Department of Human Settlements 2013 Budget Speech by Minister Madikizela
The Honourable Speaker,
The Honourable Premier,
The honourable leader of the opposition,
The honourable members of the house,
Ladies and gentlemen
Mr Speaker, In her state of the Province Address last month, the Premier stated that the only way we can tackle our many challenges is through a “whole-of-society” approach. This is especially relevant in Human Settlements, where successful delivery requires partnership between the services offered by the state, the presence of a well capacitated and professional construction sector, the leadership of communities in supporting projects, and the willingness of the individuals to contribute what is reasonably expected towards the initial and on-going success of their housing solutions.
Our approach to human settlements service delivery is directly in line with the National Development Plan, or NDP. The impact of the global climate change, particularly on the poor, is acknowledged in the PSO6 through the outcome “optimal and sustainable use of resources”, and the Department is proactively enforcing the use of alternate building materials in projects such as in the 1 951 unit Delft 3 and 5 project.
The provision of quality housing and the building of an asset base is a core element in the eradication of poverty, and “Citizens active in their own development” is another priority area stated in the NDP. The PHP programme encourages the participation of beneficiaries in the provision of the own housing opportunities.
In Human Settlements, much of our focus is on the poorest of the poor. While 76% of the overall provincial budget is spent on the poor, 93% of our R1.725 billion budget is spent on those earning less than R3 500 pm. The provision of housing solutions gives them a hand up so they can become part of the “whole-of-society”, becoming contributors to both their own success, and that of greater society. Let me outline two examples of partnership which enable beneficiaries to participate in the ‘whole of society’ approach.
During April 2012, I handed over a face brick house, in partnership with Corobrik to wheelchair-bound Ms Angela Mzizi of Strand. She had been staying in a 1 room shack constructed by her late husband on a serviced site provided by the Department. The shack was cold and fire was made inside it in order to keep out the elements of the cold cape winter, exposing her to smoke and a fire hazard. Through partnership, she can now live with dignity.
The Department during the 16 Days of Activism in 2012 committed itself to build homes in Ilitha Park, Khayelitsha, for two families headed by a disabled parent. One of the families is headed by Mr Dingiswayo, who was living with his wife and matric son in a shack erected on the pavement in Khayelitsha. Mr Dingiswayo, who is taken care of by his wife, is wheel chair bound after having lost a leg and having a stroke, and found it very difficult to access shared sanitation services. The Department provided land, and various commitments in the form of building material sponsorships were received that were used, along with a government subsidy, to build houses enhanced for special needs for the two beneficiaries. I am proud to say that I handed over the houses for Mr Dingiswayo on Human Rights day on 21 March 2013, all part of a ‘whole of society’ approach.
We know there are many thousands of people like Mr Dingiswayo and Ms Mzizi, and that these are just two examples, they show that the lives of people are changed one life at a time, one house at a time. The business of the Department is to change society through changing one life at a time, and through the staying in touch with the needs of all those people who require the support of the state.
In the Department of Human Settlements, we are focusing on creating enabling environments that support people in their journey to economic freedom. This year marks 100 years since the 1913 Land Act, which effectively dispossessed many South Africans of their land, and their right to own land. Human Settlements has an important role to play in ensuring that people get title deeds to their houses and sites, which helps in redressing the imbalance of the 1913 Land Act. Under previous administrations in the Western Cape, as in other provinces, many people had received their houses or sites, yet didn’t have title deeds, and were thus unable to participate in the property market, or use their homes as collateral for loans. This is why in 2011 we initiated a study to find out the extent of this problem, and we found that conveyancing hadn’t been done correctly in numerous projects, and over a third, or 36% of the beneficiaries in the Western Cape since 1994 hadn’t received ownership. We have now reduced this backlog to 28%, through the issuing of 20 400 title deeds that should have previously been issued. With their title deeds, a property is now a freedom that can be used, and is also a contribution towards land reform.
We are also pushing transformation in economic sectors related to Human Settlements. The property sector is worth R4.9 trillion, and in 2009 contributed 8.3% of South Africa’s Gross Domestic Product (GDP), yet this industry is still dominated by white males between the ages of 55 and 65. There is a clearly a need to drive transformation in this sector in a way that is sustainable, and which will allow for opportunities for members of other demographic groups of South Africa. The Estate Agency Affairs Board (EAAB) was, with effect from 17 May 2012, relocated from the Department of Trade and Industry to the Department of Human Settlements, and the first National EAAB Summit was held on 4 – 5 October 2012, in Gallagher estate, Midrand. On 25 February 2013, under my leadership, the Department hosted the Western Cape Agents Consultative Dialogue. This is enabling us to lead the country by being the first province to host such a summit, which will produce practical steps on how to deliver opportunity, lower barriers to entry and train and capacitate previously disadvantaged individuals in the estate agents sector, so that they may also participate in this wealthy industry.
