Department of Human Settlements: April to June 2012 performance

Meeting report

Department of Human Settlements (DHS) 1st Quarter performance
The Deputy Director General: Strategy and Planning, Mr Neville Chainee, looked at annual performance plan monitoring, communication outreach, job creation, accreditation of municipalities, entities performance and financial matters.

Mr Chainee looked at how many targets in the Annual Performance Plan had been achieved. In total, the DHS had approved 93 targets and it had achieved 59 giving a percentage of 63%; 34 targets had not been achieved giving a percentage of 37%.

With regards to communication and outreach, the DHS had launched the Masimong Community Housing project on the 20 June 2012. 1000 stakeholders attended the Govan Mbeki Human Settlements Awards. 200 stakeholders attended the budget vote and 100 stakeholders attended the World Urban Forum Consultative Workshop. The 2012 Youth Build which took place on the 14 May 2012 was attended by 1000 community members.

On job creation, 7 942 services were sited and 24 168 top structures were delivered. This translated into 12 223 jobs based on the model approved for measuring job creation. In terms of temporary employment, approximately 25 844 jobs were created during the construction.

Eighteen municipalities had been assessed for accreditation and the reports were under consideration by the provinces. The Gauteng Provincial Department of Housing and Local Government had concluded the Implementation Protocols with the Metropolitan Municipalities. The Western Cape Department of Human Settlements and the City of Cape Town had also finalized their Implementation Protocol.

Mr Chainee looked at the performance of the agencies under the DHS. The Social Housing Regulatory Authority (SHRA) 2B contracts were finalized in the first quarter. The call for proposals for the Social Housing Investment Programme (SHIP 3A) investment programme was published. Tenants had started moving into the units on projects approved in SHIP 2A. The first draft of the National Social Housing pipeline had been completed and presented to provinces for their consideration and adoption. The SHRA hosted the Rooftops Canada delegation to review and advice on the SHRA’s regulatory implementation framework.

The Housing Development Agency (HDA) had land approved for human settlements in various provinces. One implementation protocol had been signed with the Western Cape Department of Human Settlements and 11 protocols were maintained. The HDA participated in the councillor induction programmes as requested by the DHS and the South African Local Government Association (SALGA). The Joint Coordinating Committee on Land meeting was undertaken as planned during the quarter and annual targets were exceeded.

The Committee was presented with the programmes of the National Urban Reconstruction Housing Agency. In the Subsidy Housing Programme, the performance of the programme had exceeded targets for the first quarter of 2012/13. For the Affordable Housing Programme, the performance was below target with the exception of houses built and sites serviced. The overall performance of the Infrastructure and Community Facilities Programme was disappointing. The poor performance was attributed to the changes in lending criteria and the winding down of the intermediary relationship. The performance in the remaining period and especially the second quarter was going to indicate the response of the market to the new products and the future impact in broadening access to finance.

Mr Chainee also spoke about the performance of the Rural Housing Loan Fund, the National Home Builders Registration Council, the National Housing Finance Corporation and the Estate Agency Affairs Board.

The Chief Financial Officer, Ms FJ Matlatsi, presented the departmental expenditure per programme as at 30 June 2012. The five programmes were: Administration; Housing Policy, Research and Monitoring; Housing Planning and Delivery Support; Housing Development Finance; and Strategic Relations and Governance. The DHS had spent an average of 14% of the final allocation. The Committee was presented with figures and percentages for Grant and Transfer payments, the expenditure of the Human Settlements Development Grant as well as for the Urban Settlement Development Grant (USDG) for the eight metros: Buffalo City, Nelson Mandela, Mangaung, Ekurhuleni, City of Johannesburg, City of Tshwane, eThekwini and the City of Cape Town. The total amount of the USDG for these municipalities was R6 266 998 000 and of this amount, 87% had been spent.

Discussion
Mr S Mokgalapa (DA) said that it was important for the DHS to start monitoring the transfers it made to provinces. How did municipalities get accreditation when they always complained of lack of capacity? Did the assessment by the DHS not take into consideration the capacity of the various municipalities? Implementation Protocols were good but there was the need for monitoring to ensure that the protocols and delivery agreements were being achieved. On the issue of land, was the DHS having any engagements with the Department of Public Works. Part of the problem with housing development was land, but another part of the problem was Public Works.

Mr Chainee replied that there was a Joint Coordination Committee which had been set up as part of the service delivery agreement between the DHS, the Department of Public Works, the Department of Public Enterprises and the Department of Rural Development. It was well documented that the governance and administrative issues were being handled. There was a degree of cautiousness in the handling of the land issues but the DHS was going to get the Minister of Human Settlements to sign and request for a meeting where the issues were going to be raised and covered.

Mr K Sithole (IFP) said that he was serving on the Public Works Portfolio Committee and the Department did not have a policy. The policy that was developed in 2006 was not yet implemented and the department did not know the assets which they held.

The Chairperson said that the Committee was going to make a recommendation to the Minister of Human Settlements to meet with the Minister of Public Works so that they could negotiate on the release of land for human settlements. 

