Department of Human Settlements 2014 Strategic Plan: Committee Researcher's briefing

Human Settlements, Water and Sanitation

01 July 2014
Chairperson: Ms N Mafu (ANC)
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Meeting Summary

The Committee Researcher and Committee Secretary briefed the Committee on, respectively, issues relevant to the human settlements portfolio, including its legislation, the structure of the Department, the procedure to be followed during the budget process, an analysis of the budget vote for the Department of Human Settlements, and the Legacy Report of the Portfolio Committee on Human Settlements in the Fourth Parliament, which identified matters which the Department had dealt with during the preceding five years and those issues which the previous committee felt needed to be taken further. It was emphasised that the Department had been renamed in 2009 when its mandate extended from providing housing to sustainable human settlements, and it had taken over the sanitation function. The Department concentrated on achievement of Government Outcome 8, with its four delivery outputs, as well as achievement of Millennium Development Goals.  

The budget of R32 billion, to be spent on various programmes to improve the lives of South Africans, was outlined and the figures for sanitation, housing, upgrading, grants, and informal settlements were outlined. The purpose of the grants, including the Rural Household Infrastructure Grant was explained. The challenges facing the Department included the filling of posts, and there were concerns from the Financial and Fiscal Commission that the increases in the budget were not linked to increases in delivery on the ground. Members were appreciative of the background, noted that certain questions would have to be put to the Department when it presented its budget and strategic plan on 3 July, and highlighted the need to revise policies, including the subsidy limits, find a way to deal with the increasing number of evictions, and discuss the figures for sanitation upgrades.


Meeting report

Chairperson’s opening remarks
The Chairperson urged Members to arrive on time for the meetings, to enable all work to be finalised within the time allotted. She noted that the purpose of the meeting was to familiarise the Committee Members on the budgetary process, and specifically the budget vote for the Department of Human Settlements (DHS or the Department). Members had been given background information on the achievements and challenges facing the Department and the ways in which these challenges could be tackled.

Department of Human Settlements: Committee Researcher briefing
Mr Leepo Tsoai, Researcher for the Portfolio Committee on Human Settlements, tabled an orientation paper on the role of the Portfolio Committee on Human Settlements, which was to consider bills, deal with departmental budget votes and oversee the performance of the Department of Human Settlements. In the South African context, oversight was a constitutionally mandated function of legislative organs of state. Parliament had established mechanisms to fulfil its oversight and accountability mandates in terms of the Constitution and under the rules of the National Assembly and National Council of Provinces, individually and jointly. The Committee also needed to request information so as to make recommendations about any facet of the Department, including its structure, functioning and policy. In conducting oversight, the Committee should either request a briefing from an organ of state or visit the organ of state for fact-finding, depending on the purpose of the oversight.

Mr Tsoai indicated that the Department’ focus (and the Committee’s oversight) was on certain key pieces of legislation, including:
- Housing Act (No 107 of 1997)
- Housing Consumer Protection Measure Act (No19 of 1998),
- Housing Development Agency Act (No 23 of 2008)
- Social Housing Act (No 16 of 2008)
- Sectional Titles Scheme Management Act (No 8 of 2011
- Community Scheme Ombud Service Act (No 9 of 2011)

The Portfolio Committee also oversaw key national policies, including the National Development Plan (NDP), which recognised that reshaping South Africa’s cities, towns and rural settlements was a complex process that therefore required long-term projects that would involve major reforms and would need strong political will. Mr Tsoai also emphasised that the NDP proposed a national focus on spatial transformation across all geographic scales, and these included policies, plans and instruments that would be needed to reduce the travel distance and costs, especially for poor households. The Breaking New Ground (BNG) was still considered as a comprehensive plan for the development of sustainable human settlements. BNG clearly indicated that there was a need for the residents to live in a safe and secure environment and have adequate access to economic opportunities, a mix of safe and secure housing, and inclusion of other elements like entertainment, cultural activities, health, welfare and also police services.