Mr Speaker, it is this delivery that changes lives. We are committed to continually improve how we can deliver something for everyone, and we keep our word when we say we will deliver. In this address, I will outline the deliverable commitments made by Premier Helen Zille in her 2009 State of the Province address, and the subsequent progress made. Secondly, I will present the performance in the 2012/2013 financial year, and the broad range of programmes through which we deliver for our people.
In 2009, we committed to embark on an urgent land audit. The land audit has been completed, and the Department-owned property register is now updated annually. The Housing Development Agency (HDA) has been appointed to acquire land for Human Settlements development. In 2011/2012, 168 ha land was released, with 20 ha in the City of Cape Town. In 2012/2013, 121ha was released, with 36 ha in the City of Cape Town. By 2014, all properties are expected to have been devolved and the Western Cape Housing Development Fund to be closed.
We committed to transfer land to the City of Cape Town for flood relief. To date, five sites have been provided for flood relief by my Department, but unfortunately could not be fully utilized due to resistance from communities, through NIMBY, or ‘Not in my back yard’ attitudes.
We committed to increase funding for the People’s Housing Process. To date, allocation for PHP has increased from 25% of the budget in 2010 to 40% in 2012/13. The internal controls we have implemented to curb challenges within this program are yielding positive results, and we now have much better quality houses and better performance by contractors than before.
We committed to develop a Province-wide plan for in-situ upgrading. An Informal settlement database was compiled in 2010 and completed in 2011, and the Access to Basic Services programme was launched in 2012. More about the Access to Basic Services program will follow later.
We committed to work with other spheres of government to re-conceptualise the next phase of the N2 Gateway. The target was 14 191 units, and to date: 11 228 have been delivered. The Current N2 Gateway Projects are managed by the Department, and the next phase will be done as ministerial priority projects which include the areas of Gxagxa, Kanana, Barcelona, Europe, Vukuzenzele and Lusaka along the N2. Funding for the next phase has been requested from the National Department of Human Settlements.
We committed to work with the City and the HDA to develop Joe Slovo Phase 2 in a manner which will not require mass evictions. To date, development is continuing without mass evictions. The project is an In-situ development with high density units, and despite numerous challenges, 588 houses have been delivered out of a target of 2 639. The challenges include the refusal of 7 shack dwellers to relocate to make way for construction, delays with the construction of Delft 3 and 5 to house extra beneficiaries from Joe Slovo, the resistance of communities to allow the construction of TRA5 and TRA3 in Delft, which would house Joe Slovo residents while construction is underway.
We committed to introduce a municipal housing demand database support programme to ensure that accurate, tamper proof data is used to select beneficiaries for human settlements projects. To date, the Western Cape Housing Demand Database has been developed, and by 31 March 2013 all 24 non-metro municipalities’ data will have been included in the provincial database.
We committed to develop clear guidelines which set out the minimum densities for low-cost and GAP housing projects. The PSDF density guidelines were applied, and a PSO 6 Target for a minimum of 60units/ha for new developments on well-located land was set. Projects with densities greater than 60 units / ha include All Social Housing (Bothasig; Steenberg, Drommedaris) Happy Valley; Pelican Park; Nuwe Begin; Our Pride; Joe Slovo and Delft Symphony 3&5.
We committed to Increase the percentage of units built using energy-efficient methods. Through the 1 953 unit Delft Symphony 3 & 5 development, the Department is making use of alternative building technologies aimed at higher efficiencies. Second, all social housing projects use energy efficiency systems. Several municipalities have also raised funding for the provision of solar water heaters. We also committed to greening our developments. The WEHBSO project, which stands for the Witsands Eco Housing Beneficiary Support Organization project, which delivered 500 units and cost R37.1 million, was completed in June 2012, with 60 units built by women contractors. In partnership with an NGO, Green Communities, the City of Cape Town provided each household with a choice of indigenous trees, bushes, flowers, herbs and vegetables for their own gardens.
