Construction Education and Training Authority (CETA) & Outcome 8 service delivery agreements: progress reports

Meeting report

Construction Education and Training Authority (CETA) on progress made on its programmes
Mr Themba Mhambi, CETA Administrator, informed the Committee that the Minister of Higher Education, Dr Blade Nzimande, had placed CETA under administration since March 2011. He had been appointed for a period of six months to deal with the challenges and to get CETA running again. He would first talk to the strategy, the CETA constituencies, and how they had performed in the last six years. They would highlight some of their achievements but indicate their challenges, and further express their thinking in terms of the strategic partnership with the National Department of Human Settlements moving forward.

With regard to CETA’s strategy, he noted that there were two specific areas to which they needed to draw the attention of the Committee, namely, their mission was to ensure quality education and training to enhance the sector to fight joblessness and poverty. They would like to achieve excellence in the service of their sector, stakeholders and the people of South Africa because they were a public institution. The critical constituencies were the levy-paying entities together with the smaller ones which could not pay levies, which was the construction industry, the material manufacturing industry on the construction site, and the built environment profession. From the 1 April the electrical construction industry was moved from the Energy SETA to the Construction SETA which therefore constituted the fourth critical element, as well as the National Department of Human Settlements and the National Department of Public Works.

In terms of the large, medium and small companies, there were 1 231 large, 1 924 medium, and 4 706 small companies. He wanted to focus on the medium and small companies because, particularly with regard to human settlements, where a lot of activity was on the residential side, those were the entities they should be empowering and utilising when it came to delivery of housing. With regard to BEE support particularly, they supported 314 BEE firms. In terms of cooperatives they had a very bad record because there were no cooperatives that received support from CETA. In terms of moving forward the support for cooperatives was a critical issue for CETA in relation to the National Skills Development Strategy (NSDS) 3 and CETA’s strategic plan.

One of the key areas in the construction industry was Adult Based Education and Training (ABET) with most of the construction workers coming to the programme because of illiteracy. The target set for CETA from 2005 -2010 had been 22 806 ABET learners supported. The CETA had done extremely poorly over those years because the overall total was 6 101. Some of the reasons for the poor performance were that the sector was very project based and cyclical in nature. What happened was that a construction company would be in the Eastern Cape for a major project for 7 months and then it would move to the Western Cape for another project, and the people who received training in those first 7 months would no longer receive that training. This was identified as a major problem. It was therefore important for CETA to focus on government and its institutions because government departments were permanently everywhere in the country, and the projects they were carrying out were projects that were ongoing because the department would not stop building houses. Therefore if CETA partnered with government and its institutions there would no longer be the problem of training people and when a company left, they lost such training. The CETA found that the industry did not seem to take ABET seriously. It considered the programme as something that did not add value to productivity. Therefore CETA was going to tie funding moving forward. The funding from CETA to the construction industry would be tied according to the ABET provisions. For example, if funding was requested by the industry for NQF level 5 it would be given with the proviso that an ABET component was built into the training. They discovered the ABET model they were using was a generic one which was based on how to teach people to read, write and do basic calculation. In order to make it more appropriate and more attractive to their industries, they should change it and make it more construction specific.

In terms of workers in learning programmes, they had a total of 2 280 from 2005 to 2011 and no bursaries were given during that period. In terms of the Manpower Training Act (MTA 13 and MTA 28) they had 593 and 169 respectively, and there were 136 internships. Including the short skills programme, there were 10 585 beneficiaries. They had exceeded the 3 210 target they set themselves but that number came from a very low base and the achievement was not a major achievement in real terms.

One of the reasons they could not go even higher with regard to apprenticeships in particular was that they had only started in 2008/09 financial year onwards when the Ministry of Higher Education was established. That was when the Minister came with this new trajectory in terms of skills development. Moving forward, they had seen more apprenticeships because NSDS 3 prioritised apprenticeship, artisanship and trades training programmes. For the 2005/06 and 2006/07 financial years, the sector focused more on learnerships and short skills programmes which in construction was not the most appropriate training. This was because they needed training that goes all the way so that automatically get a person into the industry. When it came to NSDS 3 they would be diversifying more than short skills programmes and learnerships. They found that the industry preferred shorter skills programme but that left people with meaningless certification. The CETA would therefore be focusing on a fuller qualification as they move forward.

In terms of non-levy paying supported as from 2005 to 2011 he reminded members that most of the entities in the construction industry were relatively small therefore they did not pay levies because their wage intake was less than 500 000 per annum. Therefore what CETA had been doing was to support them via discretionary grants funding. The total number of the entities that were supported by CETA in the period from 2005 to 2011 were 523.

