the occasion of tabling a Budget Vote for 2006/07 financial year
21 June 2006
Honourable Speaker and Deputy Speaker,
Honourable Premier,
Honourable members of the Executive Council,
Members of the legislature,
Distinguished guests,
Ladies and gentlemen:
The outcome of the recent local government elections which were declared
free and fair with a remarkable voter turnout of 48,4 percent compared to the
previous election, has demonstrated once again the willingness of the people of
this country to participate in the affairs of the local government sphere. As a
province we had the second highest voter turnout in the country and the ruling
party had been given a clear mandate through us taking control of all the
municipalities. Such a positive indication gives all of us in government a
renewed energy towards ensuring more effective service delivery in this term of
local government because we have the confidence of the citizens in
developmental local government.
To improve our performance as government and as a nation, government has
identified two major interventions to create the conditions to achieve more
rapid progress toward the realisation of the constitutional rights of our
people. One of the initiatives, Accelerated and Shared Growth Initiative for
South Africa (AsgiSA), our national effort for faster and shared growth we
believe are known to all of you. The intention is to move faster to address the
challenges of poverty, underdevelopment and the marginalisation of the poor.
While AsgiSA will contribute to speed up progress towards faster growth and
development of at least six percent per year, it will also ensure that our
social development programmes are sustained and improved to support those most
exposed to poverty.
The second most important intervention is the programme to strengthen local
government. We will elaborate more on this at a later stage.
The total budget allocation of the Department for this financial year is
R260,680 million. This is an increase of six percent or R51,683 million from
the 2005/06 allocation of R208,997 million. This budget will be divided amongst
the three programmes in the Department. Programme one which is responsible for
administration will receive R30,625 million, the housing programme will receive
R123,178 million of which R104 million is for housing delivery and finally the
local government programme will receive R106,877 million.
Madam Speaker, housing remains one of the greatest challenges government is
faced with. The extent of the challenge derives from the size of the housing
backlog and the desperation and impatience of the poor and homeless. The
Department of Housing and Local Government by way of the goals of the
provincial government continues to work through these challenges whilst
endeavouring to alleviate the pressures of the housing environment.
Achieving sound delivery in the housing process over the past 12 years was
not always easy. The Department was able to provide a substantial number of
houses through intensive capacity building programmes, which took place across
the province resulting in an increase in the skills base for housing
development.
Now that the delivery of housing is in full swing in the province there are
unfortunately not sufficient funds to meet the total housing needs in the
Northern Cape. New legislation and policy changes has placed an added burden on
the Department and municipalities in the province thus making the planning,
implementation, monitoring and evaluation of housing programmes more difficult
in the province.
The Northern Cape has received R104 million from the national allocation for
the 2006/07 financial year for housing development. This is an increase of R11
million from the Medium Term Expenditure Framework (MTEF) projection. In light
of this, the province is planning to build 2001 houses for the year. Of these
654 houses will be delivered on current running projects, 874 houses will be
delivered on blocked projects while 473 houses will come from new projects. A
total number of 1 060 new sites will be planned and serviced in the Northern
Cape.
This budget allocation is noble but not adequate if compared with real facts
which will add a new dimension to the problem we are faced with in housing
development. The Department cannot initiate any new projects in the Northern
Cape. This budget will mostly be used to unblock and complete some of the
blocked projects as well as complete some of the running projects which were
initiated towards the end of the 2003/04 financial year.
In terms of the Breaking New Ground in Housing delivery strategy, the
Northern Cape has identified two pilot projects. These being Lerato Park in
Kimberley and Ou Boks in Colesberg, in terms of the upgrading of informal
settlements programme. In Lerato Park, located in the Sol Plaatje Municipality
the 2005/06 budget allocation of R2,5 million for this project was used mainly
for the planning processes. The geo-technical investigation and the
environmental impact assessment process have also been completed. The town
planning process is currently going through final approval. An additional R6
million has been allocated in the 2006/07 financial year. This money will be
used for the installation of services in the area.
The project in Ou Boks in the Umsobomvu Municipality caters for 2 000 sites.
The consultant appointed as project manager will submit the business plan by
the end of this month. To date the socio-economic and demographic survey of
existing services and determining of flood lines have been completed. The town
planning, environmental impact assessment, geo-technical survey and traffic
study are in progress.
