1 long term sustainability project portfolio committee 7 june 2011 long term sustainability project...

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Long Term Sustainability Project

Portfolio Committee7 June 2011

Long Term Sustainability Project

Portfolio Committee7 June 2011

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Contents• Our journey thus far• What have we been doing?• IDT’s impact and footprint• Where have we invested the monies?

Who are we?

What is needed

to Transform

Why we need to Transform

Development Gap in SA

Service Gap

New IDT Board Vision 201/30

New IDT decentralised development

New IDT – short term vs long term transition

Sustainability – Financial review

Governance – Legal and legislative options


Service Gap






How long will it take

Project progress

What resources are required to transform

Next steps


Project progress


Next steps

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Our Journey: What have we been doing?

IDT has played a key role in supporting the development of our people through integrated service delivery on behalf of government as the only national government programme implementation support agency in South Africa

The IDT together with government has changed the lives of millions of South Africans in communities facing extreme poverty

The IDT together with government has changed the lives of millions of South Africans in communities facing extreme poverty

• The IDT was established as Civil society Based Development Agency in the form of a

Trust in 1990.

• Cabinet decision, March 1997, IDT Mandate:"The IDT must be transformed into a government development agency that will

implement projects which are commissioned by government departments. It must cease to be a civil society organisation, an independent agency or a funding agency.”

• Amended Deed of Trust (2001): Primary Goal of the Trust “ . . . is to use its resources, together with strategic partners, in ways which in the opinion of the Trustees will best serve to enable poor communities in the RSA to access resources and recognise and unlock their potential to continuously improve the quality of their lives.”

• IDT categorisation: Schedule 2 - a major public entity providing government programme development support

The IDT has managed client funded service delivery programmes to the value of R10.4b in the period 2002-2011 when it moved from grant making towards being a development implementing agent.

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Our journey: The IDT’s walk with South Africa

The IDT’s history closely parallels the development trajectory of South Africa. The IDT is now taking the next step towards being a world class community development agency

VISION:To be the Leading Knowledge-based community development agency

Medium-Term Strategic Framework (2009 – 2014)

IDT STRATEGY 2010/30

Grant making civil society

1990 - 1999

Govt Program support agency“Infrastructure focus”

2000-2010

Community Development2011 onwards

IDT’s Development Journey

Era

dic

atio

n o

f ch

ron

ic i

nte

rgen

erat

ion

al p

ove

rty

Established as an independent vehicle to spearhead Socio-economic upliftment of

Previously disadvantaged communities

2009-14 Govt Strategic Priorities

2011-13 IDT Corporate Plan

2010/30 IDT Strategic Vision

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The IDT’s Footprint

“The defining feature of this administration will be that it knows where people live, understands their needs, and responds

faster” President Zuma 2010

IDT continues to support government by strengthening delivery capacity and actively being on the ground where communities live

Building vibrant

communities

Basic/Core Services

Enterprise Development

Social & NaturalInfrastructure

Institutional Capacity

Community Development

(Social & Cultural capital)

(Economic & Financial capital)

(Human capital e.g. health, education)

(Institutional &Political capital)

(Physical & Environmental capital)

A map of IDT programmes against municipal areas of

greatest poverty reveals IDT is strengthening service delivery in areas of very high poverty

where delivery is needed most

A map of IDT programmes against municipal areas of

greatest poverty reveals IDT is strengthening service delivery in areas of very high poverty

where delivery is needed most

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Where have we invested the monies?

The IDT was established in 1990 with a grant of R 2 billion. The Table below reflects the revenue and expenditure over the period 1990 to March 2011, together with the value of client-funded programmes delivered

Details Values R‘millions

Grant received (16/07/1990) 2 000

Interest received 3 903

Management fees 169

Operational Costs (2 839)

Grants Made (2 817)

Closing Balance (31/03/2011) 416

Client-funded Programmes delivered (largely at IDT cost)

10 414

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What impact have we made?Key Performance Indicator Verified Actual

Representative participation of women as per demographics of targeted communities

49

Representative participation of youth as per demographics of targeted communities