With regard to unemployed learners in learning programmes, the target was 3 210 in terms of learnerships, bursaries, MTA, internships, and skills programme. The overall total was 8 921 from 2005 to 2011. The same reasons applied with regard to unemployed learners in which in 2008/09 financial year learners were indentured on apprenticeship and where the industry focused on shorter skills programmes. The numbers were very low for placement of learners in employment and/or those who went on to be self employed. They stood at 384 from 2005 to 2011.The intention of CETA as they moved forward was to make sure that when they funded an entity, they increased the number of learners trained and at least a percentage of those learners should be retained after the training as employees.

In terms of new venture creation and support in the past five years, the total number was 444 but that figure was not entirely accurate because they did not have figures for how many people trained in the new venture creation had gone on to establish venture entities. Those were some of the challenges they had discovered since they had taken over the administration of CETA and moving forward they would address them.

In terms of CETA’s quality assurance functions, they had accredited 673 providers, registered 1 271 assessors and 452 moderators, certified 7 414 learners in internships and 15 796 in skills programmes which was more than 50% of school qualifications, and the statement of results was 6 371 and it was not a good picture at all because in essence they trained people to go and sit at home.

In analysing CETA’s budget, Mr Mhambi noted that they would be focusing on the 2010/11 Budget because the Administration would be using just over R40m, R204 118 would go to Mandatory companies to give training and Discretionary Grants (which were funds CETA decided where they should go) would receive R81 647m. The picture showed that over a period of five years as the Construction SETA they would spend up to a billion rand quite easily when it came to construction. It would be interesting for members to note that according to their estimates in the past ten years CETA had spend over R70b to R100b on skills development in the country. This begged the question as to why CETA was still in existence. Due to the past performance of CETA, it was responsible for the mess CETA was currently in because over the past two years they had not zeroed in as to the real reasons of such poor performance. So they were just repeating a cycle of training for no purpose in real terms. This was a challenge moving forward, and indeed they would like to work with the Department of Human Settlements in addressing the problem.

Mr Mhambi said there were highlights he wanted to share with the Committee. Over the past five years they had successfully done their Sector Skills Planning (SSP) but the quality had not been so good. That was why certain weaknesses still existed in the system and they had identified those and would be improving on them. In 2009/10 they had an unqualified audit for finances. However, the real audit was the performance audit which had major lapses. They wanted to admit their weaknesses there and their commitment in addressing those. Overachievement was still a problem. The short skills programmes had been allowed in terms of the NSDS 2 and from that perspective they had succeeded but it was a “short victory” because it did not translate into anything that was sustainable and they needed to address that. They had supported 673 unemployed learners via bursaries and they were starting to accelerate that process. They had accredited 16 FET Colleges and that was a major development but as they moved forward their focus would be more on public institutions and government departments rather than private providers. The CETA would support private providers provided they worked with public institutions but they would no longer support private providers that were touting on their own because most of them were coming in for a specific project and after the project they disappeared.

In terms of accredited institutes of sectoral excellence, Mr Mhambi assured the Committee that CETA had done well. CETA still had major problems in reaching out to the rural areas. Their governance had been seriously weak over the years and that was why the Minister had put CETA under administration. They had not achieved in terms of the core NSDS target, they were not doing well when it came to learners with disabilities, NSDS 2 was not aligned to the sector needs and their organisational structure was a major draw back on their performance. For example, their regional offices were more like post offices than delivery entities. In terms of internal audit findings, up to 80% of their projects had some fraud or another. The internal auditors took 25 projects and analysed them. They discovered 20 of them had some fraud issue and they found that the fraud totalled R13.6m. If one looked at the fact that CETA had more than 300 projects and did the calculations, one would discover that CETA had been defrauded of up to R204m. CETA had therefore taken a decision that it was going to subject all projects to a forensic audit. The ones they had already discovered to be fraudulent, CETA would subject the individuals in those project to investigation via the Special Investigating Unit and other law enforcement agencies of the country.

