National Social Security Agency: briefing

Social Development

25 February 2003
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Meeting report

030226pcsocdev

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE
26 February 2003
NATIONAL SOCIAL SECURITY AGENCY: BRIEFING

Chairperson: Mr E Saloojee (ANC)

Documents handed out:
Establishment of an Agency for Social Security: Department briefing

SUMMARY
The Department briefed the Committee on the background, benefits and implications of a National Social Security Agency to manage and administer social assistance grants which would be phased in from 2004 to 2006. Wide-ranging public consultation is required. New legislation would address the changes in service delivery; and further legislation would address the powers and function of the Agency. Immense restructuring was in the pipeline to capacitate the agency envisaged. Cabinet would be provided with a detailed report in June/July.

Many committee members were concerned about the success of the proposed system. The Committee was predominantly concerned with whether the agency would not be viewed as government shifting its responsibility; and whether the agency would have the capacity to deliver effectively.

The Department was emphatic that the present system was not an option as it was not working; instead it was compromising the issue of accountability of social services delivery and assistance. An institution with the power and flexibility to improve service delivery was imperative.

MINUTES
In opening the meeting the Chairperson expressed his disappointment that the Committee had not received any briefing documents prior to meeting. He stressed the importance of this.

National Social Security Agency
Mr Selwyn Jehoma (Chief Director: Grant Systems and Administration) pointed out that the documents were in a very raw form and at a skeleton stage. He noted that there would be a more comprehensive briefing meeting with the Committee in March 2003.

The Chair said the Committee was keen to have a substantial briefing regarding the complex issues concerned.

Mr Jehoma's presentation (see document) outlined the background leading to the Department's decision that the need for a Social Services Agency existed. Cabinet had granted the move in principle but he also indicated that the Department still needed to investigate and inspect the implications and report back to Cabinet before a final decision.

The benefits of having an Agency were outlined. They included the alignment of budget and policymaking; a clearer accountable framework that would address the frustrations of beneficiaries who on moving between provinces often found themselves without a grant and destitute; and standardisation and uniform business processes would reduce costs of service delivery. Practices of double dipping into funds grants would also not be possible with an Agency as the institution would have a better grip on social services.


Mr Jehoma said that they were conforming to the brief of the Transitional Committee which was set up to investigate the implications and to consult. The Transitional Committee was made up of representatives from Treasury, the Department as well as the Department of Public Service and Administration

He reflected on the potential constitutional challenges. With reference to the Mashavha case, social assistance as assigned to the provinces was invalid. Capacity to manage a budget equivalent to R35 billion required that the department restructure in order to be able to monitor the process and have a policing unit.

Mr Jehoma explained that an amendment could not be made to the Social Assistance Act because its functions had been assigned to provinces, hence what was now required was a whole new Social Assistance Act. Cabinet would be provided with a more detailed report in June/July. He concluded by saying that post April 2004 they expected that there would be a gradual transfer of functions from the provinces to the Agency.

Discussion
The Chairperson said it would be a massive undertaking, with a long process that involved radical departure from the current system in place. He added that the public was bound to have an interest in this huge change, and suggested that public hearings be accommodated.

Prof. L Mbadi (UDM) expressed his concerns for the communities who were suffering under the current dispensation of the outsourcing of services. From his constituency work, he knows there is an outcry over the fact that social services do not reach them. It was believed that such service providers earned R28.00 for every beneficiary they made payment to; and probably more per pay point. His concern was that the money that should be reaching beneficiaries was enriching the pockets of private directors. He asked if there could not be a way to bring this new system to the people sooner.

The Chairperson wanted to know if the same paypoint companies and staff would be used.

Ms S Rwexana (ANC) felt that this huge task required clarity regarding the plan of phasing out the system in the provinces and the phasing in of the Agency, she wanted to know what role the department was going to play in this issue.

Mr Jehoma said that government would have to honour the contracts entered into between provincial government and the private service providers. He highlighted that this was the only country where people had to queue in the open at pay points. He added that banks were not going to move to the rural areas and township areas unless there are profits to be made. One could not expect the market to go out and provide a social product.

Mr Jehoma acknowledged that the phasing from provinces to a single agency was a complex process and that it was probably the biggest transformation within an institution of government. Government could not handle it alone, it needed help from abroad. He said they would want to ensure that service delivery continues during the transition. National Treasury was on track in so far as preparing the requisite budget; and that it was now really an issue of legislation.

A member highlighted the negative consequences of centralisation and asked if these had been investigated. The uncertainty that this change would cause amongst current staff was also mentioned.

