“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 up-front technical and participative work to ensure that human settlements and housing projects are viable and appropriate is inadequately done. Municipalities do not have thecapacity 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 under-estimated with preparation needing to commence well in advance of capital expenditure – government it has been suggested, 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 rollout of basic services for informal settlements. Currently the only grant which is well suited to this is the new Urban Settlement Development Grant (USDG) which is only available from Treasury to Metro’s. Othermunicipalities cannot access this funding and must rely on the Upgrading ofInformal Settlements Programme (UISP) grant which comes from provincial Housing Departments.

Unfortunately this instrument does not work in practice: a) it envisages land acquisition occurring in phase1 which is not practical given how long land acquisitions usually take; b) the budget of around three thousand rand allocated for basic services is too small and; c) it does not provide preparation funding including for the all-important community engagement.

The UISP 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 (SNH) - for orphans and vulnerable children, those affected by HIV AIDS, 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 (NDHS) or a dedicated subsidy instrument. A clear directive from the NDHS or treasury that provincial Departments must utilise a specified amount of their housing budget for Special Needs Housing is required.

The ACDPfeels this Special Needs Housing responsibility should not be assigned to the Dept of Social Development, as has been mooted, as it does not understand housing issues nor have the capacity to deal with them.

Currently cities like eThekwini are compelled to start building double story attached low- income housing to optimise scarce land and promote a more efficient 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 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 top-structures but 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.”