CETA had major problems in terms of the partnerships with professional bodies and some of the bigger employers. They were addressing this and they had had a stakeholder summit on the 12 May and were moving in a new direction. They had analysed the current situation in the residential market using Statistics South Africa analysis. In January – March 2010 the residential market indicated there was more than R5 billion in value of the building plans coming from larger municipalities. The comparative period in 2011 was R6 billion. There was always a breakdown in building residential houses and non-residential buildings. Therefore if non-residential buildings was R3 billion in the first three months of 2010 and it rose to R3.6 billion in the first three months of 2011. Alterations were valued at R4.9 billion for the same period last year and it was static in 2011. But the total reflected R13.9 billion at the same period last year and R14.6 billion in 2011 which was an increase of R1.6 billion. Therefore there was some movement forward towards the residential market which meant there would be activities at the lower end of the spectrum for smaller and medium size entities. In terms of government’s own infrastructure maintenance programme, there was an infrastructure maintenance strategy in place, which ensured there was ongoing maintenance that talked to the smaller and medium sized entities. And then with Breaking New Ground, there was a new development to replace most of the informal settlements and of course the Expanded Public Works Programme (EPWP), the Neighbourhood Development Grant Programme, the Comprehensive Rural Development Programme, and the National Youth Service Programme. All those programmes were beginning to move away from the bigger entities, the so called ‘’Big Five’’ which had monopolised the construction industry for so long in the country towards the small and medium sized companies. It was therefore important for CETA to start diverting resources and support towards training at the level of small and medium sized enterprises so ordinary South Africans in the industry could start to take advantage of the programmes of government.

In terms of human settlement interventions, they had listened to the Minister’s Budget Vote speech and they had re-looked at some of the plans of the Department which had identified 1 100 slums for upgrading. The intention was to create 80 000 rental opportunities by 2014 and the Mortgage Default Insurance (MDI) potential was to have people access 600 000 home loans/bonded units. The 75 restructuring zones identified in seven provinces and the R1.2b to be spend over a period of three years and some of the National Priority interventions such as Duncan Village, Khutsong, Lephalale, for which they were allocated almost a billion rand in the current financial year and another in the following year. There was the Human Settlements Development Grant totalling R21.2b and the R9b for social housing units in the Kempton Park inner city. That therefore was an indication that the Department of Human Settlements was moving aggressively in terms of residential housing in the country. CETA was out of step with the Department and needed to get into step with it as these opportunities happened so that people at the lower end of the spectrum should benefit from these building opportunities more than the big entities.

The implications for CETA was that they needed to start building programmes and qualifications that were customised for that nature of construction work. Instead of focussing on civil works, they needed to move to the lower ends which included plastering, plumbing, brick laying and so on. Then SMME development needed to be prioritised and training contractors for new venture creation including the development of cooperatives and CBOs. They needed to identify and commission quality service providers because at the current moment there were providers who came and went because they were interested in one particular project. They needed to use those projects as work places for practical and experiential learning requirements because the problem they had experienced was that there were lots of people who had been trained over the years in construction but because they never done practical work or been placed somewhere on the job and had not done trades testing, they ended up with worthless certificates. They should create job incentives and conditions for funding by CETA so that people who were trained in those programmes could have sustainable employment beyond the training programmes. They needed to mobilise the youth and women for greater participation in the industry. CETA’s strategic plan included a space for young people and they had talked with the National Youth Development Agency (NYDA) about this. There was a special summit for women that was in the strategic plan and they were meeting with South African Women in Construction (SAWIC) next week. They wanted to establish projects and partnerships that would ensure that there were enough trained artisans to qualify and be work ready. The poor numeracy skills of unemployed youth needed to be addressed by CETA. Hence they were talking about the importance of ABET and then of course public sector capacity for improved service delivery and the building of a developmental state by way of interfacing more with the Department of Public Works and the Department of Human Settlements. CETA’s thinking towards the Department of Human Settlements was it needed to take forward its commitment to support the emerging contractor development programme. They wanted to operationalize the MoU with the Department of Human Settlements and he had already told his colleagues they needed to revise it to be in line with the new vision it had. They had supported the training of 270 contractors to obtain construction qualifications and they had to support the contractors in alignment with the building of 13 500 houses nationally and they had started with a project in Ivory Park.

Mr Mhambi concluded that the Department of Human Settlements strategic programme needed to be incorporated to CETA’s Sector Skills Plan (SSP) in terms of what skills were required. They needed to collaborate on research projects that related to the residential programmes. They needed to be more visible in what they were doing in terms of participating in national construction celebrations and workshops. They needed to support energy efficiency and green economy compliant programmes through education and training and support of artisan development programmes that related to the empowerment of women and youth, and rural development. They needed to encourage the National Department of Human Settlements to contribute to the 10% of the 1% training budget for the necessary administration CETA was carrying out because at the end of day they would get more than that in terms of investing in their programme.

Discussion
The Chairperson thanked Mr Mhambi for his eloquent and eye opening presentation. She asked members of the Committee to engage with the presentation.

