EPWP Phase II

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EPWP Phase II
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Background to EPWP II

• The first phase of the Expanded Public Works
  Programme achieved its targeted 1 million work
  opportunities a year ahead of schedule
• The second phase of the EPWP will scale up
  further to contribute significantly to halving
  unemployment by 2014
• Cabinet approved the high level proposals for
  EPWP II in June 08 and the Business Plan at the
  Lekgotla in January 2009
• R4.1 billion was allocated in the form of an
  incentive over the MTEF to scale up the EPWP
  outcomes.
• Agreement at the PCC for DPW to set targets for
  provinces and municipalities and for them to
  report to DPW
• EPWP II implementation to start on 1 April 2009.

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SONA address President JG Zuma 3 June 2009

• As part of Phase 2 of the Expanded Public Works
  Programme, the Community Work Programme will be
  fast-tracked.
• Another important element of our drive to create
  job opportunities is the Expanded Public Works
  Programme (EPWP). The initial target of one
  million jobs has been achieved.
• The second phase of the programme aims to create
  about four million job opportunities by 2014.
• Between now and December 2009, we plan to create
  about 500 000 job opportunities
• Given SONA and Economic Crisis EPWP is a
  national priority and key component of government
  crisis response

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Goal of EPWP Phase II

• To create 4 million work opportunities for poor
  and unemployed people in South Africa so as to
  contribute to halving unemployment by 2014,
  through the delivery of public and community
  services.
• EPWP to enable government to act as an employer
  of last resort as part of the Anti-Poverty
  Strategy

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Critical Success Factors for EPWP II

• Make creation of paid work the primary objective
  of the programme (Employer of last resort)
• Locate clear political and administrative
  accountability for EPWP job creation targets
  across all spheres of government
• Align EPWP outputs with the core mandates and
  programmes of implementing public bodies
• Provide fiscal incentives to accelerate scaling
  up of EPWP outputs across all spheres of
  government
• Mobilise non-state capacity to deliver additional
  EPWP work opportunities

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Key Components of EPWP II

• Targets and accountability across Government
• Each public body to have annual job creation
  targets
• Political and Administrative heads to commit and
  held accountable for achieving these targets
• EPWP Incentive Grant
• Incentive grant for public bodies to create EPWP
  employment through providing R50 for every
  person-day of work created above a set minimum
  threshold
• Phased in over the next two years to other
  sectors, provinces and municipalities

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Key Components of EPWP II

• Non-State sector
• Mobilise the capacity outside the state (capacity
  of NGOs, CBOs, non-profit organisations) to
  create work for EPWP targets group
• Work will focus on a wide range of activities as
  indentified by local communities or the NGOs and
  CBOs
• Funding provided on the basis of the wage
  incentive
• Technical Support to spheres, sectors and
  implementing bodies
• Implementing bodies requiring capacity can access
  support through the EPWP Unit and other support
  programmes like the Technical Assistance Unit
  from National Treasury

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1-Targets and Accountability
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1-Targets and Accountability across all spheres
of Government

• Overall Phase II targets will be distributed
  across all spheres of government and the five
  year period so that
• Each public body has a clear target for each
  financial year
• It is clear which programmes/ activities of the
  public body are expected to contribute to the
  target
• The targets are adjusted annually over the MTEF
  in line with budgets available and the
  performance of each public body
• Targets are calculated by applying an employment
  factor in FTE per Rand million to grants received
  by public bodies
• Respective political and administrative heads to
  be held accountable for achieving respective
  targets
• EPWP Unit to manage the setting, monitoring and
  feedback process for performance in relation to
  all targets