Allow me to elaborate briefly where this notion of blocked projects stems
from. In the Northern Cape a larger product was ensured by setting a minimum
house size of 36 sq m whilst the Department of Housing laid down 32 sq m as a
minimum house size at a national level. Nevertheless the province has succeeded
in delivering houses as large as 54 sq m because the Department is focused on
providing decent houses for the people.
This, however, has created high expectations amongst the people who sought
to benefit from the subsidy scheme. The poor expect bigger houses but in
reality the subsidy can only provide a basic liveable structure with the most
basic services.
This tension in policy development continued into a delivery practice with
various attempts to increase the size of the house, because beneficiaries
wanted the biggest structures they could get. This made it difficult and
impossible for the developers to sustain the housing projects causing a number
of these to come to a complete standstill.
These incidents occurred because key factors such as the location,
fluctuating input prices and distances were not considered enough when
developers were encouraged to build bigger houses. These factors together with
a number of other related problems have caused the downfall and financial ruin
of many developers and contractors in the province. As a result many projects
were stopped or abandoned by the developers and have not shown any progress in
long a time. These are the projects we refer to as âblocked projectsâ.
Other factors which have affected the delivery of houses were policy
changes. A number of Small, Medium and Micro Enterprises (SMMEs) were appointed
to manage projects but their lack of proper project management skills has
caused delays on some projects not forgetting community conflict.
Housing has also experienced budget shortfalls and cash flow problems which
has been a major cause of most projects coming to a complete standstill.
Madam Speaker, we have instances where contractors also defaulted on some of
the projects and in many cases left projects incomplete whilst still owing the
Department money. The Department is still busy with legal processes against
some defaulting contractors. The legal action against contractors is separated
from the completion of the projects. This process is currently ongoing and the
State Attorneyâs Office is also involved. Municipalities and the Department
have jointly looked at ways to secure funding for the completion of the
affected projects.
The Department is currently looking at ways to evaluate contractors
currently working on housing projects on a regular basis. A database will be
established and the track record of contractors will be documented. This will
assist the Department and the municipalities in the appointment of credible
contractors. It will assist contractors in identifying shortcomings and
possible interventions, as part of their own capacity building for housing
delivery.
The process to unblock and complete all blocked projects only in the 2006/07
financial year, will require an additional budget of no less than R154,829
million. The allocation of R104 million will be inadequate and is therefore not
sufficient to fund all the housing projects. In terms of national policy all
blocked projects must be completed by 31 March 2008.
It is therefore critical that additional funds be sourced for the 2006/07
financial year in order to prevent a further disruption in the implementation
of the housing programme in the Northern Cape in the ensuing financial
years.
The Department is also grateful for the additional R20 million received from
the Provincial Treasury during the 2005 budget adjustments in order to unblock
some of the blocked projects and to complete outstanding houses and services on
other unfinished projects. The additional allocation enabled the Department to
unblock a further eight blocked projects and to allocate funding to nine
running projects with limited funds. Houses and services are currently under
construction on all these projects and it is planned to complete 470 houses and
services to 390 households.
The Department has approached Thubelisha Homes to assist with the unblocking
and completion of blocked projects in the Pixley ka Seme Region. Thubelisha
Homes is a National Housing Institution that was established by the Minister of
Housing and is also reporting directly to the Minister of Housing. The
Department is thus in the final stages of concluding its arrangement with
Thubelisha Homes.
Madam Speaker, the province has a housing backlog of approximately 40 000
housing units and this total is constantly increasing as a result of an
increase in the number of households in the province. In terms of the
objectives of the Provincial Growth and Development Strategy (PGDS) this
backlog must be eradicated completely by not later than 2014. This is also in
line with the national target in terms of Breaking New Ground (BNG) and the
Millennium Development Goals (MDGs).
At the current pace of delivery in the Northern Cape as well as the funding
to the province, it will virtually be impossible to eradicate the backlog by
2014. The stakeholders involved in the housing process were therefore called
upon to assist with the fast tracking of housing delivery in the province.
