Department of Human Settlements Strategic & Annual Performance Plan 2015/2016; Response to Human Settlements issues raised during State of the Nation Address

Human Settlements, Water and Sanitation

24 March 2015
Chairperson: Mafu, Ms N (ANC)
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Meeting Summary

The Department of Human Settlements briefed the Portfolio Committee on its strategic plan, budget and Annual Performance Plan (APP), and also programmes to respond to human settlements issues raised during the State of the Nation Address.

The Committee once again highlighted the importance of the mandate and work of the Department, and asked that the Department be more proactive, act with speed and had aggressive interventions where they were needed. Plans of the Department needed to be relevant to communities, and the national Department needed to find ways of working with relevant parties to mitigate any shortcomings – Human Settlements could not be an isolated entity.

Both the Department and the Committee still expressed concern over Gauteng and Limpopo – the Committee vowed to do its part to intervene and assist the provinces but the Department also needed to work with them closely. The Department had been working on a monitoring and evaluation unit that would ensure that the work and delivery of provinces spoke to their business plans, and that when there was a need this Unit would pick up red flags so there could be intervention earlier than the normal third to fourth quarter intervention when things came to the attention of the national Department.

Providing houses for military veterans was a key area highlighted in the State of the Nation Address (SoNA) and the Department was working on delivering on this; and the house specifications for military veterans were revealed to the Committee. The Department said that veterans did not want to be mere beneficiaries of these projects but wanted to be involved from the beginning. Military veterans were in fact encouraged to form cooperatives in order to be part of projects in terms of labour or companies (that had gone through the correct processes). In other provinces, military veterans formed companies that were part of programmes. It was a misconception that the provision of housing for military veterans was not a moving target, they were, as it was found that the numbers were not accurate.

The Department was concerned over the decrease of their budget for the upcoming financial year. However, while the budget was reducing, the budget for the next three years would be effective based on how effective and efficient planning was. Sometimes, how well the money was spent was more effective, essentially one could say there needed to be proper pipeline planning. Enhancing the Project Management Unit (PMU) remained a key corner stone of the success of the Department.

Regarding mining towns, another key note area mentioned in the SoNA, the Department briefly mentioned that in some active projects, such as Marikana, the miners did not qualify for Breaking New Ground (BNG) – Reconstruction and Development Programme (RDP) – houses, so the alternative was to have the Community Residential Units (CRU) programme.

Meeting report

The Chairperson read apologies received from the Minister and the Deputy Minister.

Department presentation
Mr Thabani Zulu, Director General, gave a brief background on what informed the strategic plans of the Department. The National Development Plan (NDP) placed a responsibility on government on the need to fast track the delivery of housing and improving the living conditions of citizens. In response to the Constitutional mandate and the call by the NDP to integrate settlements and develop in strategic and well-located areas, the Department has prioritised the delivery of houses using different tenure types with special emphasis on integration and densification. The 2014 -2019 Medium Term Strategic Framework (MTSF) prioritised the delivery 1,5 million housing opportunities in partnership with the private sector, all stakeholders and communities. The Human Settlements development programme would, in the next five years (2015-2020), be a catalyst for transforming the national space economy in order to achieve measurable results by 2030. The delivery approach would focus on mega projects of integrated housing mix to cater for different incomes levels and needs.

Strategic Plans
Mr William Jiyana, Director General: Strategy and Planning, spoke on the strategic plans of the Department. The strategic plan report tabulated the macro performance indicators and strategic goals by programmes.

Annual Performance Plans

4. Delivery Agreement (Outcome 8)
The objective of Outcome 8 was to manage a comprehensive Human Settlements programme with multiple projects that covers extensive geographical spread aiming to improve the workings of the space economy.  This would be achieved by providing poor households with adequate housing in better living environments; supporting the development of a functionally and equitable residential property market; and improving institutional capacity and coordination for better spatial targeting.