We committed to formalise backyard shacks, by upgrading existing informal settlements. In the UISP, informal settlements for upgrading are identified as part of municipal Human Settlement Plans. Some examples of provision for backyarders include services which have been provided to backyarders in some City of Cape Town projects, such as Factreton, where 270 backyarders are accommodated, and the projects at Hanover Park and Langa, which are in process. The provincial projects of Our Pride and Nuwe Begin will accommodate 600 and 300 backyarders respectively.
We committed to provide affordable housing through market mechanisms and densifying suburbs. Our Pride, in the Blue Downs areas of Cape Town, is a completed affordable housing development with Gap Market housing options. Planning for Social Housing includes restructuring zones being developed for Oudtshoorn, Knysna, George, Bitou and Mossel Bay. High density projects have been previously detailed.
We committed to the Appointment of five Professional Resource Teams, or PRTs to ensure that municipalities can plan and manage long and complex pipelines. To date, seven PRTs have been appointed, one each for Eden, West Coast, Winelands and Central Karoo districts, two for the City of Cape Town and one PHP. The appointment for Overberg is being finalised. The PRTs are actively assisting with planning and implementation of projects, and the impact on planning is to have all business plans specified in the 2013/2014 business plan approved and ready for construction before 1 April 2013.
Mr Speaker, this Department has delivered for a wide spectrum of our people, over a wide range of outcomes. In total, this administration has, since 2009, provided a total of 101 265 housing opportunities, and there are up to 15 subsidy programs through which we can deliver, as specified in the National Housing Code.
From April 2009 to 31 March 2013, 53 758 houses and 40 470 sites, or a total of 94 228 sites and houses, will have been delivered, at a cost of R5.12 billion. Since April 2009, R166.3 m has been spent on individual subsidies, creating 2 385 new housing opportunities. R121 million has been spent on the Extended Enhanced Discount Benefit Scheme, which uses a housing subsidy to write off old housing loans, and which enabled 3 911 householders to receive title deeds. Since April 2009, 789 social housing opportunities, where people pay a reduced rental based on their income have been delivered at a cost of R228.1 million. Since April 2009, a further R714.7 million has been spent on upgrading and renovating existing Community Rental Units. In addition, R129.7 million has been spent on the procurement of land for housing projects, R70.6 million has been spent with the National Home Builders Registration Council, or NHBRC, ensuring that the houses built are guaranteed to a high level of quality, and R12.5 million has been spent on rectifying previously built RDP houses.
Mr Speaker, our strategic approach to human settlements delivery is in line with the National Outcome 8 for Human Settlements, especially with our focus to ensure that everyone living in informal settlements, backyards and overcrowded families in the Western Cape has access to basic services by 2014.
The National target for improving the quality of life of informal settlements by 2014 is 400 000, and the Western Cape’s share of the national target is 45 360. Although the Western Cape already leads the country with 99.1% of households having access to piped water and 96.9% to toilet facilities, we are aiming for 100% in both categories.
To ensure that everyone has access to basic services, the Access to Basic Services Programme was launched in January 2012 and by December 2012, the program had ensured that a further 405 standpipes and 634 toilets had been delivered. This means that an extra 4 185 households, or 10 995 people have benefitted from access to clean water, and an extra 3 170 households, or 8 225 people have benefitted from access to sanitation, according to the national minimum requirements.
Mr Speaker, in 2012/2013, the Department spent its budget on a number of programmes, and I wish to reiterate the point that we do far more than just houses, and deliver through up to 15 different subsidy programs.
Our initial targets for 2012/2013 were 10 615 sites and 15 567 houses, yet after the interrogation of projects in the first quarter of the financial year, we set revised targets of 9 325 sites and 15 416 houses, fully briefing the Standing Committee on the adjustment. By 31 March 2013, we will have delivered 8 275 sites, or 89% of our target, and 14 339 houses, or 93% of our targets. There are currently another 1 722 houses and 1201 sites under construction and these houses and sites will be finished within the next few weeks. When complete, this will ensure that 9 476 sites and 16 061 houses will have been delivered, ensuring that the 2012/2013 targets will have been met. To achieve this, by 31 March 2013, 100% of our 2012/2013 budget allocation of R1.725 billion will have been spent.
The Department has three broad categories of programmes, namely Incremental Housing, Social and Rental Housing and Financial Interventions. In 2012/2013, R1.137 billion, or 64% of the budget, was allocated to Incremental Housing, R426 million, or 24% of the budget to Social and Rental Housing, and R211 million, or 12%, to financial interventions.