Mr Mokgalapa said that the land which was held by Public Works had to be released for human settlements and not be given up for commercial purposes. The establishment of sustainable human settlements meant that settlements had to be built closer to the cities.

Ms M Borman (ANC) said that there was no reason why the Department of Public Works did not release the land for human settlements. She had raised the issue and the officials had asked for erf numbers of the properties so that the process could be facilitated. Could the DHS provide the erf numbers so that the release of the land was facilitated?

Mr Chainee replied that the DHS was going to make available the erf numbers for the Committee.
On the issue of accreditation of municipalities, the accreditation was done before the municipalities lost most of the senior management to other jobs. An example was Buffalo City and Nelson Mandela. It was important for the Committee to follow up on the reasons for decrease in capacity. At the time when the assessments were conducted, there was a rational basis for the accreditation. The challenge which the DHS had was that the response to the capacity issue should not be taking money away from the municipalities.

Ms M Borman (ANC) asked for a clear explanation of what the DHS was doing to improve the sanitation system. What was the particular setup by the DHS to deliver on sanitation? What was the DHS doing to fill its vacant positions and how long was it going to take for these vacancies to be filled. Was the NHBRC Board a completely new board with a new Chairperson? Were the targets presented only for the first quarter or for the whole year and were they realistic? What was the DHS hoping to achieve with the programme of communication and outreach and what were the possible benefits? What was the essence of the participation in the councillor induction programme and what was the structure of the programme.

Mr Chainee replied that the NHBRC board was new and he was going to arrange for the Board to be introduced to the Committee. The communication and outreach programme had the objective of showcasing the youth and assisting in the eradication of youth poverty and unemployment. It was intended to make the youth part of human settlements and to show the youth their place within the system. On how realistic the targets were, the report and the figures presented were informed by data provided by the provinces. The DHS was avoiding a situation where unrealistically low targets were set. The targets were only for the first quarter and not for the entire year. The adverts for the vacancies had been published and there were interviews in process and the Department was going to overcome the challenge of vacancies. Sanitation was under the jurisdiction of the Programme and Project Management Unit and there was a Chief Directorate in charge of sanitation programmes.

Mr K Sithole (IFP) asked for the municipalities in Limpopo where the informal settlements upgrade programme was carried out.  What was the reason for the underspending in the Buffalo City municipality?

Ms A Mashihi (ANC) asked for an update on the progress of the accredited municipalities. Such an update was important before the process of assessing the municipalities could be continued.

Mr J Matshoba (ANC) asked what the reason was for the poor spending by the Social Housing Regulatory Authority where the spending percentage was 0%.

Ms Matlatsi replied that the process was that the regulatory authority had to request the money before it was transferred. During the first quarter, no requests were made and its first request was made in July in the second quarter. It was required that unless an entity needed the money for immediate use, it should not be requested for.

The Chairperson asked where the Estate Agency Affairs Board (EAAB) featured in the allocated budget of the DHS for the financial year.

Mr Chainee replied that the Estate Agency Affairs Board was an entity which operated just like other entities. It previously was under the Department of Trade and Industry but from the current year, it was under DHS. The strategic plan of the Agency was going to be submitted to the Portfolio Committee. There was no budget from the DHS as it was a self-sustaining entity.

The Chairperson said that the issue of the Estate Agency Affairs Board would be raised during the Medium Term Budget Framework. It had to be regulated and legislated on. The transfer was based on a Cabinet decision and there had been a formal transfer and sign-off by the various ministers and all the resources and information had been transferred.

Mr Mokgalapa said that the EAAB could not just be adopted from the Department of Trade and Industry. There had to be some legislation and regulation governing the entity.

The Chairperson asked if the DHS ever made follow ups on the money which the National Home Builders Registration Council (NHBRC) collected from the DHS every year. It was important for the NHBRC to account for the funds they had received from government. What was the problem regarding capacity at the NHBRC. The DHS was not serious about the filling of the vacancies in the Department. This was already the second quarter and there were still unfilled vacancies. On departmental performance targets, the Committee urged the DHS to improve on the achievement of its targets. How many consultants did the DHS have and what were the consultants doing? There were highly paid workers at the DHS yet most of the work had to be done by consultants and service providers. The employees of the DHS received a performance bonus. What was the need for highly paid workers and the bonuses if the job still had to be done by external consultants?

Mr Chainee said that the DHS had been putting enormous pressure on the NHBRC to account for its expenditure. The entities had to subscribe to and be governed by the mandate of the government. The money which the NHBRC received was included in their financial statements so there was the guarding of funds and due monitoring by the DHS. The NHBRC and the National Treasury had a concurrent jurisdiction on the functions of the NHBRC so the usage of funds had to be approved and monitored. In the DHS only level 1 to 12 personnel had received performance bonuses. This was included in the new wage agreement.

Ms Matlatsi said that she would provide the details on the number of consultants to the Committee.

The Chairperson said that it was important for DHS to provide to the Committee a comprehensive list of informal settlements which had been upgraded.

The meeting was adjourned.