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					DEPARTMENT OF HOUSING

PRESENTATION TO THE PORTFOLIO COMMITTEE ON HOUSING

ANNUAL REPORT 2004/05
Date: 26 October 2005

STRUCTURE OF THE PRESENTATION

1. 2. 3. 4. 5. 6. 7. 8. 9.

Aim, Vision and Mission of the Department Our Values Our Mandates Housing Legislation and Regulations Our Policy Framework Overview of Economic and Market environment Overview of Programme Financial Statement Programme Performance Conditional Grants

DEPARTMENT OF HOUSING
AIM The aim of the Department of Housing is to determine, finance, promote, coordinate, communicate and monitor policy in respect of housing and human settlement. Vision A nation housed in sustainable human settlements Mission To establish and facilitate a sustainable process that provides equitable access to adequate housing within the context of affordability of housing, services, and access to amenities and economic opportunities

OUR VALUES Our values, based on the constitution, are: – Human dignity, equality, advancement of human rights and freedoms; – Non-racialism and non-sexism; – Supremacy of the constitution and the rule of law; – Accountability, responsiveness and openness

OUR MANDATE SA CONSTITUTION – Section 26: Access to adequate housing a basic human right; Govt. to ensure environment conducive to the progressive realisation of the right – Schedule 4: Housing is a concurrent national and provincial legislative function – Botshabelo Housing Accord (1994) Signed by all housing stakeholders – Reconstruction and Development Programme (RDP) – set out framework and principles for sustainable development

OUR MANDATE

HOUSING LEGISLATION PASSED
Housing development programme continues to operate in the following legislative framework: • Housing Act 107 of 1997 (as amended); • Prevention of Illegal Eviction from and Unlawful Occupation of Land Act No. 19 of 1998; • Housing Consumers Protection Measures Act 95 of 1998; • Rental Housing Act 50 of 1999; • Home Loan Mortgage Disclosure Act 63 of 2000 (not yet in operation);

OUR POLICY FRAMEWORKS

Our overall policy framework continues to be as determined by the White paper on a new housing policy and strategy for South Africa, 1994

OVERVIEW OF ECONOMIC AND MARKET ENVIRONMENT • Unemployment rates continue to pose challenges on housing delivery even though current trend show marginal reductions • Employment created within the construction sector statistics reveal large growth in the delivery of both formal and informal employment
• At 25 % between April to September 2004 and October 2003 to March 2004 • Low income housing contributing 2,2%

OVERVIEW OF ECONOMIC AND MARKET ENVIRONMENT • Core input costs to construction have escalated at rates far in access of the consumer Price Index – putting pressure on government’s targets of delivering at large scale • Mortgage interest rates have continued to decrease making owning a house more affordable while growth in house prices has had the opposite effect

SUMMARY OF PROGRAMMES For the year 2004/05 activities of the Department of Housing are organised in the following six programmes: Programme 1: Programme 2: Programme 3: Programme 4: Programme 5: Programme 6: Administration Housing Policy Planning and Research Housing Programme Management Housing Sector Performance Housing Equity Housing Development Funding

PROG 1: ADMINISTRATION
PURPOSE: • Administration provides the department with strategic leadership, and administrative and management support services. The Special Investigative Unit, housed within Administration, investigates allegations of maladministration, irregularities, fraud corruption related to the implementation of national housing programmes.

MEASURABLE OBJECTIVE:
• Provide strategic leadership and administrative and management support services to the department. Its key objectives have been achieved mainly through the following sub programmes and key functions:

SERVICE DELIVERY ACHIEVEMENTS: • The Department conducted a Skills Development Audit across all occupational categories and compiled a Workplace Skills Plan which was submitted to the SETA and thus informs our training and development initiatives.
• The Employee Handbook was developed distributed and contains the following policies : Study Aid, Internship, Overtime, Leave, Recruitment & Selection, Employee Wellbeing, Job Evaluation, HIV/AIDS & Sexual Harassment Policies, to keep all employees informed. • The Department appointed 14 Interns, Coaching and Mentoring programmes are ongoing

SERVICE DELIVERY ACHIEVEMENTS: • Employment Equity Framework and Employment Equity Plan approved. • Service Delivery Standards reviewed

SERVICE DELIVERY ACHIEVEMENTS CONT.: • Departmental operations were aligned to Government planning and reporting cycle.

