Towards Integrated, Sustainable Communities

Budget Speech 2005/06

In memoriam of Mcebisi S. Dingela

Mr Marius Fransman,
Provincial Minister for Local Government & Housing,
Western Cape

VOTE 8: LOCAL GOVERNMENT AND HOUSING

Honourable Speaker,
Honourable the Premier, Mr Rasool,
Provincial Cabinet Colleagues,
Members of the House,
Invited guests,
Comrades and friends,
Ladies and gentlemen

Mr Speaker, it is our mandate as government to improve the lives of people. Randall Matthews, a learner in the Community Development Worker (CDW) learnership programme, says:

By allowing me to take part in the CDW programme, government has not only given me an opportunity to fulfil a calling that has been within me since childhood, but through the learnership I have been given the opportunity to embark on a career that would be completely purpose-driven to improve lives in my community.

Now Randall has difficulty speaking, and he was unable to study community development after matric because he could not afford it. Randall says further,

I received the news of my selection with mixed feelings. I was extremely excited but had a number of reservations, especially about my stuttering. However, I carefully thought the situation through and realised government was true to its word when it committed itself to providing opportunities for all. I realised that if government had confidence in me, I should have confidence in myself.

Mr Speaker, this is the essence of what my department wishes to achieve. Here is a person who is being empowered to equip himself with skills and knowledge, and who then uses his new-found skills to improve the lives of others in turn. This is about initiating a positive cycle of community-building, with government and communities working in partnership to achieve common goals.

It is only when we work together that we can hope to take up the challenges before us. For as I stand here today I am faced with a sobering reality. It is the reality that in the world today, there are 924 million people living in urban slums. In Africa, 187 million people live in desperate circumstances in urban areas. Urbanisation in Africa is set to continue as people migrate to cities in search of better prospects and living conditions. By 2020, Sub-Saharan Africa's urban population will approach 440 million, or 46 percent of its total population.

There is a similar trend in South Africa. In the Western Cape, an estimated 48,000 people migrate to the province each year. This represents an increase of more than one percent of the total population. And the nature of households is changing: they are decreasing in size and increasing in number. The housing backlog in the Western Cape is estimated at 310,000 households, and this backlog is expected to increase to 460,000 households by the year 2010.

Building integrated communities

The challenge of ensuring adequate shelter and services must be tackled in a comprehensive, holistic, and integrated way. The goal is to create environments that provide for the physical, social, and economic needs of our people. The goal is to strengthen communities and to build bridges between communities that have been divided. The goal is to achieve a new relationship of trust and co-operation between communities and government, and we have seen how the CDW programme is doing just that. The goal is to use the housing process to create jobs and transfer skills to the unemployed and thereby make the shift from dependency on the state to economic self-sufficiency. In short, the challenge is to build integrated, sustainable communities, and to achieve this through integrated, co-operative action.

But building integrated communities comes with risk, and we have witnessed these risks recently. We were all distressed at the suffering and loss experienced by the victims of shack fires in Joe Slovo and Grabouw. But I think it was just as distressing to see some of the conflicts over resources emerge within and between communities in the months that followed. We have seen residents of Mandela Park resisting the settlement of Site C residents in their area. We have seen residents of Ravensmead resisting the temporary accommodation of people in desperate need. We have seen people taking the law into their own hands and invading provincial property and refusing to allow others access. Some of these conflicts reflect the differences between older and newer residents of Cape Town, others reflect African-Coloured differences, and then there are industrialists' vested interests.

Whatever the fault lines of the conflict, one thing has become clear. The conflict is about delivery and access to resources, and it is no accident that it arises just at the time that delivery is taking place. We must heed the call of our President in his State of the Nation address this year:

We must also make a determined effort to educate our population that our country does not have the resources immediately to meet, simultaneously, all the admittedly urgent needs of our people, especially the poor.

So the challenge lies before us to address these divisions in a way that is based on long-term planning, rather than ad hoc promises to communities ahead of local government elections.

I would like to describe the essential components of integrated, sustainable communities, and to outline what my department has done and will continue to do to realise this vision.

Delivering on human settlements

One of the most basic needs of human beings is for shelter. When I took over the Housing and Local Government portfolios, I was faced with significant under-spending on the housing subsidy and a long list of delayed housing projects. I established a dedicated monitoring team to speed up housing delivery. Of the 29 previously blocked projects, 23 were expedited.

We have accomplished much in the past year. Over 20,100 subsidies were approved during the 2004/05 financial year. A total of 12,518 houses were built and 16,965 sites were serviced. An amount of R30 million was spent on converting hostels to family accommodation, which translates into 1,000 units. We spent over R85 million on the People's Housing Process (PHP) and completed approximately 4,000 housing units through this programme. We spent altogether R519 million on the housing subsidy programme, or close to 90 percent of the total subsidy allocation, and we ring-fenced the remainder for the N2 Gateway project.

