Progress made in roll-out of phase three of Expanded Public Works Programme

Meeting report

Chairperson’s opening remarks

The Chairperson welcomed Members to the meeting, together with officials from the Department of Public Works and all other stakeholders present. He indicated that an apology from the Director-General had been received by the Committee indicating that he would not be able to attend the meeting due to the Cabinet Lekgotla.

Presentation: Progress report for the roll-out of the Expanded Public Works Programme (EPWP) Phase three

Mr Stanley Henderson, Deputy Director-General: EPWP, DPW thanked the Committee for the invitation. He reiterated the point that the Director-General wanted to be at the meeting but was unable to do so. He explained that the presentation report covered data for the first two quarters, from the end of September 2014. The figures for December 2014 however have not yet been validated. The final figures would be submitted to the Committee at a later date. The Department’s targets focused on work opportunities created and full-time equivalents, designated groups,; labour intensity and financial performance of the programme in terms of the incentive grants. The presentation would also look at the EPWP 3^rd Summit, challenges and measures put in place to address the challenges.

He said the EPWP 6 million work opportunities had been disaggregated into annual targets of the number of work opportunities created and the number of full-time equivalents created. The EPWP created 630 718 work opportunities against a second quarter target of 522 760 by the end of the second quarter of the 2014/15 financial year. The programme was on track to meet the target for the 2014/15 financial year. The EPWP work opportunities reported in the second quarter of the 2014/15 financial year represented 10.5% of the overall target. Between the period of 1 April 2014 and 30 September 2014 the Department had achieved 65% progress on its targets, these targets covered the following sectors: infrastructure, environment, social, non-profit organisations and community work. Projects across the five sectors were evaluated according to; number of projects/sites, work opportunities created, duration of the work opportunities, full-time equivalent and average minimum daily wage.

Under the infrastructure sector the Department had set a annual target of 379 156 work opportunities, of these 270 450 were created, therefore 71% of the target was reached. Environment had an annual target of 227 650, they achieved 122 163 (54%), social set a annual target for 202 714 and managed to achieve 131 371 (65%), non-profit organisation set an annual target of 49 000 and managed to achieve 41 209 (84%) while the community work programme set an annual target of creating 187 000 work opportunities but managed to achieve 65 525 (35%). With regard to the work opportunities achieved versus the shortfall per sphere of government between the period of 1 April 2014 and 30 September 2014, municipalities had a shortfall of 44%, provincial governments had a shortfall of 12% while national governments had a shortfall of 61%. With regard to full-time equivalents, the Department had set a target of 420 952 across all five sectors but only managed to achieve 137 971, 32.8% of the annual target. The programme was not on track to meet the target in terms of full-time equivalents for the 2014/15 financial year.

All provinces have achieved their work opportunities targets, however only three provinces; KwaZulu Natal, Limpopo and Gauteng municipalities have achieved over 50% of their targets by the second quarter. In the infrastructure sector, the majority of the provinces, six out of nine have achieved 50% of their provincial sphere work opportunities except for Free State, Gauteng and the Northern Cape. In total the Department had set an annual target of 168 511 work opportunities for the infrastructure sector in the provinces and 175 459 of these were reported. In municipalities a target of 190 645 was set but only 87 122 was reported on, 46% of the total target. In the environment and culture sector, the majority of provinces, seven of nine, the provinces have achieved 50% of their provincial sphere work opportunities except for the Eastern Cape and KwaZulu Natal. With regard to the EPWP progress against designated groups, overall the programme achieved the 55% women target. The programme achieved 46% against the 55% youth target and 1% against the people with disabilities target. The Environment and Culture sector, was the only sector that has achieved the 55% youth target.

With regard to EPWP expenditure per economic classification he said in total, the budget allocation for the EPWP for the 2014/15 financial year was R 1.9 billion, as at 30 November 2014 the programme had used up 1.5 billion of the allocation. Transfers and subsidies took the bulk of the allocation (88%), followed by compensation of employees (64%), goods and services (61%) and machinery and equipment at (44%). With regard to social sector grants, 98% of the allocation was transferred to provinces as at the end of November 2014.