• Security was improved according to MISS (physical, Infrastructure and information)
Communication Services

• There was improvement on the external communications Strategy aimed at marketing the comprehensive plan on Human Settlements.
• Coordination of the Minister’s Public Information Campaigns, imbizos and exhibitions. Advertorials and opinion pieces were published in the mainstream media to communicate with the citizenry.

SERVICE DELIVERY ACHIEVEMENTS CONT.: Financial Services

• All necessary reports were submitted to governance structures, other units in the Department and to the National Treasury.
• A risk assessment exercise, which commenced at the end of the previous year, was completed, culminating in risk assessment and fraud prevention plan documents. • A cash management policy document was developed and approved as part of an attempt to improve internal controls and reporting.

SERVICE DELIVERY ACHIEVEMENTS CONT.: Financial Services cont.

• Although the updating of the procurement policy will be finalised in the following year adjustments were made on the procurement process to ensure compliance with the Supply Chain Management Framework. • We continued to support provinces on the Debtors systems ensuring that necessary changes are made on the system and training is given to users on request.

PROG 2: POLICY PLANNING AND RESEARCH
PURPOSE • To develop sound national human settlement and housing policies, supported by research and underpinned by an appropriate legislative framework. MEASURABLE OBJECTIVE • Upgrading of all informal settlements by 2014 through policy, legislation and research that enables housing delivery in sustainable human settlements, in line with the MDG targets.

SERVICE DELIVERY ACHIEVEMENTS • Draft Farm-worker Housing policy

• Model for the alignment of Housing Development Plans with
Integrated Development Plans • Successful engagement in World Urban Forum and CSD ( 12th

Session)
• African Ministers Conference on Housing and Urban development

• Draft housing land policy
• Guidelines for mainstreaming gender in housing

SERVICE DELIVERY ACHIEVEMENTS Cont. • Prevention of Illegal Eviction from and Unlawful Occupation of Land Amendment Bill, 2005

• Less Formal Township Establishment Amendment Bill, 2005
• Housing Consumers Protection Measures Amendment Bill, 2005. • Housing Amendment Bill, 2004. • Regulations under Home Loan and Mortgage Disclosure Act, 2000. • Audit of Provincial Housing Legislation and Policy.

• Liaising with State Departments and Provinces for purposes of co-ordinating and aligning legislation.

SERVICE DELIVERY ACHIEVEMENTS
• Informal settlement upgrading policy and guidelines • Research network

• Research support to informal settlement upgrading, Peoples housing process, Township Property Market Study, ex-servicemen policy, alternative technologies

PROGRAMME 3 : PROGRAMME MANAGEMENT PURPOSE The Programme: Programme Management manages national housing and human settlement programmes and consists of three sub-programmes, namely National Housing Programmes, Capacity Building and Special Programmes Support. MEASURABLE OBJECTIVE

To develop, administer and fund capacity-building frameworks and programmes, the Housing Subsidy Scheme, the Human Settlement Redevelopment Programme and the Presidential Pilot Project on Rental Housing in order to support housing delivery and improve the quality of human settlements

SERVICE DELIVERY ACHIEVEMENTS
• The Development of a Set of Technical Standards and Specifications that will serve as the National Norm for the Public Sector Hostel Redevelopment Programme.

• Extension of the National Home Builders Registration Council’s [NHBRC] Warranty Scheme.
• Special Housing needs of Disabled People with specific impairments

SERVICE DELIVERY ACHIEVEMENTS Cont.

• Develop detailed Deposit Taking Strategy at provincial and municipal level • Development and implementation of the new procurement regime • Detailed Guidelines for National Savings Programme for Housing (NSPH) • Annual adjustment of the quantum of the housing subsidy • Adjustment of SCCCA variation • Payment for completion of top structure prior to the registration of transfer (P5 before P4) • Management of Human Settlement Redevelopment Programme (HSRP) • Management of aspects relating to Presidential Pilot Project on Rental Housing (PPPRH)

SERVICE DELIVERY ACHIEVEMENTS Cont. • Provincial Housing Capacity Building Business Plans.
• The professionalisation of the housing sector.

