Madam Chair

[Slide 1: Iziko staff in action]

I thank you for the invitation extended to Iziko Museums to make a presentation at this Public Hearing on Budget Vote No. 14.

The presentation of the national heritage institution officially known as Iziko Museums of Cape Town here today relates primarily to the one line reference to Iziko in the Arts and Culture part of the Social Services chapter of the Estimates of National Expenditure 2004 (ENE) publication. There, the following figures appear:

[Slide 2: Figure 14 of ENE2004 DAC Vote No. 14, Programme 5 (Heritage Promotion)]

The final subsidy allocation for 2004 – 2007 MTEF period represents a 6% increase respectively for each year. The allocation for 2004/05 is inclusive of:

• funds for improvement of conditions of service; and
• for this year, the additional R260 000 to be spent on an internal auditing function, the audit committee, honoraria for Councilors and the production of the Annual Report for Parliament

The abovementioned 6% increase in the subsidy allocation merely covers the costs for the carry-through effect of the improvement of conditions of service in 2003/2004. It does not allow sufficient funds for improvement of conditions of service for 2004/2005, though it is mentioned above. In effect there is no increase in subsidy if the abovementioned factors are taken into account.

In fact, there has been no increase in Iziko’s core subsidy since 1994.

In accounting terms, the subsidy allocation of R32 256 million covers the following costs:

• 90% for human resources costs (8% reduction from previous year)
• 10% towards operational costs (operational costs is 13% of the Iziko Council approved budget)
• zero % for core functions (core functions is 7% of the Iziko Council approved budget). This function is funded under great stress through own income generated.

Slide 3: ENE 2004/005 – 2006/007 (Submission to National Treasury in Sept. 2003 and DAC in Jan. 2004)]

The estimates of national expenditure for Iziko were provided to National Treasury via the Survey on Governance Frameworks for Selected Public Sector Entities, but no feedback had yet been received from National Treasury. The deficit of R1,2 million shown for this fiscal year reflected the additional funds Iziko Museums required to give effect to its strategic plan. However, this amount was not granted to Iziko.

[Slide 4: Approved Budget by Iziko Council, 2004/2005]

The budget approved by Council is based on the final allocation for 2004 – 2007 MTEF period.

In compliance with the PFMA, Iziko could not budget for a deficit and therefore Iziko had to scale down on operational costs and critical core functions. Thus, the institution had to maintain its core functions through own income generated and donor funding. In addition, the institution had to take austerity measures and augment its income through marketing of its venues, publications, sales and services.

Total estimated income, including subsidy allocation, is R51 835 million. The subsidy allocation makes up 62% of total income. It is estimated that Iziko will have to generate 36% through own income of which 24% is being or had been raised externally as a result of the initiatives of dedicated staff.

The remaining 2% of the budget has to be funded from the limited funds Iziko has in reserve.

It has become quite a challenge to manage a heritage institution as the subsidy has not increased sufficiently over the past few years. In fact, the increase was based purely on additional funding to contribute towards a "cost of living increase". It also needs to be noted that for the past four years the percentage increase was often a few percent lower than that of public servants. For example, last year the increase for public servants was almost 9 percent while the increase allocated to heritage institutions was only 6%. Naturally, this is a bone of contention for staff in the heritage sector.

Also, an additional burden to increase the income generated by Iziko has been placed on discontented employees in order to meet budget requirements. This must be seen against the background of the staff shortage in Iziko due to insufficient funds.

We are therefore faced with a situation where we are not only underpaying our staff, but also compelled to freeze vacated positions in order to meet the demands of the salary budget and the PFMA. This situation leaves us little room to move and is especially detrimental to our goals for employment equity. I should urge Treasury and DAC via this committee to at least adjust our subsidy in keeping pace with the salary increases in the public service.

Madam Chair, it is no mean feat to have generated the additional income required in order to present a budget to Council which represents the following:

• Cost of human resources make up 56% of total budget
• Operational costs make up 13% of total budget
• Core function costs make up 7% of total budget. Core functions expenditure is for collections, collection management, conservation, research, education and public programmes, exhibitions and research publications.
• Costs of special projects make up 24% of total budget. (All projects are fully funded externally, without funds available in DAC Budget Vote no. 14 for Iziko)

But there is a broader context to this Vote No.14 of 2004, in respect of Iziko, that our Council and senior management would like this ad hoc committee of Parliament to understand more clearly. This is the context of the making of Iziko by a post-apartheid Act of Parliament in 1998, which leads one to the question: What is Iziko?

Five museum institutions, comprising fifteen sites, merged to form the Southern Flagship Institution, now known as Iziko Museums of Cape Town, in terms of the Cultural Institutions Act 119 of 1998. It is therefore a heritage institution comprising 15 museums and sites and not just one museum, as implied in the above text of ENE, p. 338. In this regard the honourable members in the new parliament should perhaps be reminded that Iziko has to take care of 15 sites. This means that Iziko does not have one museum with a single building, with one security system, one switchboard, with limited staffing and maintenance needs. No, Iziko has fifteen sites with infrastructure needs in terms of all fifteen sites, three being outside the Cape Town City Bowl - Langebaanweg, Constantia and Muizenberg.