Ms M Njobe (COPE) asked where the training of learners was taking place and who was responsible for it because she was wondering whether the learners were getting quality training.

Ms N Mnisi (ANC) asked if in terms of the zero performance in cooperatives whether that was due to the negligence of CETA or were there no people that came forward to form those cooperatives. Where there any plans in place to help such people? She told the CETA delegation that it would help the members if they reported according to provinces in terms of the number of women and youth trained in the construction industry. She asked what CETA had been doing in the past five years because there was nothing to show in terms of the development of people in the construction industry. People with 3 to 5 days training were not employable in the industry.

Mr M Mdakane (ANC) agreed with Ms Mnisi and added they should do away with the 3 to 5 days training because it did not add value to the industry and this was leading to corruption. There should be a discussion with CETA in terms of its turn-around strategy so that it could attract mostly young people in large numbers who were not employed and that posed a serious threat to the government as Mr Vavi had previously alluded to. The problem of the unemployed youth was a ticking time bomb and government needed a radical response to that challenge. It was therefore crucial for the Committee to hold discussions with CETA so that they could pave the way for sector to turn its focus towards the development and training of young people so as to be employable in the construction industry. CETA should have data checking how many young people they had trained had managed to find employment and how many had not and establish what they should be doing with those to further assist them in finding employment.

Mr K Sithole (IFP) asked about the number of learners that CETA had trained and what was the initial target of learners that were going to build houses nationally. What were the number of bursaries that were going to support learners. How many colleges were not accredited since they had only 16 that they had accredited. He asked CETA to explain how many rural projects they managed to support and sustain.

Mr A Steyn (DA) stated that he found it very difficult that their colleagues in Public Works would have received the same report about CETA’s end results because he could not believe that it had taken so long to try and turn the agency around. In terms of past performance results during the boom years in the construction industry from 2005 to 2008, the results of CETA were just about zero where there should have been skills training because the market was booming, yet nothing happened. He asked how could a scenario like that be explained and by CETA’s own admission they were training people to sit at home. Why did the organisation not realise that despite a boom in the construction industry, people were still unemployed. Skills development had been on the government agenda for the past five years and they had an agency to do just that and what they got was zero performance. He bet that the expenditure of CETA was 90% every year.

He asked how CETA proposed to contribute to human settlement interventions. He thought during that period CETA would have identified and done placements. He proposed that they should establish a joint working Committee to facilitate the operationalisation of the MoU to be signed with Department of Human Settlements. Something like that should be on the cards already and it should be known how it was going to work. In terms of bursaries, he noted that in the report the sector focused on learnerships between 2005/06 and 2006/07 but there were zero bursaries in that period. He could they come and tell the parliamentary committee that they focused on skills programmes but their report was saying zero bursaries from 2005-2008. That was a clear contradiction and a lie. He asked if the new administrator was brought in by the Minister of Higher Education or whether his delegation was part of the previous board and administration.

The Chairperson asked if the 2 to 3 week skills training could do something for learners in those programmes. She asked if they could assist the Committee in terms of time frames for their programmes of their turn-around strategy as their presentation indicated no time frames for the programmes.

Mr Mhambi responded that he would like to assure the Committee that there was no lie anywhere in their report because when they talked about the sector having focused in those years on short skills programmes they meant the companies and it should be remembered that they gave them mandatory grants whereby 50% of their levy went back to the companies as mandatory grants and they were obliged to utilise the funds for training in the sector. They had discovered that the companies, instead of training people for full qualification in those years, they trained people in short skills programmes. Therefore when they were saying zero in the report they were saying zero for them as a Construction SETA - they did not spend money and achieve anything there. There was an explanation for the years 2005/06 and 2006/07 because CETA was technically insolvent. Therefore if one checked, there was a common trend in those years that they did not achieve anything. That was the only explanation and they would certainly not lie to the Committee.

Mr Mdakane followed up and asked for clarity since CETA had been solvent all along. How could it be said it had no money or was insolvent?

The Chairperson asked Mr Mhambi to unpack that scenario of insolvency.

Mr Mhambi explained that that meant in the years before the 2005/06 and 2006/07 financial years, CETA made an over-commitment in terms of projects. As a result when the aforesaid financial years came they had to settle the accounts of the previous years and that left CETA with no money to perform their targeted programmes. That was the technical insolvency that they had experienced. Prior to being the Administrator of CETA, Mr Mhambi said that he had been an Administrator of the Public Service SETA, and he was therefore not part of the previous board and indeed his colleagues were not part of the previous administration because they were brought in together from various government entities.

