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Overview The Expanded Public Works Programme

(EPWP)

17 Aug 2010

EPWP incentive update for Select Committee on Public Services

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Outline• Introduction

• 5 Year Targets

• Progress up to March 2010

• Sector Achievements and Challenges

• Fiscal Incentive

• Technical Support to Municipalities

• Conclusion

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• Goal: to create 4.5m work opportunities for poor and unemployed people in South Africa

• To contribute towards halving unemployment by 2014, through the delivery of public and community services

• Scale up from 210 000 FTEs in Y1 to 610 000 FTEs in Y5• Equivalent of 4, 5 million work 100-day work opportunities

in 5 years• EPWP to enable government to act as an Employer of

Last Resort as part of the Anti-Poverty Strategy

Introduction

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Year Infrastructure Environment & Culture

Social Non-state Total

09/10 300,000 150,000 80,000 20,000 550,000

10/11 342,000 156,000 96,000 48,000 642,000

11/12 440,000 200,000 132,000 96,000 868,000

12/13 572,000 275,000 187,000 176,000 1,210,000

13/14 720,000 375,000 255,000 300,000 1,650,000

Total 2,374,000 1,156,000 750,000 640,000 4,920,000

Phase II Targets per sector & per year

Year Infrastructure Environment & Culture

Social Non-state Total

09/10 108,696 32,609 60,870 8,696 210,870

10/11 130,435 41,739 67,826 20,870 268,870

11/12 170,435 59,130 90,435 41,739 361,739

12/13 220,000 81,304 124,348 76,522 502,174

13/14 273,913 110,870 169,565 130,435 684,783

Total 903,478 325,652 513,043 278,261 2,020,435

FULL TIME EQUIVALENT TARGETS

WORK OPPORTUNITY TARGETS

5

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Wo

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un

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Target gross jobs Work opportunities

Target gross jobs 300,000 150,000 80,000 20,000 550,000

Work opportunities 263,457 95,942 206,421 60,039 625,859

Infrastructure Environment Social Non-State TOTAL

Q4: Work opportunities per sector against total targets for 2009-10 (Overall)(1 Apr 2009 – 31 March 2010)

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Achievements Across Sectors

• Several new programmes being added, such as Khari Gude, School Nutrition and Mass Participation Programmes

• The Food for Waste Programme will add 4 municipalities in 2010/11.The programme will cover 10 municipalities

• 900 new Vuk’uphile Learnerships

• Infrastructure incentive grant beginning to have intended effect of encouraging Public bodies to exceed FTE targets

• From 2010/11 Environment and Culture Sector will also have an incentive allocation

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Challenges Across Sectors

• Labour-intensity of projects implemented not being optimized by Provincial Departments and Municipalities.

• Lack of technical capacity in public bodies to implement projects

• No institutionalized human resources to drive development interventions

• Lack of data capturing capacity to report properly on implemented projects

• Management and coordination across 3 spheres of government

• Lack of non-wage funding to kick-start key programmes across all sectors

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Responses to Overcome Challenges

• Technical support continue and intensified to improve labour-intensity in implementation of projects

• Key partnerships exist and new ones developed to piggy-back on existing support initiatives

• Replication of highly labour-intensive programmes is being encouraged

• Continued training of municipal officials in Labour-Intensive methodologies

• Teams of data capturers assisted in cases where capacity lacks and will be intensified in short term

• Minister’s drive for greater political buy-in have been boosted through signing of target agreements with Premiers

• New funding proposals developed to assist implementing bodies to start new programmes

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1.0 Introduction

• The EPWP incentive has now been introduced to all sectors of the EPWP from the 10/11 financial year.

• The Infrastructure sector incentive is applicable to Provincial Departments and Municipalities.

• The Environmental sector incentive is applicable to National Departments through their appropriations from National Treasury.

• The Non-state sector grant is paid to Non-Government Organisations ( NGOs) and Non-Profit Organisations through the Independent Development Trust ( IDT) which was appointed as the intermediary.

• The Social sector grant has been paid as a schedule 5 grant to Provincial Departments of Social Development and Education.

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2.0 Progress of the Infrastructure sector incentive in the 10/11 financial year

• For Provincial Departments, the incentive has been paid to 8 of the eligible departments in 5 provinces. R85.943 million will be paid out of the R330.67 million available for the 10/11 financial year considering 1st quarter reporting. This represents 26% of the Provincial allocation.

• For Municipalities, 56 of the eligible Municipalities have been paid the incentive in all the Provinces. R 85.943 million of the R 622.996 million will be paid considering 1st quarter reporting. This represents 32% of the Municipal allocation for the 10/11 financial year.

• Provincial Departments in Gauteng, Mpumalanga, Western Cape, Northern Cape and North West reported in the 1st quarter 10/11 but did not exceed the threshold for incentive payment.

