Department Human Settlements: Under-spending plans & Green Paper process briefings, Housing Development Agency regulations postponed

Meeting report

Agenda item for Housing Development Agency Regulations
The Chairperson noted that the Department of Human Settlements (DHS or the Department) was due to give an update on the progress of the Housing Development Agency Regulations. She reminded Members that this was a matter raised in November, when the Committee had commented that the regulations should have dealt with developmental aspects. She had hoped that the process would be finalised by now.

Ms M Borman (ANC) said that the presentation placed before this Committee contained no draft regulations, and that being the case, she thought that the Committee should not even hear the presentation. She thought that another date should be fixed for something definite to be presented – perhaps the end of April.

Mr S Mokgalapa (DA) agreed, saying that what had been placed before the Committee seemed to indicate merely a process, but no regulations

Ms D Dlakude (ANC) also agreed that the Committee should waste no more time on the presentation this morning, and commented also that no policy was set out.

Ms J Sosibo (ANC) asked when the policy and regulations could be produced.

Mr Thabane Zulu, Director General, Department of Human Settlements, said that consultation was required on the policy before the Department could proceed to draw the regulations. He conceded that the DHS should have expedited the process and he took full responsibility for the fact that it had not. He noted that the DHS faced severe capacity constraints on the policy side, which had contributed to the situation. The Department could get consultants to deal with the matters. He commented that it might be difficult to meet an April deadline, given the number of issues to be decided upon.

Mr J Matshoba (ANC) said that the DHS clearly needed enough time to deal with the matter properly. However, he queried how capacity would be arranged; several people were employed in the Department yet there was talk of consultants. He wondered what that would cost and was concerned at the implications.

Ms Borman concurred with Mr Matshoba on the consultancy implications, pointing out that the DHS had said it would need to use consultants, no matter what the time frame. She wondered how far the policy preparation had gone and thought that surely something must exist to be fast-tracked. She was very worried that the Housing Development Agency (HDA) was trying to function without having the full legislation and regulations in place. Land was critical to this Department, and it must pull out all the stops. She stood by her suggestion that a timeframe of end of April was appropriate, as the matter was urgent.

Ms Dlakude said she believed enough time had already been given, through the previous extensions. If this continued, it was likely to drag on to October, at which stage the Committee would be busy with campaigning. Capacity problems should have been raised when the regulations were first mooted. She urged that the policy – even in draft – and regulations must be expedited. She had thought that there was a unit to deal with this, but if external systems were needed then so be it.

Ms P Duncan (DA) was very upset to hear this report. The absence of regulations resulted in the fact that town planning was still not breaking the apartheid spatial patterns and the disadvantaged were not being empowered. During the policy workshop between the Committee and DHS on 28 and 29 January Mr Anton Arendse had given an extensive and well-prepared presentation, and she could not understand why the DHS had neglected to put the policy forward. In her constituency the comments were called for, but lip service only was being paid to the process and development was still geared to improving the lives of the wealthier sector. She suggested that the Committee must now caucus, set a date, and inform the Department when it must report.

Mr Mokgalapa said that the Department was putting itself into a tight spot. The Committee was still waiting for the Green Paper and at the workshop strict timeframes were mentioned that had to be adhered to. He agreed with the suggestion that they should be presented by the end of April.

Mr R Bhoola (MF) said that speaking about policy was one matter and getting it to work was another. The President had stressed that alignment was important. It was vital to have capacity to deal with the objectives and planning of human settlements. He wanted to know what the destabilising factors and constraints were, and what the real problems were in getting the matter up and running.

Mr Matshoba expressed his concern that government was spending exorbitant amounts on consultants.

Mr Zulu said that once the Committee had caucused on the desired date, he would check that this presented no conflicts as far as MinMEC was concerned; alternatively a special MinMEC might be needed before the regulations were brought to this Committee.  He thought the next MinMEC meeting was on 9 May.

