1. Department of Performance Monitoring and Evaluation
The Presidency
Department of Performance Monitoring and Evaluation
Performance of the Department of Human Settlements towards the Achievement of Outcome 8
Presentation to the Human Settlements Portfolio Committee
National Assembly
20 October 2011

2. Introduction
The President created the Department of Performance Monitoring and Evaluation in the Presidency to:
Facilitate the development of plans for the cross cutting priorities or outcomes of government and monitor and evaluate the implementation of these plans
Monitor the management performance of individual national and provincial government departments and municipalities, in partnership with the Offices of the Premier, which will be starting in November 2011
Monitor frontline service delivery in partnership with the Offices of the Premier
Carry out evaluations
Promote good M&E practices in government
Implement interventions to address blockages in delivery, in partnership with delivery institutions

3. The outcomes Aim is to improve service delivery by:
Introducing whole-of-government planning linked to key outcomes, clearly linking inputs and activities to outputs and the outcomes
Implementing the constitutional imperative for cooperative governance by negotiating inter-departmental and inter-governmental delivery agreements for the outcomes
Increasing strategic focus of government
Making more efficient and effective use of limited resources through introducing more systematic monitoring and evaluation

4. The 12 outcomes BASIC EDUCATION: Quality basic education
HEALTH: A long and healthy life for all South Africans
SAFETY: All people in South Africa are and feel safe
EMPLOYMENT: Decent employment through inclusive economic growth
SKILLS: Skilled and capable workforce to support an inclusive growth path
ECONOMIC INFRASTRUCTURE: An efficient, competitive and responsive economic infrastructure network
RURAL DEVELOPMENT: Vibrant, equitable, sustainable rural communities contributing towards food security for all
INTEGRATED HUMAN SETTLEMENTS: Sustainable human settlements and improved quality of household life
LOCAL GOVERNMENT: Responsive, accountable, effective and efficient Local Government system
ENVIRONMENT: Protect and enhance our environmental assets and natural resources
INTERNAL AND EXTERNAL RELATIONS: Create a better South Africa, a better Africa and a better world
PUBLIC SERVICE: An efficient, effective and development oriented public service and an empowered, fair and inclusive citizenship

5. Delivery Agreements
A Delivery Agreement is a charter between all the key stakeholders who need to work together to achieve the outcome.
Performance Agreements between President and outcome coordinating Ministers requested them to work with other key stakeholders to develop detailed Delivery Agreements for each outcome
Delivery Agreements describe key activities, sub-outputs, outputs, indicators, and targets , identify required inputs and clarify roles and responsibilities of each key body which contributes to the achievement of the outcome
Performance Agreements between President and other Ministers also requested them to work with the coordinating Ministers on relevant delivery agreements
New National Treasury guidelines for strategic plans indicate that departments’ strategic plans and APPs must reflect their commitments to delivery agreements – will be monitored by the Auditor General and should also be monitored by Parliament

6. Department of Human Settlements role in relation to the Outcomes
Outcome 8: Integrated human settlements: sustainable human settlements and improved quality of household life
Output 1: Accelerated delivery of housing opportunities
Output 2: Access to basic services
Output 3: Land assembly and effective utilisation
Output 4: Improved affordable property market

7. Overall progress against the outcomes
Output 1: Accelerated delivery of housing opportunities
Colour Code
1.1 Upgrading of households in informal settlements with access to secure tenure and basic services
1.2 Implementation of the National Upgrading Support Programme for informal settlements
1.3 Provision of well- located rental accommodation units by 2014
1.4 Accreditation of 27 municipalities to perform the housing function
Output 2: Access to basic services
2.1 Household access to basic water should be 100% by 2014
2.2 Household access to basic sanitation should be 100% by 2014
2.3 Household access to refuge removal should be 75% by 2014
2.4 Household access to electricity should be 92% by 2014
Sub outputs which are on track and require no major interventions
Sub outputs which are either proceeding slower than targeted or which face impediments requiring intervention
Sub outputs which are either substantially behind timelines or which face impediments which will require urgent intervention at the Ministerial or Cabinet level