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2.1 Performance on the EPWP infrastructure incentive by Provinces after the 1st Quarter of the 10/11 financial year reporting

Province Infrastructure Incentive allocation for the 10/11 National financial year (R’000)

1st Quarter incentive payment for the 10-11 financial year

(R’000)

Total incentive disbursed

In the 10/11 financial year (R’000)

Percentage of the 10/11 incentive disbursed

Eastern Cape 60,354 5,640 19,011 31

Free State 13,767 817 817 6

Gauteng 38,821 0 2,498 6

Kwa-Zulu Natal 169,470 28,896 59,300 35

Limpopo 2,903 0 2,617 90

Mpumalanga 18,074 0 0 0

Northern Cape 1,167 0 0 0

North West 2,897 0 0 0

Western Cape 23,218 0 1,700 7

Total 330,671 35,352 85,943 26

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2.1 Performance on the EPWP infrastructure incentive by Municipalities after 1st quarter 10-11 reporting

Province Infrastructure Incentive allocation for the 10/11 National financial year (R’000)

1st Quarter incentive payment for the 10-11 financial year

(R’000)

Total incentive disbursed

In the 10/11 financial year (R’000)

Percentage of the 10/11 incentive disbursed

Eastern Cape 97,806 6,844 16,182 17

Free State 34,400 1,402 1,539 4

Gauteng 165,048 69,984 110,476 67

Kwa-Zulu Natal 123,613 18,056 42,526 34

Limpopo 55,355 4,955 16,195 29

Mpumalanga 37,288 568 602 2

Northern Cape 50,399 1,889 1,931 4

North West 36,049 1,887 9,400 26

Western Cape 26,038 823 1,408 5

Total 622,996 106,119 200,259 32

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3.0 Non State Sector (NSS) Progress for the 2009/10 financial year

• The final budget allocation for the NSS was R 204.5 m. This was the result of an additional allocation of R114.5m for the Community Works Programme (CWP) in the adjustment budget on the original budget ofR90m.

• Included in the NSS allocation is a transfer of R14.5m to the Independent Development Trust (IDT) as the appointed intermediary to manage the NSS on behalf of DPW.

• The allocation for the CWP was made up of wage costs and non-wage costs. The non-wage costs amount to R58.5m and the wage costs R91m

• By the end of the 2009/10 financial year DPW had transferred the full allocation to the two programmes.

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3.1 Community Works Programme Budget performance for the 2009/10 financial year

Budget Actual

Balance of supervision costs: community level 1 048 384 2 537 038

Bank charges 3 639 990 686 997

Protective clothing 3 471 177 8 593 238

Tools and materials costs 18 916 719 11 570 957

Training and technical support 9 099 976 7 130 120

Project management 14 130 668 13 714 420

VAT - 5 610 472

Assets - 463 673

Venue hire, accommodation 138 000 138 000

Project Management Fee 213 045 213 045

Travel & Subsistence 210 000 210 000

Tools and materials 531 450 531 450

Technical Support and Training Crew 911 000 911 000

Wages (supervisors) 340 000 340 000

Programme Management Fees: TIPS 5 850 000 5 850 000

Total Expenditure 58 500 409 58 500 410

Budget Actual % Spent

Wage 90 999 935 87 544 300 96%

Goods and services (less programme management) 50 306 914 50 306 915 100%

Totals 141 306 849 137 851 215 98%

Table : Site level expenditure, 2009/10

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3.2 Non Governmental Organizations (NGOs) performance for the 09/10 financial year

PROVINCE AMOUNT PAID

EASTERN CAPE 6 560 000

FREE STATE 4 872 300

GAUTENG 2 636 400

KWAZULU NATAL 6 620 432

LIMPOPO 5 083 700

MPUMALANGA 3 684 000

NORTHERN CAPE 2 400 000

WESTERN CAPE 4 330 750

NORTH WEST 3 972 825

TOTAL 40 160 407

• The full allocation of R40.1 million was transferred to NGO’s participating in the institution based programme.

• The full allocation is for wages at a rate of R50 per person per day.

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4.0 Measures put in place to improve performance on EPWP incentive draw down

• Public bodies ( Provincial Departments and Municipalities) are being provided with support to report on EPWP. The 90 data capturers employed are helping in this regard.

• A partnership with DBSA through the Siyenza Manje programme has been put in place to support municipalities jointly.

• Training of officials in Municipalities in Labour-intensive methods of construction is being planned with LG-SETA.

• Training on reporting is also being done to Public body officials to enable them to report better on EPWP.

• Technical support being provided to Public bodies to implement their projects more labour-intensively so as to create more work opportunities and Full Time Equivalents that will increase the incentive drawn down.

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5.0 Proposals being considered for the 11/12 financial year in terms of the incentive

• Increasing the Minimum FTE payment to R60 for Provincial Departments and Metropolitan municipalities. • Increasing the FTE payment for Rural Municipalities from R60 to R70. • Introducing a provision that 10% of the incentive earned can be used for project management capacity on EPWP incentive.• Introducing an integrated incentive at Provincial and Municipal spheres that combines the Infrastructure and Environmental Sectors.• Increasing the nominal amount for eligible Public bodies from

R500,000 to R2 Million. • Introducing a Non-wage component for the Non-state sector.

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Conclusion

• On-going communication drives brought more public bodies on board

• Drive for political champions across three spheres of government starting to have desired effect on implementation and reporting, but needs to be intensified

• Collective responsibility to deliver on EPWP have to be tied in through Delivery Forums and Delivery Agreements to achieve up-scaled targets for outer years of Phase 2

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Thank you!

Stanley.Henderson@dpw.gov.za

Office: +2712 310 5110Mobile: +2783 676 5119

Website: www.epwp.gov.za