Department of Human Settlements performance towards achieving Outcome 8: by Department of Performance Monitoring & Evaluation

Meeting report

Performance of Department of Settlements towards Achievement of Outcome 8
Dr Sean Phillips, Director-General: Department of Performance Monitoring and Evaluation: Presidency, presented its report on the performance of the Department of Human Settlements (DHS) towards the achievement of Outcome 8 of the government’s outcomes-based approach adopted in 2010. Outcome 8 focuses on “integrated human settlements” and aims for “sustainable human settlements and improved quality of household life”.

The President has mandated the DPME to “facilitate the development of plans for the cross-cutting priorities or outcomes of government and monitor and evaluate the implementation of these plans”. The DPME has been working with the National Treasury, the Department of Public Service and Administration, the Public Service Commission and the Auditor-General in developing a methodology for assessing the quality of management practices in individual national and provincial departments and municipalities. Its aim was to provide Cabinet and the provincial executive councils with periodic assessments of the performance of departments and municipalities in terms of management and administration. These would be starting next month, in November 2011. The DPME was mandated to monitor frontline service delivery in partnership with the Offices of the Premier. The DPME was also mandated to implement interventions to address blockages in delivery, in partnership with delivery institutions.

There were four sub-outputs of Outcome 8:
▪ Accelerated delivery of housing opportunities
▪ Access to basic services
▪ Land assembly and effective utilisation
▪ Improved affordable property market.

The overall progress of specific targets under each of the above sub-outputs were classified as “on track and require no major interventions”; “proceeding slower than targeted or which “face impediments requiring intervention” and “substantially behind timelines or which face impediments which will require urgent intervention at the Ministerial or Cabinet level”. Under sub-output 1, the upgrading of 400 000 households in informal settlements with access to secure tenure and basic services was on track but the government’s aim of providing 80 000 well-located rental units by 2014 was proceeding slower than targeted.

All targets under sub-output 2 were classified as proceeding slower than targeted. Two of these targets were for household access to basic water and basic sanitation to be 100% by 2014. It was reported that, as of March 2011, 95% of households had access to basic water while 82% had access to basic sanitation.

Progress of all targets under sub-output 3 were also reported as proceeding slower than targeted and included the release of 6250ha of land vested nationally or provincially for human settlements development by 2012; the increasing of urban densities to 60 units/ha by 2012 and the development of an approved land use management framework.

Under sub-output 4, three targets were classified as being substantially behind timelines and requiring urgent intervention. These were the development and implementation of a Mortgage Default Insurance Scheme (MDI) – the target was for the MDI Scheme to contribute 36% of the targeted 600 000 housing finance opportunities by 2014; the formulation of a policy position regarding the introduction of a long-term fixed interest rate instrument by 2014 – no progress had been made on this to date; and the target to create housing finance opportunities contributed by sector stakeholders (together with the revised Finance-linked Individual Subsidy Programme) to provide for the remaining 41% of the 600 000 housing finance opportunities by 2014. The DHS was not adequately monitoring and reporting the progress of banks making loan finance available in the affordable housing market.
 
In conclusion, the Delivery Agreement was not only an agreement between government departments but was intended to involve all the key stakeholders that need to work together for the twelve outcomes to be achieved. There was room for more sector-wide engagements in meeting the targets and outcomes. The DPME and the DHS had just started a process to begin evaluating some of the Outcome 8 interventions and would focus on informal settlements upgrading, rental/social housing and “mixed income with affordable housing loans”, all with the aim of identifying possible improvements to be made.

Discussion
Ms M Borman (ANC) said the presentation had nicely summed up what the Committee had been trying to get out of the DHS for some time. A great concern for the Committee was the working between the government departments. For Outcome 8, Integrated Human Settlements, to function, all of the other twelve outcomes, except possibly two or three, needed to be functioning. In trying to coordinate all these departments to achieve all the twelve outcomes, “where does the buck stop”? For example, you cannot build houses until you have the necessary infrastructure. The Committee was still seeing new developments not breaking new ground since 2004.