The momentum developed over the year will lead to increased delivery of top structures in the coming year. We will deliver 16,000 houses, provide 18,000 serviced sites, and have committed R691 million. The entire conditional grant for housing for the 2005/06 financial year is committed to projects already under way. Let me make it clear that these figures are over and above the provisions for the N2 Gateway project.

The rapid delivery of housing will be supported by the revised housing subsidy system. Until 31 March this year, beneficiaries with a household income of less than R1,500 per month were granted a full subsidy but were required to make a R2,479 contribution, and beneficiaries whose household income exceeded R1,500 per month received a smaller subsidy and had to make the R2,479 contribution. With effect from 1 April, households earning less than R1,500 per month are exempt from making a contribution, and households earning between R1,500 and R3,500 per month will be required to make only a R2,479 contribution or sweat equity to that value. People earning between R3,500 and R7,000 per month will qualify for a deposit subsidy on their first housing purchase. The subsidy has increased to take account of increases in building costs. We have also increased the establishment grant for PHP projects to R800 per beneficiary (from R570), enabling greater efficiency and technical support to the needy.

The result of these policies is that the base of qualifying participants has been broadened. It also means that future housing developments will include more social and economic diversity instead of catering almost exclusively for the indigent.

Achieving integration

In speeding up housing delivery, we cannot lose sight of the fact that we seek to build integrated, sustainable communities. Settlements can either build social capital in communities or it can destroy it. The way shelters, neighborhoods, and open spaces are designed can either promote surveillance and safe spaces for women and children, or they can generate zones of violence and gangsterism. It is not high rise flats that generate anti-social behaviour, it is their design and their location. With the new housing policy, facilities such as crèches, sports fields, community halls, and taxi ranks can be funded from the housing budget.

With integration, we are talking about overcoming the past patterns of racial segregation and building a "Home for All." National Cabinet has endorsed the N2 Gateway as one of the projects that will demonstrate a new, integrated approach to human settlements. The project will accommodate 22,000 households from Cape Town's informal settlements and backyards. It will pilot new approaches to human settlements, including in-situ upgrades of informal settlements, medium-density housing, different tenure options, and the installation of grey-water systems. It is a project of partnership, with the three spheres of government acting together jointly. Besides piloting new institutional and financial models, this project aims to transform the City's spatial, racial, and socio-economic make-up. Through this project, local jobs will be created and skills will be transferred.

Functional integration is also important. Instead of dividing our living, working, and recreational spaces as the planners have done with office parks and gated communities, we should look to our most successful models of mixed use and mixed income, like Wynberg and the old parts of Paarl and Caledon.

Creating housing assets

We continually see areas of our cities and towns being priced out of the range of most of our people. The average market value of housing in the formal sector has appreciated by 30 percent and 22 percent in the last two years respectively, yet people with subsidised houses struggle to find value in their homes. This speaks to the essence of the new human settlements policy, which recognises that the quality of the asset is a critical component of sustainable settlements.

I agree with the Premier who argued that it is in the interests of developers to help create mobility in the housing market, with low-income housing forming a key component of the overall market. In countries like the United Kingdom and Malaysia, a contribution of 20 percent is made towards affordable housing development from the profits of higher-end developments. The exact details of such a development contribution in the Western Cape will be the result of various interactions, including those between the national Ministry and major developers and contractors. In six months' time, we will present a policy proposal on this matter.

In seeking to integrate, we should learn the lessons of past projects. The Integrated Serviced Land Project (iSLP) has been running since 1991. In the Western Cape, the iSLP has created four new suburbs and constructed 32,600 houses and 58 new community facilities, including 24 schools, 4 health centres, 11 halls, 4 libraries, 6 early childhood resource centres, and 9 sports facilities. The iSLP was officially concluded on 31 March 2005. The lessons learned from this process have been published and these learnings will be taken forward.

I often get calls from employers of workers who are seeking to assist their employees with housing. In fact, Mr Speaker, our own province has many workers who are un- or under-housed. They range from those earning below R800 per month to those earning around R7,000 per month. We will pay significant attention to this issue, and we are currently in discussion with some employers to work out appropriate pilots.

Maximising state assets

When the Western Cape Housing Board is abolished (and a Bill to this effect is now before the Legislature), substantial assets will accrue to the province. These assets can be used to heal our communities and give opportunities to people who live on the periphery of our towns and cities. Let us bring people into our rented accommodation who really need it, and let us dispose of state assets that cannot add to our strategic agenda.

In this respect, we are in discussion with our national colleagues about the future use of the public assets of the "Big Four" land parcels (Culemborg, Wingfield, Youngsfield, and Ysterplaat). Already our efforts have borne fruit. National government has already indicated that it is releasing 59 hectares of land at Wingfield to be used for human settlement.

An exciting example of maximising state assets is the planned development of two provincially-owned sites in Eerste River, located near transport routes and shopping and community facilities. We are aware, Mr Speaker, of the problems of earlier state-sponsored projects like Wesbank and Delft, which created problems of unaffordability. We are also very aware that there are people who are trying to improve their situation by establishing savings groups. One such group is the Guguletu Housing Process, whose members have been saving for years and searching for well-located land. We recognise their plight, as well as that of people in the greater Eerste River / Blue Downs / Kleinvlei area, and will fast-track this project to serve their collective needs in a manner that integrates affordability, tenure options, and access to amenities. The project will commence this year.