A social contract was entered into between government and the private
sector, wherein all the parties committed themselves to the Northern Cape
Social Contract for the Rapid Delivery of Good Quality Houses that translates
their goodwill into practical co-operation with common objectives. This
historic event has taken the form of a half-day workshop, whereby government
and each sector represented in the housing delivery value chain has signed the
Northern Cape Social Contract for Rapid Delivery of Good Quality Housing as a
commitment to âBreaking New Groundâ in housing delivery and to achieve through
a collective initiative housing for all by 2014.
The key role players in the delivery of housing were drawn from national,
provincial and local government, Financial Institutions (FIs), Housing
Institutions (His), the built environment consisting of developers,
contractors, material manufacturers and suppliers, consulting engineers, town
planners and conveyances and the non-governmental organisations (NGOs) and
community-based organisations (CBOs) from the various civil society
organisations.
We believe therefore that âthrough our diversity of talents and cultures, we
will harness our tremendous human and other resources to accelerate housing
delivery to improve the lives of thousands of our poor by building sustainable
livelihoods, communities and human settlements, providing a choice of quality
housing opportunities with secure environments and access to water and proper
sanitation for all.â
Madam Speaker, the Housing Act of 1997 (Act 107 of 1997) stipulates a new
and important role for municipalities in the housing process. Local government
the sphere of government closest to the people is responsible for the social
and economic well being of the people within its area of jurisdiction. It must
therefore be at the forefront of housing delivery.
While the Department of Housing and Local Government is responsible for the
determination of housing policy to facilitate the provision of adequate housing
in the Northern Cape it is equally important that provincial government support
and strengthen municipalities to manage in the delivery process.
The province as part of its New Comprehensive Plan (NCP) has begun a process
to accredit competent municipalities to administer national housing programmes.
Current plans call for the Housing Department to embark on a 10 year phased
approach towards the accreditation of South Africaâs full compliment of
municipalities. Accreditation seeks to achieve two interlinked objectives which
are co-ordinated human settlement development and accelerated housing delivery.
In order to be accredited, municipalities will have to demonstrate their
capacity to plan, implement and maintain both projects and programmes.
Due to the lack of municipal capacity and the vast distances between towns
in the Northern Cape, the Department targeted the five district municipalities
(Frances Baard, Pixley Ka Seme, Kgalagadi, Siyanda and Namaqua) as well as the
Sol Plaatje, Emthanjeni and Khara Hais local municipalities for
accreditation.
The Department of Housing is regarding the accreditation of the district
municipalities as a pilot for the country. The legal framework to formalise the
housing mandate for district municipalities will be finalised during this
Medium Term Expenditure Framework (MTEF) period.
The Department of Housing and Local Government officially launched the
Municipal Accreditation Programme (MAP) in February of this year. We are the
first province to have completed the municipal assessment process and submitted
business plans to the national Department. The next phase will be to capacitate
municipalities to move to first and second level accreditation within the next
two years.
Although the housing process is not an easy one, this does not prevent the
Department from establishing good relations with other spheres of government in
our endeavour to promote easier access to service delivery for our communities.
It is therefore also heart warming. We want to make use of this opportunity to
thank Ms Elizabeth Waterboer of Pofadder for the encouraging gesture she made
recently at the Presidential Imbizo when she stated that she is grateful that
after waiting 12 years for a house, she never lost hope and nor should the
other people because the African National Congress (ANC) government is
committed towards changing the lives of the citizens of this country.
Madam Speaker, we have just completed the first term of democratic local
government and a number of findings were made during the Local Government
Review Process (LGRP) for the first term. The main findings that have emerged
from this review in terms of the performance of municipalities are poor
capacity and inadequate accountability mechanisms.
It is therefore necessary in this current term of local government that we
work towards a more sustainable system and a general improvement in the
capacity and functionality of municipalities and their ability to deliver
reliable services to the communities that they serve.
Whilst it is the responsibility of the Department of Housing and Local
Government to monitor, guide and support municipalities to achieve their
constitutional and developmental mandate it has become clear that the whole of
government has a role to play in achieving sustainability and reliable service
delivery at municipal level.
The plan to strengthen local government has been developed and approved and
released in March this year called the Five Year Strategic Agenda for Local
Government. Project Consolidate as we know it has been main-streamed into the
Five Year Strategic Agenda and all municipalities will be part of this process
as opposed to a few.