From the 28^th to 29^th November 2014, the EPWP hosted the 4^th EPWP Summit. The aim of the Summit was to ensure that EPWP implementers from all sphere in particular the municipal sphere to ensure they contribute to the following objectives: accelerate the implementation of the EPWP by all implementing bodies and to introduce EPWP Phase three to all implementing bodies. One of the resolutions taken was that all public bodies should continue to ensure that there is proper record management for EPWP projects and the DPW undertakes to develop an appropriate Management Information System for EPWP phase 3 by 30th June 2015. Some of the challenges with the implementation of the programme included delays in the approval of TORs by the Office of the Deputy President, non-attainment of persons with disability and youth targets, non attainment of full-time equivalent targets due to shorter duration of work opportunities, not adhering to the daily minimum wage determination and poor reporting from the CWP. Some of the measures taken to address these challenges were that different programmes were being engaged to enable them to adhere to the EPWP minimum wage and technical improvements were planned to improve the EPWP reporting system.

Discussion

The Chairperson thanked the Department for the presentation.

Ms L Mjobo (ANC) thanked the Department for the report. He said according to the presentation, the Department approved all its targets, however of the nine provinces, only three provinces had achieved more than 50% of their targets. What about the other six provinces, what was the Department doing to address their shortcomings?

Mr K Mubu (DA) indicated that according to the presentation the Department had created over 630 000 work opportunities against an annual target of just over 1 million. What the Department was able to achieve is just over 50% of its annual target, however according to the report given, the Department envisioned that it would have achieved 100% of its targets by the end of the 2014/15 financial year. How would this be achieved? What guarantee did the Department have that this would be achievable, seeing that there was still a lot of work which still needed to be done? With regard to the minimum wage, he acknowledged the wage was determined by the Department of Labour and not by the Department of Public Works; however there were huge disparities between the wages among the different sectors. This was a serious concern.

According to the presentation, national government seemed to be performing poorer compared to provincial governments. Was it correct to say that national government was letting down the programme? If so, what was the Department doing to correct this? He asked about the duration of the work opportunities created; what plans did the Department have to create more permanent work opportunities?

Mr S Masango (DA) asked the Department for clarity on why the Department was focusing on engaging organisations which represent people with disabilities in an attempt to improve their participation in the EPWP. Why was the Department not engaging bodies of employment rather to make their environments friendlier towards the employment of people with disabilities? He also indicated that in many cases, incentives to municipalities and provinces were not being properly appropriated. What was the Department doing to address this? A lot of money was being spent without it being approved?

On monitoring, he asked what the Department was doing to ensure that those municipalities and provinces which did not meet their targets were being dealt with. What kind of value did the EPWP projects bring to local communities? He indicated that targets were usually informed by budgets; however some municipalities exceeded the targets they set. How did this happen and where did the funding come from?

The Chairperson thanked Members for interacting with the report given. 

Mr Henderson thanked Members for their questions and comments and indicated that the questions would be shared among the officials from the Department present.

Mr Ignatious Ayiyo, Chief Director: EPWP Infrastructure, Department of Public Works responded to the question on incentives and explained that initially the type of incentive the Department had was a schedule eight grant. The allocations given to public bodies were indicative and the incentive was based on performance but this created problems with appropriations. The grant was therefore changes to a performance-based and planning-based. The allocations in the Division of Revenue Act did not change. With regard to the public bodies which were not meeting their targets, he said the Department was providing them with technical support, especially at municipal level.

The Department sent out various officials to go help out at whatever municipality where there was a skills shortage. He agreed that there were three provinces which were on track in achieving their targets, however because the Department had achieved about 60% of its target so far, it was likely that the Department would achieve 100% of its targets at the end of the second quarter; reason being that a lot of projects were still going to be implemented. On the question on the minimum wage he indicated that according to the Department of Labour, the minimum wage varied according to the different provinces. There was no standard minimum wage across the country. Urban centers had higher wages that for projects. The principle for EPWP was to create a wage which was comparable to unskilled labour in any area; avoiding to pay below the minimum wage.