Mr Tsoai noted that the Accreditation and Assignment Framework for Municipalities to administer national Human Settlements programmes was a Framework provided for various policies, and constitutional and legislative aspects, in order to enable municipalities to manage the full range of housing instruments within their areas of jurisdiction. Mr Tsoai indicated that in order for the municipalities to be accredited and ultimately assigned the functions, they had to demonstrate their capacity to plan, implement and maintain both projects and programmes that were well integrated within Integrated Development Plan (IDPs) and within the three years of rolling capital investment programmes mandated by the Municipal Finance Management Act (MFMA). The Financial Linked Individual Subsidy Programme (FLISP) was established with the objective of providing assistance to households that were unable to access mortgage finance to acquire a residential property, because these households earned too little to qualify for loans or their monthly income exceeded the maximum income limit applicable to Government’s “free basic house”.

The Human Settlement mandate was also a part of key international instruments, including United Nations Millennium Development Goals (MDG) of 2000. The Portfolio Committee focused on Outcome 8, which aimed to provide sustainable human settlement and improved quality of household life. Under Outcome 8, the target was to increase the provision of basic services by the year 2014, including increasing the access to sanitation from 69% to 100% The Department’s Strategic Plan aimed to achieve eradication of sanitation backlogs by 2014, one year prior to the target specified by MDG 7.

Mr Tsoai stated that the stakeholders in the sector had observed that expenditure management had been a challenge at the DHS. The Financial and Fiscal Commission (FFC) highlighted that while there was an increase in the budget over the years, this increase was not aligned to actual delivery on the ground. In fact, FFC stated that the delivery units were decreasing despite the increase in the budget. The FFC also noted that there were two challenges impacting on the effectiveness of the Human Settlements Development Grant (HSDG). Firstly, there were a number of different sectoral diverse infrastructure grants which were meant to contribute to the delivery of sustainable and liveable human settlements. Some examples included the Integrated National Electrification Programme, Neighbourhood Development Partnership Grant and Regional Bulk Infrastructure Grant. These grants were currently segmented and this affected housing delivery. He suggested that there was a need for alignment and sequencing in the implementation of infrastructure related grants.

The Department itself had also noted that there was a need to offer variant of the institutional housing subsidy for persons with special needs, especially those with disabilities. It was also highlighted that people with disabilities constituted only one group within the overall focus on Special Housing Needs (SHN), as the special needs also could also include women having to leave their homes because of abuse from intimate partners, in order to escape that abuse. Such women, as the DHS had emphasised, needed to be provided with temporary or emergency housing but this was not taken into account when the focus was mainly on categories of disability.

Mr Tsoai indicated that the Auditor-General (AG) stated that the Department of Human Settlements (DHS) had achieved an unqualified audit opinion, with matters of emphasis during the 2012/13 financial year. A similar situation applied to the 2013/14 audit, as although the Department’s audit certificate was financially unqualified, there were findings on predetermined objectives and compliance. The Department had reported that it had been unable to obtain certain information, from entities and provincial departments, and this had contributed to DSH obtaining a qualification on reliability of information. The AG also raised a concern that an audit executive had been acting for six months at the DHS, and pointed out that the challenge with appointing people in an acting capacity was that positions still remained vacant. The AG also mentioned that in order to achieve targets, entities required resources and personnel, and there should be a clear link between the targets and where the money was being spent.

Legacy Report of the Portfolio Committee on Human Settlements in the Fourth Parliament
Ms Koliswa Pasiya, Committee Secretary, indicated that the purpose of the Portfolio Committee Legacy Report was to provide an account of the Portfolio Committee’s work during the Fourth Parliament. The report would also inform the Fifth Parliament’s Committee Members of the key outstanding issues pertaining to the legislative and oversight responsibility over the Department of Human Settlements. She also stated that the report provided recommendations to strengthen operational and procedural processes, to enhance the Committee’s oversight and legislative roles in future. She pointed out that the name of the Department had been changed, in 2009, from “Department of Housing” to “Department of Human Settlements” as it was given an expanded mandate of creating sustainable human settlements and improved quality of household life. The expanded mandate also required the DHS to deal with sanitation issues, which had been transferred from the former Department of Water Affairs. 