In terms of the operation of the MoU, indeed they would love to have it happening currently but what had happened was that that MoU dated back to NSDS 2. It was important for the Committee to note that NSDS 2 had been driven by targets, numbers and quantity rather than quality per se. NSDS 3 was very different from NSDS 2 and they were reviewing all their MoUs to bring them in line with NSDS 3. Not all SETAs had signed their service level agreements (SLAs) with the Minister of Higher Education and Training. They had been told that this would happen before the end of June, and they had to revise them based on the NSDS 3.

Mr Mhambi stated that his colleagues in the Department of Labour had been aware of the challenges in CETA over the years and they should indicate that the previous Minister of Labour had started processes towards putting CETA under administration. Therefore there had been no erudition of responsibility on the part of the Department of Labour. Even the Minister of Higher Education struggled in attempting to put CETA under administration. The initial attempt last year led CETA to take the Minister to court. There were major difficulties before CETA was put under administration in March 2011. Therefore government had indeed taken the initiative to put things back on track in CETA.

With regard to the key entities they were targeting which constituted youth, women and persons with disabilities, they would focus on them because NSDS 3 brought about a new way of doing things within the skills sector in the country. Included in the new programmes, was the Pivotal Grant that forced SETAs, FET Colleges and Universities to work together to ensure that all marginalised groups were part of that new framework which needed to be unpacked amongst all of them. Therefore some of those gatherings would be absolutely necessary as part of their strategic plan because their strategic plan should talk to the very people they wanted to bring in and it was not intended to be a mere talk shop.

The failure to reach people in the rural areas was their own. They did not have a focussed strategy to deal with rural areas. During the Minister’s budget vote last week they had met with the Deputy Minister of Rural Development and Land Affairs, Mr Thulas Nxesi, and they managed to set a meeting between CETA and that department to work hand in hand so as to address the rural outreach.

In terms of how many young people were involved in the construction industry, Mr Mhambi stated that they did not know. In terms of those that had interfaced with CETA, the numbers were not enough. But what they did know was that the Department of Human Settlements had a programme focusing on young people and they had identified that they had to take the programme on as they moved forward.

With regard to bursaries, he stated that the bursaries end up nowhere because learners did not go and get professional registration like those who did architecture, town planning, etc. They now had a strategy of a care intensive programme with mentoring support so that learners would go all the way till they were registered, and that was the direction they were taking from now on. There were 50 FET Colleges around the country and the 16 that they had accredited were the ones that had construction departments. The objective was to ensure they established construction departments in the FET Colleges that did not have them.

Getting rid of the short skills training programme was the department policy and the two to three week programmes were out. CETA was moving to full qualifications that would be 9 to 12 month leanerships. And after that they wanted learners to move to the Pivotal Grant programme that the Minister had introduced as part of the NSDS 3 where they moved on to technological universities and onward to registration.

In terms of cooperatives, Mr Mhambi responded that they had failed as far as cooperatives were concerned but one of the challenges they identified was that as a country they did not articulate their policy to get them going as promptly as they should have. What they should do now as a CETA was not go out and look for cooperatives, but rather look for individual with similar intentions and assist them in setting up cooperatives and registering them.

In terms of reporting according to provinces, he noted that the figures they had in terms of provinces were just technical figures that came by way of how many learners were coming from a particular province. What they should be asking was what they were doing in each province in terms of impact because a learner in Johannesburg would be there as a job seeker from the Eastern Cape and those figures did not reveal much. What they should be doing was to assess what specific projects they had in each province and what impact did it have there. They were revising the Workplace Skills Plan (WSP) form that employers should fill in and they were factoring in the new ones that would give them more information, and yesterday they had a meeting with the specialist in that area and they were articulating amongst themselves some of those lapses they had found.

In relation to the question of where the training was done and who was teaching the learners, Mr Mhambi responded that private entities were training the learners in the main and there were more than 500 entities all over the country responsible for the training of learners. The training per learner was indeed very expensive and they invested about R40 000 per learner and about R30 000 of that money did not go to the actual training of the learner because most of the service providers were not very scrupulous and that was their concern. In terms of public institutions, he noted that their training was not geared to address the requirements that professional bodies set per industry. Due to that disjuncture learners would not be able to finish their training. Therefore the Minister had instructed those public institutions to work hand in hand with CETA so that training continued all the way to the registration of the learner. But more importantly where human resources were concerned, the lecturers in those institutions varied in terms of education and the institutions themselves were not strong financially. CETA had to use part of their budget to support those institutions. For example, the budget of CETA was R376m per annum compared to the FET Colleges that had small budgets. That was why the Minister said they should take some of their budget and invest it in the public institutions so that they get quality results in terms of the training.

