13 may 2008

FINANCIAL AND NON FINANCIAL INFORMATION – 2007/08 FINANCIAL YEAR AND THE BUDGET FOR 2008/2009 MICRO PRIORITIZATION

13 May 2008

TABLE OF CONTENTS

• EXPENDITURE ON CONDITIONAL GRANTS• NON FINANCIAL INFORMATION

• MICRO PRIORITIES FOR 2008/2009 BUDGET

EXPENDITURE ON CONDITIONAL GRANTS

QUARTER EXPENDITURE PAYMENT SCHEDULE VARIANCE % VARIANCE

1ST Quarter 386,533 330,535 55,998 17%

2nd Quarter 456,070 633,232 (177,162) (28%)

3rd Quarter 781,116 604,232 176,884 29%

4th Quarter 1,005,794 979,224 26,570 3%

Subtotal 2,629,513 2,547,223 82,290 3%

EXPENDITURE ON CONDITIONAL GRANTS CONTINUED

Expenditure vs Transfers

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Apr-07

May-07

Jun-07

Jul-07 Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Month

Ran

d (R

'000

)

Actual Expenditure

Cashflow - Payment Schedule

EXPENDITURE ON CONDITIONAL GRANTS CONTINUED

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08

Actual Expenditure

Monthly Average

NON FINANCIAL INFORMATION

PROGRAMME SUB PROGRAMME

PERFORMANCE MEASURE

OUTPUT YEAR TO DATE

APR – DEC 2007

OUTPUT

JAN – MAR 2008

Housing Development Implementation

Individual Housing Subsidies Number of properties transferred or bonds registered

49 44

Number of beneficiaries approved 49 44

Number of sites serviced 49 44

Number of units completed 49 44

Housing Finance Linked Number of properties transferred or bonds registered

91

Number of beneficiaries approved

91

Project Linked Subsidies Number of serviced sites 16,212 393

Number of houses built and delivered to beneficiaries 7,341 410

Number of projects approved 61 11



PERFORMANCE MEASURE

OUTPUT YEAR TO DATE

APR – DEC 2007

OUTPUT

JAN – MAR 2008


Project Linked Subsidies Number of subsidies represented by approved projects 11,718 4,218

Number of houses completed 14,402 5,921

Phase 1 – Planning and Services

Number of stands serviced and delivered 2,656

Phase 2 – Housing Consolidation Number of houses 5,948

People’s Housing Process Number of subsidies represented by approved projects 3,210

Number of houses completed 1,270 569

Informal Settlement Upgrading

Number of units transferred 912

Number of serviced stands 1,018 6,452




PERFORMANCE MEASURE

OUTPUT YEAR TO DATE

APR – DEC 2007

OUTPUT

JAN – MAR 2008


Consolidation Subsidies Number of houses completed 7,113 1,927

Affordable State Rental Accomodation

Number of units upgraded 225

Number of units converted 1,249

Housing Property Management Maintenance

Number of houses maintained 51 213

Sale and Transfer of Rental Stock

Number of properties transferred 233

Number of properties sold 76

Enhanced Extended Discount Benefit Scheme

Number of residential properties transferred to households 9,403 2,924



PERFORMANCE MEASURE

ANNUAL TARGET

2007/2008

ACTUAL DELIVERY

2007/2008

Mixed Housing Development

Eradication of Informal Settlement

Project Linked Subsidies Number of subsidies represented by approved projects 31,794 16,611


Individual Subsidies Number of sites serviced 352 93

Number of properties transferred

70 91

Phase 1 – Planning and Services

Number of stands serviced and delivered 4,107 2,656

Phase 2 – Housing Consolidation Number of houses 6,384 5,948

People’s Housing Process Number of houses completed 1,504 1,270

Informal Settlement Upgrading

Consolidation (CBP)

Number of serviced stands 1,660 7,470





PERFORMANCE MEASURE

ANNUAL TARGET

2007/2008

ACTUAL DELIVERY

2007/2008

Alternative Tenure

Housing Assets Management

Affordable Rental Accommodation

Number of units upgraded 1,920 225

Number of units converted 886 1,249

Backyard Rental Number of beneficiaries assisted

750 761

Transfer of Rental Stock Number of properties transferred

4,004 233

Sale of Rental Stock Number of properties sold 300 76

Devolution of Rental Stock Number of houses and properties devolved to municipalities

