Strategic Plan for MTEF Cycle 2003/4 to 2005/6

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Strategic Plan for MTEF Cycle 2003/4 to 2005/6

• Presentation to the Public Works Portfolio
  Committee on 21 May 2003 by
• James Maseko, Director-General
• National Department of Public Works (NDPW)

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Strategic Planning for MTEF Cycle 2003/4 to 2005/6

• Presentation Outline
• Introduction Governments Planning Cycle
• Key Challenges facing the NDPW
• Strategic Overview
• Significant Shift in Strategic Direction
• Current Restructuring Transformation
• Key Policy Developments
• Budget and Programmes
• Conclusion

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Introduction

• Since my first such presentation to the Portfolio
  Committee some background on Governments
  Planning Cycle is given to contextualise the
  presentation
• In 1999 Government moved to strengthen strategic
  planning process by adoption of the MTSF/ MTEF
• The President instructed FOSAD MANCO to develop a
  multi-year planning cycle which includes a
  strategic planning framework
• The planning process consists of 9 steps

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Government Planning Framework
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Step 1

• Departments begin in September/October identify
  3 or 4 new MTS priorities with measurable
  indicators
• These priorities must be in line with 5 priority
  areas for Government
• Be informed by MTSPs Cabinet approved in
  preceding year (first list of priorities is
  approved at January Cabinet lekgotla, reviewed
  and finally approved
• at July lekgotla) for operationalisation

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Step 1 contd..

• Be located at strategic level and state where
  coordination with other agencies will occur
• Identify partnerships with other stakeholders
• Priorities should be presented in a report
  indicating strategic objectives, policy
  priorities, indicators, programmes, available
  budget resources (or if additional funds are
  required) with supporting explanations and skills
  required and/or motivation for additional skills
• Submitted to the Presidency by 16 October
  annually

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Step 2

• DG Clusters assess departmental submissions
• Develop Cluster-relevant priorities and
  indicators that emphasise integration and
  coordination
• Submit to FOSAD MANCO by 16 November in same
  format departments use

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Step 3

• During December FOSAD MANCO and
• G A DG Cluster assess cluster-level strategic
  priorities review, synthesise and amend inputs
• Produce draft MTSF with support of the Central
  Coordinating Committee by 15 December

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Step 4

• Draft MTSF submitted to January Cabinet lekgotla
  for debate, review and approval
• Priorities and indicators finally integrated and
  synthesised
• Thereafter the MTSF is included in the
  Presidents State of the Nation Address in
  February and cascaded downwards to Clusters and
  departments

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Step 5

• The MTSF is explicitly geared towards achieving
  increased transparency and accountability sets
  Governments goals and indicators by which
  success and failures will be measured
• It includes a review of the past year and a
  thorough analysis of success and failures
• The State of the Nation Address (SONA)
  communicates the main thrust of the MTSF and the
  Programme for the year to the nation at large

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Steps 6 7

• Step 6
• GCIS is responsible for initiating and managing a
  high-profile campaign to inform the public about
  the contents of the MTSF
• Step 7
• During February March MinComBud, the PCC, the
  Budget Council and Budget Forum have joint
  responsibility for MTSF consultation with local
  and provincial spheres of Government

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Step 8

• Step 8
• Once the MTSF is distributed Ministers and DGs
  are responsible to ensure that their staff is
  familiar with it and the direction that it
  provides for the various programmes
• Spending agencies undertake a detailed planning
  and budgeting exercise to align their programmes
  and projects with the priorities in the MTSF by
  way of their business plans

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Step 9

• Step 9 Monitoring, evaluation and reporting
• Reviews of Governments corporate strategy occur
  at mid-financial year programmes and
  expenditure), financial year-end (evaluation of
  annual business plans and service delivery
  performance) and mid-term Policy priorities of
  Government) (departmental strategic and
  operational plans for first year of next MTEF
  cycle submitted 15 workings after annual budget
  speech which was 26 February 2003 this year)

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July Cabinet Lekgotla

• July Cabinet lekgotla provides opportunity to
  incorporate new and unforeseen needs or events
  and feed it into next MTSF planning cycle

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Governments current Strategic Priorities or
Policy Thrusts

• Growth, Investment and Employment
• Human Resource Development
• Prioritising the Poor and Disadvantaged
• Fighting Crime and Corruption
• Effective and Efficient Government
• Nation Building
• A Better Africa In A Better World