You have heard our Premier commit himself and me to the cleaning up of the Kleinvlei Canal. It is a challenge we gladly take up as a department, both to address the environment as well as the safety of our children.

Another example of the creative use of provincial assets is the development of the Belhar Central Business District in this financial year. The province owns well located property between the University of the Western Cape, the Telkom Training Centre and the suburb of Belhar. The successful bidder is planning a mixed-use, mixed-income, and medium-density development that will link the academic communities of UWC and the Cape Peninsula University of Technology with the surrounding residential area and retail and commercial opportunities. This development promises to be a shining example of integrating bleak and fragmented land pieces and bringing communities together.

It saddens me to see how people are given false hope around waiting lists. We need to address this issue clearly and unambiguously with municipalities. There are a number of waiting lists from the previous subcouncil areas in the metro, and there are problems with waiting lists in other municipalities. Some of the waiting lists are defunct, in other cases there are duplicate names. We have called on municipalities to commence the auditing and verification of waiting lists, and to regularise their waiting lists based on greatest need. The municipalties that we are targeting first are Theewaterskloof, Matzikama, Drakenstein, and the City of Cape Town.

Promoting integrated development planning

This integrated approach is one that my department will promote in the formulation of the next round of municipal Integrated Development Planning (IDP). My department's engagement with the IDP process in municipalities will focus particularly on the housing chapters as essential instruments for integrating our cities and towns.

A very successful IDP Conference was held in Hermanus from 10 to 11 March 2005 and was attended by delegates representing municipalities, provincial and national departments, parastatals, and other stakeholders. At the end of the Conference, delegates unanimously supported what has become known as the "Hermanus Declaration". Allow me to share four of the nine resolutions in this declaration, as they encapsulate the vision of a Home for All and the intent of iKapa Elihlumayo:

"We, the delegates representing municipalities, provincial and national departments, parastatals, and other stakeholders, commit ourselves to:

• Using the integrated development planning process to create a home for all in our cities, towns, villages, and rural areas;
• Promoting economic growth that is shared across and within communities;
• Working towards the alignment of IDPs with the provincial spatial development framework, provincial growth and development strategy, and the national spatial development perspective; and
• Focusing on IDP as a means of building stronger communities and building bridges between communities.

This declaration will be the basis for assessing all municipal IDPs in the coming year, and it provides valuable criteria for assessing municipal performance for the Vuna awards.

To support integrated planning and the implementation of the Hermanus Declaration, my department has been preparing municipalities for the IDP hearings that will be held in May and June this year. At these hearings, the manager of each district municipality and the City manager of Cape Town will each present their IDP to a panel made up of national and provincial officials and other expertise. Municipalities will be asked tough questions, such as whether their IDP will succeed in extending basic services and transforming the landscape of apartheid. Provincial and national departments will be asked whether they have taken account of municipal IDPs during their planning and budgeting processes. The IDP hearings will provide an opportunity to take us forward in our integrated planning and implementation.

Responding to disasters

There is another feature of integrated communities that we must focus on, and that is preparedness for disasters. These last few months have once again demonstrated the dangers of living in unplanned settlements, with fires spreading rapidly from shack to shack and fire-fighters struggling to reach the site of the fire. No sooner had the fires abated than the floods have begun. Last week the Premier and I visited towns in the Overberg that suffered serious flood damage to assess the damage and provide provincial support.

These disasters require a number of strategies. The most effective long-term strategy is to ensure that communities do not live in circumstances that make them vulnerable to disasters. I have already outlined how my department will upgrade informal settlements and build new and safer settlements through our integrated human settlements programme. The foundation of disaster management is, after all, disaster prevention.

In the meantime, we need to respond effectively to emergencies when they happen. I would like to thank the disaster, emergency, and fire services personnel in this province for the invaluable support they have provided in responding to disasters in the past year. To support their work, my department, along with the Departments of Health (EMS) and Community Safety (Traffic), decided in February 2005 to co-locate in a single Provincial Emergency Management Centre at Tygerberg Hospital. The official launch of the Centre is expected to take place by the end of 2005.

To strengthen community response to disastrous events, a Training, Education, Awareness, and Marketing (TEAM) programme will be implemented in informal settlements in the Western Cape. The programme will increase the capacity of communities and households to prevent and respond to disasters through training in First Aid, Home Care, Fire Prevention, Community- Based Risk Assessment, and Community-Based Risk Reduction.

Ten of the most vulnerable communities in the Western Cape Province will be used as pilot projects, namely Wallacedene, Joe Slovo / Langa, Nomzamo, Phola Park, Khayelitsha, and Du Noon (all in the City of Cape Town), Slangpark (Grabouw), De Doorns (Breede Valley), Kayamandi (Stellenbosch), and Thembalethu (George).