CETA was not aware of what was happening in ABET programmes because they had not customised ABET to address construction. The question was really how much they had done in terms of Recognition of Prior Learning (RPL) because even the people they thought required ABET were actually people who had a lot of knowledge in construction. They had not applied RPL and they had an obligation to do so. They could find that after applying RPL, they had NQF3 and NQF4 qualifications and the construction sector needed that more than any other sector. They had not pushed that as far as ABET was concerned and it was a challenge.

The placement figures were small and they acknowledged that. That was why they had said to the industry they would fund them in respect of the percentages they had trained and there should be guaranteed jobs at the end of the training. In terms of whether they had the people to train the learners to the level they should be, Mr Mhambi stated that they did. Their challenge was not capacity but it was the nature of the training and where the training led to, and the providers of the training were the ones who benefited more from the training rather the recipients. The challenge for CETA was to turn that situation around as an industry and indeed assisted by government departments.

In terms of providing information on turn-around strategy he noted that they would be more than happy in sharing that information after signing their SLA with the Minister.

The Chairperson thanked Mr Mhambi for his responses and asked the Chief Operations Officer of the Department of Human Settlement to make some comments on the presentation.

Mr Neville Chainee, DHS Chief Operations Officer, stated the Department welcomed the initiative that had been taken by the Minister of Higher Education with the Construction SETA. One of the problems they had been grappling with as a department was trying to coordinate the programmes around improving the skills levels in the building industry. They had asked their Chief Director to take up the issue of building a relationship between the Construction CETA, Construction Industry Development Board (CIDB), the National Home Builders Registration Council (NHBRC), the Development Bank of Southern Africa (DBSA). As a mainstream department, they wanted to see the relevant entities take responsibility for skills development in order for the department to tap into that for professional and technical skills such as plumbing and carpentry.

The operationalisation of the MoU was something they were going to take up with the Construction SETA based on the fact that there were some challenges. They would support CETA and hopefully CETA would be able to respond as the Committee was aware of some of the challenges around oversight, monitoring and inspections because they did not have such capacity to be able to undertake that and which had eventually blemished the department’s track record.

The Chairperson thanked Mr Mhambi and his team for responding to the call from the Minister. The Committee was going to interact with CETA and the Department on a regular basis because their intention was to build the nation.

Progress made on Delivery Agreement for Outcome 8 by Department of Human Settlements (DHS)
Ms Monika Ghinzler, Acting Chief Director for Intergovernmental Relations: DHS, stated that they should quickly recap some of the outputs and sub outputs to be achieved by 2014. Outcome 8 in the Department of Human Settlements for the improvement of life had four outputs, namely, the accelerated delivery of housing opportunities which needed the upgrading of 400 000 households in informal settlements with an affordable rental housing stock of 80 000 units. The second output was the access to basic services that focussed on the national bulk infrastructure programme and increased access to basic services. The third output was more efficient land utilisation that looked at the acquisition of 6 250ha of state owned land. The fourth one was the improved property market where the sub output was the supply of affordable housing finance to 600 000 households.

They had signed a delivery agreement for Output 1 between the Minister and each of the nine provincial MECs. For Output 2 they had played a support function for the Department of Cooperative Government and Traditional Affairs and the agreement had been signed between the Minister of Human Settlements and the Minister of CoGTA. The third output was the release of public owned land and an agreement between the Minister of Human Settlements and Ministers of Public Works, Public Enterprises and Rural Development and Land Reform. Output 4 for an improved property market did not yet have a delivery agreement.

In terms of the implementation progress, she noted that for Output 1- the accelerated delivery of housing opportunities for the upgrading of informal settlements - they had 27 054 serviced sites that had been planned for the 2010/11 financial year. A total of about 43 260 serviced sites were delivered by 31 December 2010, and the increase in the target implied that there was a reprioritisation that had taken place since the delivery agreements were signed. The project management had been established in the department with a direct link to the project implementation process by the Provincial Departments of Human Settlements.

In terms of sub output 1.2, she noted that was the implementation of the National Upgrading Support Programme and 81% of municipalities had been briefed. Three out of the four IT platforms were functional and the resource kit was in the final stage of drafting. In terms of the increased well located rental accommodation, 8 188 rental units had been delivered up to 31 December 2010 against target of 6 430. The Social Housing Regulatory Authority (SHRA) had been established and it was responsible for channelling funding, defining new norms and standards, and supporting and stimulating social rental housing projects.