Dr Phillips replied that the approach taken by the DPME up until now was that the buck stopped at Cabinet. Systematic monitoring and evaluation was being done at the highest level by Cabinet. This Report would be going to Cabinet. Cabinet had also asked for the DPME to provide it with its own views and so would be getting reports from the various departments as well as from the DPME. It was the role of Cabinet to assess where there were blockages in the implementation of Delivery Agreements that needed to be addressed.

Ms Borman asked how regularly the management performance assessments, due to begin in November 2011, would be done.

Dr Phillips replied that this was a new initiative and had to be implemented incrementally. For this financial year, the DPME had set itself the target of conducting assessments of 20 national departments and working with the offices of the premier to conduct assessments of 20 provincial departments. In future it was likely that the assessments of the management performance of departments would be done on an annual basis. The assessments were a lot of work and so it would probably not be feasible to do assessments quarterly. The reason it was called a “management performance assessment” was because there were currently some basic administration and management problems in government. Addressing these problems was a priority and would focus on aspects such supply chain management, human resources management, strategic management and planning and financial management and not on the actual deliverables of the departments as such. These assessments would not be based on annual reports, as annual reports focused more on Outcomes, but would be based on reports done by the Auditor-General, the Service Commission and the Department of Public Service and Administration.

Ms Borman said the progress reported on in the presentation seemed to be based purely on the reports of the respective service delivery departments. Was this the case? How confident was the DPME of the quality of service delivery on the ground? Specifically, flush toilets had been installed but there was no water connected to the toilets. “Flush toilets”, such as the VIP toilets, were therefore reported as installed but in fact did not function.

Mr A Steyn (DA) said he also got the impression that the DPME report was based on the DHS report. If that was the case, the Committee was concerned. In addition to receiving reports from DHS, the Committee also did its own oversight. More times than he cared to remember he had found that what was written in the DHS report was not the same as what was happening on the ground. Mr Steyn said he also often found conflicting reports on the same thing. It was of great concern to the Committee if the DPME was going to put its report together based on paper reports it received from the departments.

Dr Phillips replied that the DPME shared the concerns that members had about the verification of its data. The DPME was still a young department that was building its capacity. In the past year, the DPME had focused on putting together Performance Agreements, the Delivery Agreements and the monitoring framework for the implementation of these agreements. The next stage for the DPME to move into was to focus much more on verification and interrogation of the data that was provided by departments. The DPME would have to be very smart in the way that it did this and draw data from a wide variety of sources. The DPME had made applications during the budgeting process for an increased budget to enable the Department to hire more staff so that it had people on the ground to do verification. Financial constraints made it unlikely that the DPME would have sufficient staff to do comprehensive verification of data in the foreseeable future. The DPME would have to be smart in using its limited resources and would have to collaborate with researchers outside of government. Dr Phillips agreed with members that there was a need for the DPME to not be merely a “postbox” that received information from the government departments and passed it on to Cabinet. If the DPME was going to add value it would need to be able to give an opinion on the validity of the data given to it by departments. This needed to be the DPME’s main focus area moving forward.

Ms Borman said that the huge rectification programme, of R50 billion or R60 billion, sitting with the Department had not been mentioned in the presentation.

Mr Steyn asked what was meant by “facilitate the development of plans for the cross cutting priorities or outcomes of government and monitor and evaluate the implementation of these plans” as one of the DPME’s functions. The Housing Development Agency (HDA) had been established to do the exact same thing and the National Planning Commission (NPC) had also been tasked to “facilitate the development of plans”. Mr Steyn saw a lot of overlapping and wondered if it would result in a duplication of work or if the different entities would talk to each other when trying to do the same thing.

Dr Phillips replied that the DPME’s role was somewhere in between that of the NPC and the HDA. The NPC’s role at the moment was limited to developing the long-term plan. It did not have a generic planning function for government but was focused on developing only a long-term plan. Delivery Agreements were short to medium term plans and once a long-term plan was in place, the Delivery Agreements would be informed by this long-term plan. The Delivery Agreements did not go into as much detail about plans that an organisation such as the HDA would.