The Chairperson said this had nothing to do with MinMEC, which must, if it so wished, reschedule a meeting to consider this as an urgent matter. The matter had been raised by Parliament months ago, and still no regulations were brought forward. The message had to be taken back to the executive that Parliament was very serious, and the Committee could not wait on MinMEC. She was most unhappy to hear of the capacity constraints around policy development, saying that if policy was a problem, then essentially the DHS could not run.

After a closed session, during which the Committee caucused, Ms Borman announced that the Committee had agreed:
- that the DHS be given an extension, with a deadline of 15 May to produce the regulations
- that the Committee did not agree with the employment of any consultants for this work. The people already in the employ of the DHS must do the work, and that was the reason why the Committee had agreed on the extension
- that DHS must work out its own capacity needs and if extra work had to be done, this should be done without any overtime pay
- that no further extensions would be allowed.

Ms Dlakude commented that there was a legal unit, and that could surely advise on policy. The Committee was not here to discuss policy and if people were employed that were incapable of doing their jobs, then this was something that the DHS should police. It should not be outsourcing functions that should be done in-house. The Committee was tired of trying to defend the DHS and it would not be prepared to allow any further extensions after 15 May. If nothing had been done by then the Committee would recommend that further action be taken.

Ms Sosibo noted that the Minister would be advised of the decision.

Mr Mokgalapa stressed that it was up to the DG to ensure that the regulations were formulated. It had been over a year since the matter was first raised.

Department of Human Settlements: Under Spending 2012 and Recovery plans: Progress Report
Mr Zulu said that he would briefly reflect on the transfer payments and programmes that DHS was running, as well as detailing the underspending challenges at national and provincial levels.

Mr Zulu noted that at the operational level, the expenditure of the DHS during the 2012/13 year was not satisfactory but steps had been taken to address this problem. One of the first issues was the agreement that DHS had with the State Information Technology Agency (SITA). SITA managed all the IT processes for the Department, with key assignments, but there were difficulties in delivery, which in turn affected the spending of the budget. The matter was being discussed with the Chief Executive Officer of SITA and this entity was also trying to turnaround its service to government as a whole. In the last management meeting with the Minister of Human Settlements, Mr Zulu had expressed a desire to reconsider the whole agreement, and although it was policy that departments should use SITA, it was a fact that its poor performance was affecting service delivery in the DHS.

Office accommodation was another worrying factor. The DHS had assured the Committee some time back that it would be undertaking a comprehensive process to ensure sufficient accommodation for all employees. Not only were there space constraints, but the present accommodation was lacking in security compliance. The Department of Public Works had been trying to resolve the issues for the building currently occupied by the Independent Electoral Commission, and a court action was pending. The issues were beyond the DHS’s own control and there was underexpenditure on the office accommodation.

Mr Zulu noted that the Special Investigating Unit (SIU) had been working on DHS matters for about four years. There had been a challenge with their payments because one stage the legality of SIU charging departments was questioned and it had, pending further investigation and amendment of its legislation, ceased to submit invoices for a while.

The Rural Housing Infrastructure Grant (RHIG) was another programme where underexpenditure was apparent, and this was largely due to the inability of Mvula Trust and the Independent Development Trust (IDT), who were the two service providers, to deliver. Other service providers had now been appointed, and the funds earmarked for the assignment may only be used after the end of the financial year. At the moment, there was R89 million underspent. This had been allocated for appointment of another six service providers, and the funds were therefore committed. National Treasury would be asked for permission to roll over this funding. Work was being done, invoices were being sent, and tight timelines had been set for delivery.

Provincial expenditure had improved since DHS last reported to the Committee, although Eastern Cape and Limpopo were still experiencing problems.

The Urban Settlements Development Grant (USDG) also remained a challenge but steps were being taken to review the current expenditure patterns.

Ms Funani Matlatsi, Chief Financial Officer, DHS said that the DHS had indicated that the USDG still had another four months of spending left to it, but the DHS was trying to expedite spending. She tabled figures (which were provisional still), as at February 2013, explaining that they were not final because some general entries on the operational budget still had to go through. After all reconciliations and analysis, the agencies were expected to provide figures by the 15^th of each month. They would be presented on the following Monday. Progress reports on the Human Settlements Development Grant (HSDG) would be provided to the Executive in the next two weeks. She was expecting to see improvements in the spending of that grant.