In terms of Outcome 8 MTSF for Human Settlements, a total number of 1,5 million housing opportunities would be delivered over the MTSF period of five years.  The 1,5 million housing opportunities will consist of: 750 000 households in informal settlements upgraded; 563 000 individual units for the subsidy market; 110 000 loans (70 000 FLISP plus 40 000 DFIs); 27 000 social housing;10 000 CRU and 35 000 affordable rental.  2 200 informal settlements would be assessed, and 10 000 hectares of well-located land would be rezoned and released for new developments targeting poor and lower to middle income households. 50 catalytic projects would be implemented, 563 000 title deeds would be issued to new homeowners in the subsidy market; and the title deeds backlog of 900 000 will be eradicated.  Provincial Departments needed to revise their business plans to focus on the priorities as set out in the MTSF.

The presentation highlighted the strategic goals that would provide strategic leadership, governance oversight and essential support and promote a compliant well-functioning Department and agencies:

-  Strategic goals to manage the development of Human Settlements policies and strategies.
- Strategic goals to build, oversee, support and monitor the sector institutional capability and capacity to deliver human settlements programme and projects.
- Strategic goals to provide funding for the delivery of all human settlements programmes in line with approved policies, planning and strategies.

All of these strategic goals Mr Jiyana went into detail one by one, making use of the Annual Performance Plan for 2015/2016 report.

Mr Nyameko Mbengo, Chief Financial Officer, reported on the budget of the Department, speaking on:

  • Allocations over the 2015 MTEF period
  • Consolidated additional allocations
  • Consolidated reduction in allocation
  • Net impact on the Department’s budget over the MTEF period
  • Allocation over MTEF by Programme
  • Allocation over MTEF by Branch
  • Allocation over MTEF by economic classification
  • Allocation of the Human Settlements Development Grant (HSDG)
  • Allocation of the Urban Settlements Development Grant (USDG)
  • Allocation of the Municipal Human Settlements Capacity Grant

2015-16 Delivery targets
Mr Mbulelo Tshangana, Chief Operations Officer (COO), reported on :

  • Summary of Consolidated Planned Provincial Delivery per Programme
  • Planned Provincial Delivery in Mining Towns

The presentation went into detail on the strategic goals that informed the 2015/2016 delivery targets; the strategic goals that would provide strategic leadership, governance oversight and essential support and promote a compliant well-functioning Department and agencies:

-  Strategic goals to manage the development of Human Settlements policies and strategies.
- Strategic goals to build, oversee, support and monitor the sector institutional capability and capacity to deliver human settlements programme and projects.
- Strategic goals to provide funding for the delivery of all human settlements programmes in line with approved policies, planning and strategies.

MTSF Actions
The Department’s Structure was being revised to match strategy. The Department was now reporting on 25 Strategic Objectives and 59 high-level Targets. The sharper focus from the current 163 targets to 55 would bring much needed efficiencies in performance and monitoring. A much extensive process would be undertaken during the Budgeting period to align budgets against strategy.

Mr Zulu made opening remarks on the responses to the SONA inputs. The key projects in the 100 days following the Fifth Parliament State of the Nation Address (SONA) was carried in the Minister’s Budget Vote speech and effectively budgeted for and implemented through Human Settlements programmes and projects. The available human capital was reassigned to focus at building enabling organisational configuration to carry the mandate. The presentation was an update on work done to date.

Mining Towns
Mr Tshangana read the statements that were made in the SONA regarding mining towns. 133 informal settlements were being assessed or prepared for upgrading through the National Upgrade Support Programme. 32 settlements were being upgraded and 87 housing projects were being implemented across the prioritised mining towns. Importantly, Government, the mining sector and the Banking Association of South Africa signed a Social Contract for the development of sustainable human settlements.

Me Tshangana spoke on the revitalisation of mining towns; talking on plans, funding and progress report on active projects.

National Upgrading Support Programme (NUSP)
The objective of the programme was to strengthen the nationwide approach to informal settlements upgrading through promoting incremental upgrading, strengthening capacity of government and professional practitioners, and providing technical capacity and support to provinces and municipalities.