950 98

Discount Benefit Scheme Number of residential properties transferred to households

32,500 10,792

TOTAL ACHIEVEMENT

Serviced stands achieved: 26,830

Houses Delivered: 63,487

Gauteng Province Micro Priorities for 2008/2009 Financial Year

PORTFORLIO COMMITTEE ON HOUSING

CONTENTS1. INTRODUCTION

2. HOUSING DELIVERY IN THE CONTEXT OF GPG STRATEGY

3. 2008/9 STRATEGIC OBJECTIVES

4. CURRENT PLANNING CONTEXT

5. STRATEGIC ANALYSIS OF THE OPERATIONAL ENVIROMENT

6. HOUSING DELIVERY TARGETS

7. BUDGET CONSIDERATION

8. CONCLUSION

1. INTRODUCTION

• In developing our strategy we recognized that the emphasis of housing delivery in Gauteng and indeed South Africa had moved beyond the issue of numbers to the enhancement of quality and building of thriving communities while at the same time trying to turn around the apartheid spatial development patterns that we had inherited

• We take cognizance of the June 2007 Provincial Exco Lekgotla resolutions which emphases the need to accelerate service delivery while reducing the cost of doing business

• We also note our achievements informed by the GPG Mid-term report which provides an indication that the department is on track to achieve its targets for the 5 YEAR TERM

2. HOUSING DELIVERY IN THE CONTEXT OF GPG STRATEGY

Sustainable Economic

development

Growth and Development Strategy

Social Development Strategy

Sustainable Development Strategy

Key Provincial Strategies

Gauteng Provincial

Government Departments

GPG 5 year plan of action

Susta

ina

ble

Other Provincial strategies

HRD Strategy

Gauteng Province

Economic growth and job creation

Reduced poverty and safe, secure and sustainable communities

Deepened democracy, nation building and citizenship

Healthy, skilled and productive people

Effective, responsive and caring government

Sustainable Economic

development

Growth and Development Strategy

Social Development Strategy

Sustainable Development Strategy

Key Provincial Strategies

Gauteng Provincial


Gauteng Provincial


GPG 5 year plan of action

Susta

ina

ble

Other Provincial strategies

HRD Strategy

Gauteng Province

Economic growth and job creation

Reduced poverty and safe, secure and sustainable communities

Deepened democracy, nation building and citizenship

Healthy, skilled and productive people

Effective, responsive and caring government

3. 2008/9 STRATEGIC OBJECTIVES

• To consolidate the Department’s efforts towards the conclusion of the strategic plan cycle

• To develop strategic interventions aimed at optimising performance (accelerating delivery)

• To realign the Department’s interventions to the strategy, housing demand, current back logs, budget and resources available

• To develop a basis for the formulation of plans that will be implemented by the Department beyond the current strategic plan cycle – Vision 2014

4.CURRENT PLANNING CONTEXT HOUSING OUTSTANDING BUSINESS BASED ON 2004/9 DEPT PRIORITIES

AND LEKGOTLA RESOLUTIONS

1. Mixed Housing Development-acceleration of land acquisition to promote new integrated settlements-reduction of long planning process in order to meet government priorities-acceleration of eradication of apartheid settlements -increased involvement of private sector investment

2. Eradication of Informal Settlements-more resources to meet 2014 targets- utilization of Alternative Building Technology to fast track development and usage of other energy sources-enhancement in the implementation of By-Laws-managing implications of rapid in-migration/urbanisation-de-linking subsidy from beneficiaries & other policy review

CURRENT PLANNING CONTEXT CONT…

3. Alternative Tenure-Conclude and implement strategy for lower income rental-Extend backyard rental programme to more municipalities-Mobilise alternative funding model for hostel redevelopment; upgrade 60 hostels-Role of SHI’s alternatives to SHI’s

4. Urban Renewal Programme-Increase pace of development -massify housing and infrastrucuture development-ensure local economic development

