Human Settlement
With regard to the Human Settlements Development Grant (HSDG) and the Urban Settlements Development Grant (USDG):
- What is his Department’s policy and/or approach when aligning the funding of the HSDG with the USDG and (b) how are housing developments prioritised when it comes to the distribution of funding received from the national government?
- There is currently no departmental policy on the alignment of the Human Settlements
Development Grant (HSDG) and Urban Settlements Development Grant (USDG). The USDG is the supplementary grant available to metropolitan municipalities and transferred directly to these municipalities. My department submits USDG funding applications to the City of Cape Town for consideration and these are either approved or deferred to outer years. My department and the City of Cape Town’s Human Settlement Directorate have reached an agreement to set up a USDG prioritisation matrix which will ensure better alignment between the two grants. The City’s Human Settlement Directorate is only responsible for 44% of the total USDG allocation with the balance allocated to other line functions. The USDG/HSDG prioritisation discussions are therefore only limited to the 44% of the total budget allocated to the City’s Human Settlement department at this stage.
- My department follows a regulated process of grant allocation, which is also an audited process. My department sets a strategy for the Medium-Term Expenditure Framework period, and this strategy guides the business plan requirements for the year. This is also adjusted as new directives are added from the National Department.
The Regional Directors, project managers and planners hold monthly technical meetings as well as ad-hoc project pipeline discussions with municipal planners and human settlement officials to ensure that the pipeline is continuously refined in accordance with the strategy and budget limitations.
The parameters of the project, whether it is a Greenfields or brownfields development, whether it requires top structures or relates to in-situ upgrades, determines the programme under which the project will fit. The municipality or developer then prepares the comprehensive funding application and submits this to my department for review.
Each project funding application then serves at a Project Planning Committee (PPC) engagement, for each Directorate to provide input into the project approval process. The business plan pipeline is then deliberated at a formal Grant Allocation Advisory Committee (GAAC) with all the senior management in attendance, before a draft business plan is submitted to the National Department for review. There are three drafts submitted at different points in the year, before it is adopted by the National Department (for the following year).
The process follows an annual cycle and committees have been institutionalised by approved standard operating procedures (SOPs) for the business planning process, the PPC and the GAAC. The audited process is constantly reviewed, and SOP’s updated, to ensure alignment to the internal audit and National Department requirements.