This strategic agenda defines three overarching Strategic Priorities and
Five Key Performance Areas that will be implemented in the next five years to
improve local governance.
The three strategic priorities are:
* mainstreaming hands on support to local government to improve municipal
governance, performance and accountability (previous Project Consolidate
focus)
* addressing the structure and governance arrangements of the State in order to
better strengthen, support and monitor local government
* refining and strengthening the policy, regulatory and fiscal environment for
local government and giving greater attention to the enforcement measures.
These strategic priorities culminate in the following five Key Performance
Areas (KPA):
* municipal transformation and institutional development
* basic service delivery
* local economic development
* municipal financial viability and management
* good governance and public participation.
This strategic agenda introduces measures to address the differential
capacities of municipalities. It also focuses on time-bound outcomes and
emphasises the role of both national and provincial governments. Lastly it
enforces monitoring and evaluation mechanisms.
In the province we have since April 2006, facilitated a process of Municipal
IDP analyses including sector departments as part of the analysis. We also
facilitated a provincial IDP engagement process, where we have engaged as
provincial and national sector departments with municipalities to put in motion
a process of feedback, support and concrete resources to facilitate more
credible IDPs. This IDP engagement process will be an annual process. It
provides a platform for national and provincial government to engage with
municipalities in the planning, alignment and harmonisation processes in
meeting the priority needs of communities and meeting the targets of government
as espoused in the Governmentâs Programme of Action, the National Spatial
Development Perspective (NSDP) and the Provincial Growth and Development
Strategy (PGDS). Through this engagement we have seen strengthening in
intergovernmental relations. The engagement and it demonstrates the
interdependency of the spheres of government as espoused by the Constitution of
the Republic of South Africa to implement Governmentâs Programme of Action.
This Five Year Strategic Agenda harnesses the Support of Stakeholders in the
local government sector, as we are very clear âthat government cannot do it
alone.â
To this end Madam Speaker, support to the elected political leadership will
be intensified through structured programmes of training and capacity building;
bringing stability to the political and administrative components of
municipalities and providing a process to unblock bottlenecks that adversely
affects the delivery of services at municipal level, through our partnership
with South African Local Government Association (SALGA) - Northern Cape.
In this financial year the Department will support municipalities who lack
the core basic municipal systems to function as effective local government
structures. This will include the implementation of a competency framework that
will regulate the appointment, performance and evaluation of municipal managers
and senior managers. Prioritise more effective Performance Management Systems
(PMS), including the signing of performance agreements for section 57 managers,
which relates to the IDPs. The Department will be supporting municipalities to
fill vacant municipal and senior manager posts.
We need to in the process, look at retaining continuity and stability at an
administrative level especially as many section 57 managersâ contracts will
come to an end in this financial year.
There are a number of national targets as set out in the PGDS in terms of
meeting basic service delivery and unless we have the resources both human and
financial we will not meet these targets. With regard to meeting these national
targets, we can however report that as a province the Northern Cape has made
good strides and are on track to meet these targets. The province has an
electricity backlog of 56 628 households. With regard to meeting the 2012
target of universal access, the Northern Cape is one of two provinces that can
meet the target in four years by 2009/10. About 90 percent of households will
have at least a basic water supply in respect of a distance of 200 m from their
homes. A total of 25 899 households are without a basic water supply. Basic
sanitation is supplied to 73 percent of all households in the province. A total
of about 73 892 households are still without basic sanitation. In order to
achieve these targets for access household water and basic sanitation an
integrated approach is needs to include housing projects that should reach new
needy households namely household growth. The Municipal Infrastructure Grant
(MIG) needs to address the current backlog and district municipalities must
supplement the funding.
Through the support of the organised engineering fraternity namely the South
African Institute of Civil Engineers (SAICE) and the South African Association
of Consulting Engineers (SAACE), engineering capacity has been provided at the
Frances Baard District Municipality to support those category B municipalities
in their jurisdiction who lack capacity in this field to be able to implement
and oversee service delivery.
We are in the process of engaging this fraternity to provide this expertise
to other district municipalities and in order for them to assist the local
municipalities and to oversee their deployment.