NUSP Achievements
The Programme had provided technical support to 62 municipalities, including Mining Towns – to do rapid assessments and categorisation of selected informal settlements, develop municipal upgrading strategies and detail informal settlement upgrading plans. 597 settlements were assessed and categorised, some 800 upgrading plans were in the process or completed. An extensive capacity building programme would be completed by end March 2015.

Military Veterans
Following the announcement to restore the dignity of Military Veterans, the Department concluded a Memorandum of Understanding (MoU) with the Department of Defence and Military Veterans. The focus was on subsidy administration, size of the unit, running projects, subsidy top-up allocation and empowerment.

The Data Base
The Department of Military Veterans (DMV) had established a Data Base; the Data Base was the only source from which beneficiaries were identified. The first 5 854 applicants were preloaded and tested against the Housing Subsidy System (HSS) and the results were reported to DMV. The HSS had also been adjusted in line with the latest qualification criteria of R125 000 per annum.

Mr Tshangana went through the provincial targets for 2013/14 - 2015/16.

Title Deeds
This objective was in the State of the Nation Address and was carried in the operation of the Department and its entities. The Estate Agency Affairs Board (EAAB) was appointed as an agent of choice and a budget was made available for this purpose. The programme had yielded additional benefits to date such as training of new entrants in the property transfer value chain.

Youth Programme
The programme was launched as a flagship Human Settlement Youth programme on 2 December 2014 at Savannah City. Implementation was scheduled to commence on  1 April 2015. The programme seeks to align roll out of 1.5 human settlement opportunities and youth development through jobs and economic opportunities; training, reskilling and education. Opportunities were to be identified from the entire HS value chain. There would be a reallocation of funds to KwaZulu Natal, Western Cape, Eastern Cape and Mpumalanga for provinces to stimulate employment placement.

Mr Tshangana gave progress to date on the SONA inputs regarding the youth programme.

There were viable partnerships, projects pipeline, buy in at provincial level and implementation Plan in place.

There was a lack of adequate human resource to implement the  programme fully, lack of departmental investment, and no stipends meant no project. There was a lack of lack of programme prioritisation within the Department; and slow turn around in the conclusion of Memoranda of Understanding due to extensive consultative processes.

Mr H Mmemezi (ANC) noted the R4 billion reduction, and R1.6 million was not really lost because it had been moved to another department (Department of Water and Sanitation). Compensation of employees was the largest hit by the budget reduction. If the Department implemented when there was time these eventualities could be avoided. As strategic managers, officials had a right to meet up with relevant departments to work on problems such as recruiting.

It was comforting that the Department was responding to the SoNA and gave clear feedback to deliver on the matters the President had highlighted – although there were still areas with no clear plans but there was a budget.

The Committee was comparing what they were hearing from the Department and what was happening on the ground as they had seen during oversight visits. But the most important people doing oversight were the citizens of South Africa, there had been reports of uncompleted projects. The incomplete projects were now being vandalised and costing the Department more money and need to be investigated. In the plans of the Department, this should be addressed.

Mr Tshangana said there was never a budget for sanitation; the Department had asked Treasury to top slice the housing development grant to create a budget for sanitation and prioritise sanitation. It was for this reason that the Department was concerned about the moving of this budget.

Mr K Sithole (IFP) asked how far the Department was with the backyard rental strategy policy; also there was no progress report on the process of accreditation of municipalities. He disagreed with Mr Mmemezi that moving the budget for sanitation to the Department of Water and Sanitation did not affect the budget of the Department; this transfer was a huge drop on the budget of the Department and transferring sanitation out of Human Settlements was not a move in the right direction.  The Committee had seen that Limpopo and Gauteng had poor planning, what capacity could the national Department provide to these provinces? 

Mr Sithole asked for a progress report on the  two categories of rectification; rectification and re-rectification..