She then took Members through the slides setting out expenditure compared to budget allocations (see attached presentation). The projections for spending by this time were 89%, but there had been underspending in the programmes for Administration, Housing Policy, Housing Planning and Strategic Relations. Housing Development Finance spending was at 93%, and overall spending was at 92%. This expenditure excluded all transfer payments.

She then tabled the grants and transfer payments., and noted that the spending had improved since the last meeting, when 71% spending was reported, to 92% expenditure by the national Department on transfers as at end February. The USDG grant money had been transferred in full, as well as the Social Housing Regulatory Authority, Operational and Capital Restructuring Grants and the Rural Housing Loan Fund, and amounts to the National Urban Reconstruction and Housing Agency (NURCHA) and bursary payments and UNHABITAT payments. The RHIG, however, showed only 26% expenditure.

Ms Matlatsi said that the root causes of the underspending had been investigated. The number of vacancies was linked to office accommodation problems, and even if officials had been appointed they could not have been accommodated. The DHS was still aware that it must appoint, and had advertised posts, in the hope that the accommodation would be sorted out soon. Two Chief Directors had been appointed, and the rest of the vacancies were at shortlisting stage, but it was up to the Minister to finalise these appointments. All the posts that could be appointed by the Director General had been filled.

The process for the outstanding performance awards for Senior Management Staff from the previous year had been completed and the payments would be effected on 16 March, so that they did not run over into the next financial year. There was likely to be underspending of around 8%, as not all senior posts had been filled.

The personnel costs also impacted on goods and services, because operational costs were linked to each post. It was expected that there would be 74% spending on goods and services. There had been savings on subsistence and travel. The Department was seeking a rollover on the amounts budgeted for goods and services as a result of the inability to populate the offices.

There were delays in the implementation of the National Upgrading Settlements Programme (NUSP). Bids had been advertised and evaluated, and the appointments would be made in this financial year, with spending starting in the following year. It was projected that in this year 4% would be spent, with around R55 million underspending. DHS admitted that it had been slow on this programme.

In regard to the SIU, Ms Matlatsi noted that Mr Zulu had outlined the reasons for underspending. However, DHS was now again receiving invoices from the SIU, with the last one, for R14.5 million yet to be processed. Invoices for February and March were awaited. Funding was shifted from SIU to other items that were either unfunded or needed additional funding. Total expenditure on SIU was 18%.

The SITA challenges had also been outlined and she reiterated the proposal to implement IT services differently. DHS admitted to slow progress on the SITA and the fact that there were other challenges. The projection was that R11 million (26%) would not be spent.

Office accommodation had now been secured, and the building was being upgraded so that it could be utilised. There was some debate over what the DHS had to pay for the space it had been using as storage space. The office accommodation should be finished in four months time. DHS would be requesting a rollover. The projection was that 50% would be spent, leaving R19 million unspent.

Ms Matlatsi then moved on to the RHIG, reiterating the slow delivery by Mvula Trust and IDT. Funds were committed and a rollover would be sought, and the amount budgeted for RHIG in the next year had been reduced, to release some money to other projects. DHS was not sure of the underspending, since Mvula Trust had assured the Standing Committee on Appropriations that it would be able to spend, but estimated it at about R164 million.


A summary of all the projections was tabled (see slide 16) which noted that the total amount t be surrendered as unspent could be R886 million (4% of the total allocation). That included the surrender from Eastern Cape and Limpopo, but she reiterated that there were processes in place to try to cap the surrender.

