DCoG Presentation to the Appropriations Committee

HEARINGS ON THE MEDIUM TERM BUDGET POLICY STATEMENT

2 November 2010

Purpose of the presentation

• To outline DCoG’s spending priorities for the 2011 MTEF as well as substantial adjustments to conditional grants allocations; and

• To present the actual spending of DCoG for the first 6-months of 2010/11 financial year.

Differentiated approach

Access to basic services

Community Work Programme

DCoG MTEF Budget Priorities: Focus on Outcome 9

3Support to Human Settlements Refined Ward Committee Model

Municipal Finance & Administration

Single window of coordination

Transfers to Municipalities

• MUNICIPAL INFRASTRUCTURE GRANT - A requested has been provided for the approval for an additional R16.9 billion as an increase to the baseline allocation of the Municipal Infrastructure Grant for the 2011 MTEF, in order to meet sector targets to eradicate infrastructure backlogs.

•  BULK INFRASTRUCTURE FUND (BIF)-To unlock the delivery of reticulation services by funding bulk infrastructure and procuring well located land towards addressing backlogs in order to ensure universal access to basic services.

The BIF will also be utilised to upgrade, refurbish and rehabilitate bulk infrastructure such as Water and Waste Water Treatment Works.

• LOCAL GOVERNMENT EQUITABLE SHARE (LGES)– This is to complement the institutional component of the LGES by funding critical skills in

municipalities, prioritising water and sanitation over the MTEF in order to build long-term municipal institutional capacity through the proposed reconfigured Municipal Systems Improvement Systems Grant (MSIG) into the Local Government Institutional and Systems Support Grant. (LGISSG).

–

Transfers To Municipalities

R’000 2011/12 2012/13 2013/14 MTEF

Municipal Infrastructure Grant 5,000,000 5,700,000 6,200,000 16,900,000

Bulk Infrastructure Fund 6,619,856 8,895,253 10,826,795 26,300,000

Local Government Equitable Share

1,334,763 1,408,175 1,478,584 4,221,522

Additional Funding Requests to the Baseline

R’000 2011/12 2012/13 2013/14 MTEF

1. Special Purpose Vehicle

100,000 110,000 121,000 331,000

2. Disaster Management 140,000 140,000 140,000 420,000

3. Implementation of the Master Systems Plan for the National Disaster Management Plan

67, 940 293, 335 71, 816 433, 091

4. Municipal Infrastructure Audit 200 100 - 300

5. Local Government Turnaround Strategy

25,000 28,000 32,000 85,000

6. Township Renewal Prog 8,000 8,800 9,000 25,800

Additional Funding Requests to the Baseline (1/2)

1. Special Purpose Vehicle– The purpose of establishing a Special Purpose Vehicle is to create focussed capacity for the delivery

and rehabilitation of infrastructure with the main focus on low capacity municipalities to ensure the sustainable provision of municipal infrastructure towards the achievement of service delivery targets and the Millennium Development Goals.

– The Special Purpose Vehicle will be responsible for municipal infrastructure planning, delivery and rehabilitation; the provision of technical support to enable municipalities to deliver infrastructure in a sustainable way and monitoring of municipalities performance in relation to infrastructure delivery and management.

2. Disaster Management– Since the promulgation of the Disaster Management Act, 57 of 2002 unsatisfactory

progress has been made with the establishment of disaster management centres throughout the country. The requested funding is to establish the centres in 27 district municipalities and the Northern Cape province.

3. Implementation of the Master Systems Plan for the National Disaster Management Plan

– To create and implement Information Technology and Communication Systems capability of the National Disaster Management Centre (NDMC) in support of the implementation of the Disaster Management Act.

Additional Funding Requests to the Baseline (2/2)

4. Implementation of the Master System Plan for the National Disaster Management Plan

– To create and implement Information Technology and Communication Systems capability of the National Disaster Management Centre (NDMC) in support of the implementation of the Disaster Management Act.

5. Municipal Infrastructure Audit– The project is intended to assess the status of municipal infrastructure in the country

through an audit. This would assist government to know what needs be done about the municipal infrastructure.

6. Local Government Turnaround Strategy– To assist in implementing Outcome 9 and the municipal turn around strategies.

7. Township Renewal Prog– To provide practical hands on support to municipalities in implementing economic

development initiatives towards regeneration of small towns.

(Expenditure outcome Department)

1. Administration 197,922 75,310 122,612 38.1%2.Policy, Research and Knowledge Mang Support 48,168 13,430 34,738 27.9%3. Governance and Intergovernmental Relations 44,174,110 18,565,527 25,608,583 42.0%4. National Disaster Management Centre 78,842 39,795 39,047 50.5%5. Traditional Affairs 74,077 24,009 50,068 32.4%Total 44,573,119 18,718,071 25,855,048 42.0%

Current expenditure 661,318 290,532 370,786 1

Of which:

Compensation of employees 227,490 82,129 145,361 36.1%Goods and Services 433,828 208,403 225,425 48.0%Transfers and subsidies 43,893,769 18,426,659 25,467,110 2

Of which:Provincial and Local Government & other transfers 43,805,452 18,383,212 25,422,240 42.0%South African Local Government Association 24,625 12,313 12,312 50.0%Municipal Demarcation Board 37,187 17,582 19,605 47.3%South African Cities Network 5,104 2,552 2,552 50.0%Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities 21,401 11,000 10,401 51.4%Payments for capital assets 18,032 880 17,152 5.0%Total 44,573,119 18,718,071 25,855,048 42.0%

DeviationCOGTA

Prelim. Expenditure

Outcome

Available funds (inc roll-

overs(R’000)

Total Expenditure

(R’000)

Program expenditure Trends (April – Sept 2010)

• The lower spending within Program 2: Policy, Research and Management Support are related to slow spending within newly created sub-programs like Knowledge Management as they are still being established and also the vacancies within the Program. We also received roll-over funds for the new computer services within the Department of Traditional Affairs to the value of R2.4 million which is not yet spent.

• The low spending of 5% within Payments for Capital Transfers is due to the delay for the procurement of office furniture for the new Department of Traditional Affairs.

1. Administration 197 922 75 310 95 946 27.4%2.Policy, Research and Knowledge Mang Support 48 168 13 430 25 859 92.5%3. Governance and Intergovernmental Relations 44 174 110 18 565 527 19 441 823 4.7%4. National Disaster Management Centre 78 842 39 795 20 276 -49.0%5. Traditional Affairs 74 077 24 009 38 081 58.6%Total 44 573 119 18 718 071 19 621 985 4.8%

Current expenditure 661 218 290 532 338 534 16.5%

Of which:

Compensation of employees 227 490 82 129 113 700 38.4%Goods and Services 433 728 208 403 224 834 7.9%Transfers and subsidies 43 893 934 18 426 659 19 276 057 5%

Of which:Provincial and Local Government & other transfers 43 805 617 18 383 212 19 232 908 4.6%South African Local Government Association 24 625 12 313 12 313 0.0%Municipal Demarcation Board 37 187 17 582 17 582 0.0%South African Cities Network 5 104 2 552 2 552 0.0%Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities 21 401 11 000 10 702 -2.7%Payments for capital assets 17 967 880 7 394 740.2%Total 44 573 119 18 718 071 19 621 985 4.8%

Projected outcome (R’000)DCOG

Prelim. Expenditure

Outcome

Available funds inc roll-over

(R’000)Total Expenditure

(R’000)