8. Output 3: Land assembly and effective utilisation
Colour Code
3.1 Release of ha of land vested nationally or provincially for human settlements development
3.2 In creased urban densities to 60units/ha
3.3 An approved land use management framework
Output 4: Improved affordable property market – housing finance opportunities created
4.1 Establishment and implementation of a Mortgage Insurance Guarantee Scheme to deliver 36% ( ) of the housing finance opportunities
4.2 Revised Finance-lined Individual Subsidy Programme (FLISP) to responsive to the challenges in the affordable (Gap) market
4.3 Formulation of a policy position regarding the introduction of a long term fixed interest rate instrument
Mortgage and non mortgage loans delivered to the target market – amounting to 22% of the housing finance opportunities
4.5 NURCHA to issue loans to facilitate construction finance of 6686 units within the affordable housing market (1.1% of the housing finance opportunities)
4.6 Housing finance opportunities contributed by sector stakeholders to together with the FLISP initiative provide for the remaining 41% of the housing finance opportunities

9. Progress reported up to March 2011
Progress on Outcome 8 Output 1: Accelerated delivery of housing opportunities
Sub-output
Targets
Progress reported up to March 2011
DPME comments
1.1 Upgrading of households in informal settlements
Upgrading of households in informal settlements with access to secure tenure and basic services by 2014
2010/2011 target: Upgrading of households in informal settlements with access to secure tenure and basic services
A total of serviced sites were delivered in 2010/2011, exceeding the annual target and representing 13.1% of the 2014 target
In addition households were provided with top structures
In first quarter of 2011/12 financial year a further serviced sites were delivered
Good progress has been made with exceeding the initially low target of households in the first financial year. The targets are progressively higher over the outer years.
However, these targets could be at risk if provincial budgetary commitments are not made to mach the higher targets in the outer years.
Meeting the targets in 2014 would also require direct management and dedicated technical support for provinces and municipalities by the NDHS.
A Programme Management Unit to support informal settlement upgrading is in the process of being established in the NDHS, and is to be encouraged. A Task Team on Informal Settlement Upgrading has also been established which will also assist in rationalising the efforts of several agencies (including non governmental) so as to optimise programme rollout.
Furthermore, reaching planning/agreements on the funding alignment (between Urban Settlement Development Grant and Human Settlement Development Grant), and targets for informal settlement upgrading between provinces and municipalities are critical. There is also need to align support for the upgrading of informal settlements with municipal development plans.
Lastly the mapping and categorisation of all informal settlements in the 49 priority municipalities (with the largest informal settlement backlogs) should be completed to improve the spatial understanding of the state of settlements, how upgrading will be staged, financed and managed.

10. Progress reported up to March 2011
Sub-output
Targets
Progress reported up to March 2011
DPME comments
1.2 Implementation of the National Upgrading Support Programme for Informal Settlements
49 municipalities to be supported by the NUSP programme
9 Provincial NUSP structures established by end of 2011/12
NUSP has interacted with 40 of the 49 municipalities
Gauteng and Northern Cape have agreed to establish provincial NUSP structures
Good progress has been made by the NUSP programme in engaging 40 municipalities with capacity building support frameworks and establishing the 2 provincial NUSP structures within the 2010/2011 financial year.
However, the agreement with Cities Alliance and World Bank to provide technical expertise lapsed on June This requires that the National Department of Human Settlements (NDHS) establish new contracts with the NUSP core team to ensure programme scale up. Furthermore the NDHS should ensure that sufficient funding is available for the roll out of the programme.