Ms Matlatsi then tabled the spending on the Human Settlements Development Grant (HSDG). She said that there had been some improvements in the capturing of invoices by the Provinces, although they had not given the final numbers of units. Most provinces had spent their full allocations, and the underspending had dropped by February. It was estimated that R284 million from Eastern Cape and R294 million from Limpopo may have to be surrendered.  There had been negotiations on the utilisation of the allocation. The DHS had withheld those two amounts at national level, and had taken a decision not to transfer. If, however, there was a difference in the spending by the end of the week, another assessment would be done and a decision may be taken to transfer. The HSDG underspending was, in February, at 18%, but this may drop to 3.5% by the end of the year. Delivery figures for January were presented.

The Urban Settlements Development Grant (USDG) still had four months to run. At the moment, DHS was focusing on the HSDG but it would be providing assistance to the metros where required. Buffalo City Metro had notified the DHS of difficulties. The DHS would liaise directly and give full assistance, before reporting back. In the previous financial year, most of the money was paid in July, at the end of the financial year. She pointed out that this grant operated on an accrual system. The spending to date was at 32% (compared to the target of 58%). The delivery performance was tabled, but the DHS wanted to check on where the spending had taken place and whether it had impacted on the needy households.

Discussion
Mr Mokgalapa commented that not much had changed, because the bottom line was that underspending was continuing. He said it was disappointing that so much money was likely to be surrendered. He also pointed out that some of the figures presented were transfers by the National to Provincial departments or entities, and he said it was necessary to check that the “money was followed”. Transfers alone were not enough, as new mechanisms were needed to check what had actually been spent on the ground.

Mr Mokgalapa noted the figure of R89 million to be paid to the six service providers.

Mr Mokgalapa did not understand why “a saving” was being declared, when there was a huge demand that was not being met. He also asked how much had been allocated for NUSP for this year, and said that he was concerned that R55 million would not be spent. There were several similar problems, and he would not repeat them all. Again, he stressed that the essence of the presentation was that over R800 million would not be spent in this year.

Ms Borman urged the DHS not to refer to underspending as “savings”.

Mr Mokgalapa said there were conflicting comments on Limpopo and Eastern Cape. On the one hand, DHS had said that it had decided not to transfer. On the other, it was suggesting that there might be space to do this if the Minister agreed. He thought that any transfer at this stage would amount to fiscal dumping because those provinces could not spend. This was a disingenuous remark, and it was unacceptable that over R500 million would be surrendered.

Mr Mokgalapa also had his doubts whether there would be spending on the USDG by the end of the financial year. He thought that far more planning was needed on these matters. There had been numerous service delivery protests and it was necessary to find out exactly why the funds were not being spent. At some stage, the Committee would have to reconsider whether it was prepared to accept the DHS simply transferring the money, but doing no more to follow up. He questioned what the purpose of the exercise was if provinces and municipalities continued to underspend on the HSDG and USDG grants.

Ms Borman said that she looked forward to the day when the DHS could produce a report with up to date figures. She too was very upset with the report on amounts that were not being spent. She heard the reasons, but had heard them all before, and this was of even greater concern when the needs and the struggles on the ground were not being met.


Ms Borman referred to the USDG allocations slide and wanted clarity on the 2013/14 allocation of R7 billion. She thought that might be a 2012/13 allocation, and asked the DHS to check on that.

Ms Borman noted that the slide headed “Transfer payments” reported on 100% spending, but she asked if this actually meant that 100% was transferred. She questioned why a breakdown of spending appeared only for the RHIG and why the USDG had not been fully spent.

Ms Borman emphasised that DHS must fill the vacancies, and, whilst she had noted that the DHS was busy with this process, she asked that the Committee be given the assurance that those being appointed would be fully capable of doing the work and ensuring real delivery.

Mr K Sithole (IFP) said this presentation was an eye-opener, but the matters raised were not new. He asked what time frames were attached to “in the process of being filled”.

Mr Sithole also wanted to question the reference to the senior managers, who were to be paid. He asked if performance had been checked before making the awards.

Ms Sosibo asked when the people were likely to start work. She noted the links between vacancies and office accommodation problems.

Ms Borman was not sure when NUSP had started, but it was a “disgrace” that so little was spent. The presentation gave no sense of how many informal settlements were targeted, and where they were, and the Committee needed to follow up on this.