The Municipal Infrastructure Grant (MIG) is progressing well although
logistical problems are still being encountered to capacitate the district
municipalities and municipalities to register and implement their projects.
This programme remains a key part of government's overall drive to alleviate
poverty in the country and provide infrastructure in such a way that employment
is maximised and opportunities are created for enterprises to flourish.
The main focus of the MIG programme is still to ensure that all basic
municipal infrastructure backlogs have been addressed at the end of the 10-year
period and that municipalities would have been capacitated to the extent to be
in a position to operate, maintain and sustain the entire infrastructure
services that have been provided.
A total of R130,922 million has been allocated to the Northern Cape for the
2006/07 financial year. The following amounts have been allocated to each
district:
Kgalagadi District - R33,056 million
Namakwa district - R16,460 million
Pixley Ka Seme District - R34,042 million
Siyanda District - R16,027 million
Frances Baard district - R31,337 million
As it is governmentâs policy to eradicate all buckets, MIG has allocated
funds direct to the municipalities to eradicate their buckets. In total 11
municipalities in the Northern Cape will be receiving funds this financial year
(2006/2007) to the value of R31,061 million to eradicate buckets. An additional
amount of R21,2 million has been allocated from the Provincial Infrastructure
Grant (PIG) for the eradication of buckets which means a total of amount of
R52,261 million for 2006/07. Although we are on track with the eradication of
buckets programme with the current MTEF allocations, we will need additional
funding to meet the 2007 target for the eradication of buckets.
Madam Speaker, the Department along with the Department of Water Affairs,
SALGA NC, Frances Baard District Municipality and Swedish International
Development Agency (SIDA), started the operation and maintenance project in
August 2004 and has made considerable progress. This initiative was started
after it became apparent that some of our municipalities are struggling to
ensure optimum delivery of municipal services in a sustainable manner to its
consumers. This project seeks to develop amongst other things the following
five handbooks:
* Water Supply Services
* Sanitation Supply Services
* Roads, Streets and Storm Water
* Legal and Environment
* Management (addressing both strategic and operational aspects of
management).
We are actively involving staff from our municipalities during the
compilation and testing phase of these handbooks. This we believe will ensure
ownership right from the outset. We have therefore included a number of
municipal officials to participate in this process.
Madam Speaker, the Northern Cape has a great challenge when it comes to
disaster management, a discipline that is not clearly understood by all yet the
success of disaster management lies in integration, participation and
communication by all local government stakeholders.
The Department of Housing and Local Government has placed special emphasis
on ensuring that disaster management attains its rightful place within our
province. This task is not without its share of challenge but we are confident
that with the required resources, those within the disaster management
fraternity will be more than able to rise to this challenge.
The current financial year will see significant progress being made starting
with the establishment of the Provincial Disaster Management Centre. This will
allow us to better fulfil the role and responsibilities of the province with
regards to disaster management. An amount of R1 344 000, 00 has been dedicated
for this purpose legal compliance to the Disaster Management Act, Act 57 of
2002 is one of our main objectives and we will continue to pursue the
implementation of the Act to its fullest.
The conditional grants to support district municipalities with regards to
the National Emergency Alarm Radio (NEAR) communication system will still
continue this financial year. The total amount of this conditional grant is
R2,968 million.
District municipalities will also again receive a conditional grant towards
fire fighting equipment, the total amounting to R2,904 million.
We are in partnership with the Department of Economic Affairs to improve
local economic development. The Department of Economic Affairs will be the lead
Department in this Key Performance Area (KPA) and the Department of Housing and
Local Government will provide a co-ordinating and support role. All districts
will in this financial year have to convene District Growth and Development
Summits and begin a process of drafting implementable LED strategies. All of
these will have to be aligned to the National Spatial Development Perspective
(NSDP), the PGDS and the AsgiSA.
The municipalities of Siyancuma, Kamiesberg and Moshaweng will benefit from
the âSiyenza Manjeâ Programme of the Development Bank of Southern Africa
(DBSA). They will be receiving support in strengthening financial management
capacity and the experts will be deployed by 1 July this year.
We are in the process of engaging the DBSA to increase their support to
other targeted municipalities in the province, when they deploy their next
round of experts in December 2006.