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Phase II targets in Full Time Equivalent Jobs
broken down per sphere of government
  Local Provincial National Non-State Totals
2009/2010 61 922 117 554 22 698 8 696 210 870
2010/2011 74 371 136 630 28 999 20 870 260 670
2011/2012 97 342 181 667 40 991 41 739 361 739
2012/2013 125 853 243 527 56 272 76 522 502 174
2013/2014 157 086 320 692 76 570 130 435 684 783
Totals 516 573 1 000 070 225 531 278 261 2 020 435
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Phase II targets in 100-day work opportunities
broken down per sphere of government
  Local Provincial National Non-State Totals
2009/2010 182 607 247 325 100 068 20 000 550 000
2010/2011 208 032 281 720 104 248 48 000 642 000
2011/2012 267 920 370 420 133 660 96 000 868 000
2012/2013 349 129 501 283 183 588 176 000 1 210,000
2013/2014 440 721 659 286 249 994 300 000 1 650 000
Totals 1 448 409 2 060 034 771 557 640 000 4 920 000
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Breakdown of Targets for EPWP phase II for
different sectors (work opportunities)
Year Infrastructure Environmental 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
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Break down of Targets for EPWP phase II for
different sectors (Full Time Equivalents)
Year Infrastructure Environmental 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
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Phase II targets in Full Time Equivalents broken
down per Province
E Cape Free State Gau-teng KZN Lim Mpum N Cape North West W Cape Totals
2009/10 12,732 8,349 21,091 24,908 13,070 8,880 5,384 22,867 13,177 117,554
2010/11 15,102 9,726 24,224 28,878 15,364 10,357 6,342 25,301 15,083 136,630
2011/12 20,059 12,951 32,472 38,344 20,434 13,793 8,455 32,863 20,087 181,667
2012/13 26,572 17,371 44,978 51,386 27,239 18,490 11,288 44,046 27,195 243,527
2013/14 34,401 22,893 58,802 67,640 35,587 24,350 14,779 57,989 36,312 320,692
Totals 108,866 71,290 181,567 211,155 111,694 75,870 46,247 183,066 111,853 1,000,070
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Phase II targets in 100-day work opportunities
broken down per Province
E Cape Free State Gau-teng KZN Lim Mpum N Cape North West W Cape Totals
2009/10 32,078 18,115 36,618 50,680 30,649 19,505 13,031 31,763 23,807 247,325
2010/11 36,034 20,544 43,398 57,999 34,578 22,094 14,629 36,592 27,462 281,720
2011/12 46,798 26,979 56,023 76,373 45,142 28,993 19,085 48,226 35,560 370,420
2012/13 62,506 36,533 90,097 103,323 60,691 39,234 25,705 64,912 50,171 501,283
2013/14 81,326 48,124 118,581 135,713 79,439 51,660 33,744 84,939 66,769 659,286
Totals 258,741 150,296 344,717 424,089 250,499 161,487 106,193 266,432 204,770 2,060,034
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Phase II targets in Full Time Equivalents for
Local Municipalities by Province
Province 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014
Eastern Cape 9,779 11,735 15,334 19,793 24,644
Free State 3,993 4,792 6,261 8,082 10,063
Gauteng 11,028 13,233 17,291 22,320 27,789
KwaZulu-Natal 13,081 15,697 20,511 26,476 32,964
Limpopo 8,046 9,655 12,616 16,285 20,276
Mpumalanga 4,182 5,018 6,557 8,464 10,538
North West 5,240 6,288 8,216 10,606 13,205
Northern Cape 1,259 1,511 1,975 2,549 3,173
Western Cape 3,946 4,735 6,187 7,986 9,944
Total 60,554 72,665 94,949 122,562 152,596
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Phase II targets in 100-day work opportunities
for Local Municipalities by Province
Province 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014
Eastern Cape 28,559 32,557 41,886 54,452 68,541
Free State 11,661 13,294 17,103 22,234 27,987
Gauteng 32,204 36,712 47,232 61,402 77,289
KwaZulu-Natal 38,201 43,549 56,027 72,836 91,681
Limpopo 23,497 26,787 34,462 44,801 56,393
Mpumalanga 12,212 13,922 17,911 23,285 29,309
North West 15,303 17,445 22,444 29,177 36,727
Northern Cape 3,678 4,192 5,394 7,012 8,826
Western Cape 11,523 13,137 16,901 21,971 27,656
Total 176,837 201,595 259,361 337,170 424,410
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Acceleration of EPWP to meet SONA December 2009
Work Opportunity Targets
Actual performance April 08 - Dec 08 Planned targets to meet SONA Dec 09
Social Sector 60 021 60 000
Environment 79 542 100 000
Infrastructure 255 300 300 000
Non state CWP 3 000 50 000
Non state NGO 10 000
Economic Sector 5 474
Totals 403 337 520 000
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1-Targets and Accountability across all spheres
of Government