11. Progress reported up to March 2011
Sub-output
Targets
Progress reported up to March 2011
DPME comments
1.3 Provision of well located rental accommodation units by 2014:
Social Housing Units
Communal Residential Units
8 497 Institutional Subsidy units
Private rental units
Targets for 2010/11:
(1) 2917 Social Housing Units
(2) 3000 Communal Residential Units
(3) 513 Institutional Units
1)A total of 2918 Social Housing Units were delivered
2)A total of 5168 Communal Residential Units were delivered
3)A total of 569 Institutional units were delivered
In first quarter of 2011/12 an additional 1411 social housing units, communal residential units and 49 institutional units were delivered.
The Department has met the targets for the 2010/11 financial year.
However, budgets have not yet been secured to meet the targets for social housing, putting the 2014 targets at risk.
There needs to be policy and programme adjustments to bring the communal residential units and institutional subsidy programmes under the Social Housing Regulatory Authority’s ambit of responsibility. This is necessary to ensure regulatory oversight.
The Department also needs to complete a policy framework for private rental, including backyard rental housing.
Furthermore, the Department has to develop a clearer monitoring model to understand the contribution of the private sector to the target rental market.
DPME is encouraged by the Department’s process to establish a programme management unit and a rental housing task team. This will draw all the role players into a joint effort to achieve the overall target.

12. Progress reported up to March 2011
Sub-output
Targets
Progress reported up to March 2011
DPME comments
1.4 Accreditation of 27 municipalities to perform the housing function
Accredit 6 metros to level 3 by 2014
Accredit 21 additional municipalities to level 2 by 2014
6 Metropolitan Municipalities and 2 District Municipalities received their level 2 accreditation certificates in March 2011
In the first quarter of the 2011/12 financial year 5 municipalities have been assessed by the Municipal Capacity and Compliance Panel and a further 11 have been scheduled for assessment
Given the accreditation of 6 municipalities in 2010/11 to level 2 as well as the recent assessment processes carried out it is likely that the 2014 targets will be met.
However , the Department needs to resolve issues related to human resources, systems (Housing Subsidy System) and related budgets from provinces to municipalities in order to confidently allow for the accreditation targets to be met.

13. Progress on Outcome 8 Output 2: Improved access to basic services
Sub Output
Target
Progress: Up to March 2011
DPME Comments
2.1 to 2.4 Improved access to basic services
Household access to basic water should be 100% by 2014
Household access to basic sanitation should be 100% by 2014
Household access to refuge removal should by 75% by 2014
Household access to electricity should be 92% by 2014 – 2010/2011 target (provide electricity to households)
95% of households have access to basic water
82% of households have access to basic sanitation
71.3 % of households have access to refuge removal
Out of targeted households were electrified
It needs to be noted that the Department of Co-operative Governance is co-ordinating these sub-outputs. Other line departments are, however, responsible for implementing the programmes to realise the targets.
It appears that good progress has been made against the targets set for 2014.
However, the reported progress is against particular departmental norms. Different departments are using different definitions (norms and standards) to measure access to basic services. This means that there may be different calculations of the extent of the backlogs and the progress made to date.
There is a need for this to be addressed by the relevant departments. The Sustainable Human Settlements and Basic Services Task Team that has met on more than one occasion, but has had limited success in addressing these matters.
The July Cabinet Lekgotla decisions regarding need for more co-ordinated and accelerated infrastructure delivery in priority areas will hopefully reshape the programme and activities of the Sustainable Human Settlements and Basic Services Task Team. But for this to occur the Joint Work Programme of the Task Team will have to be reviewed.
The report requested by the South African Human Rights Commission on the national state of sanitation will also assist in determining a common baseline for the rolling out of sanitation programmes.

14. Progress on Outcome 8: Output 3: Land assembly and effective utilisation
Sub output
Target
Progress up to March 2011
DPME Comments
3.1 Release of land vested nationally or provincially for human settlements development
Release of hectares of land by 2014
The Housing Development Agency (HDA) has acquired 309 properties (812,8 ha) including 548 ha from Transnet
An additional ha has been indentified for release to the HDA in 2011/2012.
(A total of ha of private and public land has been acquired by Provincial Departments of Human Settlements. This has not been clearly disaggregated between public and private land).
While there has been progress in identifying and acquiring properties, there is concern that the Department of Public Works and other associated public land holding agencies are not prioritising the processing of land identified with HDA quickly enough.
The Department should disaggregate the land acquired by provincial departments into that acquired from public land holdings and that acquired from private land holdings.
There is furthermore a need for the HDA to conclude technical support arrangements with provinces and municipalities for the obtaining of land and the finalisation of the land financing agreements amongst government departments.
3.2 Promote increased urban densities
Increase densities to on average 60units/hectare by 2014
The 548 ha acquired from Transnet by the Housing Development Agency (HDA) is from Transnet’s non core properties located at railway station precincts. It is anticipated that this land will be developed based on medium to high densities.
A policy framework setting out the density pre-conditions for land released especially in metros and secondary cities still needs to be finalised by the Department. A monitoring mechanism to measure the density performances has to be developed and put in place.
The current density performances of well located BNG type mixed income projects will have to be evaluated.

