National Development Plan alignment with Medium Term Strategic Framework & progress 2014/15: Parliamentary Budget Office assessment

Standing Committee on Appropriations

05 April 2016
Chairperson: Mr N Gcwabaza (ANC) Acting Committee Chairperson
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Meeting Summary

The Parliamentary Budget Office (PBO) reviewed the NDP in order to assess where it was in the achievement of its targets. The NDP was the guiding framework for budgetary allocations and South Africa's planning framework. There was no oversight of the NDP by Parliament at present. Perhaps it was time that Parliament called in those responsible for oversight of the NDP to account. The PBO at the outset said that the briefing information might not be a true reflection of what departments had done on outcomes, given that there were a great deal of quality issues in reporting. The briefing spoke to the assessments of all 14 outcomes of the NDP. Progress was assessed by comparing the number of targets achieved with the total number of targets set per sub-outcome. The Committee was provided with the percentage of targets achieved for each NDP outcome:

▪ Outcome 1: Quality Based Education 37%.
▪ Outcome 2: A Long and Healthy Life for all South Africans 45%.
▪ Outcome 3: All people in South Africa are and feel safe 29%.
▪ Outcome 4: Decent employment through inclusive economic growth 45%.
▪ Outcome 5: A skilled and capable workforce to support an inclusive growth path 52%.
▪ Outcome 6: An efficient, competitive and responsive economic infrastructure network 46%.
▪ Outcome 7: Comprehensive rural development and land reform  0% (most due for 2018/19).
▪ Outcome 8: Human Settlements 13%.
▪ Outcome 9: Responsive, accountable, effective, efficient developmental local government system 64%.
▪ Outcome 10: Protect and enhance our environmental assets and natural resources 29%.
▪ Outcome 11: Create a better South Africa; contribute to a better and safer Africa in a better world 44%.
▪ Outcome 12: An efficient, effective and development–orientated public service 39%.
▪ Outcome 13: An inclusive and responsive social protection system 27%.
▪ Outcome 14: Nation building and social cohesion alignment and progress 42%.

The PBO then assessed each outcome on whether there was good alignment between the MTSF and the NDP and which NDP recommendations the MTSF did not address and proposed steps to deal with poor achievement. 

On the way forward, it noted that the DPME had indicated that departments had started a review process of indicators and targets reflected in the current 2014-2019 MTSF action plans. To ensure effective synergy between sectoral plans and performance budgets, the planning process would need to be fully integrated into the budget cycle. The PBO plans to do an alignment exercise of annual performance plans (APPs) with MTSF documents. This would allow the reconciliation of performance with expenditure. Another possibility is to suggest specific indicators that will assist Members to oversee the implementation of the NDP.

Members asked how accurate the assessment done by the PBO was and why the assessment had been done on 2014/15 information and not on 2015/16 information which was more current. The PBO was asked whether it felt that changes needed to be made to the goals of the NDP. Was there a need to reprioritise the NDP? It was an eye opener to the Committee that perhaps no effective monitoring and oversight was being done over the NDP. Members asked what measures did the PBO suggest be put in place for monitoring the NDP. Were resources, capacity, lack of oversight or a combination of these the problem with the NDP implementation? However not all members were convinced that the goals of the NDP needed changing. Efforts should rather be made to meet the goals that had been set. Implementation of the NDP had only started in 2013 and it was considered far too soon to revise it. Members observed that achievement of targets on NDP outcomes seemed to be on the low side and were hopeful that improvements were going to be made. Skills development was important to the Committee and the focus should not only be limited to ICT but also on other skills that were needed. Members suggested that an analysis be done to determine what skills were needed in SA’s economy and to direct students in those directions. Were universities skilling students according to what was needed in the economy? Members felt that the Committee needed to facilitate a discussion between government, business and academia on what skills were needed in SA. Universities needed to skill students according to what the economy demanded. The observation was made that many South Africans looked towards the public sector for jobs but the concern was whether government’s budget could afford to employ so many people. Members had differing views on SA increasing duties on the importation of steel. Actions like these to protect local South African industries did have its pros and cons. Members raised concern about loans sharks taking possession of social security cards of beneficiaries and felt that it was high time that the problem be addressed. The PBO was asked if it was its opinion that it was DPME’s responsibility to have oversight over the NDP. Members suggested that the Committee invite the DPME to address it on this. The Acting Chairperson commented that Annual National Assessment (ANA) results had always been poor and asked if the ANA tool had been assessed. How could things be made easier for teachers to implement the Annual National Assessment?
 

Meeting report

Parliamentary Budget Office (PBO) on National Development Plan (NDP) alignment with the Medium Term Strategic Framework (MTSF) and progress in 2014/15
The PBO delegation comprised of Prof Mohamed Jahed, Director, Ms Nelia Orlandi, Deputy Director: Public Policy, Dr Dumisani Jantjies Deputy Director: Finance, and Ms Abigail Stiglingh, intern.