50

Value from partnerships expressed as total monetary value of resources leveraged (5% of portfolio programme budget)

94 619 597.00

Minimum Number of Classrooms 693

Minimum Number of Health Facilities

6

Minimum Number of Community Facilities

16

Minimum Number of Cooperatives Supported

394

Value of public mandated portfolio 2581 450 230

Value of total public mandated programme spend

2 269 520 666

BEE Spend 1 541 028 872

Number of job opportunities : IDT 29 421

No. Of job opportunities: EPWP 2 32 697

Training numbers 17 447

Review of 2010/11

financial year

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Sustainability Challenge: Financial Review (1990-2011)

260

650748 768

551

1,0691,167

1,313

1,629

2,259

0

500

1,000

1,500

2,000

2,500

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Invested Funds

Investment Income

Management Fees

Programme Expenditure

R,000’s

The IDT’s funds under investment have decreased from the grant of R2.05bn allocated in 1990 to R415m in 2011 (over 21 years) and as a result investment income has dropped to R42m at present. Client funded programme expenditure has grown substantially to R2.26bn currently for which IDT charged an average management fee of 3.6% (R81.3m) in 2010/11

The IDT invested R2.8b in development grants between 1990 and 2000 and supported non funded government priority programmes like ASGISA, JIPSA to the

value of approximately R250m including mud schools programme initiation between 2005 and 2010

The IDT invested R2.8b in development grants between 1990 and 2000 and supported non funded government priority programmes like ASGISA, JIPSA to the

value of approximately R250m including mud schools programme initiation between 2005 and 2010

R415m

R2.05bn

Since 2002, the IDT has programme managed cumulative expenditure of

R10.414bn (2002-2011)

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Contents• Our journey thus far• What have we been doing?• IDT’s impact and footprint• Where have we invested the monies?

Who are we?

What is needed

to Transform



Service Gap

New IDT Organisation Vision 2010/30






Service Gap

New IDT Organisation Vision 2010/30






Project progress


Next steps


Project progress


Next steps

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Bridging the Development Gap in SA

While the is a vast array of services provided by government and other agencies, delivery remains uncoordinated and often misaligned. The SERVICE GAP is that there is NO coordinated and integrated delivery at community level

In 2007, NT commissioned a review of all 310 listed public entities and public sector funded agencies delivering services or funding at national, provincial and local level. entities were identified. Detailed analysis of entities that focused on funding of development related activities (DFIs) and development providers (Development Agencies) highlighted the development gap in South Africa

In 2007, NT commissioned a review of all 310 listed public entities and public sector funded agencies delivering services or funding at national, provincial and local level. entities were identified. Detailed analysis of entities that focused on funding of development related activities (DFIs) and development providers (Development Agencies) highlighted the development gap in South Africa

IDT’s value proposition – niche offering

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Completing the Development Value Chain

Even though the development gap in South Africa is substantially with significant investment in service delivery, regrettably - has not yielded expected development returns1 at community level

Community Development

ServiceDelivery

Institutional Building

Capacity Building &

Training

Development Funding & Financing

Policy & Legislation

1South Africa ranks 110th in the UN Human Development Index, just below Krygystan. SA’s Gini coefficient (gap between rich and poor) of 0.68 is the highest in the world, overtaking Brazil

A Gap exists for single nation wide agency to coordinate and implement an integrated approach to community development, focused on improving capacity of people and their institutions to access services

• IDT is only major development Agency in SA with national footprint

• Has strong local relationships with communities in all provinces

• Has a track record of development delivery management and community empowerment

A Gap exists for single nation wide agency to coordinate and implement an integrated approach to community development, focused on improving capacity of people and their institutions to access services

• IDT is only major development Agency in SA with national footprint

• Has strong local relationships with communities in all provinces

• Has a track record of development delivery management and community empowerment

•National Government

•Treasury•Provinces•DBSA•IDC•NDA•Youth Fund

•CSI•NEF

•SETA’s•Higher education

•Service providers

•All 3 tiers government

•Service providers

•Public Sector Institutions

•NGO sector

“Since we are building a developmental and not a welfare state, the social grants will be linked to economic activity and community development,

to enable short-term beneficiaries to become self-supporting in the long run” President Zuma, SONA: 2011