Ms Pasiya stated that the Committee in the Fourth Parliament had focused on Government Outcome 8, which mandated the Department of Human Settlements to create integrated and sustainable human settlements and improve quality of household life. In essence, Outcome 8 had four delivery outputs on which the Committee had focused its effort. Output 1 focused on accelerating the delivery of households’ opportunities and upgrading of 400 000 households in informal settlements with access to secure tenure and basic services. There was a focus on the implementation of the National Upgrading Support Programme for informal settlements. Output 2 focused on the access to basic services and provision of universal access to adequate sanitation by 2014. Output 3 focused more on land assembly and effective utilisation, specially the release of 6250 hectares (ha) of land vested nationally or provincially for human settlement development, increased urban densities to 60 units per hectare and an approved land use management framework. Output 4 put more emphasis on the improvement of affordable property market, provision of 80 000 well-located rental accommodation units by 2014. The Department also planned to establish the implementation of the mortgage insurance guarantee scheme to deliver 600 000 housing finance opportunities by 2014 and also the revision of FLISP so as to be responsive to the challenges in the affordable Gap Market.

Progress achieved on Output 1 included the upgrading of household and informal settlements, as it was indicated that during the term under review, the target was to upgrade 400 000 households and informal settlements, and the Department managed to achieve 417 423 (as of December 2013). Ms Pasiya added that on level 1 the Department had accredited, with Level 1 accreditation, eight district or local municipalities in various provinces, and eight metros, 12 districts or local municipalities had also been accredited on level 2. Overall, the assessed and accredited municipalities to date totalled 28 municipalities. Implementation protocols had been concluded with 24 municipalities. The assessment and the process for the accreditation of metros for level 3 had been put on hold for further consideration.

Under Output 2, the Department had made many strides in terms of accelerating the access to water and sanitation since 1994. Approximately 3 million South Africans gained access to adequate sanitation services since 1994, although 2.2 million were still without proper sanitation. The Rural Household Infrastructure Grant (RHIG) was introduced as an intervention strategy to provide water and sanitation facilities to rural areas. It was reported that between March 2010 and March 2013, a total of 131 municipalities benefited from the grant.

The Committee had managed to undertake oversight visits to eight out of the nine provinces but had been unable to visit Limpopo due to time constraints. The Committee was also concerned by the issue of evictions in Gauteng province, and here its visit was a response to unforeseen development in Lenasia, when the provincial Department had demolished houses illegally erected on the land earmarked for subsidised housing. The Committee engaged with the government and community, and made recommendations intended to resolve the immediate tension, and provide long-term solutions.

During the Fourth Parliament, the Portfolio Committee processed two pieces of legislation; the Sectional Tittles Schemes Management Bill (B20-2010) and Community Scheme Ombud Service Bill (B21-2010). The Rental Housing Amendment Bill (B21-2011) was withdrawn but then re-introduced. The Department still had two outstanding legislative issues, the Consumer Protection Measures Bill and Housing Development Property Bill.

The outgoing Committee recommended in this Legacy Report that the Fifth Parliament should consider following up on certain issues, including:
- a review of human settlements funding model on all projects and programmes
- address the issue of topography, dolomite and other conditions that had a bearing on building materials and construction cost
- a follow-up on the complaints received from Gobo Gcora Construction and Eastern Cape construction companies and the Newtown housing evictions
- The Department should fast-track the drafting of the policy that would regulate the registration and issuing of title deeds for state subsidised houses as this was seen as a limitation to the provision of security of tenure
-There was a need for a follow-up on the use of modern technology to monitor when a house would be handed over to the respective beneficiary, and to ensure that a title deed was made available immediately
- Policy was needed to specifically deal with the issue of backyard dwellers, as there was no standard way of dealing with this important matter.

Finally, since 2015 was the target date for the achievement of the MDGs and the Committee was encouraged to continue with its oversight over progress towards achievement of Goal 7. 

The Chairperson thanked the presenters, and said that it was not in her view necessary for the presentations to be discussed in detail. The purpose of them was merely to apprise the Members of the work that had been done by the previous Committee, to familiarise them with the issues prior to the budget vote process.