The victims of disasters qualify for state assistance under the Emergency Housing Programme (EHP). The Department is implementing EHP projects in Mfuleni to resettle approximately 1600 families who are living under life-threatening circumstances in a rail and road reserve, to resettle 1,500 families in Mbekweni (Paarl) who are living under overhead powerlines, and to provide basic services to 800 families in Saldanha Bay (Middelpos) who are living in abject conditions. The Department also obtained or purchased temporary shelter for 3,000 people left homeless after a fire in the Joe Slovo informal settlement.

Supporting the delivery of basic municipal services

I said earlier that one of the most basic needs of human beings is for shelter, and I have outlined how my department will address this need in a holistic way. Human beings also need access to basic municipal services such as water, sanitation, electricity, and refuse removal.

My department has been actively involved in ensuring that all poor residents of this province have access to free basic municipal services. Last year I reported that all 30 municipalities in the Western Cape provide a certain amount of free water to poor households. I can now report with pride that all municipalities have extended this to include electricity. I can report with even greater pride that all municipalities are also providing free sanitation and refuse removal services, even though this is not yet national policy.

But we must remember that there are still some people who do not receive free basic services because the necessary infrastructure is not in place. National government is addressing this through the Municipal Infrastructure Grant (MIG) programme. For 2004/05, municipalities in the province were allocated R263m from the MIG fund. Among the many MIG projects is the upgrading of taxi and trading facilities in Mitchell's Plain, which is costing R55 million, the upgrading of bulk water infrastructure in Vanrhynsdorp (R2.4 million), the upgrading of wastewater treatment works in Gwaiing in George (R5.1 million), and a new reservoir in Grabouw (R1.3 million).

I am happy to say that, as of the end of March 2005, municipalities had spent more than three-quarters of their national infrastructure grant allocations, and they are on track to spend the remainder by the end of the municipal financial year in June.

The MIG funding represents only one portion of municipal capital expenditure. In the Western Cape, municipalities budgeted R2.5 billion in capital expenditure for 2004/05, of which R1.5 billion was to be spent in the City of Cape Town. In the coming year, we will develop a monitoring system to track the rate and efficacy of capital spending by municipalities.

But there are still people who will not benefit from this investment because they live on private land. This applies particularly to farmdwellers. My department has just completed a study that has found that most municipalities struggle to deliver services to rural residents. My department is committed to facilitating the delivery of basic municipal services through agreements between municipalities and owners of private land.

Making housing affordable

The end result of the policies and programmes I have just described is that there is no longer a basis for claiming that our people cannot afford basic services or housing. The new subsidy bands of the revised housing subsidy programme ensure that all low-income people have access to the full housing subsidy. Those earning between R3,500 and 7,000 a month will be assisted to buy their first homes. The free basic services policies of municipalities ensure that people have access to minimum levels of basic services.

We are also pleased to announce the resolution of the Servcon properties in Khayelitsha, after years of uncertainty about their tenure. We have already processed and transferred funding in order for Servcon to settle the ownership of 1,400 houses. The balance should be resolved within three months.

In addition, we are providing support to people who prefer to rent through the open market rather than own property. The Rental Housing Tribunal deals with complaints from people who are renting private accommodation. The number of complaints received by the Tribunal increased to 6,572 complaints during 2004/05. There were 347 formal case files opened, and the Tribunal had an astonishing success rate of 100 percent in resolving these disputes. The Tribunal is upgrading its facilities and equipment to increase its effectiveness even further.

Achieving sustainability

I have talked a lot about integration, but integration is incomplete without sustainability. Our people must be housed in ways that give them economic opportunity. This can be done by ensuring that settlements are built close to centres of economic activity. It can be achieved through ensuring that housing units are affordable to those who live in them. It can be promoted through construction methods that transfer skills and are labour-intensive. As the Premier pointed out in his State of the Province speech earlier this year, sustainable development underpins our provincial growth and development strategy.

Already the labour-intensive strategy is bearing fruit. Through the use of labour-intensive methods, Municipal Infrastructure Grant projects contributed 580,423 person-days of labour up to the end of February 2005. The Expanded Public Works Programme for labour-intensive construction methods has started on certain housing projects and will be implemented on all new projects approved from 1 April 2005.

Supporting the youth

Sustainability is not possible if we do not invest in the youth of today. My department is engaged in three initiatives that equip young people to enter the mainstream of our economy. The Department is working with the Umsobomvu Youth Fund and National Youth Service Programme to support the PHP programme. This programme is aimed at creating jobs and developing the technical and engineering skills of 1,000 young people. "Project 2" in Mbekweni (Paarl) and Elangeni in Mossel Bay are the first projects to be implemented under this new programme. This is an example of a local economic development programme that addresses poverty and housing issues through an integrated approach.

A further 100 youth will be recruited across the province by the National Youth Service Programme, and these young people will be actively involved in community projects and will work closely with our Community Development Workers.