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Business case for Long Term Sustainability

The New IDT long term business case is in line with IDT Vision 2010/30 and provides a key opportunity for Treasury to invest in the development of communities in South Africa

Secure long term self funding work by

Strengthening programme mgt capacity

and improving development impact

Build Competencies to provide policy and

planning support to institutions

CURRENT service split

FUTURE service split

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The IDT is transforming into “a leading knowledge-based community development agency” in South Africa. This is a bold and innovative vision drawing from the IDT’s rich history, core competencies and international best practices to support the realities of South Africa’s development trajectory. The Board of Trustees has taken the opportunity and responsibility to prepare the IDT for the next generation of development in South Africa

What does the New IDT do?What does the New IDT do?

The New IDT: Strengthening community development

Current IDT

Middle IDT

High Road: Quantum LeapNew IDT

Low Road

“Bandage” Temporary

Scenario

“Business as Usual” Termination

Scenario

Strategic Scenarios

“Butterfly”Transformation

Scenario

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Decentralized Development

The Board has approved a decentralised model consisting of a number of empowered IDT sites located at key nodes in all of the provinces of South Africa; spearheading the fight against poverty and becoming government’s arrowhead in the regions to build vibrant communities

EC FSGP

WC NWNC

MPU

LIM

KZN

HO

• Strategy: Shift towards community development

• Services: Developing communities, supporting institutions and delivering programmes

• Structure: Regions facilitate local development, coordinated by HO

New IDT

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“Imagineering” the New IDT

Bold innovation to imagine, explore and design a new IDT; incorporating the best thinking and practice in community development and working together with our people and partners to build vibrant communities across South Africa that are empowered, cohesive and sustainable

• IDT could expand its reach into rural communities. SA has 52 districts/262 municipalities:

• e.g. 9 Development Action Labs with +/- 5 highly motivated community development teams (with avg 6 cadres in each team)

• if each team works with identified communities in 5 municipalities per year,

• IDT would have active presence in (9x5x5) = +/- 225 municipalities with a field staff of (9x5x6) = +/- 270

• Team members not always IDT employees, e.g. CDW’s seconded from municipalities, interns from universities, or local CBO/NPO staff trained by the IDT in best practices

• Methodologies include asset based/ community driven development, e.g. utilising cooperatives to generate sustainable livelihoods

• Program funding sourced from local, provincial or national government departments, corporations or international agencies

Concept

Example Team Leader:

Community Development Hub (Western Cape)

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Contents• History of IDT• IDT’s current make-up• IDT’s impact and footprint

Historical Review

What is needed

to Transform















Project progress


Next steps


Project progress


Next steps

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Long-Term Sustainability Project Milestones

MILESTONE END DATE

CONSEQUENCES

CONSULTATION: I

Internal; peer organisations; Shareholder (esp. NT); sector experts; Minister’s office

5-Feb-11 Well-thought through Transition Plan for approval

VISION FOR NEW IDT: PHASE 11 OF CONCEPT DESIGN

24-Feb-11

• Conclude high-level 2012/14 Corporate Plan and Budget• R150m draw-down plan

IMPLEMENT TRANSITION PLAN (PHASE 11) W.E.F 1 MAR-11• Activate Work-streams; Advisory Panel; • Deploy 2 Dev, Action Learning Locales • Consult, Advocacy: Npc; Targeted Ministers Delivery Agreements; Clusters

15-Jun-11

• Consultations with key stakeholders i.e:

– DPW– DPW Portfolio Committee– Relevant clusters– DPSA– NT– JET– Cabinet

•Finalise Business Case•Key Outcomes: Skills Audit; Competency profile for new IDT; Perception survey; benchmarked cost of doing business

NEW BUSINESS CASE APPROVED: BoT; DPW Portfolio Committee; DPW Minister and National Treasury