Ms Borman was also worried about SITA but would not go into that now.

Mr Sithole wanted more details of the projects to and from which budgets were shifted.

Mr Sithole asked for the names of the six new contractors on the RHIG and questioned if the DHS could guarantee that they had capacity to do the work.

Ms Dlakude hoped the six new contractors had been given strict timeframes and urged DHS to actually go out and check the performance  on the ground.

Ms Sosibo raised a similar question, asking if their records had been checked and tracked.

Ms Dlakude noted the statement that Eastern Cape and Limpopo were not performing well, but commented that Mpumalanga should also have been noted as underspending. She asked what strategy was in place to address the problems. There was not only a huge backlog of new houses, but also a need to replace or fix houses damaged by storms in 2011.

Ms Dlakude, like her colleagues, was disappointed with the USDG performance and said the metros were expected to spend. She was not sure what the DHS needed to do to ensure that spending was done. In every province, too, there was a need for infrastructure and if the provinces were not performing and the DHS was not addressing the problem, then this was very serious.

Mr Bhoola stressed that the Committee wanted to see real delivery. He welcomed the honesty and the frank statement of challenges from the DHS, but said also that the figures could actually be overstated and DHS might anticipate greater spending than would happen. He also asked if any provinces were likely to overspend by the end of the financial year.

Mr Bhoola wanted to hear what plans DHS had for more support for municipalities.

Mr Bhoola asked if an entity in one province was under investigation, because this had apparently stagnated delivery, and what the role of the province was in that regard.

The Chairperson asked which entity he was referring to.

Mr Bhoola said it was the Housing Development Agency and the Director General obviously knew about the matter. He asked how many hectares of land had been transferred.

Mr Bhoola was pleased to see that KwaZulu Natal was on track, and suggested that perhaps it could receive transfers from the provinces who were underspending.

Mr Bhoola also commented on the storm disaster, saying that during a recent visit to municipalities he had been told that they were still awaiting transfers from National Treasury. He wondered what the role of provinces was, as infrastructure had been completed closed in some centres, impacting negatively on the poor.

The Chairperson also commented on disaster recovery, noting that in the previous year there had been mention of an expected rollover to deal with disaster recovery. She asked if that had been approved, and the current status of the matters. This was a critical programme.

Mr Bhoola asked if all of the funding on the USDG was earmarked for housing, or if there was slow spending also on matters like engineering services and roads were included also. He wanted to know the exact amount that was ring fenced for housing in particular.

Mr Bhoola asked about the recovery plan, and asked if money recovered had gone back to the human settlement budgets.

Mr Matshoba referred to a visit to Maduma, and questioned who was supposed to be providing services, as nothing was happening in these places. He asked for follow-ups on this. He also referred to lack of toilet facilities in Engcobo and urged that progress reports be given. He cited problems in a number of Eastern Cape rural settlements.

Mr Matshoba asked about the time taken to fill vacancies and asked for how long there had been problems with office space.

Ms Duncan wanted a list of all the problems that the DHS had found in the provinces and municipalities about the delays, and their reasons for not spending their budgets. The Committee could call upon them to account to it. She wondered how strong the monitoring and evaluation was within the DHS, and how entities were held to account and deliver.

Ms Duncan noted that other key departments could also be delaying processes, and that matters such as Environmental Impact Assessments did take time. The Minister of Finance had stressed that provinces would have to submit their plans for the future to ensure that infrastructure was expedited, and she commented that no money should be given unless the plan had been properly constructed and thought through. If a project had been identified, the EIA processes must be expedited, so that the municipalities could be sure that they could get and spend the money.

Ms Duncan said that the Committee was appreciative of what was being done and recognised the work that was being put in. However, as politicians, the Members of this Committee must ensure that services reached the people and changed their lives for the better.

Mr Matshoba asked the Director General about the allocations for R4 million for various named municipalities, and what had happened to that money. Some projects had been started and then stopped.

The Chairperson said that there was also an issue with material lying around unused for years. She reminded Members of their experiences during oversight visits. The Chairperson said that a list of service providers was needed, to enable Members to conduct oversight.