Under Incremental Housing, we spent R198 million on the Integrated Residential Development program, delivering 3 781 sites. We spent R479 million on house subsidies, delivering 7940 houses. We spent R42 million on the Emergency Housing Program. We spent R316 million on the Enhanced Peoples Housing Process, delivering 5 229 houses. We spent R102 million on the Upgrading of Informal Settlements Program, delivering 3 974 sites.
Under Social and Rental Housing, we spent R358 million Community residential Upgrades, predominantly in the City of Cape Town, ensuring people in community housing can have homes they can be proud of. We spent R15 million on Institutional and Social Housing, and a total of R53 million on individual subsidies, delivering 600 opportunities.
Under Financial Interventions, we spent R13 million on the EEDBS, or Enhanced Discount Benefit Scheme, clearing old housing loans and giving recipients freehold title to. We spent R19.3 million on land procurement and a further R12.45 million on the rectification of old RDP houses.
Municipalities are our primary developers and implementing agents, and their performance determines whether or not we reach our targets. The performance of the City of Cape Town, and each region for 2012/2013, is as follows.
In the City of Cape Town, 5 464 houses were targeted, and it is projected to deliver 4 781. This substantial underperformance was mitigated in part by accelerating PHP projects, yet has still impacted significantly on the provincial targets. The city services sites from their USDG grant and these sites are therefore not included in the provincial targets.
In the Winelands District, 2 329 sites were planned, and 1 847 delivered. 2 440 houses were planned, and 2 324 delivered. Difficulties included the halting of construction in Breede Valley due to farmworker strikes, appointments of contractors and the issuing of a water license. R220 million was allocated, and R194 million or 88% was spent.
In the Overberg District, 1 591 sites were planned, and 1 512 delivered. 557 houses were planned, and 541 delivered. Challenges lay with contractor appointments and staff capacity. R93m was allocated, and R91m or 98% was spent.
In the Central Karoo District, 570 sites were planned, and 589 delivered. 287 houses were planned, and 240 delivered. Laingsburg and Prince Albert did not plan to build any houses. R34 million was allocated, and R33 million or 95% was spent.
In the Eden District, 2 395 sites were planned, and 2 024 delivered. 2 104 houses were planned, and 1813 delivered. Delays were experienced in Mossel Bay due to contractor appointments. R214 million was allocated, and R201 million or 94% was spent.
In the West Coast District, 1 162 sites were planned, and 1 002 delivered. 656 houses were planned, and 1 107 delivered. Delays lay in appointment of contractors. Projects at Graafwater, Doringbaai and Vredendaal were accelerated. R89 million was allocated, and R75 million or 84% was spent.
The Department spent additional funding from under expenditure in the regions on provincial projects.
The Department continues to develop its business model to ensure continuous improvement in all areas of the delivery of human settlements.
An area long overlooked has been the issue of farmworker housing, and the Department works to improve access to basic services and shelter amongst farmworkers and farm residents in two broad settlement contexts: namely in towns and on or near farms.
Firstly, because many farms are within commuting distance of towns, it often makes sense for farmworkers to live in towns where social services are more available, and municipal services are more cost effective to supply. However, in a number of our municipalities, many farmworkers have not been registered on databases in order to benefit in housing projects. The Department is strongly encouraging municipalities to go on special registration drives in its farm areas. Furthermore, the Department’s Beneficiary Selection Framework states that municipalities must take special account of farmworkers and residents who have lived on farms for many years and have not been registered or have recent housing database registration dates and therefore have to wait for a long time for a town based housing opportunity.
Secondly, the national Farm Resident’s Housing Programme allows the Department to direct public money to subsidise the provision of rental accommodation, which in some cases can lead to housing owned by farm residents on the farms. There are, however, many challenges to this approach, and the Department will need to partner with farmers, farmworkers, municipalities and the Department of Agriculture to solve them.
- Perhaps the most important challenge is finding viable ways of providing, managing and funding basic municipal services in remote on-farm or near-farm areas. In many cases, farm residents and farmers will need to be part of provisional solutions as grid-based solutions will not be viable.
- Challenges also exist with the design of the subsidy as the new minimum wage for farmworkers will put many farm worker households over the R3 500 income level limit for the subsidy.
