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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
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
How long will it take
Project progress
What resources are required to transform
Next steps
How long will it take
Project progress
What resources are required to transform
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
Why we need to Transform
Development Gap in SA
Service Gap
New IDT Organisation Vision 2010/30
New IDT decentralised development
New IDT – short term vs long term transition
Sustainability – Financial review
Governance – Legal and legislative options
Development Gap in SA
Service Gap
New IDT Organisation Vision 2010/30
New IDT decentralised development
New IDT – short term vs long term transition
Sustainability – Financial review
Governance – Legal and legislative options
How long will it take
Project progress
What resources are required to transform
Next steps
How long will it take
Project progress
What resources are required to transform
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
Why we need to Transform
Development Gap in SA
New IDT Board Vision 2010/30
New IDT decentralised development
New IDT – short term vs long term transition
Sustainability – Financial review
Governance – Legal and legislative options
Development Gap in SA
New IDT Board Vision 2010/30
New IDT decentralised development
New IDT – short term vs long term transition
Sustainability – Financial review
Governance – Legal and legislative options
How long will it take
Project progress
What resources are required to transform
Next steps
How long will it take
Project progress
What resources are required to transform
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