Department of Human Settlements Budgetary Review and Recommendation Report

Meeting report

Opening remarks
The Chairperson said the Committee needed to finalise and adopt the Budgetary Review and Recommendation Report (BRRR), as the deadline was on Friday.   All BRRRs should be finalised so they could be sent to the Announcements, Tablings and Committees (ATC). Some Members had requested that the process be concluded today, as few Members would be in Parliament for adoption on Friday. The Committee would therefore proceed until very late into the night.

Ms A Mashishi (ANC) supported the proposal and agreed that the report be adopted, even if it meant remaining until late.

Mr S Mokgalapa (DA) seconded, and said the BRRR was simple in nature. The Committee needed to review what the Department of Human Settlements (DHS) had done, then make recommendations based on what it had seen and how the Department should move in the future.  He congratulated the Committee staff, and said the Committee’s report had been presented at the BRRR training workshop, as a model for all Committees.

The Chairperson said the Committee should follow the template that was provided by the Office of the House Chairpersons. The Committee staff had followed another template that had been prepared by the Committee Section, and that appeared too technical. At the BRRR training workshop, an agreement was that a template be developed by the Committee Section. That template should have been taken to the Chairperson’s Committee for approval, but that had not happened. Staff had just developed their own template and given it to content advisors and secretaries to follow. Compiling the report was not an easy exercise.

The Chairperson then presented the structure of the BRRR report and read it out to Members.

Discussion
Ms P Duncan (DA) requested that the Committee report make a recommendation that there ought to be a policy guideline on how a “household” was defined. This had been a challenge when DHS reported during the week. There also had to be consideration regarding the type of units DHS delivered -- whether they were Reconstruction and Development Programme (RDP), rental, Peoples Housing Process (PHP), or the gap market. Reporting ought to be done as such, or should clarify this information. The figures that DHS reported on were mainly RDP, and there was an indication of other types of houses. There had to be a clear understanding of how many houses the state had provided in different programmes, grants and typologies. This kind of information was particularly important, as it related to the title deeds.  The Department reported only on title deeds in regard to RDP housing. It did not include any other type of housing.

Ms Duncan said she was concerned with the mining towns’ projects (sometimes referred to as the Presidential Package, which would be implemented in eight mining towns) as not much information had been made available.  The ownership structure of the houses to be provided through this programme ought to be clarified. She asked if the houses would be administered by the mining companies or whether employees of these companies would have absolute ownership.

Mr Mokgalapa commented that the Committee had resolved to call all the municipalities where the mining towns were located, to come and account on the projects. The Department had shown that it had implementation challenges. The problem was the municipalities, as the ownership of units and the land on which the houses were built could be clarified only by the municipalities.

Ms Duncan said the issue of ownership was particularly important, because even at the mines there was a category of workers that were not permanent – more like seasonal workers on farms. Housing those workers was crucial.

The Chairperson said the Committee should also highlight the evaluation process that had been presented to the Committee the previous day. This was a critical programme, and the Committee ought to endorse the DHS plan to evaluate itself annually.

The Committee should also comment on the critical role of the National Home Builders Regulatory Council (NHBRC). Quality assurance was crucial and had to be looked at in terms of the performance and the projects the entity had carried out.

The Chairperson commented that the issue concerning the voucher scheme should be raised. Another programme that the Committee needed to highlight was the People’s Housing Programme in the provinces and the performance of the National Urban Support Programme (NUSP).

Members should also comment on the Mortgage Default Insurance (MDI), especially as the Department and the National Treasury (NT) were not finding each other on the matter. She sought clarity on who mediated, where departments had challenges with the NT.

Mr R Bhoola (MF) said there was a need to include the Enhanced-Extended Discount Benefit Scheme in the recommendations.

Mr Mokgalapa commented that the report did not speak about the analysis of the annual report.  This was a critical report, which the Committee needed to look at.   The sanitation programmes remained a challenge -- over 2.5 million South Africans were still without decent sanitation. This ought to be prioritised, as had been the case when the Committee had its strategic planning. Sanitation should be among the key findings and prioritised.

Ms Duncan said she had reservations about the Housing Development Agency (HDA). There was more privately-owned land in the country than there was Government land.

Mr Mokgalapa said the report also needed to highlight under-spending, as it had been a challenge for the past five years. It should be included as one of the key findings as well.

The Chairperson concurred, and said the Minister should intervene regarding the office space issue, where the Department had been returning over R22 million budgeted for offices over the past four years, and although the building was leased to the Department of Public Works (DPW),the DHS had failed to take occupation.

Discussion on the recommendations
The Chairperson read out the recommendations and the places where minor and grammatical changes had been made. She asked if Members wanted to add anything in the amended report.

The Chairperson said rescheduling of the Rural Household Infrastructure Grant (RHIG) could be done.  Following that, Members had questioned Schedule 7, and agreed on Schedule 6B. The weakness with Schedule 7 was that the Department did not work cooperatively with provinces.

Ms Duncan requested that the issue over water legislation still being with the Department of Water Affairs (DWA), be addressed.

The Chairperson replied that this issue had been addressed.   The DWA no longer had water legislation for the sanitation.  The DHS should have legislation, or an interim measure, to regulate water use on sanitation.