Going forward, the Department will be engaging intensively with stakeholders in the sector to work on developing viable solutions. The aim is to develop a set of viable and useful on or near-farm accommodation options for typical Western Cape rural situations. These options could then be used as a basis of human settlement planning. Municipalities will play a critical role in implementing these projects, as their funding will come out of their housing grant allocations.
A key challenge in the development of human settlements is integrated planning and implementation between and within the three spheres of government. To this end, the Department had adopted a revised macro organizational structure emphasizing enhanced regional support. This involved appointing dedicated Departmental Regional Directors, tasked to provide direct support to municipalities as well as to the City of Cape Town. The Regional Directors are in turn supported by dedicated teams comprising of Regional Technical Managers, project managers, inspectors as well as administrative support. Combined with the introduction of Professional Resource Teams, the capacity of the department to support and monitor long-term municipal planning, project packaging and implementation, has significantly improved.
In late 2012, the Department adopted a framework of norms and standards for municipalities to select beneficiaries from housing waiting lists for subsidy projects. The purpose of the framework is to enhance fairness and transparency in the allocation of housing opportunities. The Framework Policy defines core principles and mechanisms for selection. Some of the core elements of the framework include:
- The need for municipal policy to be systematically inclusive and to avoid unfair discrimination.
- The need to prioritize the elderly and those longest on the waiting list.
- The need to balance green field project opportunities against opportunities created in informal settlement upgrade projects.
- The need for verification of beneficiary information by way of independent information sources.
The Department will continue to engage with municipalities on the implementation of the framework and provide support to them on the design of their selection policies, in 2013.
The Portfolio Management Office, or PMO, continued to mature in 2012/13, with further refinement of standard operating procedures relating to project information. Particular attention was paid to the findings of the Auditor-General on pre-determined objectives for the 2011/12 year, as well as the roles, responsibilities and time management of the different role players in the department that are involved with human settlement projects. The next financial year will see a transition from an outsourced PMO to the establishment of capacity within the department to manage and fulfil the functions of the PMO.
A big advantage of the PMO is that there is one central repository for all project-related information, which means that officials don’t have to track down the project file to look something up. They can go to the system and download an electronic copy of the document they are looking for. This means that project information can be accessed by more than one person at the same time.
On 4 March 2011 the City of Cape Town received their compliance certificate for Levels 1 and 2 Municipal Accreditation.The Provincial Department of Human Settlements and the City of Cape Town developed an Implementation Protocol which was signed by the Minister and the Mayor of Cape Town on 14 June 2012. The Implementation Protocol governs the roles and responsibilities of the relevant parties to the Levels One and Two mandates, as contained in the Accreditation Framework as well as the delegation of powers.
The Provincial Government and the City of Cape Town now have to enter into an Executive Assignment Agreement which needs to address the roles and responsibilities of each party. It is anticipated that the Executive Assignment Agreement, effective from 1 July 2013 will be signed by 30 June 2013.
Since the Municipalities in the Western Cape are already performing the function of human settlements developer, the Provincial Department of Human Settlements is of the opinion that most of the Municipalities should qualify for at least Level One Accreditation. A select few should qualify for both Levels One and Two Accreditation. The Department has decided to broaden the scope of the original tenders of the Professional Resource Teams to include the Municipal Accreditation process in two of the regions, namely Eden and Cape Winelands and have requested them to assist with the drafting of the Accreditation Business Plans. During the period 1 April 2012 - 28 February 2013, 101 housing consumer education sessions were held in various Municipalities, and 2 974 consumers attended these sessions.
During the month of January 2013 forty one (41) staff members from various departments and private companies were trained as Housing Consumer Education trainers through an accredited training programme.
Training is organized to transfer technical skills to the unemployed in communities. The aim of the training is to enable the community members to participate actively in the construction process through the process of job creation. It is with this in mind that the department entered into discussions to the Construction Education and Training Authority, or CETA, to fund a request by the City of Cape Town for assistance to train 80 apprenticeships in the different disciplines of Bricklaying/ Plastering, Plumbing, Electrical and 30 skills programmes in Carpentry and Painting and Decorating.
Ten million rand has been allocated to the department by CETA to fund the above training. The training in the Ocean View project is calculated to cost under R4 million, and is scheduled to commence on 1 April 2013.