15. Sub output Target Progress up to March 2011 DPME Comments
3.3 An approved land use management framework
Approved Land Use Management Act
Human Settlements policy regarding LUM
The Department provided comments in the Spatial Planning and Land Use Management Bill released for public comments by the Department of Rural Development and Land Reform (DRDLR)
Whilst the DRLDR is responsible for preparing the legislation and regulations, a policy position by the NDHS responding to the new policy framework and regulations should be developed.

16. Progress on Outcome 8: Output 4: Improved affordable property market
Sub-output
Targets
Progress as reported up to end of March 2011
DPME comments
4.1 Development and implementation of a Mortgage Default Insurance Scheme (MDI)
Develop and implement the Mortgage Default Insurance Scheme to contribute 36% ( ) of the targeted housing finance opportunities by 2014
Approvals from the National Housing Finance Corporation (NHFC) Board and stakeholders have been attained.
Meetings with key stakeholders were initiated and first round of consultative/advisory forums completed.
Commercial Banks have confirmed their interest in the initiative.
Final approvals are needed from the National Treasury and Minister of Finance. Requests for these approvals have been submitted.
Application for Financial Service Board approval and South African Reserve Bank recognition to receive attention in next months
Not withstanding progress in the development of the MDI we are concerned that the level of progress may not allow the 2014 target to be achieved.
Banks still have to agree that they will use the programme to address the affordable housing finance challenges and the administrative arrangements and schedules for the use of the instrument have to be agreed upon.
4.2 Revised Finance-Linked Individual Subsidy Programme (FLISP) to respond to the challenges in the affordable market
Revised Finance Linked Individual Subsidy Programme
To deliver a contribution towards the delivery of housing finance opportunities by 2014
The revised FLISP policy was still in the process of being finalised in 2010/2011.
However, the revised FLISP policy was approved in July 2011 and is in the process of being prepared for inclusion in the Housing Code.
Despite progress in revising the programme it still has to be launched.
Take up with the banks still has to be negotiated and programme scheduling and administrative arrangements agreed upon.

17. Progress reported up to March 2011
Sub-output
Targets
Progress reported up to March 2011
DPME comments
4.3 Formulation of a policy position regarding the introduction of a long term fixed interest rate instrument
Policy position in place by 2014
No progress has been made as this initiative is dependant on the success of the Mortgage Default Insurance Scheme
Given that the policy will not be concluded by 2014 this will impact negatively towards achieving the target.
We believe an early policy review should be undertaken in anticipation in developing a fully fledged instrument.
mortgage and non mortgage loans delivered to the target market by the DFIs (22% contribution towards the housing finance opportunities)
1929 mortgage loans granted by the National Housing Finance Corporation (NHFC) by 2014
incremental loans granted by the National Housing Finance Corporation (NHFC) by 2014
housing units contributed by wholesale funding by the NHFC by 2014
housing units leveraged with other funders by the NHFC by 2014
40152 Incremental loans granted by the Rural Housing Loan Fund (RHLF) by 2014
709 mortgage loans were granted by the NHFC in 2010/2011. In the first quarter of 2011/12 the NHFC delivered an additional 795 mortgage loans, (77% of target has been delivered)
1613 incremental loans were granted by the NHFC in 2010/ In the first quarter of 2011/ incremental loans were granted (13% of 2014 target has been delivered
3545 housing units – were contributed by wholesale funding by the NHFC in 2010/ In the first quarter of 2011/12, a further 7176 units from whole sale funding were provided (27% of 2014 target has been delivered)
1460 housing units were leveraged with other funders by the NHFC in 2010/ In the first quarter of 2011/12 a further 2214 units leveraged with other funders have been provided (28% of the 2014 target has been delivered).
incremental loans were granted by RHLF in 2010/2011. The RHLF delivered an additional incremental loans in the first quarter of 2011/2012. (The target has already been exceeded by 8938 loans)
We were initially concerned about performance based on the 2010/11 progress reports. However significant progress in the first quarter of 2011/12 indicates that the Development Finance Institutions (DFIs) could be on target to realise the targets.
The rationalisation of the DFI’s into a single entity and identifying the stronger programmes should afford further sector impetus and will support a concerted engagement with the banks.
The role of the DFI’s in providing support to provinces and municipalities to frame and package integrated projects should be strengthened.