Ms Dlakude asked an inaudible question.

The Chairperson said that during the last meeting, the DHS had raised issues of provinces not cooperating with the national Department and she urged that the SITA gaps must be closed and conscious decisions taken in this regard. She was sure that this would be a contested issue, and urged the DHS to prepare itself well. IT was the backbone of the organization.

The Chairperson said that the Committee also wanted to know where funds were to be shifted, as it had been in disagreement with previous decisions to move funds to Social Housing. Whenever any shifting was planned, the DHS must inform the Committee. She thought that more attention had to be paid to NUSP.

The Chairperson was not certain that she agreed with the estimations of what might be spent. She doubted that in respect of the USDG, there would be full spending within the next four months At a previous meeting, it had been agreed that before any money was transferred to the Free State and Mpumalanga, the DHS should go out and verify what was happening on the ground. The DHS now said that it was waiting for reports. She was critical of the fact that it had said it would do something, then had gone out and done something else. This would not inspire confidence amongst Members if DHS did not perform in line with what Parliament had requested. The Chairperson had expected to hear that DHS had actually visited both these provinces, and that its decision would be based on the visits and assessments on the ground.

The Chairperson commented that on the slide for USDG delivery, there were very large amounts shown merely as “other expenses” and she found it unacceptable that there were not more precisely detailed for the Committee. She also questioned what “Achievements not linked to costs” meant, in relation to the USDG spending by eThekweni. She asked what proportion had been provided by the Department of Energy. There had been challenges in Ethekwini on electricity.

The Chairperson referred to slide 19, on delivery, and asked how the variances were justified and what exactly was going on. The annual delivery targets were way out of line in several provinces (which she summarised). She wanted more clarity on those figures and the reasons for the discrepancies. More detail was needed n the programmes undertaken.

Mr Zulu said that he would give some general responses and then pass over to his team for other responses. He said that the underspending in the provinces had to be put into perspective. He was not trying to make excuses and the DHS was trying t deal with the recurring challenges in the sector. The main point was that capacity to spend was vital and where this was lacking, there would be underspending. He was working on a strategy to address the monitoring structures and to resource these units properly. There had been underspending on capital grants, and this meant that the business plan must, in future, be monitored and measured to the end of the year. Capacity remained a general challenge across all government departments.

In October 2012 the DHS had started to analyse spending patterns, and was trying to put measures in place and recovery plans to deal with the capacity problems. Unfortunately DHS must take what it could get at the moment, and there was simply not, in practice, sufficient capacity to ensure that recovery plans were in place. DHS was trying to do more effective monitoring and follow where money was going.

Mr Zulu said that this brought him to the point of moneys unspent by December. At that stage there was not much that the DHS could do to transfer funds to projects that had not shown sufficient planning, for that would amount to fiscal dumping, which DHS tried to avoid. DHS took the line that if there were existing projects with clearly defined targets, money could be used for those, but this must happen using the proper processes. In this instance it was clear that money could not be shifted from one province to another. That had been done two hears ago and there were great difficulties as the province to whom money was given then failed to spend it. He added that the approval process for moving funds could take up to two months, and it made no sense to start that process in December.

He returned to the point about capacity to spend, and said that DHS had decided rather to focus on bolstering that capacity, giving more resources to personnel in the area, with appropriate training and emphasis on business plans, project management, evaluation and proper quarterly reports. An in-principle decision was taken that if existing projects could not be found that had plans to spend, then the money must go back to the fiscus. This would happen where there had been failure to comply with business plans or implement recovery plans. Provinces were required to show cash flow processes but that did not happen either. The DHS could only go so far in providing leadership and technical capacity.

Mr Zulu answered the questions about disaster funding, saying that in some cases of storms and other disasters, DHS would be asked to assist but it was usually handled by the provincial departments for local government. There was no longer a disaster recovery fund in DHS. National Treasury had tried to allocate some money at national level to manage disasters, but the approach was not well coordinated and the budget was small. In general, if disaster areas were officially declared, this would unlock funding.