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Process for Strategic Business Planning in the
NDPW

• Three high level strategic goals/priorities were
  adopted at TMCs strategic retreat held from 3 6
  Oct 2002 for submission to The Presidency
• Ten strategic drivers were also formulated
• NDPWs Ten-Year Review Planning and SONA
  submission to The Presidency made in Nov 2002
• Our final Estimates of National Expenditure (ENE)
  for MTEF 2003/4 to 2005/6 to National Treasury on
  6 Dec 2002 and finalised mid-January 2003

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NDPWS Strategic Goals

• Three high level strategic goals/priorities
• a) Contributing to economic growth, investment
  and employment by effectively transforming the
  Construction and Property Sectors
  
• Key Performance Indicators
• Job creation through labour based technologies
• Establishment of a Centre of Innovation and Best
  Practice
• Intensification of BEE
• Facilitation of infrastructure investment

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NDPWS Strategic Goals Contd

• b) In ensuring a concerted attack on poverty the
  NDPW will, as part of a comprehensive
  Government-Wide Expanded Public Works Programme,
  implement Community-Based Public Works
  initiatives.
• Key Performance Indicators
• Poverty Alleviation
• Job Creation
• Increased infrastructure investment
• Development of Government wide Policy and Best
  Practice guidelines for the CBPWPs.
• Implementation of Community Development Programme
  initiatives

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NDPWS Strategic Goals Contd

• c) Transforming the NDPW to be strategically
  positioned for optimising the value of the
  States immovable asset portfolio for effective
  service delivery.
• Key Performance Indicators
• Ensuring functional, economic and social returns
  for the State
• Development of Government wide Immovable
  Immovable Asset Management Policy Framework and
  Legislation
• Consolidated State Immovable Asset Register
• Transformed Organisation for effective service
  delivery.

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10 Strategic Drivers of the NDPW

• Drive Governments Expanded Public Works
  Programme (EPWP)
• Reinforce and highlight our immovable asset
  Custodianship/Ownership role
• Establish a clear separation of our immovable
  asset Custodianship/Ownership and Service
  Provision roles
• Reinforce our role as Policy Maker for the
  Construction and Property Industries
• Refocus the NDPW for its effective contribution
  to Government-wide priorities, incl. Regional and
  International initiatives

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Strategic Drivers contd

• To be the Centre of Innovation for the built
  environment, infrastructure and property skills
• Intensify the transformation of the Construction
  Industry, whilst initiating the transformation of
  the Property Industry
• Develop Government-wide policy and best practice
  guidelines that deepens the impact of the CBPWPs
• Ensure an integrated human resource strategy
• Turn around financial management in all its
  facets, including clean Auditor-General reports
  and effective migration towards a Trading Entity

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Key Challenges facing the NDPW

• Lack of uniform guidelines regarding various
  aspects of public immovable asset management in
  all organs of the State.
• Inadequate maintenance budgets that negatively
  impact on the environments where various public
  services are delivered.
• Absence of an integrated information systems and
  appropriate skills to deliver on the Departments
  mandate.
• Industry-wide challenges like
• Capacity constraints within the Construction
  industry
• Shortage of skills- inability to attract new
  skills
• Skewed ownership within the construction and
  property industries
• Transform the physical environment to improve
  service delivery.

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Strategic Overview Key Policy Developments
1999/2000 to 2005/6

• Main emphasis during 1999/2000 to 2002/3 on
  providing services to Client Departments
• Initially the various Client Departments/
  Institutions negotiated funds for projects with
  National Treasury (NT) who then allocated it to
  NDPWs Vote
• In last 2 years NT allocated funds to Client
  Department/Institutions Votes they therefore
  had direct control over such funds, but NDPW is
  still executing projects

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Significant Shift in NDPWs Strategic Direction

• A significant shift in NDPWs strategic direction
  to take place during 2003/4 to 2005/6 MTEF Cycle
  clear separation between 2 main roles e.g
• - Being custodian of the States immovable
  properties, policy maker regulator of the
  Construction Property Industries as well as
  the National Public Works Program (NPWP)
• - Provider of accommodation asset management
  services to National Departments/ Institutions

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Current Restructuring Transformation