• Targets have been set for each Sphere of
  Government and for each Sector
• Implementation Protocols will be signed between
  the Minister of Public Works and the Premier of
  each Province committing them to agree, meet and
  report on targets over the next five years -
  Ministerial Event with Premiers (TBD)
• This will take place between now and mid July and
  will be Managed by the EPWP Partnership
  Development Directorate

• Support for EPWP II planning
• EPWP will assist public bodies to identify gaps
  between targets and planned projects
• Public bodies may request technical support from
  DPW to work in the Province
• All identified programmes commence reporting on
  the web based reporting system, supported by the
  EPWP Monitoring and Evaluation Unit

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1-Targets and Accountability across all spheres
of Government

• Detail of the Protocol
• Purpose of the protocol
• To establish an agreed framework for cooperation
  and coordination between the Parties to achieve
  EPWP objectives
• To promote the objectives of the EPWP by
  mainstreaming the use of labour-intensive
  employment
• To confirm the Province/ Municipalitys agreement
  and commitment to achieving the targeted number
  of full time equivalent jobs in the Province/
  Municipality
• Specify the institutional structures that will
  oversee, monitor and report on EPWP progress
• Obligations and roles of relevant parties
• Planning to meet targets
• Comply with the rules of the programme in terms
  of reporting timelines and audit requirements
• Monitoring roles

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2-EPWP Incentive Grant to Provinces and
Municipalities
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2- EPWP Incentive Grant

• EPWP Phase I had a specific stipulation attached
  to the Municipal Infrastructure Grant and the
  Infrastructure Grant to Provinces to implement
  such projects using labour intensive methods
• Follow through on EPWP principles and guidelines
  uneven
• EPWP Incentive Grant aims to reinforce and reward
  public bodies that actually implement labour
  intensive methods or increase the labour content
  of infrastructure delivery
• What is the basis of the Grant? Three key factors
  built into grant formula
• Aligned to the share of the unemployed in each
  province
• Rural bias built into the allocations
• Built in a reality check to account for past
  performance on EPWP specifically
• R3.2 billion has been allocated to DPW over the
  MTEF to pay out the incentive to public bodies
  and this is expected to grow to at least R5
  billion by 2014

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2- EPWP Incentive Grant - eligibility

• How was Eligibility determined? In order for
  provinces and municipalities to be eligible for
  the incentive grant, must meet 2 sets of
  criteria
• 1. PBs have to report EPWP performance on
  projects to DPW in a prior financial year
• 2. Meet minimum job creation targets based on the
  available infrastructure grant budgets
• Agreements Eligible public bodies will enter
  into agreements with DPW which will specify
• Targets to be met by the public body and the
  allocation that can be claimed for EPWP work
  created
• Reporting and verification and audit requirements
• Basis of payment
• While indicative performance targets and
  incentive amounts are set for each eligible
  public body, they will only be able to claim the
  incentive upon proving that work has been created
• The EPWP incentive is based on paying all public
  bodies that create work above a minimum threshold
  for the EPWP target group an incentive of R50 per
  day for every day of work created.( Rural
  Municipalities do not have a minimum threshold).

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2- EPWP Incentive Grant

• Appropriation of funds
• Eligible public bodies should take into account
  in the planning processes the fact that if they
  meet their job creation targets, they will
  receive the incentive allocation through a
  quarterly payment by DPW
• This payment should be used for any job creation
  programmes
• Basis for measuring EPWP performance
• Number of FTEs per million Rand of the
  infrastructure grant budget, taking into account
  the different portfolios of infrastructure and
  the rate at which each can contribute to job
  creation
• Each public body must meet a minimum eligibility
  threshold before they can start accessing the
  incentive (zero threshold applies to rural
  municipalities)
• The incentive is not paid out for work created
  below the eligibility threshold, but is paid for
  all work created above this threshold

