Chair, hon Minister, what the ACDP is hearing on the ground is that project preparation is still very weak and is generally not funded. This means that all upfront technical and participative work to ensure that human settlements and housing projects are viable and appropriate is inadequately done. Municipalities do not have the capacity or funding to do this in-house and they can't readily access preparation funding from their provincial departments. This funding would greatly assist in capital cash flows, risk management, limiting wasteful expenditure and reducing corruption by ensuring clear project specifications and requirements before implementation commences.
Lead-in times are also said to be underestimated, with preparation needing to commence well in advance of capital expenditure. It has been suggested that government needs to get ahead of the game to generate bankable project pipelines, which make effective use of increasingly scarce and heavily subscribed capital budgets.
Funding or grant instrument problems are expected in most municipalities with regard to the rapid roll-out of basic services for informal settlements. Currently the only grant that is well suited to this is the new urban settlements development Grant, USDG, which is only available from Treasury to Metros. Other municipalities cannot access this funding and must rely on the upgrading of informal settlements programme grant, UISPG, which comes from provincial housing departments. Unfortunately, this instrument does not work in practice. It envisages land acquisition occurring in phase one, which is not practical given how long land acquisitions usually take. The budget of around R3 000 allocated for basic services is too small and it does not provide preparation funding, including for the all-important community engagement. The UISPG must be made more flexible and accessible, or the USDG must be expanded to other municipalities, or a new Treasury grant is required.
Currently special-needs housing for orphans and vulnerable children, those affected by HIV/Aids, the aged, abused women and children, etc is not adequately provided for despite significant and long-standing programmes dating back to 2001. To date there is no clear direction from the department or a dedicated subsidy instrument. A clear directive from the national Department of Human Settlements or Treasury that provincial departments must utilise a specified amount of their housing budget for special-needs housing is required. The ACDP feels that this special-needs housing responsibility should not be assigned to the Department of Social Development, as has been mooted, as it does not understand housing issues or have the capacity to deal with them.
Currently cities like eThekwini are compelled to start building double- storey attached low-income housing to optimise scarce land and promote a more effective and sustainable urban form. As the housing subsidy is fixed, it does not accommodate the significant cost premium of densified housing, which typically costs 1,5 to 2 times the usual subsidy amount.
Lastly, there is a concern that the rural housing programme is unsustainable and a poor investment of scarce housing subsidies. While some rural housing is appropriate around rural nodes and where there are indigent households in special need, the main rural human settlement needs are not for top structures, but for basic infrastructural services like water, sanitation, basic road access and key social services, especially education and health care.
The ACDP will be supporting this Budget Vote, yet we are very aware that people are not happy and a lot still has to be done. [Applause.]