18. Progress reported up to March 2011
Sub-output
Targets
Progress reported up to March 2011
DPME comments
4.5 National Urban Reconstruction and Housing Agency (NURCHA) to issue loans to facilitate construction finance within the affordable housing market
Construction finance loans issued for the construction of affordable housing units by 2014
The National Urban Reconstruction and Housing Agency (NURCHA) has issued 14 loans amounting to units in 2010/2011
Due to its recapitalisation (R350 million) and the additional investment from a private investor (Cadiz) of R125 million ,it’s performance has started to improve in the 2011/2012 financial year.
In the first quarter of 2011/2012 NURCHA issued 5 loans involving units to developers
Due to the recent recapitalisation process great progress has been made with regards to this sub-output.
However , care should be taken with the DFI rationalisation to ensure that it does not disrupt this programme.

19. Progress reported up to March 2011
Sub-output
Targets
Progress reported up to March 2011
DPME comments
4.6 Housing finance opportunities contributed by sector stakeholders
Housing finance opportunities contributed by sector stakeholders to together with the FLISP initiative provide for the remaining 41% of the housing finance opportunities
The Department is not adequately monitoring and reporting the progress of banks making loan finance available in the affordable housing market.
The process of rationalising the Development Finance Institutions’ (DFIs) needs to include a focus on putting in place arrangements to enable private sector participation.
The NDHS needs to use the Home Loan and Mortgage Disclosure Act as well as existing reports of financial institutions to come to grips with the current trading performances in the gap market.
Engagement with public, private, social, community and labour stakeholders should be arranged to occur in parallel to the ongoing process to rationalise the DFIs.
A more direct engagement with the Private Finance Sector regarding the affordable housing targets may need to be asserted.
This sub-output is important as all the other initiatives of output 4 still leaves up to 41% of the target to deliver housing finance opportunities unresolved.

20. Conclusions
The Delivery Agreements provide for sector -wide engagement processes for co- production of human settlement development. The Department should use these more to ensure that targets are met.
DPME and DHS are jointly initiating an evaluation of Outcome 8 interventions :
Informal Settlements Upgrading;
Rental/Social housing;
Mixed Income with Affordable Housing Loans
So as to:
Revise plans to produce more equitable and efficient spatial outcomes
Reconceptualise policy and programme environment
Reframe fiscal flows
Rationalise/build institutional capabilities
Frame IGR performance agreements
Make recommendations for improving programme management and oversight

21. Drawing on the NPC’s Material Conditions Diagnostic for a Sustainable Human Settlement Vision
A network of matured well established cities is positive for a redirected human settlements programmatic approach
However our cities and towns are spatially inefficient and unequal and there is inertia in spatial form
Costs of inefficiency on economy and households (>20% of household expenditure)
Migration patterns are complex making planning for human settlement development challenging
Urban informal settlements are the primary locations for where the urban and rural meet
Because they will continue play this role we need to focus on the management and upgrading of these settlements
New entrants into cities in the pursuit of work opportunities often require other housing support options i.e. rental programmes
At the lower end there is still a total reliance on the subsidy programme
The policy shift towards a sustainable human settlement approach needs to be complemented by more detailed work on costs, institutional capacities, and funding arrangements. This then has to be developed into appropriate support programmes.

22. and delivery agreement guide
Thank you
Go to for PME documents including narrative guide to outcomes approach, outcomes documents
and delivery agreement guide 22