Ms Duncan said she was concerned by the fact that in terms of the Deeds Registries Act (DRA), only conveyancers were allowed to prepare deeds of transfer. The Committee needed to decide if it was still with the DRA arrangement.  She proposed that municipalities be compelled to hire a law firm that would concurrently perform the task of title deeds transfers or conveyancing, while housing projects were still on the construction phase. Often, conveyancing was the reason many projects were delayed. Such an arrangement with law firms could be for the duration of the projects.

Ms G Borman (ANC) concurred and said this was a correct approach that also related to forward planning. Municipalities tended to ignore this aspect of home ownership to the point where conveyancers could not cope with the amount of work.  Proper planning and a working relationship with the deeds office was needed, right from the beginning of a project.

Mr Mathale said if the challenge was with the planning, and not the conveyancers, there was no need for any new legislation. The current regime was fine, but municipalities should be advised to have forward planning.

Ms Duncan commented that part of the planning should be that conveyancers were available to ensure people got title deeds.  Such a process could also involve the issue of the beneficiary list. There could never be confusion and fights about the wrong people getting houses to which they were not entitled, as long as the planning was correctly done.  Correct planning, where conveyancers were included early in the process, would address any challenge of manipulation of the process.

Mr Mathale agreed and said it was a fair proposal.

The Chairperson said the point was taken and would be included in the recommendations, especially because it was in the legislation. The point would also address the issue of a monopoly among law firms, as well as fast track transfers. She noted that the Provincial Ordinances Act (POA); the Less Formal Township Establishment Act (LFTEA), and the Development Facilitation Act (DFA), were pieces of legislation that had been fingered by the Financial and Fiscal Commission (FFC) as a contributing factor in making conveyancing more complex. Each piece of legislation was complex and required different systems. A further complicating factor was the 10 June judgement by the Constitutional Court (ConCourt), which invalidated sections of the DFA.  The ConCourt had ruled that powers to establish townships and rezone land were classified as municipal planning, and were therefore the exclusive function of the local sphere of Government. Chapters 5 and 6 of the DFA were seen as invalidating this, as they assigned this function to the provincial sphere of Government.  However, Parliament had in the last year processed the Spatial Land Use and Management Bill (SPLUMB), to which the President had agreed.  SPLUMB was administered by the Department of Rural Development and Land Reform (DRDLR) and was the framework for all spatial planning. It sought to promote consistency and uniformity. This was pretty much what Members were suggesting. She understood there were provinces like KZN and the Eastern Cape that were challenging the Act, and for so long as there were provinces challenging the law, title deeds would continue to be a challenge.  How could the issue be addressed?

Mr Mokgalapa said the Committee’s recommendation was fine, but the point Members were trying to get across was that municipalities needed to plan better on such issues as how the beneficiary lists related to title deeds. He suggested that a sentence be added to the recommendation, indicating that the Committee was concerned with the slow pace surrounding title deeds, and that the issue should be prioritised by Government.

Ms M Njobe (COPE) suggested that Members did not need to dwell on legislation that they did not have a broad detail of.  She agreed with the suggestion on planning. She reminded the Committee about a comment that had been made in the Moqhaka municipality (Free State), that planning should be such that when the house was given to the owner, the title deeds needed to be ready as well. There could never be challenges if this were to happen, and it would also be indicative of the level of planning that had gone into the project.

Recommendations
Mr Mokgalapa said the Committee needed to recommend that the Division of Revenue Act (DORA) be reviewed for the Urban Settlements Development Grant (USDG), so that it could be extended to other municipalities. The Department should prioritise the Finance-Linked Individual Support Programme (FLISP), and acknowledge the fact that it was open to the market. There had to be strict monitoring so that the intended purposes of the FLISP were achieved. The mining towns also needed to be included in the USDG.

Mr Mokgalapa suggested that the Committee also put forward a recommendation that the funding model be reviewed in light of what the FFC had said the previous day -- that it was busy with that process. The process should encompass the 8% that departments were allowed to vire in terms of the NT regulations. However, it should be included in the recommendations that the DHS focus on the governance issues that had been raised by the Public Service Commission (PSC).

The Chairperson said the intervention by the Minister of Public Works over the office space issue should reflect both on the key findings and recommendations.  Another issue that also had to be raised was the non-performance of the State Information Technology Agency (SITA).

Ms Borman concurred with all the proposed recommendations and said the Committee should also clarify if reference needed to be made to mining towns or secondary cities. The issue of the USDG’s intention was stated broadly in DORA, and that allowed municipalities to deviate. Members should consider making it specific, that the USDG dealt with bulk infrastructure for housing purposes.

The Chairperson said Members should also comment on the RHIG programme. The Committee could not pretend it did not know about it.  The RHIG had been thrown to the Department without any institutional arrangement, and staff from DWA had refused to be transferred over to DHS. This was the reason the programme had started late. There were a lot of grey areas in the programme.

Mr Mokgalapa suggested that the Committee call for a DORA review.

Ms Borman asked if the Committee wanted to call for DORA review, or if it wanted to be specific.

The Chairperson said the DORA was too open to different interpretations, and that had proved a weakness at times. The language within the Act was not consistent and municipalities took advantage of that.

The report was adopted, with amendments.

The meeting was adjourned.