On the question on national departments not performing, he said most of the targets were for the municipal sphere and for provincial departments. Provincial departments were doing very well across the board; they carried the bulk of the work opportunities and met all their targets. At the end of the second quarter provinces had achieved 90% of their targets. Municipalities were lagging slightly behind with the meeting 48% of their targets. The good thing was that most of the targets were in the provincial sphere. The Department was therefore still confident that all targets would be met by the end of the financial year.

Mr Henderson added that national departments were policy departments and were therefore given small targets for implementation. The main focus was on municipalities and provinces.

Mr Ayiyo responded to the question on the duration of work opportunities and said these were shorter than expected and this affected full-time employment. Government however was trying to promote maintenance programmes within infrastructure because they were longer in duration and they were more regular and predictable. Maintenance was an ongoing process. The Department was therefore encouraging public bodies to adopt maintenance programmes to improve on full-time equivalent employment. On the question on the improvement on the targets, he agreed that targets for the EPWP were set according to a budget. Upon setting the targets, the Department was conservative and targets for municipalities were based on the conditional grants. However this did not mean that the EPWP was limited to the conditional grant. In cases were the targets were exceeded it meant that the public body used up most of their funding for EPWP and they were going above the minimum, and this was a good thing because it meant that most of the allocation for EPWP was being used up.

Ms Kelebogile Sethibelo, Chief Director: EPWP Operations, DPW responded to the concern of whether the Department would be able to achieve its targets at the end of the financial year. She indicated that some of the EPWP projects had not yet been implemented such as the Literacy Programme from the Department of Basic Education which took about 35 000 people on board, and this would only be starting during the second quarter, the Community Work Programme had also not reported all their work opportunities; they submitted their reports late. The Department was engaging the programme to ensure that all progress made is reported on. In addition some of the Departments had not yet come on board, but the Department of Arts and Culture was now onboard as part of the environment and care sector. Therefore all arts and culture projects would now be reported.

With regard to the shortfall of the national programme she said the environment and arts and culture sectors had a lot of shortfalls, as a result some of the projects started late. However now that the Department of Arts and Culture had come on board the Department would start reporting and more targets would be met. With regard to people with disabilities she said the Department had a workshop with the sector last year where the Department was mobilizing the sector to ensure that people with disabilities participated as much as possible. However the Department acknowledged that it should not just be the non-state sectors which took part in this initiative but it should be all sectors. All other sectors have since agreed to come on board. She indicated that there was confusion with the disability grant, people assumed that they would forfeit the grant by participating but clarity was given by the Department of Social Development that people would not lose their disability grant by participating in the EPWP. With regard to monitoring and evaluation, and engaging public bodies on meeting their targets, she said the Department had had challenges in a number of provinces such as the North West, Western Cape and with other departments and sectors which experienced reconfiguration. The Department has met with the various Heads of Departments in the problematic provinces and the situation was improving.

Mr Henderson responded to the question around the true value of the projects to the communities. He explained that each budget was linked to a specific output/deliverable. Work opportunities created and services delivered were monitored on a continual basis. The Department had a monitoring and evaluation framework which looked at all the deliverables from the different projects and reported back on these. The presentation given by the Department to the Committee was a mid-year report therefore it needed to be taken into account that most of the projects were still running therefore not much progress could be reported back on them. In addition the Department had also undertaken research within various communities to ascertain how they perceive the projects implemented in their communities. These results would be made available to the Committee once they have been put together.

Mr Masango raised a caution to the Department around the fact that most of the reporting was done during the last quarter of the year. He argued that this led to fiscal dumping. Reporting should be done earlier in the year and more frequently. The EPWP has been around since 2003. He added that from the Department’s responses it was clear that the Departments intentionally set itself unrealistic targets. On the disability incentive he said any public body which did not employ more than 2% of disabled people should be receiving less grants so as to force them to employ more people with disabilities.