• The Housing Consumer Education Pilot Programme
• Housing Scholarship Programme

• The Housing Sector Skills plan, seminars and workshops on housing policies and programmes and the train the trainer programme.
• Sanitation Health and Hygiene Training Modules

PROG 4: HOUSING SECTOR PERFORMANCE PURPOSE To monitor the implementation and performance of national housing policies and programmes and evaluate their impact on beneficiaries, the environment and the three tiers of government. MEASURABLE OBJECTIVE To conduct effective monitoring and regular evaluation of policy implementation, by using information systems that provides accurate, strategic and statistically sound data

SERVICE DELIVERY ACHIEVEMENTS

• Schedule of data sets are collected, compiled and populated based on user requirements including Provinces and is maintained in the InfoHub. • The development of a comprehensive information and knowledge base with the operational system that is aligned with policy, expenditure data on HSS was aligned with BAS data.
• Continuous technical support and training to PHD’s to utilize the system effectively conducted periodically.

SERVICE DELIVERY ACHIEVEMENTS • Number of records have been uploaded and successful searches were conducted.
• Updated information sets and tables on indicators were used as required to support and informed various users. • Information is updated and available on and off-line.

SERVICE DELIVERY ACHIEVEMENTS • Reports produced on: – Impact assessment of information on the national housing programmes on the beneficiary, environment, socioeconomic and the three tiers of Government. – Impact assessment of projects delivered under the Human Settlement Redevelopment Programme. – Functional M&E systems for special housing programmes with adequate feedback mechanisms for housing interventions.

SERVICE DELIVERY ACHIEVEMENTS • Reports produced on: – Monitoring and evaluation of the performance of the construction and housing sector, and the state of the building industry, including indicators such as business confidence, employment in the construction sector and the building cost index, etc.

– Monitoring and evaluation of the performance of the macro-economic sector, including indicators such as inflation, exchange rates, GDP and their impacts on housing delivery evaluated quarterly.

SERVICE DELIVERY ACHIEVEMENTS • Reports produced on: – Monitoring and evaluation of the performance of the financial sector, including indicators such as national savings, national expenditure, interest rates done quarterly. – Monitoring and evaluation of the performance of the housing institutions, in terms of targets and explanations of targets met. Presentations by institutions on their business plans including mid term reviews conducted and submission of the review reports, and recommendations made to the Minister.

PROG 5: HOUSING EQUITY

PURPOSE
Eradicate discrimination and unfair practices to do with access to housing finance, by implementing and administering the Home Loan and Mortgage Disclosure Act (2000) and its regulations. MEASURABLE OBJECTIVE

Increase the level of private sector finance for affordable housing in line with the Financial Sector Charter targets of R 42 billion by the end of 2008, through monitoring and analysing lending practices, and by supporting the development of appropriate instruments by lending institutions and appropriate partnerships between lending institutions, government, housing support institutions and other lenders

SERVICE DELIVERY ACHIEVEMENTS • This programme has been in discussions with the financial institutions around the Financial Sector Charter and the Breaking New Ground Policy on Housing Delivery which concluded in the signing of a Memorandum of Understanding by the Minister of Housing, the Managing Director of the Banking Association South Africa and the CEO’s of the four major banks on 31 March 2005. • The regulations under the Home Loan and Mortgage Disclosure Act (HLAMDA) have been developed and submitted for approval. • Compliance manual on reporting requirements is still in a draft form and will be finalised once the regulations are finalised, hence financial institutions are still not briefed on reporting requirements.

PROG 6: HOUSING DEVELOPMENT FUNDING Purpose: To fund national housing programmes in terms of the Housing Act (107 of 1997

Measurable objective:
To disburse and monitor funds for housing delivery in compliance with the Public Finance Management Act (Act 1 of 1999) and Division of Revenue Act requirements to ensure that expenditure matches annual delivery commitments

SERVICE DELIVERY ACHIEVEMENTS • 92% of the allocated funds to benefiting Provinces was spent. Challenges

• Need for serious intervention for unblocking of projects to fast track service delivery and complete all old projects, • Improvement of planning and spending and alignment to the project life cycle.