The third initiative is the establishment of youth units in municipalities. These units will be responsible for the design, support, and implementation of youth programmes linked to municipal IDPs and other government initiatives within municipalities. We will roll out this strategy in the coming year in the district municipality of Cape Winelands and the local municipalities of Matzikama, Cederberg, Saldanha Bay, Swartland, Witzenberg, Stellenbosch, Drakenstein, Theewaterskloof, Langeberg, Mossel Bay, and Oudtshoorn.

These youth initiatives, Mr Speaker, are in line with the resolution adopted by the Governing Council of UN Habitat at their conference in Nairobi earlier this month. The resolution invites all governments to assist in building the capacity of youth and creating partnerships with youth organisations.

Sustainability is also not possible if we do not join hands with our social partners in addressing unemployment. I am in the process of negotiating a Memorandum of Understanding with Standard Bank to provide support to emerging contractors in terms of funding bridging finance and cash flows. The Bank will invest R500,000 in this incubator strategy, and between 20 and 40 contractors will be assisted. This will be linked to the monitoring and training of emerging contractors in construction, project management, and financial management.

Sustainability also relates to the natural environment. In today's world of global climate change, we must all make our contribution by using resources more carefully. Water is a scarce resource, and we must re-use it, as we are with grey-water systems in the N2 Gateway project. We are currently working on the Kuyasa energy efficient project with the City and we will be finding ways to roll out these concepts through other municipalities. Green spaces which are welcoming and cared for by our communities will add to the humanity of our new settlements. We must also find ways - with Minister Essop - to renew our dreary, often polluted township environments.

Deploying community development workers

The building of integrated, sustainable communities is being done in partnership with communities, and one such partnership is the Community Development Worker (CDW) learnership programme. As Minister Mufamadi noted at the Public Participation Conference held in March this year, CDWs are "a cord which articulates our system of government to the mass base. Without them, our system of government cannot be said to be rooted amongst the people."

Last year I announced the launch of the CDW programme in the Western Cape. I am honoured to report that remarkable progress has been made with the implementation of the CDW Programme in this province since 2004. The Department was able to extend the programme to 400 learners after negotiations with partners, specifically the Local Government and Water SETA (LGWSETA) and local municipalities. There are 130 CDW learners in the City of Cape Town and 270 in the five districts.

I would like to take this opportunity to announce that the CDW programme will initiate a new intake of learners in July. Altogether 200 new learners will be recruited and will embark on the same learnership process. The Department intends to employ at least 150 learners in the public service in the coming year. Municipalities will also have the opportunity to appoint some of the CDWs to their staff once they have completed their learnerships.

Strengthening ward committees

My department is also supporting the establishment and efficient functioning of ward committees. In order to speed up the process of implementation, an assessment was carried out in all local municipalities. A total of 272 ward committees have been established in the province, including 100 in the metro. This indicates that over 80 percent of ward committees have been established, and up to 2,720 community members are active on ward committees. The report also revealed that at present only four municipalities have not implemented ward committees, namely Breede River / Winelands, George, Knysna, and Mossel Bay. I have decided to intervene in these municipalities and will be deploying a team of senior officials to address problem areas highlighted during the assessment.

My department is currently building capacity with respect to ward committees in each of the five district municipal areas. My department has also developed and distributed a Guideline Document for Public Participation in municipalities. These are important steps in rooting government amongst the people in this province.

My department plays a more direct role in linking people with government, and that is through our own housing Help Desk function. The old Housing Department would sometimes take months to deal with queries and complaints, and staff on the Help Desk were sometimes abrupt or unhelpful. So we are focusing attention on our customers. Even if we have bad news - we cannot help everyone, we do not have the funds, we have backlogs - at least we can listen and explain respectfully.

This improved responsiveness to the public will be supported by our new directorate of Communications and Customer Care. This directorate will report directly to the Head of Department, and we will set standard response times so that we can measure our effectiveness.

This is how we wish to build integrated communities. It is through encouraging communities to participate enthusiastically and meaningfully in their own development through interaction with government, CDWs, ward committees, and other public participation forums. To support this further, my department is hosting a provincial public participation conference in July, which will focus on strengthening the work of ward committees and CDWs.

Promoting co-operative governance

You will have noted that much of what my department is doing involves partnership with other stakeholders. I have committed my department's resources to play a leading role in co-ordinating the interaction between national, provincial, and local government. We will play a key role in establishing and supporting the new intergovernmental structures proposed in the Intergovernmental Relations Bill.

I have already mentioned how the N2 Gateway project presents an opportunity to demonstrate that co-operative governance works. Another opportunity is in the Presidential nodes. The Integrated Sustainable Rural Development Programme (ISRDP) in the Central Karoo and the Urban Renewal Programme (URP) in Khayelitsha / Mitchell's Plain call for a new way of doing things. This new way requires that all the provincial departments work together with the relevant municipalities to co-ordinate and implement development plans together. This is not easy, as it involves the alignment of programme plans as well as MTEF budgets.

