum of a 40m2 house for new projects (i.e. projects approved from the 2007/08 financial year onward);
The National Housing Development Agency which will assist the department in dealing with the challenges relating to the availability of suitable land for housing development;
Adequate funding will be made in order to meet the 2014 clearance of slums target from within the baseline;
Human resource is the key component to achieve the desired outcomes of the Department. As a result, there is a need to budget sufficiently for personnel in terms of the newly approved structure, which takes into consideration the added responsibilities of the ‘Breaking New Ground’ (BNG) concept in housing and inflationary wage adjustments; and
Funding for the bulk infrastructure and basic internal services will be made available within the baseline (where required). 29 29

30. KEY RISKS 30

31. KEY RISKS (2) 31

32. Thank you