Mr Tshangana said the Minister was not comfortable with the rectification programme, it had to be done, but she was worried about how the Department was doing it currently. The National Home Builders Registration Council (NHBRC) and the policy unit of the Department had been mandated to come up with the new model on how to deal with rectification.

Mr N Capa (ANC) said the military veterans issue was very sensitive, the project related to housing for military veterans should be internalised by the Department due to its importance, and not over rely on others to give direction. Military veterans communities were decreasing and they were dying while waiting for houses. It seemed that poor performance by Gauteng had no impact on their budget, as they still received the largest share of the allocations. Regarding the upgrading of informal settlements and the reallocation of people due to environmental issues, how would it be ensured that people did not rebuild on that same land?

Considering that 2014/2015 was over, did the performance from this financial year indicate if the Department would be doing better or worse in the upcoming year?

Ms T Gqada (DA) referred to military veterans’ projects, specifically the one in Blue Downs where it was said that some of the units were changed to accommodate military veterans.  The COO said the veterans not only wanted to be recipients, they wanted to be involved from the beginning until the house was completed. During projects, there were steering committees, and if they were recipients in a particular project then they needed to form part of those committees. The worry was when they wanted to own the projects and drive the projects.

The report also mentioned jobs, but there ought to be report back to say – this many houses were built and this number of jobs had been created.

The Director General said there was a system of calculating jobs that was dependant on the nature of the project. Based on the business plans, the Department would be able to say how many jobs they would be creating.

Mr Tshangana said a key point of the military veterans programme and avoiding conflicts within communities would be facilitation. South Africa was one of the few countries that had such housing programmes for military veterans’ projects. The Department did not want to create a separate community of military veterans.

Regarding the military veterans in Blue Downs, Mr Tshangana said the Department did not see that as an issue. The sites were prioritised for military veterans’ housing, and the majority of people who would be staying in the area of this project were military veterans. All the houses in the area would look the same;  the Department could not foresee any possible conflict.

Dr Zoleka Sokopo, Chief Director: Monitoring and Evaluation, said there was a model called Social Accounting Matrix (SAM), which showed how many direct and indirect jobs were created by the Department. Dr Sokopo was asked to come to show the Committee how this model worked.

Ms T Baker (DA) said after the report from the COO she had a new motto from the Department “do more, work less”. On human capital, there was a reduction on the budget; she asked for comment from the DG or the COO on how this would affect performance and how it would be dealt with so that the impact was not felt.

Ms V Bam-Mugwanya (ANC) was a concerned as to how the new system would deal with the backlog of title deeds. The Committee had seen how poorly Gauteng was performing, and yet were still getting the bulk of the budget. Was there a method where the Department would assist the province to plan and improve their performance? The province was inundated with protests; there were complains on the lack of service delivery.

Mr Zulu said a unit had been established to ensure there was effective monitoring and evaluation, but strengthening the capacity of this particular area was very important to the Department. The COO had been working on this and trying to capacitate it from inside and outside the Department. This would mean that the national Department would be able provide support to provinces that needed it in time. There was a national team working with Gauteng, same as with Limpopo. There should be progress and improvement on the performance of the provinces; this was one of the targets of the Department.

Mr S Gana (DA) said from the Strategic Plan for 2015 to 2019 there was a proposal of sourcing capacity outside the Department to help with monitoring and evaluation with provinces and municipalities, was that a programme already started or starting in the upcoming financial year? Regarding mining towns, there were still municipalities that had no plans for sites and units but there was a budget, what was that budget for – was it for assessment?

When the CFO started the presentation he said imali ayikho (there was no money), Mr Gana said he was not sure if that was true because when the Committee got progress reports, they did not indicate any situation where there were plans and no money. At the end of each year, municipalities asked for a rollover, as they could not spend the allocated budget. Perhaps the problem was not money, but rather the capacity to spend that money

With the land that the Department purchased, there was no serviced land where people could build for themselves. It was impossible to build a house for everyone.