There has been considerable progress in terms of service levels in the Central Karoo node, with household access to basic services increasing by between 30 percent and 55 percent, depending on the service. The focus is therefore shifting to investment in economic development, and issues of social capital also need to be addressed.

In the urban node, significant progress has been made on the anchor projects of the Khayelitsha CBD, Rail extension, HIV/AIDS and other health projects, and housing projects. Projects completed or in process during 2004 totalled about R253m, of which housing represents about 55 percent. In the Khayelitsha CBD project, R265m has been secured from the private sector to provide for a number of commercial projects, including a retail centre and service station. A number of projects have been completed in the Mitchell's Plain CBD, with projects focusing on public transport and the upgrading of public spaces. Projects completed or in process in Mitchell's Plain in 2004 totalled about R247m, of which housing represents 21 percent.

The Premier is the provincial political champion of the urban and rural nodes, and I have been tasked with being his chief support. We are committed to leading the development in the nodes. We will be engaging with the municipalities around the long-term vision for their nodes and how government investment can best contribute to the realisation of that vision.

Facilitating the restitution process

Another co-operative initiative involves the resolution and finalisation of land restitution claims. Once a claim has been settled by the Land Claims Commission, it is necessary for the province, municipalities, and claimants to engage in a process whereby claimants are settled on residential or productive land. This can be a long and complex process as many stakeholders are involved.

To bring all the stakeholders together, my department convened a workshop together with the Land Claims Commission and Premier's Office on 18 March 2005. The workshop was attended by the provincial Departments of Agriculture, Environmental Affairs and Development Planning, Transport and Public Works, Office of the Premier, Department of Land Affairs, National Development Agency, and other government agencies. Workshop participants declared their intention to work together to ensure that restitution claims are incorporated into the development plans of provincial departments and municipalities. A provincial steering committee consisting of the major stakeholders was established at the workshop, and my department will continue to play a leading role in this process.

I attended the signing of a framework agreement in Ebenhaeser between the Land Claims Commission, Department of Land Affairs, and Ebenhaeser Land Claims Committee on 21 March 2005. The agreement provides for the release of land with a total value of R100 million over five years in terms of a development plan. The Ebenhaeser land claim has been delayed for many years, and it provides an opportunity to demonstrate how the three spheres of government can work together to bring final resolution in land reform matters.

The challenge of seamless, co-operative government requires effective intergovernmental planning and budgeting. This includes having the ability to share key planning information between the three spheres of government. To this end, my Department will assist in rolling out an Integrated Development Planning Nerve Centre information tool that is able to capture and provide key planning information of municipalities, provincial departments, and national departments on any given municipal area.

Addressing gender issues

My department is paying careful attention to the issue of gender. In the process of expanding the senior management capacity in the department, the number of women managers was increased to over 30 percent of senior management. We will seek to increase that representivity even further and to ensure that it permeates throughout the department. In the CDW programme, gender representivity was strongly considered in the appointment process, given the anchoring role that so many women play in their communities.

The department is actively encouraging the involvement of women in the construction sector, and held a workshop on Women in Construction in December 2004. In line with this workshop, the Department has developed a support programme for women contractors and developers to have better access and opportunities to jobs and projects in the construction sector. We have an on-going dialogue with organisations like South African Women in Construction (SAWIC), who jointly organised the workshop with us.

Women have told us that they experience difficulties as women in local government, both as councillors and officials. To respond to this, the department sponsored a conference on Women in Local Government in September and developed a management course for women, which was attended by 48 women. The department also worked with the Gender Desk of the Premier's Office to assist municipalities in incorporating gender into local strategies and structures. All five district municipalities were assisted in this way.

Building capacity in the department

The challenges that I have mentioned cannot be tackled without a strong, capacitated department, and I have taken steps to create this.

Last year I stated my intention to amalgamate the two departments, believing that important synergies could be created in this process. In the past year, the "Breaking New Ground" policy was launched by the national Department of Housing. This policy places great emphasis on the building of integrated and sustainable communities. The delivery of housing and the delivery of basic municipal services are so intertwined that if we separate them, we lose important opportunities for integration. We must be integrated in our design of human settlements. And we must integrate our implementation if we wish to speed up delivery processes.

Combining the two departments is only one part of the process. When I took office, I did an analysis of the strengths and weaknesses of both departments. In the housing department, there was a culture of blaming other spheres of government for lack of our own delivery, of blaming policies and lack of local government capacity. In the Department of Local Government, I noticed that there was insufficient emphasis on development and transformation.

I realised we were not geared for delivery according to the new approach, so I asked for a new amalgamated structure that could deliver. Then we set out to recruit the new team, and through our appointments we boosted the percentage of women in senior management from 21 to 33 percent and the percentage of Africans from 7 to 21 percent. Here is the amalgamated team - we have brought them from different backgrounds to enrich our process, our understanding, and our determination to transform for delivery. Some have been here for 30 years and more, and some have been with us for only a few weeks, and they have shown flexibility, commitment, and determination to serve our people.