Mr Zulu informed Mr Matshoba that the R4 million payments were made in line with a model proposed by National Treasury, to various municipalities. The Standing Committee on Appropriations had discussed the matter in this week and there was a process pending for approvals.

Mr Zulu assured the Committee that there was a monitoring and evaluation unit at national level. This had been raised before. However, he reiterated his previous comment that it was not fully capacitated. The process of appointing a Deputy Director General and making it into a fully-fledged branch had been started. Resources needed to be put to this, so that there could be evaluation of all projects timeously throughout the year. If the right skills were found and a proper dashboard approach taken, this could resolve many of the difficulties around under-expenditure and lack of monitoring. He had been very frustrated by the lack of leadership on that. DHS was indeed focusing on trying to find people with the right skills, as referred to by Ms Borman. The DHS would definitely prefer to have a stronger internal team than to outsource the functions. Even the success of the National Development Plan (NDP) would be determined by capacity. No matter how much money was given, capacity was the most important.

Mr Zulu noted that from assessments made so far, money may be returned by two provinces. In Mpumalanga there had been spending but it was not specifically measured against delivery, and this had happened in other provinces also. The approach in Free State was similar to that of Mpumalanga, as it had spent but it was being investigated whether the spending fell within normal patterns, and as expected. The Chief Financial Officer had tried also to check whether there was correct spending. The expenditure patterns looked fine on paper, but the challenge was whether this translated to anything positive on the ground, which he agreed could not be seen by a desktop analysis. DHS needed more capacity to test how matters were running, and how disasters would be handled, and to isolate where deviations were happening. He agreed that random visits and tests on the ground had to be done. He also said that there should be checks on whether the units were built within the standards and norms set. Money spent on resourcing units properly would be well spent and would show results.

Mr Zulu confirmed that he would provide the names of the six new contractors to the RHIG. The normal process of appointment had followed; they were private sector companies in the field of sanitation and their competencies had been tested. He was satisfied on the supply chain process, but said that there were some problems with the time lines, although they had assured DHS they would be able to deliver in this year. Even if the project ran past the end of March, the funds were committed. They had not been tested “on the ground” and he noted that there were sometimes problems when models of delivery changed.

In regard to the vacancies, Mr Zulu said that the funded vacancies would be filled by end March. DHS would thereafter continue to ensure that the vacancies were addressed continuously. Processes were on tract. The Human Resources and eleven other branches were told to ensure that every vacancy was advertised. However, he cautioned that processes were still slow and it had recently taken four months to get a decision on the appointment of a Deputy Director General, including the time to get references and security vetting. He also reiterated that the office accommodation had posed a challenge in where people were to be housed. There was still a very worrying situation with both his own situation and that of Internal Audit, who were required to keep documents confidential but had no proper security arrangements. He reiterated that this was an issue outside DHS’s control.

Mr Zulu had said that other members of the Department would add to his responses, but the Chairperson noted that the Committee was short of time and asked for a very brief presentation of the next item.

Green Paper for Development of Human Settlements: Department of Human Settlements presentation
Ms Zoleka Sokopo, Chief Director: Strategy, DHS, said that government was focusing on a social approach, and economic justice, to reverse the problems of poverty and inequality. A holistic approach was needed for human settlements and to ensure a decent standard of living. In addition to basic services, there were a number of other services highlighted in the National Development Plan, such as security, safety, transport, education and skills, employment, health care and the environment, so that establishing holistic settlements that catered for all these requirements was not the task of the DHS alone.

Emerging from the January 2013 workshop with the Committee, it was clear that the DHS needed to adopt a comprehensive plan. However, before doing that it would have to address other issues, such as the model of sustainable human settlements, the role of Social Housing the role of the Provincial Departments of Human Settlements, municipalities, other government departments and sector specific strategies. There must be clear demarcation.
DHS had a constitutional responsibility around housing. It had not yet successfully achieved the reshaping of apartheid geography and there were still questions to be fully investigated and answered around the challenges and successes were.