5. 20PTP-Synchronise budget provision across spheres of government-Drive integrated planning-Ensure targets and Premier’s timeframes are met

5. STRATEGIC ANALYSIS OF THE OPERATIONAL ENVIROMENT

Difficult conditions within the environment which is characterised by the following:

• Access to well located land• An acute housing demand which is exacerbated by urbanization and in

migration• Severe delivery capacity constraints i.e. material supply constraints,

capacity pressures on the construction industry, institutional constraints of the State

• A lack of systems aimed at up-scaling alternative building technologies as well as supporting rapid delivery

• A legal framework which is “unresponsive” to the needs of the Department i.e. a legislative framework which is largely compliance and procedurally based

• A constrained housing development process which requires that beneficiaries are linked to projects/ units ahead of actual delivery

• Create an enabling environment for the creation of integrated, sustainable human settlements.

Sub-Programme Key Measurable Objectives Performance MeasuresYear 1 2008/2009(target)

Mixed Housing Development and Formal Housing

To focus on the development of Flagship Projects, well located, integrated, higher density housing

Number of stands built 30000

Number of houses built FLISP 2500PROJ LINKED 27500

Eradication of Informal Settlement

To formalise and eradicate Informal Settlements No of subsidies approved(CBP, PHP, Formal Housing)

Number of houses built

Number of stands serviced

35406

26000

Alternative Tenure Provision of alternative tenure options through rental accommodation to alleviate the backlog and addressing the non-qualifiers

Number of hostel units

Number of social housing

Number of Backyard Rental

9500

4500

1000

Urban Renewal Coordination of high visibility projects in the historical rundown localities

Bekkersdal

Alex

Evaton

60 projects

90 projects

70 projects

20 PTP Rehabilitation of old townships for socio economic growth

Renovations/ Refurbishment of facilities

150 projects

6. HOUSING DELIVERY TARGETS

• As we strive towards the realisation of the 2014 vision, as a Department

we have identified issues that need immediate attention such as;* reducing the cost of doing business with government, * improving the commitment and upgrade skills of civil servants,

* improving communication with stakeholders and the public and focus all our projects to fight against poverty and unemployment.

• To this end, the Department had restructured its organisational structure and design with the view to strengthening it’s support plan in terms of fast tracking delivery from an integrated, all-inclusive approach.

• Based on the Conditional Grant allocation received from National, it is evident that the Conditional Grant allocation has grown substantially over the past two years, as well as into the MTEF period.

• However, the operational budget, in order to support the payment towards compensation of employees in terms of new recruits, has not grown in proportion to that of the Housing Subsidy Grant.

7. BUDGET CONSIDERATION

• Serious intervention between the National Department of Housing,

National Treasury, Provincial Treasury and Housing Sector at large would need to review the Baseline Allocation with regards to the operational Budget in order to have a meaningful inset on Housing Delivery and the quality thereof.

• Whilst this formula is outdated and not in line with the new Comprehensive Plan for the Department of Integrated Sustainable Human Settlements, the National Department of Housing is in the process of reviewing the formula for possible implementation in the 2009/2010 financial year.

• However, in response to the challenges of meeting one of the key political pronouncement of eradicating Informal Settlements by 2014, the financial forecasts and funding trend has indicated that this may not be achieved. Funding allocation of three times the existing rate would need to be availed in order to achieve the said target of 2014.

• Within the context of the Gauteng Department of Housing the forecasts resulting from possible scenarios is depicted hereunder. The Department has worked out three scenarios on the basis of which the priorities of the Department can be delivered, namely:

BUDGET CONSIDERATION

9. CONCLUSION

• Continuous engagement with both municipalities and private sector on resource mobilization needs to tightened.

• Greater emphasis to be dedicated to programmes that would yield high impact, high visibility housing delivery.

• Intensification of service delivery should match with greater spending and not conform to the indicative allocation.

• Continue to operate outside the confined current status quo such as de-linking beneficiaries to the product.

• Our situation demands a unique approach to respond to the needs of the majority of our citizens who have been disenfranchised

• We are confident that our government is on the right track in crafting mechanisms to ensure adequate shelter for deserving people of Gauteng.

THANK YOU

Questions and/or Points of Clarification

13 may 2008

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