Although this new department is less than a month old, already the benefits of amalgamation are apparent. I have a team of people that is together planning and implementing a wide range of programmes that will create integrated human settlements. This requires a significant re-orientation of the department, as we need to ensure that what we deliver is aligned with the vision and strategies of iKapa Elihlumayo.

In support of the forthcoming Interministerial Task Team on Human Settlements, we have appointed a reference group of experts from diverse backgrounds. The reference group will be engaging with the new policy in order to highlight issues of importance to our province. There will be a Human Settlements Conference in June, which will engage all stakeholders on the Breaking New Ground strategy and share information from the reference group.

I have also committed my Department to direct participation and a hands-on approach. Over the past ten months we have rolled out the Letsema programme in Rietpoort, in Zwelethemba in Worcester, in Rooidakkies in Grabouw, and right here in Mandela Park in Khayelitsha. My officials were involved in the actual construction of houses in partnership with communities. This initiative has contributed substantially towards shifting us from an administrative focus to a more developmental one.

In the next three months, we will be visiting many communities as part of our community outreach programme. We will convene community meetings, do door-to-door visits, and meet with councillors in many places, including Paarl, Blue Downs, Atlantis, Knysna, Rietpoort, Wallacedene, Khayelitsha, and Ceres.

The capacity of the department has been further boosted by eight engineers and three architects from Cuba. They are providing dedicated support to PHP projects in Mossel Bay, Mbekweni, Wupperthal, and Khayelitsha, where they are ensuring the transfer of technical skills to emerging contractors and communities. There is a deep solidarity between our two nations borne out of the struggles of the oppressed. This technical support is a further demonstration of the special bond between South African and Cuba, and I warmly thank the Cuban government for sharing their valuable skills with us.

Building capacity in municipalities

I have also focused a lot of attention on the capacity of local government. It is hard to believe that in 1993, we still had over 1100 municipalities nationwide. It has been a decade of uncertainty and change for local government. But the foundation has now been firmly laid with the new municipal boundaries and the enactment of the Municipal Structures Act, Municipal Systems Act, and the Municipal Finance Management Act.

Our flagship programme is Project Consolidate, which is a national initiative that aims to capacitate municipalities and to pilot a new style of co-operative governance and resource management. There are many initiatives that will be supported in Project Consolidate municipalities, such as assisting municipalities to pilot new billing systems, implement performance management systems, develop local economic development strategies, and develop poverty alleviation strategies.

Eleven municipalities have been identified for Project Consolidate support in the Western Cape. The support of these municipalities does not indicate crisis intervention, but rather the need to fast-track institutional support. Owing to the level of readiness, we identified four municipalities for accelerated implementation, namely Beaufort West, Theewaterskloof, Cederberg, and Matzikama.

In Beaufort West, we are developing a poverty alleviation strategy by June 2005 together with the provincial Department of Social Services, Central Karoo District Municipality, Development Bank of Southern Africa, and Wesgro. In Theewaterskloof, we are working with the provincial Department of Economic Development and Tourism and Wesgro to establish a brick-making and paving business, and 50 jobs will have been created by July 2005. In Elands Bay (Cederberg Municipality), fishermen lack access to boat launching facilities. Together with the West Coast District Municipality and provincial Department of Environmental Affairs and Development Planning, a slipway will be completed by July 2005.

These are only three projects from a list of 36 early deliverables in the municipalities of Theewaterskloof, Cederberg, Matzikama, and Beaufort West, and thirty of these deliverables will be completed by the end of June 2005. A list of early deliverables in the other seven Project Consolidate municipalities is in the process of being finalised.

Project Consolidate is another example of how we are doing things differently. We are working together with local government to identify the most urgent development needs and we are working with national and local government to speed up service delivery. This is co-operative government and efficient service delivery in action.

We are also helping local government to fight corruption. We held a five-day workshop in November 2004 with the municipalities of Cape Town, George, Kannaland, Langeberg, and Theewaterskloof, at which the areas of procurement, housing, and appointment of personnel were highlighted as potentially vulnerable to corruption. The department will assist the municipalities to develop an implementation plan for these areas. We have also developed a partnership with the Special Investigating Unit, which will provide us with the expertise to investigate possible cases of corruption in municipalities as well as in the department.

Providing support and training

In addition to the targeted support of Project Consolidate, we have strengthened the capacity of all municipalities through targeted training programmes. Municipal officials received management training through the Municipal Executive Programme (18 officials) and Municipal Middle Management Programme (24). My department also trained municipal officials in construction legislation, the Municipal Finance Management Act, electrical services, water and waste treatment, and private development service agreements.

In order to better support municipalities, I have commissioned an assessment of the capacity of municipalities to deliver services, with a specific focus on their housing delivery capacity. The final report will be completed in May 2005 and will include a capacity-building strategy and implementation plan. Early feedback shows that if the municipal sphere is to be truly developmental, much work will have to be done on improving financial management skills, attracting and retaining senior management skills, defining the roles and responsibilities of executive mayors in relation to municipal managers, and linking municipal planning with service delivery outputs.