Many of the issues in the full presentation had already been highlighted in earlier sessions, and she indicated that she would skip those slides. The NDP set out a vision. DHS’s  work was also impacted upon by the drawing of the urban development framework, the Green Paper on Rural Development and spatial planning and land use management considerations (and legislation), all of which impacted on DHS but were not within its responsibilities.

The Human Settlements Green Paper had to go beyond a mere focus on distributing subsidies, and view settlements in the context of cities, town and villages. It needed a sold knowledge base to adequately respond to the demands, and to decide upon appropriate settlements. The Green Paper would address development implementation and evaluation, and in this regard she noted that implementation had not been considered before

DHS had come up with a detailed plan and she had time to highlight only a few aspects. There was a project plan for the Green Paper, and it was being discussed at various forums. It must still go to the Social and Economic Clusters. It would also be refined as a concept paper. A project management team was being set up. A framework had to be developed and each aspect had to be examined. DHS was hoping to tap into skills at universities to get information.

She briefly described the timelines. The development process was likely to start in May 2013. between November 2013 and February 2014, the Green Paper would be drafted. By June 2014 the draft should be ready to go through the consultative process, which would include consultation with other departments. Stage 4 would happen in mid-2014. This would then revise the Green Paper and ensure that Cabinet input was considered. The whole paper should be finalised by 2015.

She noted that there had been reference to the Blueprint. The Committee could assist with development of ideology. The Department of Cooperative Governance (DCOG) was already developing a framework for urban development and there had to be a chapter on that. Issues of politics and governance had to be examined. Sustainability and resilience would be vital. Economics and finance were other areas that would need to be looked into, and different models would need to be considered, as well as the strategies.

Ms Sokopo noted that she had already spoken on implementation, policy evaluation and the success indicators and she would not repeat this here. The DHS had gone through the approval processes but it was currently doing evaluations focusing on various departmental programmes such as the USDG, Integrated Resource Development Plan and learning lessons from them. DHS would be doing some more small-scale research, and it would be collaborating with the Department of Science and technology (DST) on the appointment of researchers.

Ms Sokopo summarised that during the development process the DHS would have to look into land assembly, township establishments, services, house construction, and transfer and handover. The problems must be defined, the causes identified, and policy evaluated, to find the best solutions, taking into account the cost and then the socio political strategies.

Some of the areas that DHS would be investigating included the migration patterns, the implications of issues in 2011, municipal accreditation, housing institutions and the need to sharpen some of the existing instruments. She set out the research areas (see attached slide for details)

Mr Devraj Chainee, Deputy Director General: Strategy and Planning, DHS, said that it was necessary to go through the procurement systems and Mr Zulu had already outlined some of the capacity problems that the Department faced. There were certain contradictions in relation to the ideology, particularly in the developmental state, and the ability of the community to respond.

Mr Chainee said that the evaluation exercises had commenced, and the DHS had already tendered. The Portfolio Committee’s questions around capacity would be addressed during the tender process, and it was expected to have some results on this in May or June 2013. the DHS could bring the terms of reference to the Committee. Constraints around the IRDP and USDG all highlighted questions as to why in the past the DHS had not managed to get things correct, and the problems and possible solutions would be examined. The issues around the “capable state”, as mentioned in the NDP, were also being examined to answer the question of whether DHS had the capacity to respond to the needs in the sector.

Discussion
Mr Matshoba asked why this was taking so long.

Ms Borman commended the amount of work that had been done already on this matter, and was pleased to see a recent comment from a senior Minister, to the effect that a model for human settlements was needed, being reflected here. She wondered if the strategy would include dealing with beneficiaries, and urged that the Committee be kept updated on discussions and papers.

Mr Bhoola noted that KwaZulu Natal, as well as Gauteng, was affected by migration.

The Chairperson expressed appreciation for the report, said that DHS had done substantial work since January to come up with something tangible and urged that it must try to work within the time frames. She urged that full consultations be held in the provinces in all areas.

The meeting was adjourned.