Ms L Mnganga-Gcabashe (ANC) congratulated the Department on being able to align the strategic plan, the budget and the APP. She asked when there would be new legislation formulated for title deeds as the current legislation on real estate and the Department had been challenged in court.

There should not be a quarter when a manager was not reporting for that quarter, there were no baselines for certain programmes and lastly there was a programme where the Department was planning consultations for a period of nine months which was too long as this meant there was only one quarter to implement the findings. Regarding the creation of jobs for youth, only five provinces were mentioned, where were the other provinces? This was in line with what the Committee had asked last year, there should be a report quarterly on all jobs created by the Department.

Under challenges, the last point on prioritisation, if this was a challenge for the national Department it was clear why it would be a challenge for provinces too as seen with Gauteng, but the Department needed to give a solution and not restate the problem.

Mr Zulu said most of the work of the Department had two parts; part of it spoke to the Department’s APP but the Department was trying to align its work with that of the sector at large.

A month ago the Minister told officials that the process of consolidating DFIs was moving too slow, the COO said he was due to meet with the CEO of NHFC to discuss the best way forward and expedite the process. The Minister had urged that the Department conclude the process by the end calendar year, not financial year. There were only five provinces listed because these were the only provinces that had a budget specifically to absorb young professionals.

The Chairperson said she heard that the provincial business plans were at an advanced stage, and were waiting for Ministers and Members of Executive Councils Meeting (MINMEC), perhaps it should be indicated when these would be coming to the Committee. These plans would make more sense if the Committee were able to compare them.

The Chairperson also asked for clarity on programme two and amending the Housing Act as the Committee expected the drafting; they would be dealing with the drafting of the Human Settlements Act. There was a slide that dealt with the FLISP programme and the draft implementation policy was being drafted, did this mean that all along during the implementation of the FLISP programme there was no draft implementation policy. She also asked for clarity on “interim title deeds in the informal settlements”.

From last year there had been talks about catalyst projects, could the 50 projects now be named so that the Committee knew where they were and the progress on them. Initially the Department had said there would be 300 000 housing opportunities per annum in order to make the 1.5 million target, based on the presentation today did these numbers add up to 300 000?

The interactions around the programme of the military veterans were very important, as the structures built for them were different from the ones the rest of the community received. Would this not create tensions within the communities, how much consultation was done with these communities?

Mr Zulu said the Department requested that there would no longer be extensions on submissions of the business plans by the provinces happening beyond the week ending on 27 March 2015. By Thursday all the business plans would be received and the Department would be able to do a comparative analysis on them. If need be, the plans would be revised in order to be aligned to the plans of the Department. It was important that the business plans and the APP of the Department were aligned to the MTSF targets, and this could only be realised once the final analysis was done.

The Department would be able to make presentation to the Committee once they had received all the business plans from all relevant institutions. In the plans there were different programmes and targets, but there were already targets that were announced and should be included in those plans. The Minister had also called a meeting with relevant parties in the lower spheres of government to test the state of readiness for the implementation of programmes for the next financial year. 

Mr Tshangana said the figure presented for provinces were what the fiscus would buy and that would contribute to the 1.5 million, what was not included was the USDG, the DFIs and the private sector. These were some of the components that contributed to the delivery of 300 000 houses per annum, after the entities had presented the Committee would get a better picture of how they contributed to this delivery target. Advocate Simelane also raised the question on “interim title deeds in the informal settlements” as there was no such thing; the Department had to correct their terminology.

Mr Tshangana added that the Department had received 156 proposed projects from provinces and municipalities, from that the number had to be reduced to 50. Currently there were 28 active projects and the list would be forwarded to the Committee.

Dr Sokopo said when the Department started with the development of the Green Paper; they were not sure if they would completely redo the Housing Act or repeal it. It was agreed that the Act would be repealed.

The Chairperson thanked the Department for their presentation and response to questions.

The meeting was adjourned.

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