CONDITIONAL GRANTS EXPENDITURE REPORT 31 MARCH 2005 Post Audit Final Results

Percentage analysis
Existing (2001) Formula) with Funding Allocation percentages

WC, 9.42 NW, 9.67 NC, 1.64 MP, 6.63

EC, 12

FS, 8.24

LP, 8.21 GT, 27.7

KN, 16.49

EC

FS

GT

KN

LP

MP

NC

NW

WC

Expenditure Status 31 March 2005.
Table 1: Spending analysis as at 31 March 2005
Voted Rollovers/ Recovered funds at provinces Total Available

2004/05 Year to date (1 April 2004 - 31 March 2005)
Transferred Funds Spent by Provinces Unspent funds Spent as Unspent % of Total as % of Available Total Available

Provinces R'000
Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape Total 598,900 385,641 1,117,463 748,463 369,818 296,457 89,442 421,378 446,035 4,473,597

R'000
140,381 -8,522 4,273 994 85,380 141,417 363,923

R'000
598,900 526,022 1,117,463 739,941 369,818 300,730 90,436 506,758 587,452 4,837,520

R'000

R'000

R'000
26,336 78,457 12,971 -9,057 56,867 -4,259 0 135,453 76,302 373,070 96% 85% 99% 101% 85% 101% 100% 73% 87% 92% 4% 15% 1% -1% 15% -1% 0% 27% 13% 8%

598,900 572,564 385,641 447,565 1,117,463 1,104,492 748,463 748,998 369,818 312,951 296,457 304,989 89,442 90,436 421,378 371,305 446,035 511,150 4,473,597 4,464,450

Expenditure Status 31 March 2005.
Analysis of expenditure for the period ending 31 March 2005 6,000,000

5,000,000

4,000,000 Total Available 3,000,000 100% 2,000,000 92% 1,000,000 Spent by Provinces Unspent Funds

8% -

Provincial Spending Analysis
Total avialable vs Spent Funds as at 31 March 2005
1,200,000 1,000,000 800,000

R`000

600,000 400,000 200,000 -

l g e e e st po ga pe a ta en ap tat ap t po We an C S -N C l Ca au h u n e rt G rn ul ma Lim er n ter Fre aZ No pu ste as rth M E Kw We No

Total Available

Spent by Provinces

Provincial Analysis
Actual Expenditure over six years
1,200,000 1,000,000 2004/2005 800,000 2003/2004 2002/2003 2001/2002 2000/2001 1999/2000 200,000 0
Gauteng KwaZuluNatal Limpopo Mpumalanga Eastern Cape Northern Cape North West Free State Western Cape

R`000

600,000 400,000

Expenditure trends
Spending trends for 12 months over 2 years
1,400,000 1,200,000 1,000,000

R`000

800,000 600,000 400,000 200,000 0

ril Ap

y Ma

ne Ju

ly Ju

ust ug A

ber em t Sep

ber cto O

ber ber em em v c No De
2003/2004

a ry nu Ja

F

ary bru e

rc Ma

h

Projected

2004/2005

Expenditure trends
Expenditure trends for 12 m onths over 2 years as a percentage of available 25% 20% 15% 10% 5% 0%

Ap

ril

y Ma

n Ju

e

ly Ju

A

st gu u

r be em pt Se

tob Oc

er N

r be em ov

mb ce De

er

nu Ja

ary

a ry bru Fe

r ch Ma

Projected

2004/2005

2003/2004

Number of Units Completed or Under Construction Over 6 Financial Years
PROVINCE 1999/00 Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga 20,345 7,177 45,384 28,997 12,401 4,808 NUMBER OF UNITS COMPLETED OR UNDER CONSTRUCTION 2000/01 34,021 16,088 38,547 28,547 20,996 16,457 2001/02 10,816 7,005 46,723 14,379 16,667 14,584 2002/03 58,662 9,155 24,344 24,485 14,953 21,649 2003/04 27,119 16,746 49,034 33,668 15,810 21,232 2004/05 37,524 16,447 66,738 36,734 16,514 18,000 TOTAL 251,880 121,052 456,103 315,936 147,091 144,325