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EPWP Fiscal incentive allocation over the
2009/10 MTEF
2009/10 R000 2010/11 R000 2011/12 R000 TOTAL R000
Provinces 151,419 400,000 800,000 1,352,419
Municipalities 201,748 554,000 1,108,000 1,863,748
Non-State Sector 80,500 359,621 308,740 748,861
Provision for Capacity to NDPW 22,033 33,149 56,000 111,182
Administration provision for intermediary for Non-state sector 9,500 21,030 18,360 48,890
TOTAL 465,200 1,367,800 2,291,100 4,124,100
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2.1. Incentive Grant for Provinces

• The average Full Time Equivalent for the
  different infrastructure
• portfolios (e.g. Roads, Public Works,
  Education, Health) was considered in calculating
  the incentive amounts
• Full incentive amount (FTE Performance Target
  FTE minimum threshold) X R50 per day X 230 days
  per FTE
• DORA amount 75 X Full incentive amount,
  because only 3 payouts fall into the 2009/10
  financial year. Q4s payment will fall into
  2010/11.
• 4 Provinces, Western Cape, Gauteng, Limpopo and
  Northern Cape did not meet the FTE minimum
  threshold and were allocated a nominal incentive
  amount of R500,000.
• Total Incentive allocation to Provinces is R151
  million for the 2009/10 financial year.

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2.2 Fiscal incentive to Municipalities

• In order to cater for rural municipalities in
  line with comments from the Select Committee on
  Finance, the following was resolved
• That rural (non-urban municipalities, defined as
  those not falling into the 9 cities as per the SA
  Cities Network) will have a zero minimum
  threshold. This means that rural municipalities
  will be paid for every FTE Job created from the
  very first one.
• Full incentive amount (FTE Performance Target
  FTE minimum threshold) X R50 per day X 230 days
  per FTE
• DORA amount 50 X Full incentive amount,
  because only 2 payouts fall into the 2009/10
  financial year. Q3 and Q4s payment will fall
  into 2010/11.
• 68 municipalities will receive the incentive and
  6 metros
• 10 ISRDP nodes will be covered.
• Total incentive allocation to municipalities is
  R201.7 million, of which R147.2 million will go
  to rural municipalities and R54.5 million to
  Metros.

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2.2 Fiscal incentive to Municipalities cont

• According to reports, at least an additional 25
  Municipalities will become eligible for the
  2010/11 financial year. Work being done to ensure
  more municipalities report so that they become
  eligible for incentive.

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3- Wage Incentive for the Non-state Sector
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3- Non-State Sector Wage Incentive

• Phase II of the EPWP will also see the
  introduction the wage incentive to non-state
  bodies like NGOs, CBOs and other non-profit
  organisations whose activities also create work
  for the EPWP target group
• R80 million of the wage incentive has been
  allocated to the non-state sector for 2009/10 and
  R749m over the MTEF
• The sector is projected to grow rapidly as many
  existing non-state programmes have the potential
  to grow rapidly through the injection of the wage
  incentive
• The non-state sector will be managed by DPW with
  oversight from other key departments, but will be
  implemented with the assistance of an intermediary

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3- Non-State Sector

• Two sets of programmes will be implemented
• Area based programmes
• These will include programmes targeted at a
  specific area that will generally involve a large
  range of different activities identified as
  necessary and beneficial work by the community in
  consultation with local government.
• For 2009/10, this will only involve the expansion
  of the Community Works Programme pilot
  programmes.
• Institutional based programmes
• These will include programmes to be delivered by
  non-state bodies that have a specific focus area
  such as health care, child care, community
  safety, etc.
• For 2009/10, a pilot will be initiated by DPW
  through an intermediary to explore funding
  projects that will provide a social service and
  create jobs in the process.

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Concluding thoughts

• Employment creation remains the key priority of
  government and the EPWP remains the most
  important vehicle for government to directly
  create employment for the poor
• Strong political leadership on the EPWP has
  proven to be critical in Phase I of the programme
  and will be equally important in Phase II
• The introduction of a framework to increase
  accountability on EPWP performance and a fiscal
  incentive to reward performance and increase
  budgets for those that are performing, is
  expected to provide a huge boost to increasing
  the scale of the EPWP over the next five years.