30-Jun-11

2012/16 MTEF supported-Authorised

2012/16 MTEF BUDGET BID 20-Jul-11 Platform for 2012/16 MTEF funding commitment created

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Long-Term Sustainability Project MilestonesMILESTONE END DATE CONSEQUENCES

CABINET MEMO Before Sep- 11 Treasury Committee

BASIS FOR FUNDED MANDATE, LEGISLATIVE PROCESS

LEGISLATION CONSULTATION AND ENDORSEMENT

December 2011 NON-NEGOTIABLE STATUTORY PROCESS (FAILING WHICH THE IDT HAS TO ANNUALLY JUSTIFY ITS MANDATE WHICH COULD RESULT IN ‘TRANSFORMATION/’SURVIVAL FATIGUE AND SKILLS FLIGHT), E.G.,

• State Law Advisor: provide go ahead/advice on draft

• Minister: authorise legislative consultation process

•Leader of Government Business: authorise for the Legislative Programme •Cabinet Committees: Support

• National Assembly: • Green Paper: Public participation process. •Conclude work: Support and refer to NCOP

• NCOP:•Green Paper: Public Participation process•Conclude programme of work: Support

2013/17 BUDGET CONFIRMATION

30-Nov11 • IDT’s 2013/17 Corporate Business Plan and Budget can only be finalised after NT allocation is confirmed• Budget approved as requested: IDT can launch Transition Plan• Budget not approved/less than required: Transition Plan abandoned or tailored according to available funds

LAUNCH TRANSITION PLAN

1-Apr-13 • Failure to secure funds: Going concern challenge

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Journey mapStrategy (95%)

Services(95%)

Functional Structure(95%)

Due diligence(100%)

Comparative assessment (Legal & legislative) (50%)

Building the Financial model (30%)

Business Case

Organisation structure (HO & Regions) (10%)

Meetings with key stakeholders: Status

• DM & advisor, DG & COO of DPW• Relevant committees of NEC

• M & DM of NPC – M&E unit, DM & advisors at NT, M & DM & advisors at DPSA

• Finance committee at Parliament, Portfolio committee

• 3 clusters, Formal meetings (3 sub committees: DPSA, joint evaluation task team, Treasury and Cabinet meeting)

Assessment of current systems to deliver on the new business model

(0%)

July 2011

Transformation journey map (5%)

DevWeek

Processing the approved

Business case

Change mgt and Industrial Relations

Project mgt

Corporate branding Preparing for the launch

of the new IDT

Re-constitute the “legal entity for the

“new IDT”

Designing & Piloting the “new

IDT”

SCM Re-design

Monitoring the pilot

Iterative updates

Initiate legislativeprocess

5%

Oct 2011

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What is?•A trust governed by the property trust control Act

•Schedule 2

Where to?•We envisage that the “New IDT” to have its own Enabling legislation

Mandate?

Process must be done within the lifespan on one Minister – preferably by end 2012/13

Test the mandateClearly define the Mandate (niche)

Purify and finalise the Mandate to determine if sole or shared mandate

PD

KM RM

IS

CD •NDA•HDA•DBSA•Etc..

•N

•P

•LG

•M

…

……

… PD

KM RM

IS

CD

Strategy Mandate Legal identity(select option)

Business case approvalby Cabinet

Legislative Decision

(Select option)

Other org’s

Constitution

Map against schedule 2 & 3 Entities

Schedule 2&3

Legal FrameworkLegal Framework

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Resources required to get there: Short term funding

Budget1: Responding to Strategic Priorities

Financial Year Funding Needs

Funding received

2010/11 R200m R150m

2011/12 R200m R0

2012/13 R307m R0

Total over the MTEF

R707m R150m

Shortfall of R557m

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What do we expect from the Portfolio Committee?

• Portfolio committee to provide input on the proposed direction of the IDT as reported

• Portfolio Committee to note the progress on the transformation business case which the IDT will be presenting to the Portfolio Committee once concluded

• Portfolio committee to support the IDT’s long term sustainability transformation initiative

• Agreement to review this initiative in a workshop format

1 long term sustainability project portfolio committee 7 june 2011 long term sustainability project...

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