Let me introduce you to the sites, which are in Iziko’s care:

1. The South African Museum (1825), with it two satellite sites (the Planetarium and the West Coast Fossil Park). It gives me pleasure to inform the ad hoc committee that renovation projects are in the pipeline at what is now Iziko SA Museum. Two major capital works projects have been approved for 2004 in respect of the Iziko SA Museum, these being new storage facilities (contract price R6 million) and air-conditioning in its public areas (contract price estimate R6 million);
2. The Michaelis Collection at the Old Town House on Green Market Square (1913);
3. The South African National Gallery (1930) with its one satellite (Natale Labia Museum, 1989). External repairs and renovations to the NLM completed in April amounted to R406 980;
4. The William Fehr Collection at the Castle (1952) with its satellite (Rust en Vreugd). Renovation work on the F Block of the Castle, housing the Iziko William Fehr Collection was started in late 2003 (contract price R1.7 million);
5. The South African Cultural History Museum (1963) with its satellites (Bertram House in the Company’s Garden, Koopmans-de Wet House Museum in Strand Street, the Bo-Kaap Museum in Wale Street, the Groot Constantia Museum, the National Mutual Building in Church Square near Parliament and the SA Maritime Museum in the V & A Waterfront.)

Madam Chair, while the Department of Public Works generally funds the capital works, Iziko is responsible for the day-to-day maintenance of sites.

It should also be noted that the SACH Museum no longer exists. It has been renamed the Iziko Slave Lodge. Hopefully, the ad hoc committee will assist Iziko with some of our transformation projects such as the transformation of this building adjacent to Parliament, previously known as the SA Cultural History Museum, into a world class Museum of Slavery within the next three years. May I add that in 2003 the Iziko Slave Lodge, Old Town House on Green Market Square and Koopmans de Wet were fully renovated and restored by contractors appointed by DPW at a cost of R3.2 million. All these are important heritage sites of huge architectural and historical interest.

The Exterior of the NMB]

But of critical importance to Iziko is also an impending approval of Capital Works funding for the renovation, upgrade and extension of the Iziko National Mutual Building. This impressive building houses our extensive and significant Social History Collections, which include the Antiquity collections of Egypt and Greece as well as textile collections of international significance. Two exquisite vases are valued at R1 million rand each. Parliament should note that these invaluable heritage objects are at risk due to the deterioration of the building to the extent that some areas have had to be evacuated.

The dilapidated interior of the NMB ]

Consultants appointed by the Department of Public Works have issued a report on the building, and a recommendation for a full renovation and upgrade. The amount estimated for this task is R37 million, a cost to be viewed against the value of the irreplaceable objects held in the Social History Division of Iziko. The building itself is a Herbert Baker designed National Monument, and a prominent feature in Church Square, central Cape Town.

Madam Chair, the curatorial aspects of our 15 Iziko museums and sites are now curatorially managed by the Directors of three discipline-related Collections Divisions:

• Art Collections;

• Natural History Collections; and
• Social History Collections.

For the purpose of implementing and promoting exhibitions and public programmes they work in an integrated and holistic manner with two Support Divisions:

• Education and Public Programmes; and
• Marketing and Fundraising (who has no director yet).

In addition to the aforementioned five divisions, there are three Operations Divisions:

• Central Services, whose director is also the CFO;
• Human Resources, whose director was till last month also the Senior Manager: Employment Equity; and
• Property Services, which was the last Division to be staffed in the restructuring process, which ended just before my redeployment to Iziko in November 2002. This is the largest Division in Iziko, with disparate functions and also one where the morale is not good.

Some months after I had started at Iziko, senior management and the outgoing Council began to revise the Institution’s Strategic Plan. The new Council, instituted in May 2003, mandated me as CEO and management to embark on a process of a critical revision of the Strategic Plan for the period 2004 – 2007. It was a lengthy and intensive process, the outcome of which was a strategic plan document approved by Council on 11 May 2004. It represents a comprehensive revision of the initial strategic plan drawn up in 2002 and clarifies objectives and sets of targets.

Madam Chair, the new Strategic Plan of 2004 – 2007 kept to the vision statement of the Strategic Plan of 2002 – 2005 and remains true to our vision statement that:

But unlike the previous strategic plan, the new workshopped one has a clear statement about Iziko’s core business or mission:

Vision & Mission (core business)]

This is followed by a summary in tabular form of Iziko’s six strategic goals, coined by our Council’s Chairperson, Dr Eltie Links, as the "Super Six":

• drive the transformation process according to national guidelines;
• achieve service excellence through management and development of human resources;
• build, care for and interpret the collections of Iziko;
• improve and broaden accessibility to Iziko sites and collections;
• unlock the educational potential of Iziko and promote and innovatively showcase our arts, culture and natural history; and
• ensure financial viability for Iziko.

A business plan, based on the reviewed strategic plan, is now being developed.

Developing a holistic and integrated business plan, 2004 – 2007 for future Arts and Culture Budget Votes No. 14

Madam Chair, since the formation of the Southern Flagship Institution on 1 April 1999 and its name change to Iziko Museums of Cape Town in July 2000, my predecessors received little positive response to their appeals for a better funding structure for Iziko. I trust this Committee has a clearer picture of our dilemma now. I further believe that like our sister institutions - the NFI and SAHRA - we’ll be able to present something more exciting next year about Iziko and the 2005/2006 Arts and Culture Budget Vote No. 14. Again it will be on effective and efficient utilization of a DAC subsidy. For that we need your tangible support.

Henry C Jatti Bredekamp

9 June 2004