The Chairperson agreed with Mr Masango on the point he raised on targets that a number of departments were setting themselves lower targets so they seem to be over-performing when this was actually not the case. The Committee therefore had a responsibility to look at the Department’s targets with great scrutiny; Members had a responsibility to interrogate targets without fear or favor.

Mr Henderson responded to the issue on fiscal dumping and explained that the Department was not intentionally striving to report in the last quarter. The Departments’ experience was that reporting improved during the third of fourth quarter because projects had been implemented during the first or second quarter. Fiscal dumping took place when projects were only implemented during the fourth quarter. On targets he said the Department set targets with the view of creating work opportunities however the mindset around how projects were implemented needed to be changed. The Department has taken into account that there has been a paradigm shift to move towards a more labour intensive implementation strategy. It was a problem that many projects were still being undertaken under a machine-based process. He assured the Committee that the Department did not set unrealistic targets but the targets were realistic. Municipalities also need to be encouraged to include the EPWP in their annual plans.

Ms Sethibelo responded to the question on services created, she referred to the Social Sector Incentive and said when the Department dispersed the incentive to a public body, the Department would look at how many households would be serviced, how many Non-Governmental Organisations will be strengthened and how much capacity will the grant build with regard to the employment on women, children and people with disabilities among other things.  During their programme management meetings the Departments would also look at how many communities each project has serviced and the Department has incorporated these service delivery aspects in its monitoring and evaluation framework. The progress in this regard would be reported to the Committee during the next quarter.

Mr Mubu spoke to capacity building for municipalities; a number of municipalities were struggling even to deliver services to people. To what extent would these municipalities be capable of implementing the EPWP programmes? What was the Department’s responsibility for capacitating these municipalities? From the Department’s presentation under-reporting from some of the provinces was highlighted as a concern; how would the Department evaluate the success of the programmes they implement? On the abuse of the EPWP, he said everyone should benefit from the programme despite their political affiliation however this was not always the case. In many cases people were being manipulated and were being intimidated due to their political affiliation especially in rural areas. Was the Department aware of this and what was being done to address the problem?

The Chairperson acknowledged Mr Mubu’s concerns and said the issue had been raised in the Committee before. Government services were for all South Africans, irrespective of who they voted for. Members of all the parties should therefore guard against such and report incidences of such abuse and wrong doing so they could be addressed.

Mr Henderson thanked Members for their comments. He said the EPWP went through a clear transparency selection process to prevent political patronage. The Department would take up such abuse vigorously. The EPWP should not be manipulated.

My Ayiyo responded to the question on capacity building and said where there was no capacity within a municipality there would be challenges with the implementation of the programme. Therefore the Department has undertaken a programme to train officials in labour-intensive matters of construction, over 1200 officials have been trained to date, in different municipalities across the country. This was done in partnership with local government SETA. The Department trained municipal officials at NQF level 7 and level 5 to build their capacity. The Department was also holding workshops on EPWP on a regular basis with municipal officials. However the turnover for officials at municipal level was very high, therefore the process of training was a continual one. The Department has also devoted manuals and guidelines for municipal officials on how to properly implement EPWP projects. The Department also had a team of officials who were hands on helping municipalities on the ground. On under-reporting he said the Department resolved to going on to the sites to get the information themselves, helping officials in the consolidation of reports.

Ms Sethibelo said municipalities had capacity in the form of Deputy Directors and Programme Managers who worked in provinces and with public bodies. In addition the Department went to all the departments who were not reporting adequately to engage the Chief Directorate. The Department has also sent data capturers to assist these departments in capturing all the work done on EPWP projects. Therefore where there was no capacity, the Department deploys capacity to these public bodies. For example, six data capturers have been deployed to the Department of Cooperative Governance and Traditional Affairs to makes sure that beneficiaries were paid on time and that all project information was captured properly.

The Chairperson thanked the team from the Department of Public Works as well as Members for their engagements with the report. He said the issues presented were not issues which could be resolved in one meeting.

The meeting was adjourned.