Department of Human Settlements on Budget Vote 30; National Treasury on Budget Aspects relating to Human Settlements

Meeting report

The Chairperson advised that the National Treasury was unable to attend the meeting due to other commitments and would not brief the Committee on the Budget Aspects relating to Human Settlements.

Briefing by the Department of Human Settlements (DHS)
Mr Mziwonke Dlabantu, Acting Director-General, DHS briefed the Committee on the major challenges of the Department.  There were approximately 12, 5 million households in South Africa.  The DHS highlighted the need for an additional 2.2 million houses to provide housing for the homeless. The Department stressed the importance of providing access to water for an additional 3.95 million households, 3.2 million households required access to sanitation facilities, 2.6 million households required access to electricity and 4.56 million households needed access to refuse removal services.

 

The Department noted that meeting the needs of urban populations was complicated by the growing number of people moving to urban centers. This increased the burden on the Department as more services and decent housing had to be provided to people who were not previously taken into account.

 

The Department’s goals for the period to 2014 included the accelerated upgrading of informal settlements to provide decent housing to 500,000 households, an increase in the rate of providing affordable rental housing units of at least 20,000 additional units per year, to set aside 6,250 hectares of well-located public land for low income and affordable housing (which would accommodate approximately 400,000 units by 2014 at an average of 60 units per ha). The Department aimed to facilitate an increase in the supply of affordable housing finance to accommodate persons with annual incomes that were too high to qualify for Government subsidies but too low to qualify for a mortgage loan from a bank.

 

The DHS presented estimates on potential housing settlements for the following four year period and the number of expected completed potential settlements. The Department planned to implement service level agreements with service providers in the housing sector to ensure the improved quality of service delivery.

 

The expenditure on staff remuneration was expected to increase from R14.036 million in 2009/10 to R21.024 million in 2012/13 to make provision for both current and future new employees. Administrative expenditure was expected to increase from R167.8 million in 2009/10 to R190.9 million in 2012/13.

 

Expenditure for the provision of housing was expected to decrease from R72.2 million in 2009/10 to R50.8 million in 2012/13. The decrease resulted from a once-off additional amount of funding that was provided for the occupancy audit conducted in 2009/10. Expenditure for housing planning and delivery support was expected to decrease from R250.8 million in 2009/10 to R183.3 million in 2012/13. The expenditure on goods and services for the housing programme was expected to decrease from R135.5 million in 2009/10 to R83.9 million in 2012/13.

 

Expenditure on housing finance development was expected to increase to R19 billion. The Human Settlement Development Grant was expected to increase to R17.9 billion in 2012/13.  An additional allocation of R1 billion was intended for the acceleration of the upgrading of informal settlements, the implementation of priority projects and to cater for the increase in the cost of building materials. Expenditure on goods and services for the finance development programme was expected to increase from R23 million in 2009/10 to R25.4 million in 2012/13.

 

The expenditure on Strategic Relations and Governance amounted to R187.1 million in 2012/13.  The briefing included a summary of the provincial human settlement expenditure for the current fiscal year and an indication of the unspent allocation to date.

Discussion
Mr A Steyn (DA) welcomed the inclusion of sanitation as a priority in the Department’s presentation and hoped that service delivery would be improved as a result. He asked about the veracity of the Department’s figures on settlements and whether the figures were current and up to date. He noted that there was a shift in the Department’s 2014 goal of eradicating informal settlements to having dealt with 500,000 cases by 2014.  He asked whether there would be an official announcement on this shift. He asked when service level agreements would be completed with the service providers and subjected to scrutiny. He asked what the official sanitation appropriation amounted to.

Mr Dlabantu said that the Department was engaging on the issue of sanitation and working hard to improve service delivery in that area.  The budget set aside for sanitation was still under discussion but the matter would be resolved in the near future.  The budget would be the first of its kind dealing specifically with sanitation. He said that the Department’s figures on settlements were recent and reflected the statistics form 2007 onwards.  The Department did constant evaluations and used updated figures when they became available. He said that the goal for 2014 was shifted because the Department needed to focus on issues in a realistic and pragmatic manner, by dealing with issues one by one and by paying adequate attention to each. Service level agreements had been entered into and were enforced with a view to improving the quality rather than the quantity of service delivery. The level of enforcement of the agreements would be assessed in April 2010.

Ms D Dlakude (ANC) asked whether the settlement objectives listed in the presentation applied to communal and rural areas as well. She asked how the Department intended to deal with the housing disaster grant in the light of the natural disasters that had occurred in KwaZulu Natal and other provinces in previous years.