Northern Cape
North West Western Cape Total

2,600
12,944 26,916 161,572

4,148
14,109 17,730 190,643

2,588
13,885 16,634 143,281

6,056
23,784 20,500 203,588

3,787
10,484 15,735 193,615

3,598
10,037 11,756 217,348

36,598
145,874 213,001 1,831,860

Number of Units Completed or Under Construction Over 6 Financial Years

Number of projects
780 332 104 19

Projects approved for the 2003/04 vs 2004/05 financial year by province
400 350 300 250 200 150 100 50 0
EASTERN CAPE 26 33 FREE STATE 31 47 GAUTENG 38 366 KWAZULUNATAL 47 83 LIMPOPO 63 103 MPUMALANGA 54 9 NORTHERN CAPE 36 4 NORTH WEST 18 31 WESTERN CAPE 19 104

2003/04 2004/05

Number of planned units
Number of planned units per province for the 2003/04 vs 2004/05 financial year
100,000 80,000 60,000 40,000 20,000 0
EASTERN CAPE 20,811 9,732 FREE STATE 15,039 14,089 KWAZULULIMPOPO NATAL 43,397 42,776 32,681 17,503 MPUMALANGA 2,341 340 NORTHER N CAPE 7,452 1,763 NORTH WEST 7,570 23,543 WESTERN CAPE 8,143 77,354

2003/2004 2004/2005

GAUTENG 39,086 54,045

2003/2004 2004/2005

Number of beneficiaries
Number of beneficiaries for 2003/04 vs 2004/05 financial year
50,000 40,000 30,000 20,000 10,000 0

EASTERN CAPE 34,330 21,515

FREE STATE GAUTENG 16,280 18,514 39,778 46,958

KWAZULUNATAL 29,566 22,316

LIMPOPO 14,403 14,054

MPUMALANGA 24,736 10,237

NORTHERN CAPE 5,001 3,846

NORTH WEST 12,050 8,616

WESTERN CAPE 15,371 18,953

2003/2004 2004/2005

Subsidy percentage split by gender
Percentage of subsidies approved by gender PROVINCE Project Linked Male Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape Female Consolidation Male Female Institutional Male Female Individual Male Female

46.53
50.06 52.07 43.67 34.85 39.64 54.70

53.47
49.94 47.93 56.33 65.15 60.36 45.30

53.86
44.60 41.52 49.24 42.42 41.71 66.67

46.14
55.40 58.48 50.76 57.58 58.29 33.33

45.84
80.32 50.68 41.89 0 54.51 0

54.16
19.68 49.32 58.11 0 45.49 0

51.55
56.33 50.89 48.89 39.62 53.09 62.84

48.45
43.67 49.11 51.11 60.38 46.91 37.16

North West
Western Cape

54.41
56.23

45.59
43.77

47.68
58.79

52.32
41.21

72.58
42.84

27.42
57.16

61.27
69.44

38.73
30.56

Number of Projects

PROVINCES

99/2000 38 128 64 57 79 25 24 16 68

2000/01 53 66 41 41 51 65 32 44 51

2001/02 60 38 66 28 19 10 17 15 67

2002/03 20 141 231 36 58 122 15 4 70

2003/04 26 31 38 47 63 54 36 18 19

2004/05 33 47 366 83 103 9 4 31 104

TOTAL 457 609 1,048 552 479 335 250 221 555

EASTERN CAPE FREE STATE GAUTENG KWAZULU-NATAL LIMPOPO (NP) MPUMALANGA NORTHERN CAPE NORTH WEST WESTERN CAPE TOTAL

499

444

320

697

332

780

4,506

Number of Projects
Number of projects approved over six years
900 800 700 600 500 400 300 200 100 0 99/2000 2000/01 2001/02 2002/03 2003/04 2004/05

THANK YOU


				
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