In terms of sub output 1.4, the accreditation of municipalities accreditation certificates for level one and level two were signed by the Minister of Human settlements. The MECs for Human Settlements had signed the accreditation certificates and the Accreditation Compliance and Capacity Assessment Panel had been established and it was functioning for those municipalities that had received accreditation and to do capacity assessment for other municipalities that had been identified for accreditation.

In terms of Output 2 which related to access to basic services, she noted that they saw themselves as playing a support role to CoGTA which led on that particular output. The statistics that they were citing were not theirs but rather CoGTA’s. However what they had done to improve and incorporate efforts was with COGTA to establish a Sustainable Human Settlements and Basic Services Task Team that would focus on alignment of planning, funding and implementation. They were looking at establishing human settlements committees so they could have a direct relationship with the sector municipalities and broaden this once it had been established. It should be noted that there was still no agreement on norms and standards for service delivery on sanitation, water, electricity and refuse removal between the department and the CoGTA. They were looking at revising the project lists shared between the DCOG/Joint HS and DCOG MinMEC/ Implementation.

In terms of effective utilisation of land for human settlement development, 33 000 hectares had been identified by the Housing Development Agency nationally and provincially for human settlement development. However the framework for compensation for land still needed to be finalised with the Departments of Public Works and Public Enterprises.

In terms of increased urban densities, the policy framework for density pre-conditions for land released was yet to be developed. In terms of the Land Use Management Framework they had not made progress as planned and that would be informed by the finalisation of the Spatial and Land Use Management Bill that had to be promulgated by the National Planning Commission.

In relation to an improved property market, the Mortgage Insurance Guarantee Scheme would establish a R1b Guarantee Fund to provide support to the gap market. The approval of the programme was obtained from MinMEC and the National Housing Finance Corporation (NHFC) Board of Directors had approved the business case. The next step would be the consultation with the National Treasury and relevant stakeholders including the banking sector, organised labour and public, private and community organisations.

In terms of the revised financed linked individual subsidy scheme, this was under review and the first draft report had been completed. The subsidy scheme targeted those income earners who earned between R3 500 and R12 500. The next step was that they would start with an engagement process with the provinces.

The policy position on the introduction of a long term fixed interest rate instrument would be launched in 2014 and would be based on the success of the Mortgage Default Insurance Programme (MDIP). In terms of the mortgage and non-mortgage loans delivered to the target market, mortgages, incremental loans and wholesale funding provided by NHFC and the Rural Housing Loan Fund constituted the targets for that output. And there was a process to improve the Development Finance Institutions and it was envisaged that the outcome would improve the overall impact and extent of the output.

In terms of loans to facilitate construction finance within the targeted income gap market, R350m was earmarked for the Medium Term Expenditure Framework period to re-capitalise the National Urban Reconstruction and Housing Agency. In terms of housing finance opportunities contributed by sector stakeholders, a process of engagement with public, private, social, community, and labour stakeholders was still to be arranged to ensure relevant housing finance opportunities were collated and factored in to the achievement of that output. They needed to revamp both the departmental systems and reporting by sector stakeholders on housing finance opportunities.

In conclusion Ms Ghinzler stated that in terms of significant process developments, the first progress report had not been formally considered by the Implementation Forum yet. The first official Implementation Forum was scheduled for June and it was a political forum constituted of Ministers and MECs of provinces and other stakeholders. However they had had a joint MinMEC between the Departments of Human Settlements, CoGTA and Water Affairs. The Sustainable Human Settlements and Basic Services (SHS&BS) Task Team had been established and approved by the joint MinMEC. The next step was the formalisation of the establishment of Municipal Settlement Committees in the Metros, whose operational programme would inform the joint work programme of the SHS&BS Task Team.

Mr Chainee added, about the accelerated delivery of housing opportunities, that the important thing they needed to remember was that they should change their behaviour particularly about informal settlement upgrading and an increase in services in terms of basic infrastructure. Their prior problem was that they would have a situation where they constructed houses on sites or on houses that already received basic infrastructure. They therefore needed to strike a balance so they could increase the number of households that could access the basic infrastructure. What they could indicate was that they had seen a shift in the provinces whereby there was much improvement towards accelerated housing delivery.

The other issue related to agreements on norms and standards. The problem was they had the National Department, Department of Water Affairs, CoGTA, and the municipalities preparing standards for water provisioning and sanitation. They had taken up the issue with the Presidency. They should draft an agreed set of norms and standards for provisioning of water and sanitation so that people could hold them to account as the National Department. Therefore the National Department should be able to determine what was acceptable and what was not.