The Department has entered into a Memorandum of Understanding (MoU) with
Provincial Treasury to implement the Municipal Finance Management Act (MFMA).
This MoU includes monitoring, support and interventions to improve the
accountability for public resources.
The Department will monitor the compliance of all municipalities in terms of
submitting credible Annual Financial Statements on time to the
Auditor-Generalâs (AG) office and where necessary facilitate the required
support. It will also be important that the Department should developing
effective evaluation and monitoring system to serve as an early warning on
municipalities with serious financial problems.
In terms of implementing good governance and public participation, the
Department together with the Planning, Implementation Management Support and
Services (PIMMS) centres of district municipalities will facilitate the
re-election of Ward Committees (WC) and co-ordinate a training programme aimed
at making ward committees more functional. It can be reported that ward
committee manuals have been developed for this purpose. The people residing in
the Renosterberg Municipality will also participate in the ward committee
programme for the first time this year.
A total of 187 Community Development Workers (CDWs) have been appointed as
from October 2005. Currently an additional 133 CDWs are being trained for
deployment in this financial year. We will be looking at refining the
accountability mechanisms for CDWs in this financial year to be able to
maximise the important work of bringing government services closer to the
people.
The public participation processes towards good governance will be closely
monitored. We will support the offices of the speaker at municipal level to
develop an implementation programme for community participation. Good
governance depends on participation of the community and is a cornerstone of
our democracy.
During October 2004, Cabinet officially approved the organisational
structure of the Department. As a result of the approval the recruitment
process ensued which saw the Department filling vacancies in most units thereby
capacitating the respective programmes. The Department is proud to announce
that we have appointed most of the learners and interns whose contracts were
terminated with the local government and water related Sectoral Education and
Training Authority (SETA). We pride ourselves in the fact that our employment
equity status is improving at the senior management level. The Chief Director
for Housing has been appointed 1 June 2006 and she is a woman. The Department
received an unqualified report for the 2004/05 financial year and hope to
achieve the same result for the 2005/06 financial year and at the same strive
for the same result in the 2006/07 financial year.
In May 2006 the Department received a gold award from the Professional
Management Review (PMR) Business Magazine in recognition of being the only
Department in the province, which strives very hard to achieve its strategic
objectives. The Department is also engaged in a number of crosscutting
governance activities. These being the implementation of the Intergovernmental
Relations Framework (IGR) Act, the African Peer Review Mechanism (APRM) process
and the disestablishment of the cross boundary municipalities. These activities
put additional pressure on the already limited human resources of the
Department.
The disestablishment of cross-boundary municipalities, the employment of 187
CDWs, the implementation of the Five Year Strategic Agenda for Local Government
and the Breaking New Ground in Housing Delivery pose new and additional
responsibilities to our Department and especially corporate services as far as
the extension of provision of administrative support is concerned. The
Department is therefore currently busy to re-align our organisational structure
to be able to meet the new challenges.
In conclusion Madam Speaker,
These strategic priorities and interventions that the Department are setting
in place are designed to strengthen municipalities in order that they may
fulfil their constitutional and developmental mandate. We trust that indeed the
entire government, together with our strategic partners will lend support to
the implementation of the Five Year Strategic Agenda of Local Government and
our Breaking New Ground in Housing Delivery Strategy, in order that the people
we serve may indeed experience a better life and that we will indeed proclaim
the next five years as an âAge of Hopeâ.
In conclusion, allow us to thank and express our sincere gratitude to the
Premier for her continued guidance and leadership and also members of the
Executive, the Chairperson and members of the Portfolio Committee, all the
councillors, municipal officials; our strategic partners in local government
namely SALGA NC, the DBSA, Thubelisha Homes, NHBRC, the South African Institute
of Civil Engineers and the South African Association of Consulting Engineers;
the trade unions and our communities for striving so hard to make developmental
local government work in this province. We also want to extend a word of
gratitude to the Department of Housing, the Department of Provincial and Local
Government and the Department of Water Affairs. Lastly let us thank the
officials of the Ministry and the Department for the unwavering determination
in improving the lives of our people.
I thank you!
Issued by: Department of Housing and Local Government, Northern Cape
Provincial Government
21 June 2006