Mr Steyn asked if the DPME played a role in queries received through the Presidential Hotline.

Dr Phillips replied that the Presidential Hotline was being managed by the DPME as of the 1 October 2011. The DPME was using it as an important source of monitoring information and gauging the views of citizens on the state of service delivery as well as identifying where there were problems with service delivery. The DPME did follow up on issues that arose from the Hotline. The response and resolution rate from national departments was quite good but the DPME was concerned about the resolution rate of issues raised in provincial departments. In collaboration with the DG in the Presidency and the Forum of South African Directors-General, the DPME would focus on improving the resolution of issues arising from the Hotline that had been referred to provincial departments.

Mr Steyn asked if the Agreements signed between national and provincial ministers were being monitored by the DPME in addition to its monitoring of the Delivery Agreements between the President and outcome-coordinating Ministers.

Dr Phillips clarified that there were two types of agreements that had been signed. The President signed performance agreements with his Ministers while the Delivery Agreements were signed by coordinating ministers and ministers at other levels, MECs, mayors and members from other areas of government. The Delivery Agreements were akin to a charter between all the stakeholders that needed to work together to achieve a particular Outcome whereas the performance agreements between the President and the Ministers were more similar to the kind of agreement between a supervisor and supervisee where the President informed the Ministers of his expectations of their performance. The Delivery Agreements were very different as they were a charter amongst equals who had to agree who was going to do what in achieving the Outcomes. For concurrent functions such as Human Settlements, all the provincial and national human settlements departments were signatories to the Delivery Agreements. The Delivery Agreements were therefore agreements between national and provincial government on the Outcomes. The monitoring process that the DPME had spoken about was the way in which it was monitoring the implementation of those agreements. For example, the DPME’s quarterly reports to Cabinet on “Human Settlements” focused on issues in national and provincial human settlements departments.

Mr Steyn said he could not find the figures such as the “52 383 serviced sites” under sub-output 1.1 anywhere in the DHS Annual Report. There were absolutely no “deliverables” in the Annual Reports. Did the DPME believe that this was the way things should be done or did it believe that anybody should be able to pick up the Annual Report and source those outcomes from it?

Mr Steyn said that the schedule provided to the Committee in the presentation was totally different to what was in the reports. For example, the DPME indicated that 52 383 serviced sites were delivered in 2010/11, but the figure from DHS was given as 62 546 serviced sites for 2010/11. Under sub-output 1.1, it was stated that “55 008 households were provided with top structures” as of March 2011. This did not tell the Committee what exactly had been delivered and did not give a true picture of the deliverables on the ground.

Dr Phillips replied that such discrepancies related to the need for the DPME to verify and interrogate data received from government departments. Having heard the comments made, the DPME would interrogate the Annual Report to find out the sources of the discrepancies and identify any problems that needed to be addressed. Discrepancies could be for a number of reasons, such as different ways of describing what was being measured or different reporting periods.

Mr Ahmed Vawda, Deputy Director-General, DPME: Presidency, added that when contradictions with its data, and the data from departments, were found in the media, the DPME was sure to follow them up.

Ms Martie Van Den Berg, Director: Monitoring and Evaluation, DPME, replied that the figures in the Annual Report might include additional programmes to the figures given in the presentation. The DPME would verify the information.

Mr Steyn said that the Committee had found, over the last few years, and from province to province, was that there was absolutely no correlation between the “budget” and the “outcome” achieved with that money. This made it very difficult to agree on particular outcomes based on particular outcomes going forward. While Mr Steyn acknowledged the difficulties, he was of the opinion that there needed to be some correlation between the money spent on an outcome and the outcome achieved.

Mr Steyn was concerned about sub-output 1.2, the “Implementation of the National Upgrading Support Programme for Informal Settlements”. The DHS had come short of approving a strategic plan to provide services to informal settlements. One of the comments in the presentation on this sub-output said that “the agreement with Cities Alliance and World Bank to provide technical expertise lapsed on June 2011”. The DHS had not done anything about this since June 2011 and this raised the question as to whether it was serious about achieving this target. New agreements should be put in place well before the old ones lapse so that there is no gap left.