Mr Jehoma maintained that a number of consequences had been looked and that one ought to have service delivery and decision making as localised as much as possible. The risk was that one opens the system to more leakage and fraud. He agreed that the concept had already begun to create uncertainty amongst staff.

Ms Chalmers asked how this report was in synch with the Taylor Report and what had been the interaction thus far with the union and those integrally involved with pensions and grants.

Mr Da Camara (ANC) said that although he had a low opinion of service delivery and also of the bureaucratic system, he still wanted to establish whether there would be a real concept change or would the change just be a different person one would be reporting to. He was concerned that when changes like this were effected, people went without benefits for years. He feared beneficiaries would fall through the cracks and whatever good intentions the Department may have. He asked what mechanisms the Department had considered . He also wanted to know what the relationship between the new Agency and SITA (State Information Technology Agency) was going to be.

Ms Rwexana (ANC) asked what the powers of the minister would be in regard to the Agency. She said people tended to feel that "we are handing them over rather than the government dealing with their own responsibility". She added a series of questions:
What changes would the agency bring? Would unions remain as public servants? She also wanted to know how talks with organised and unorganised labour were moving. and expressed that more realistic timeframes should be set.

The Chairperson asked if the Agency was going to stand completely on its own (he cautioned that this would have deep implications) or would it be like SARS which stands on its own but comes under the broad heading of Finance/Treasury.

In response to this series of questions, Mr Jehoma agreed that there were far reaching implications and they would affect people. He pointed out that government had made a commitment to deliver and the current system was not an option - it just was not working out. He pointed out that any change in governance arrangements that needed to be made brought along advantages and disadvantages. Although SARS has partial independence , it is still accountable to Treasury. He saw the Agency in the same way.

He said the National Budget would reflect transfer costs, and the agency concept was in synch with the Taylor Report. There were similarities in that the Taylor Report argued for a single institution that would evolve over time, and the service delivery was more or less the same.

He said a framework would address labour relations. All the staff would be included. He believed that if you wanted performance from staff you had to implement relevant training programmes to empower them. He admitted that further engagement on staff transfers with the unions was still necessary.

In response to the mechanisms looked at, he felt that a breakdown in service delivery should not happen. A transitional plan would be developed to ensure that people are not affected negatively.

In response to the SITA question, he said there was an agreement between the Department and SITA that the new agency would not be able to ignore.

Mr Jehoma explained that having the agency would not amount to privatisation. It would still function within the public sector. Its services would be different and it would have different set of rules to enable it to respond effectively.

Ms S Rajbally (Minority Front) was concerned about the people who she felt were bound to suffer during the changes. She wanted these changes shortened and wanted to find out if the R35 billion would be spent on capacity building.

Ms T Tshivhase (ANC) voiced her concerns around "vultures flocking pay points". She wanted to know who would be accountable to whom.

Mr M Ngema (IFP) wanted to know the reasons that justified a change in the form of structure that had been operating. How were they going to justify the need to change if the National Department's money went to provinces? He was concerned that the changes would still result in people standing in long queues. He asked why the so-called improved service delivery was impossible to achieve with the current system. He also questioned whether an agency was likely to be less expensive.

Ms J Chalmers (ANC) asked how oversight would work in the system that is envisaged.

Mr Jehoma replied that the MEC would still be responsible for social services. He added that there would be an appeals function that beneficiaries could resort to.

In addressing the various concerns raised, Mr Jehoma said his department would appreciate the Portfolio Committee's opinion on how to effect the improvement. He stressed that the current arrangement was not an option and that it was not working. He gave an example of courts in the Eastern Cape that were now refusing to take beneficiary cases. The old system could not be improved; instead it was compromising the issue of accountability of social services delivery and assistance. An institution with the power and flexibility to improve service delivery was imperative.

In response to Mr Ngema's question on costs, Mr Jehoma said that they would gain value for money if they made use of an agency. He explained that potentially they could look forward to a cost reduction because there would not be nine of everything but rather only one.

A member commented that the experience of other countries showed that development was largely neglected and that they tended to rely on organisations of civil society.

Ms C Ramotsamai (ANC) proposed that the portfolio committee be regarded as a stakeholder. She felt that the committee needed to make inputs and not only be briefed. They wanted to be part of the processes and not just be presented with the final bill.

Mr Jehoma said the committee was at liberty to say how regularly they wanted to be kept abreast.

The Chairperson said that as the work advanced they wanted to be kept informed timeously.

The Committee suggested that the department should get the views of the public from the various provinces in case provinces differed. They also suggested collaboration with other departments so that, for example, there was access to water at the pay points.

In thanking Mr Jehoma, the Chair said that the presentation had given them a good sense of what was happening. The meeting was adjourned

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