Ms T Gqada (DA) wanted the report on accreditation process by the Department of Human Settlement, to identify the issues that were raised and clarify why the process was put on hold. She stated that no doubt the majority of South Africans fell outside the household subsidy limits of earnings of between R0-R3 500, since a person earning R3 510 would not be able to apply. In her view, the DHS had to review the policy as it presently was excluding a number of people who should be beneficiaries of the Government housing subsidy.

Mr S Gana (DA) said there was a need to introduce measures to prevent the eviction of people, as this was now a recurring problem in South Africa. He added that the Committee Members needed to be aware of the issues that would be in future be taken out of the Department of Human Settlements and moved to the Department of Water and Sanitation as this was important for the allocation of the budget.

Mr Tsoai wanted to clarify that the Prevention of Illegal Eviction Act did not fall under the Department of Human Settlements; the legislation mentioned in his presentation comprised the relevant legislation under this Department’s control.

The Chairperson indicated that the Members could ask for clarity on policy issues when the Department was present on Thursday 03 July 2014. She asked the Members to focus on the Budgetary Review and Recommendations Report of the Portfolio Committee on Human Settlements. 

Mr Tsoai reiterated that the strategic plan of the Department focused on Outcome 8, which dealt with provision on integrated and sustainable human settlements and also improved quality of household life. Outcome 8 had four delivery outputs, which were already covered extensively. The budget allocation showed that the budget for 2013/14 was R20.2 billion, increasing in 2014/15 to R30.5 billion, with projected increases thereafter to R32.8 billion in 2015/16 and R34.4 billion in 2016/17. The DHS currently operated under four programmes: Administration, Human Settlements Strategy and Planning, the Programme Management Unit, and Housing Development Finance, which took up the largest chunk of the budget. At the end of the last financial year, the Administration programme had underspent, at 74% at the end of the financial year. The major challenge to the Department was the filling of vacant posts, especially at senior management level. The Department also saw an increase in the utilisation of consultancies, since it needed service providers to roll out and fast-track sanitation programmes in particular. The Department introduced a new grant from 2014/15, referred to as the Municipal Settlement Capacity Grant, intended to build capacity in the municipalities so as to deliver and subsidise the operational cost of administering the Human Settlements programmes.

He suggested that the Committee needed to ascertain whether there was a clear plan to deal with the housing backlog, while at the same time eliminating informal settlements. It was indicated that more than 3 million houses had been built since 1994 but it was not clear as to whether there was a progress in the elimination of informal settlements. The previous Committee also stated that the Department needed to have a clear strategy to ensure that the new grants were effectively implemented and the required outcomes were achieved. It was evident from the Department’s performance that there were significant improvements in the service delivery, but there were still some challenges that needed to be attended to if the Department was to realise its full potential. The provision of proper sanitation to restore the dignity of the communities remained a cause for concern. The previous Committee had also felt that the Department should strengthen its strategies on sanitation if the MDGs were to be realised by 2015.

The Chairperson thanked Mr Tsoai for the budget analysis and indicated that Members should now be familiar with the kinds of programmes that the Department managed to prioritise, and those areas that still needed further consideration. She added that it was clear that the previous Committee managed to achieve a number of key objectives and now this responsibility passed to the current Committee to also achieve its mandate. The Department should tell the Members about how it planned to spend R32 billion budgeted, and she hoped that Members were now prepared for that presentation on 3 July.

Mr M Shelembe (NFP) said he was now aware of what to expect from the Department in the process of the budget vote. He also added that it was clear that there was enough money to deliver services to the people, but there was a problem of maladministration. 

Mr L Gcabashe (ANC) thanked the support staff for their presentation and added this meeting was particularly helpful to the Members new to the Committee, as they were not familiar with the content of work that was covered by the previous Committee Members.

The Chairperson thanked all the Committee Members and again thanked the Committee staff. She urged all Members, as public representatives, to work hard to achieve the visions and missions of the National Development Plan and State of the Nation address.

Adoption of minutes
The minutes of the meeting on 25 June were tabled and adopted.

The meeting was adjourned.

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