The Women in Human Settlements Programme encompasses a programme aimed at targeting women involved in construction or related activities to assist them through capacity-building and employment opportunities. In one of the initiatives the PHEP directorate identified a number of women to assist in a PHP project – these women were work shopped and trained to prepare them for the rigours of the construction industry, and they were earmarked to build ten houses each in a project that was approved in Witsand, Atlantis. By the end of the last financial year, all the women had completed their allocation and have now been earmarked to assist in the construction of units in a new project being approved in the same area. The quality of their construction was highlighted during a special ceremony held to present the female contractors with merit awards for their contribution to the quality of construction in the project. Further opportunities will also be created to assist these women so that they can be awarded larger contracts.
I have on numerous occasions committed to support emerging women owned contractors through special initiatives and partnership. In last year’s budget speech, I announced that the Department would support the proposal by the South African Women in Construction, or SAWIC, to build 413 units in the Phillippi-East project. I approved the project in principle subject to the general condition that the project is a 100% SAWIC initiative.
During deliberations the following problems were identified:
- A contract agreement between SAWIC and a contractor company called Mapumelele for the implementation of the Phillippi project was based on a 70/30 split (70% profit would go to Mapumelele & 30% SAWIC). This agreement was however not in line with the 100% principle of SAWIC involvement against which the project was approved.
- It was also not acceptable to the SAWIC members who were not part of the negotiation of the matter.
- It was also indicated that the CEO of the construction company Mapumelele was a serving councillor and this represented a conflict of interest.
- No sufficient beneficiaries were identified for the project.
All of these factors resulted in the Department taking a decision to rather assist the SAWIC members to identify another project that would fulfil all of their needs for full-scale empowerment in the construction arena, and at present the Department is actively planning with SAWIC around this issue. The Department has, however, assisted the organisation with obtaining centrally located offices from which to conduct their operations in the City of Cape Town CBD.
The decision to pursue Alternate Building Technologies was initiated by the Western Cape Department of Human Settlements, and Delft Symphony Precincts 3 and 5 were identified as the most suitable site for implementation. The technologies have been available for some time, but have not been used in the subsidy market on a large scale before. It is hoped that the experience gained through this project will shape the future ABT products, to offer more affordable products for this market over the coming years.
The use of ABT products is comparable with conventional brick/block and mortar construction, with the following performance characteristics either equal or superior to conventional structures. These include behaviour in fires, structural performance, acoustic performance, energy usage and durability. The speed of construction is also faster than conventional methods.
It is hoped that in the future similar projects can be undertaken at large scale. However the only significant drawback is the current cost of the technology, and the Department is therefore paying a premium on Delft 3 and 5 to get experience in this sector and to stimulate the industry to focus on designing affordable ABT products going forward.
Another energy efficiency intervention is used is the provision of solar water heating to houses to save on the energy costs to provide warm water. The subsidy does not currently provide funding for this, but limited provision has been made possible through donor funding. An example is Joe Slovo Phase 3 in Cape Town, where funding from the Danish Government has meant that the first 500 units of the 2 639 planned units in Shoe Slovo Phase 3 have solar water heaters. Should it be decided to go this way, the subsidy would have to be increased by a further R6 000 to R7 000.
Much negative attention has been focused on the audit disclaimer received by the Western Cape Housing Development Fund, or WCDHF, for the 2010/11 financial year. One of the major reasons for this was that a process of conversion had been initiated to a new set of accounting principles, GRAP (Generally Recognized Accounting Practice). This came about as a result of an instruction issued by National Treasury to all Public Entities to adopt GRAP, as part of that Department’s function to regulate auditing standards in the wider public sector.
The disclaimer was largely based on the fact that the Fund’s asset register and debtors system was not GRAP compliant. The system used to administer the Fund, namely the National Debtors System, is more than 30 years old and was developed to administer the pre 1994 housing policies.
In a meeting with the Auditor General, the Department, and the Provincial Treasury, decided not to submit the financial statements by 31 May 2012 as prescribed. It was more important to submit GRAP compliant Financial Statements than to comply with the deadline, as non-compliance to the deadline of 31 May 2012 would have only led to a matter of emphasis. Statements were submitted to the Auditor General on 7 July 2012, after the Department felt comfortable with the progress of work done, as well as the independent review by an outside service provider.
The Auditor General had to perform additional tests and obtain an independent review on the work undertaken. The final audit report was received on the 11th of December 2012, followed by a final management letter stating the outcome as unqualified. The report in turn had to be reviewed by the Audit Committee. This review took place on 15 January 2013, and the committee responded with their final comments a week later. The report containing the unqualified outcome has since been printed and tabled.