Although support is needed, we need to acknowledge the successes of our municipalities. Out of 30 municipalities, 29 submitted financial statements to the Auditor-General last year (the exception being Kannaland). Of these 29, 11 had unqualified audits (up from 7 the previous year), and 18 had qualified audits, with only one or two qualifications per municipality. Municipal capacity is improving, and my department will stand by to assist further.

Providing specialised support

In spite of our best efforts, we must admit that there are a number of municipalities that have struggled in recent years. During the 2004/05 financial year, the Department of Local Government implemented eight management support initiatives in municipalities. Comprehensive support was provided to three municipalities that ran into serious financial and administrative difficulties during the previous financial year, namely Cederberg, Witzenberg, and Kannaland.

In Cederberg Municipality, the support initiative is still in its initial stages. From being R8 million in the red, Witzenberg now has a positive bank balance. All major creditors have been paid and there is no projected budget shortfall. We have turned around the situation in Kannaland Municipality in collaboration with Eden District Municipality. All major creditors have been paid, and for three months running Kannaland has had a positive bank balance of R1.8 million. Ongoing support will continue to be provided to Kannaland and Cederberg.

During the 2005/06 financial year, the Department will focus its attention on the development and implementation of a more effective, pro-active municipal monitoring and evaluation system. The goal of this system will be to monitor the overall functioning of a municipality and to make forecasts relating to viability problems.

We will also focus our attention on clarifying the powers and functions of the province and municipalities. In some cases municipalities perform functions that are constitutionally assigned to the province. Where this is the case, the function should either revert to the province or appropriate funding and service delivery agreements need to be put in place. My department will be actively supporting municipalities in this process.

Commitments for 2005/06

We are therefore committed to the following deliverables in 2005/06:

• We will deliver 16,000 houses, provide 18,000 serviced sites, and spend R691 million on human settlements;
• We will pilot in-situ upgrades of informal settlements, medium-density housing, different tenure options, and the installation of grey-water systems in the N2 Gateway project;
• We will facilitate the integrated development of Eerste River and the Belhar Central Business District through the innovative use of provincial property;
• We will assess every municipal IDP against the Hermanus Declaration, including a detailed assessment of each housing chapter;
• We will establish a provincial Emergency Management Centre, together with the Departments of Health and Community Safety;
• We will increase the capacity of communities to prevent and respond to disasters in ten informal settlements;
• We will upgrade our Rental Housing Tribunal facilities to ensure that our 100 percent success rate in resolving disputes is maintained;
• We will pilot the detailed profiling of households in a municipality in order to understand how service delivery can be improved;
• All housing projects will incorporate labour-intensive construction methods;
  Over 1,000 young people will be provided with technical and engineering skills and jobs on PHP projects in Mbekweni and Elangeni;
• There will be fully functional ward committees in all municipalities;
• We will convene a Human Settlements Conference in June, and a Public Participation Conference in July;
• We will deliver on 30 Project Consolidate projects in the municipalities of Theewaterskloof, Cederberg, Matzikama, and Beaufort West by the end of June 2005, and will deliver on a similar number of projects in the other seven Project Consolidate municipalities;
• We will provide a detailed assessment of the capacity needs of municipalities, develop a plan to address these needs, and begin to implement the plan;
• A further 200 learners will be recruited as Community Development Workers in June; and
• We will employ at least 150 Community Development Workers in the public service in the coming year.

Conclusions

Mr Speaker, I am proud of what my two Departments have achieved in the past year. Although they were engaged in transformation and amalgamation processes, still we managed to deliver what was promised. I would like to acknowledge the dedicated efforts of Dr Laurine Platzky, who acted as head of the Housing Department until recently, and Ms Shanaaz Majiet, who was head of the Local Government Department and is acting head of the amalgamated department. My Chief Director Seth Maqetuka will be leaving the Department to apply his considerable skills to human settlement issues in the City of Cape Town. I wish him well and thank him for investing so much of his time and energy in delivering adequate shelter to our people. I would also like to thank all the staff in the department and in the Ministry for their work and commitment in achieving our developmental goals over the past year.

The rolled-over housing funds have been spent, and many houses and sites have been delivered. Now that we have proved we can spend, we need to prove that we need more funding. We can do this through research on migration and rapid urbanisation, and we will be challenging national government to allocate more funds for housing.

We have provided extensive capacity-building support to municipalities and specialised support to struggling municipalities. We have been leading on the issue of disaster management, and have provided funding and support for the extension of basic municipal infrastructure. With my new team in place, I am confident that the ambitious goals that we have set will be achieved.

Events of recent months have made it clear that the needs are great and the contestation over resources is intense. In such an environment, we must ensure that all of our actions support and unite our communities in their pursuit of better living environments.

At the end of the day, we want to see communities where the human dignity of people is affirmed by their living circumstances. We want to see communities where people work with each other and with government to meet their needs and to realise their potential. And we want to see human settlements that at long last address the spatial distortions of the past and lay the foundation for a shared future.