Mr Dlabantu said that the settlement objectives did not exclude communal and rural areas.  He said that the disaster relief grant would be formalised and a percentage would be drawn from each province to ensure that in the event of a disaster there would be a fixed budget to assist those affected.  Responding to the question concerning assistance for lower income homeowners, he said that the Department planned to approach the commercial banks in cases where the banks could assist people with low risk backgrounds in need of housing loans. During the previous five years, the Department had developed a relationship based on trust with the banking sector.

Mr J Matshoba (ANC) sought clarity on whether Government buildings were being used optimally and provided sufficient accommodation for staff. He asked about the outsourcing of jobs meant to be done in-house by the Department’s employees who were qualified to do so.

Mr Dlabantu said that some of the buildings under the control of the Department of Public Works were old and provided insufficient space for employees. The Department was in the process of acquiring new buildings. The use of external consultants and the outsourcing of functions would be scaled down and stringently monitored to ensure that Departmental employees did the jobs that they were qualified for. The expenditure on unnecessary outsourcing of functions would be cut.

Ms M Borman (ANC) asked about the backlog in spending by provinces and wanted to know the reasons for the failure to spend all the funding allocated by the end of the previous fiscal year. She asked what the quality was of the delivery of housing and services in those provinces that had spent most of their budgets. She said that it would be useful to have service delivery indicators to assess the quality of delivery. She inquired about the beneficiary lists and wanted to know the number of beneficiaries still awaiting housing.

Mr Dlabantu said that there was a backlog of R2.2 million in appropriations that was still to be dealt with and that would be used to repair substandard housing. The Department would be investigating the under-spending by provinces and would be reporting on the situation in each province, including the individual circumstances and issues. The beneficiary lists would be fast tracked and released and the issues at a municipal and provincial level would be highlighted.
 
The Chairperson requested a formal report on the national delivery plans before the budget debate was held in Parliament.  The Committee required more detailed information on the Minister’s budget vote.  The report should include the housing subsidies and how the subsidies can be accessed.

Mr T Botha (COPE) sought clarity on the difference between a household and a housing unit mentioned in the presentation. He sought clarity on how the Department intended to accommodate individuals who were not poor enough to be on social welfare but not wealthy enough to gain access to bank loans due to a lack of collateral.

Mr Dlabantu said that a household was not a physical structure but referred to the persons who inhabited the housing unit.  The housing unit was the physical structure. The Department provided funding for affordable housing for those persons who could not access bank loans or other Government funds.  An institution was to be set up to deal specifically with this category in the near future.  The Department planned to approach the banking sector for assistance as well.

Mr M Mdakane (ANC) asked how the Department measured the quality of service delivery. He approved of the re-aligned goal for 2014 as there was merit in the reasons provided.  He said that it was unacceptable in the 21^st century to have schools which still made use of the bucket system or had no sanitation facilities at all. He suggested that the Department pursued creative solutions to provide housing and explore alternatives to the expensive brick and mortar options currently in place.

Mr Dlabantu noted the points that were raised by Mr Mdakane and advised that the Department’s response would be dealt with at a subsequent meeting with the Committee.

Ms M Njobe (COPE) asked when the surplus in the provincial budgets would be spent. She raised a number of other issues that the Department could respond to at the next meeting.

Ms N Mnisi (ANC) and Mr A Steyn (DA) asked how the Department intended to assess the quality of housing delivery.

Mr Dlabantu said that quality assessment remained a huge challenge and performance was not always satisfactory. He said that enhancing legislation dealing with certain aspects would be helpful in order to ensure the quality of housing delivery in the future. Performance agreements would be more stringently implemented and those persons performing substandard work would be held accountable.  The Department had implemented internal audits to check the quality of service delivery.

Ms D Dlakude (ANC) asked if the Department compared the lists of beneficiaries in both urban and rural areas to prevent people from receiving houses in both areas. She asked the Department to prioritise the provision of proper sanitation systems in rural areas.

Mr Dlabantu said the Department did have lists of beneficiaries and where the same person was registered on more than one list, charges were laid against the person concerned for attempting to defraud the Department. He said that the Department planned to abolish the pit and bucket systems and worked hard to improve the standard of sanitation in rural areas.

Ms Borman said that the Committee needed to conduct more thorough oversight and needed to have more discussions with the Department.

 

The Chairperson agreed with Ms Borman and said that the date for a follow-up meeting would be arranged in the near future. She asked if the increase in the appropriation for salaries and wages was for new personnel or if the salaries of current employees would be increased.

Mr Dlabantu said that the increase was for current staff as well as any additional personnel that would be appointed.  He agreed to a further meeting with the Committee to discuss the issues more extensively.

The meeting was adjourned.