Discussion
Mr J Matshoba (ANC) asked where they get their percentages in terms of Output 2 that related to basic services such as water 95%, sanitation 81%, refuse removal 71.3%, and electricity 83% because on the ground the figures were different. Since the information was put on the Department’s website, whom was that information targeting?

Mr Sithole asked for a provincial breakdown of the 400 000 households that would be upgraded in the informal settlements. He asked where the 27 000 service sites were going to take place. He asked where abouts or in which area or province were the IT platforms to be established. He asked for timeframes for the development of the urban density plans.

Mr Steyn noted that it was clear that Members were hungry for more definitive information rather than the broad strokes that were presented by the Department. He presumed what they were given was a snap short of what was to be in the Annual Report. The norms and standards were extremely important as Mr Chainee had earlier indicated but it should not be something that took months and years to finalise. There were norms and standards but they would always differ and it was a question of getting the joint committees to agree on something. Similarly for the first time something was mentioned about the mortgage insurance programme which he assumed was linked to the insurance fund the Minister had mentioned in the 2010 budget speech, but as far as he knew it had not yet been implemented. He was not sure how the end user could access that or whether an understanding had been reached with the banks but surely it was something that needed to be moved with speed? That was something that affected people’s lives. He asked when they were going to see the subsidy at an implementable level.

He noted that this was the same story in relation to land where land was identified as belonging to other government entities and the land needed to be transferred but there were some agreements that needed to be finalised between Treasury and affected departments. What was important was that the land was government land - no matter which department had control over it. It was therefore crucial for the department to speed up the process if they were serious about service delivery agreements so that the cause for accelerated housing was realised. He asked if the state land moratorium put in place by the previous Minister of Housing, Ms Sisulu, was still in place.

Mr Chainee responded that the percentages were given to them in place of the delivery agreements based on what CoGTA had made. They had to agree on norms and standards because administratively they had to be upfront with the politicians or political leadership. They did not want a situation where the political leadership understood 95% meant each household had access to water. There were a number of standards applied around what defined “access”. The problem was that they had taken regional and international standards and the point they should emphasise was that as South Africans they should determine and define what they thought was the acceptable norm for a family that stayed in South Africa. It was important for each household to have access to water, sanitation, electricity and other basic services that were required

The programme of action of the department was on the website because government was transparent. The programme of action they had committed themselves to in terms of the 12 outcomes was on the Department of Monitoring and Evaluation’s website and it covered the outputs that they had presented to the Committee.

He stated that they will forward the provincial breakdown to the Committee and in a previous presentation they did indicate to the Committee that 400 000 would be broken down towards the specific provincial numbers.

The IT platform related to the regional and technical support processes and those that were there related to management technical evaluation. It was the same with rentals, they could provide those figures in terms of provincials.

In terms of the density framework they had indicated - as the Committee would be aware - that the Constitutional Court ruling stated that the responsibility for town planning sat with local government. They only had a draft of what had been prepared that was called the Draft Density Framework. It was drafted by the policy section of the department and that would be a guideline to provinces and municipalities because what they did not want to do was have a one-size-fits-all model.

In terms of the Guarantee Fund, he stated that the point was the Fund they were talking about was the Mortgage Indemnity Fund but as government they operated within a financial framework and that framework was overseen and monitored by Treasury. In terms of timeframes, he stated that they were less than happy about the timeframes and he would like them to move with greater speed and urgency but they needed to get the banks’ approval. Government’s outcomes approach meant changing not only government’s behaviour, but also everyone’s behaviour because it was about relationships. They had put in enough frameworks so that they were not accused of not doing enough.

In terms of land release, he noted that they had got into a situation were land had been identified but the Housing Development Agency was in the process of evaluating that land. They should respect the fact that the Departments of Rural Development and Public Works were both very responsibly cautious in this as to the management and release of the land. The point of view of DHS was that the land should be released and be utilised for the purposes it was intended.

On the moratorium, he noted that one of the consequences of the Constitution was that the local authority considered itself to be a sphere and when Minister Susulu pronounced the moratorium, lot of municipalities chose to ignore it. What they could say was that in the national and provincial spheres there had been a prudent management of land.

The Chairperson thanked Mr Chainee and emphasised that they needed the information they requested about the informal settlements. They needed the information from provinces so that when they evaluate their strategic plans they would be able to identify critical areas that had serious challenges. She thanked the delegation from the Department and CETA for their presentations and responses.

Ms Tamie Mpotulo, Chief Director, presented her presentation to the Committee. However, the Committee was not satisfied with it as they said there were too many gaps in the report. She was asked to return with a revised report.

The meeting was adjourned.