• Restructuring transformation currently under-
  way to result in establishment of 3 separate
  Branches, namely
• - A Branch within NDPW that is owner/custodian
  of the States immovable assets, responsible
  for policy-making, regulation of Construction
  Property Sectors and NPWP
• - Accommodation and
• - Asset management services to Clients
  Departments and Institutions

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Key Policy Developments Initiatives

• Some of the key policy developments initiatives
  NDPW
• will embark on
• A policy framework legislation to strategically
  reposition NDPW as owner/ custodian of the
  States immovable assets, and to enable it to
  optimise the value of these assets for more
  effective service delivery
• Parliament will hopefully approve the
  Government-wide Immovable Asset Management Bill
  early in 2004

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Good Governance Legislation

• It is good governance legislation for
  acquisition, management disposal of immovable
  assets in order to
• - Enable better allocation of limited resources
  for Government as a whole
• - Ensure alignment of immovable assets with
  service delivery objectives
• - Ensure more effective efficient use of
  existing immovable assets
• - eventually lead to greener buildings

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Addressing efficiencies, inconsistencies
duplication

• - Address the inefficiencies, inconsistencies
  duplication of efforts in management of
  immovable assets, including infrastructure at a
  Government-wide level and
• - Optimise functionality,economic and social
  returns from the State property portfolio
• - Ensure it enhances and supports service
  delivery, mindful that it is a very costly
  resource, finite and has a huge impact on the
  macro-economic physical landscapes
• Expansion of the Repair Maintenance Programme
  to address the maintenance backlog in other
  departments than Correctional Services

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Budgets to be devolved

• Budgets to be devolved are that of
• - Leasing
• - Maintenance
• - Municipal services and
• - Rates Taxes
• Will encourage improved accountability for
  Accounting Officers and more economical,
  effective efficient utilisation of available
  scarce financial resources by NDPW and User
  Departments/Institutions

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Issues for the next Budget Year

• In general it is apparent that the Departments
  budgetary allocation is far inadequate to fund
  the Departments critical programmes.
• The Department has demonstrated capacity to
  spend its allocated budget, as evidenced by the
  R34million over-expenditure in the 2001/02
  financial year as well as the current expenditure
  trends that indicate a potential over-expenditure
  of R40 million
• The serious negative implications of
  under-funding are in the next forthcoming slides

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Comparison of Requested and Approved Budgets at
Programme level

•    AMOUNT PROPOSED DIFFERENCE
• REQUESTED ALLOCATION
• R millions R millions R millions
• 1 Programme 1
• Administration 304 277 27
• 2 Programme 2
• Provision of Land
• Accommodation 4,321 3,851
  470
• 3 Programme 3
• NPWP 420 322
  98
• 4 Programme 4
• Aux. Assocd 12 12
  0
• TOTAL 5 ,057 4,465
  592

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Under-funding Implications

• The implications of under-funding as they relate
  to the main cost Items are
• Leasing The failure to honour lease commitments
  will result in the affected client departments
  being evicted from the offices they occupy.
• Rates Taxes The municipal Services will be
  terminated with catastrophic results to public
  facilities like hospitals etc. In addition, this
  sphere of Governments service delivery efforts
  will be greatly compromised

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Course of Action

• In view of the under-funding, service delivery
  by the Department will be compromised. There
  however exists a window of opportunity in that
  additional funding may still be found around
  October during the consideration of Adjustment
  Estimates Appropriation Bill.
• To this end, the Department appeals to the
  Committee to provide whatever support it has to
  ensure that additional funding is received as
  indeed, the cut back on expenditure is not a
  realistic solution to the problem.

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Under-funding Implications contd

• Maintenance May result to non compliance with
  Occupational Health and Safety Act as some
  buildings are already in dilapidated state.
• Transfer Payments The shortfall in the main is
  in CBPWP. The department will therefore be
  unable to provide as many public assets as it had
  wished to provide. A number of potential
  temporary jobs opportunities have therefore been
  lost.

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Conclusion contd

• In conclusion, the Department wishes to highlight
  the positive impact and achievements that its
  programmes continue to contribute to Governments
  overall objectives and priorities in areas of
• - Employment creation
• Black economic empowerment
• Infrastructure investment
• Land reform initiatives and
• Poverty alleviation.

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Conclusion contd

• The Department requests the Committee to assist
  the Department in its endeavours to solicit
  additional funding in future appropriations as
  the service delivery will be severely compromised
  due to inadequate funding.