It should also be noted that the Department kept the Standing Committee on Human Settlements, SCOPA, the Audit Committee, the Accounting Officer and myself continuously informed of the progress of the audit.
Although the Department have been reporting for many years on the delivery of housing opportunities, i.e. houses and serviced sites, the independent verification of actual delivery by the A-G was only introduced in the 2009/10 financial year. Prior to this, there was limited verification of what had actually been delivered on the ground, and thus there was no way of really knowing if the money being spent was actually delivering the reported houses and sites. Since 2009, the A-G has extended its audit to include Pre-determined Objectives, and now independently verifies the delivery numbers by interrogating performance evidence and visiting a sample of projects. We know now that what is reported, is what is really delivered.
Mr. Speaker, the Department is also ensuring that it complies with the recommended employment equity, or EE profiles, in order to have a professional and competent public service that reflects the population demographics of our province. The Department has an African EE target of 29.6%, and is currently 2.6% under at 27.0%. It has a Coloured EE target of 51.3%, and is currently 5.1% over at 56.4%. It has an Indian EE target of 0.9%, and is currently 1% over at 1.9%. It has a White EE target of 18.2%, and is currently 3.5% understaffed with whites at 14.7%. The Department has a male target of 53.9%, and is currently understaffed with men by 4.3% at 49.5%. Finally, it has a female target of 46.1%, and currently overstaffed by 4.3% at 50.4%.
The Department faces some unique challenges in the human settlements delivery environment. Major projects, that deliver thousands of opportunities, such as Boys Town, Delft 3 and 5 and Joe Slovo, and which contribute large numbers towards our targets, are repeatedly stopped due to community conflict. Local leaders and steering committees often use the projects to try to force the department to accommodate their agendas, which range from political agendas, to the promotion of self-interest through accessing work or business opportunities, to local forms of nepotism through trying to influence housing lists. Unfortunately, it is the people who most need houses who suffer as they have to wait longer for their housing opportunities. To mitigate some of the risks, the Department and the Ministry have dedicated stakeholder units to deal with potential conflict before it arises, and to engage and communicate with local leadership structures. The Department also spends on extra security where needed. At Boys Town, an amount of R500 000 is spent per month funding additional capacity the City of Cape Town Metro Police. One days stoppage at the site costs around R100 000.
Bulk infrastructure continues to be a challenge. The challenge is that the national government devolves the responsibility of delivering basic infrastructure to the local municipalities, without providing a commensurate grant allocation. For example in Stellenbosch Municipality, R3 billion is needed to spent over the next 10 years, yet based on an extrapolation of the MTEF allocation, only R1.5 billion will be budgeted. Many municipalities produce housing plans which are dependent on bulk infrastructure that has not yet been installed, and of course, the projects become blocked until infrastructure is available.
A third major constraint has been the legacy of poor planning, where the Department had historically included project plans that still required various approvals, for example rezoning, technical or environmental, in its Annual Business Plan and APP targets. Projects that have not gained the necessary approvals have been mitigated by other projects in pipelines ready to go, and funding reallocated mid-year to municipalities able to over-perform. We have changed our business process to ensure that only projects that have all the approvals in place are included in our business plan and targets for 2013/2014. This should ensure that there will be a limited need for funding reallocation through the year, and provide a higher degree of confidence for expected delivery.
Finally, the subsidy quantum continues to rise, and the budget allocation stays fairly constant. The new quantum will be in the region of R130 000 per house, as compared to the current average of R100 000. Mr Speaker, it is obvious that the number of houses we can deliver with the money we have gets less and less each year, while the need grows greater, with the population of the Western Cape having grown by an extra 1.3 million people between 2001 and 2011. The provision of housing as we currently do it is simply not sustainable, and looking to the future, we will need a continued focus rental, institutional and GAP market housing, as well as the leveraging of private funding in the low income and affordable market, in order to provide for all of our people.
In ending, I would like to thank all the staff of the Western Cape Human Settlements Department for their professional and dedicated work this last year, often under demanding and rapidly changing conditions. The upcoming Govan Mbeki awards will formally acknowledge and reward excellence for the role our Department has played amongst the multiple stakeholders in human settlements delivery. I would also like to extend a special mention of thanks to the Head of Department, Mbulelo Tshangana, for his competent operational leadership.
I thank you.