Mr Steyn asked about the role of the HDA as a repository for state land. A primary mandate of the HDA was identify, locate, and then hold in trust, state land. The HDA had raised two constraints with the Committee. The first was that the HDA did not have the finance to purchase land. The second was that where there was state land in other departments, there were constraints in getting this land transferred. HDA was talking to National Treasury about this but could the DPME play a role in sorting this out? Why should the HDA, and by implication the DHS, have to fork out say 30% of its budget to purchase land from another department? This should be a straight-forward paper transaction as all departments were under the same government.

Mr Vawda replied that the DHS was aware of this issue and that it was being discussed with National Treasury. Mechanisms had been put in place to resolve the financial issues. The Treasury had rightly questioned why it should finance the DHS to purchase land from other government departments and pay money to “go around in a huge circle”. The proposal from Treasury, which the DPME was a part of, was that once the first amount of money got onto the balance sheet of the HDA, they could raise their own money off their own balance sheet. The DPME had made a recommendation that this matter needed to be resolved. Dealing with the financing of existing landholding authorities was complex as the land could not just be given away; it was on their balance sheet and it had raised money against the land assets. The issue was not a simple issue that had arisen because of a lack of attending to it.

Mr Steyn said it had almost been two years since the MDI Scheme had been announced and nothing much had happened. If the MDI became successful, there would be greater demand but possibly no supply as it had not been mentioned by either DPME or DHS who was addressing the supply-side of the MDI Scheme so that prices were not pushed up and made unaffordable once again.

Mr Vawda replied that this was a departmental issue and agreed that the purpose of the MDI was to trigger changes in market behaviour. The demand-side was always a problem because of affordability and whether the banks were willing to lend money “down-market”. The DPME did deal with the supply-side of this. It was repeatedly said that the problems with the supply-side were with there not being enough land, in the right location and at the right price, hence the HDA. The subsidy regime change since 2005 to try and get better mixed-income housing was beginning to take root but was very small. The DPME would be reviewing the lead integrated projects implemented since 2005. The DPME, in collaboration with the DHS, had just completed the Terms of Reference for doing this. The DPME wanted to know whether or not the projects had worked. Its role went beyond just monitoring the progress made and extended to unblocking the blockages. There was a respect for the DPME’s role in this from the DHS. The DHS had to do more to solve planning issues as this was one of the biggest issues within the supply side of the Scheme. The time horizon between planning and “bricks hitting the ground” could sometimes be four years.

Ms M Njobe (Cope) asked to what extent the municipalities were ready to follow the “outcomes approach”. To what extent did their programmes reflect an understanding of this approach?

Dr Phillips replied that were was a particular Outcome that focused on “Local Government” that tried to identify the key outcomes and sub-outcomes that were necessary to enable the country to move towards an efficient system of local government. Addressing weaknesses in local government was the focus of this Outcome. Generally speaking, this was a process that was going to take time. The focus on outcomes and results, as opposed to outputs, was relatively new in the public service at national, provincial and municipal level. The focus on measurements and setting quantitative targets and identifying good indicators were also all new in government. It would take time for the capacity and culture of public service to adjust to this. There was a strong need for capacity building at all levels of government in order for this approach to reach its full potential. The DPME was aware of this and was working on various capacity building initiatives. One example of this was the work being done with the Public Administration Leadership and Management Academy (PALAMA) to put in place revised curricula for monitoring and evaluation (M&E). The DPME was also working with the M&E Units in the Offices of the Premier.

Mr Vawda added that, as required by the Delivery Agreements, municipalities were in dialogue with MECs about their performances around Outcome 8. The DHS initiated the Urban Settlement Development Grant with Treasury which required the metros to perform on human settlements and land for social housing and services.

The Chairperson said that the Committee always fought with the DHS about “concurrent functions” of the national and provincial departments. When would the national departments implement the intergovernmental programme?

Dr Phillips replied that the way in which the Department of Health was setting norms and standards for health facilities was a possible example for other departments with concurrent functions to follow. The way the Department of Health was driving this programme and working with the provincial departments to address gaps in the norms and standards was an example of the degree to which it was possible for national and provincial departments to work together in improving service delivery. This example showed that it was possible, within the current framework of the Constitution, for this kind of collaboration and cooperation to take place.

Ms Njobe asked what norms and standards were used for measuring the progress on targets such as the delivery of services. She was skeptical of the DPME’s report that 95% of households in South Africa had access to basic water and that 82% of households had access to basic sanitation.

Mr Vawda replied that different norms and standards applied to basic services depending on which department had been responsible for the delivery and these were not standard across government. For example, different norms and standards applied to “basic sanitation” depending on whether the DHS or the Department of Water Affairs had coordinated and funded the provision of services. The norms and standards for “access to basic water” provided for by DWA were below those used for DHA and so, depending on which department the money had come from, different parts of the same community could be provided with services of different standards. This was a major contradiction in government’s system.

Ms T Gasebonwe (ANC) asked if agreements to establish provincial National Upgrading Support Programme (NUSP) for Informal Settlements would be made in provinces other than the Gauteng and the Northern Cape.

Dr Phillips replied that the DHS was committed to establishing NUSP structures in all the provinces by the end of this financial year.

Ms J Sosibo (ANC) asked if the DPME was coming up with plans to correct areas in which the DHS was not doing well.

Dr Phillips replied that the DPME did engage with DHS on a continual basis and participated in the forum between the provincial human settlements departments where the details of the Delivery Agreements and progress on their implementation were discussed. The DPME made suggestions during these meetings and made suggestions for action to be taken where there was insufficient progress towards meeting certain targets in its reports to Cabinet.

The Chairperson said that the Committee was extremely unhappy about the delivery of sanitation services. The DHS was not doing enough to address the issue of sanitation. The Committee had been interacting with DHS on this matter in the last year. DHS had been given R100 million to drive the sanitation programme. It was disappointing to find that some of the toilets that had been delivered had defects. How was it possible for a toilet to have a defect? Whose responsibility was it to repair these toilets and who should cover the cost?

The Chairperson said that there could not be a budget of R1.2 billion managed by only two service providers. The Committee was extremely concerned about this. It was not reasonable to expect that the same service providers, serving eighteen departments, could do justice to the mandate of delivering sanitation. That very same service provider had been given advance payments of R2.6 billion. Up to the end of February the service provider had spent 11% of its budget, but then at the end of March the service provider had spent 63%. The Committee was not happy at all about this and appealed to DPME to take the matter to the President. The budget had been increased further this year, but how would this spent? When were the people going to receive the benefits?

The Chairperson said that the Committee did not believe the percentages and figures reported in the DPME’s report. What were they based on? The state of the toilets was not good and there were not adequate sanitation facilities. Secondly, the Ventilated Improved Pit (VIP) toilets being built were not sustainable and people were not using them. People were also not empowered to maintain the toilets. The Committee had been in Umkomazi, in Mpumulanga, in July 2011 where it was told that 530 toilets had been delivered. When the Committee arrived at one of the villages in this area it saw only one toilet. As the people entrusted with oversight, the Committee was very unhappy.

Mr Vawda replied that the DPME did have a handle on the process that had been initiated with the DHS around this issue. He agreed that sanitation was a major problem.

The Chairperson said the DHS needed to have a dedicated policy on housing co-operatives. The DHS was dragging its feet on this and the Committee did not know why. The Community Scheme Ombud Service Bill had now been passed by the Committee. Disputes in co-operatives were to be dealt with through this Bill and managed by DHS, but how could the DHS manage disputes over something it was not even engaging in? If the country was serious about the “developmental state”, people needed to be empowered to participate in the building of their own houses.

The meeting was adjourned.