Prof Mohamed Jahed, PBO Director, noted that there was little oversight done over the NDP. The PBO had decided to do a review of the NDP in order to see where it was in the achievement of its targets. The NDP was the guiding framework for budgetary allocations and South Africa’s planning framework. There was no oversight on the NDP by the legislature at present. Perhaps it was time that Parliament called in those responsible for oversight on the NDP to account. The PBO assessment looked at whether the short to medium-term planning of government is aligned and implements the actions and objectives of the NDP, evaluated the alignment of the medium-term plans with the NDP and progress made with the implementation

Ms Nelia Orlandi, Deputy Director: Public Policy, pointed out that the briefing information might not be a true reflection of what departments had achieved on outcomes given that there were a great deal of qualitative issues when reporting. The briefing spoke to the assessments of all 14 outcomes of the NDP. The actions of the sub-outcomes in the MTSF action plans were manually matched with the actions and targets in the NDP. The Committee was provided with a breakdown of percentages on achievement of targets for the NDP Outcomes and an assessment whether there was good alignment between the MTSF and the NDP and which NDP recommendations the MTSF did not address and proposed steps to deal with poor achievement (see document for full details):

Outcome 1: Quality Based Education
Achievement of targets sat at 37%.The assessment showed that there was good alignment between the NDP actions and the 2014-2019 MTSF. NDP recommendations not fully addressed by the MTSF included incentive schemes for good performing schools; top performing schools should be supported and not be saddled with unnecessary burdens; union influence in promoting or appointing principals. It was also found that Annual National Assessment results were poor.

Outcome 2: A Long and Healthy Life for all South Africans
Achievement of targets sat at 45%. It noted that the fatality rate of children under 5 years as a result of malnutrition has increased in terms of the baseline. There was good alignment between the NDP and the 2014-2019 MTSF. Some areas identified to be strengthened in the MTSF included the development of a human resource strategy which would for instance determine minimum qualifications for hospital managers; availability of health personnel in the public sector; address health worker morale. A suggestion was reduction of injury, accidents and violence by 50% from 2010 values.

Outcome 3: All people in South Africa are and feel safe
Achievement of targets sat at 29%.There was alignment between the NDP actions and the 2014-2019 MTSF. Shortcomings of the MTSF related to for instance the extension of compulsory community service to all law graduates and the mobilisation of youth for inner city safety. In addition all corrupt officials should be made individually liable for all losses incurred as a result of their corrupt actions.

Outcome 4: Decent employment through inclusive economic growth
Achievement of targets sat at 45%.There was partial alignment between the actions recommended by the NDP and the MTSF. Areas not presented in the MTSF for reporting, monitoring and evaluation included reducing the cost of living for poor households and reducing the cost of doing business through microeconomic reforms. The PBO posed the question how one would measure reducing the cost of doing business. What was a suitable indicator?

Outcome 5: A skilled and capable workforce to support an inclusive growth path
Achievement of targets sat at 52%. Some performance areas that still needed to be strengthened by departments were number of artisans qualified; number of eligible university students obtaining financial assistance; a centralised application system for universities and a greater percentage of university graduates with information communication and technology (ICT) skills.

Outcome 6: An efficient, competitive and responsive economic infrastructure network
Achievement of targets sat at 46%.There was good alignment between the NDP actions and the 2014-2019 MTSF. Areas not presented in the MTSF included the upgrading of fuel refineries and the importing of refined fuels. The reason most targets were reflected as not achieved was because progress reports had not been submitted by the responsible department. The Programme of Action Progress Report does not reflect the progress on the Strategic Integrated Projects (SIPs).
 
Outcome 7: Comprehensive rural development and land reform
Achievement of targets sat at 0%. Most targets are set for 2018/19. There was alignment between the actions recommended by the NDP and the MTSF. The actions as taken up in the Programme of Action covered a wide variety of responsibilities and could be delegated to other departments covering sectors like energy, water, human settlements and sanitation as some of the indicators were not relevant to land reform. This would allow the Department of Rural Development and Land Reform to concentrate on agricultural reforms and support.

Outcome 8: Human Settlements
Achievement of targets sat at 13%.There was some alignment between the NDP actions and the 2014-2019 MTSF. Most of the actions reflected in the Programme of Action was the responsibility of the Department of Human Settlements but could also form part of the responsibilities of other departments. Areas not presented in the MTSF included improvement in the balance between where jobs were located and where people were located.

Outcome 9: Responsive, accountable, effective, efficient developmental local government system
Achievement of targets sat at 64%.The sub-outcomes of the 2014-2019 MTSF showed no alignment with stabilising the political administrative interface or achieving the developmental potential of state owned enterprises. The comparison did show that there was alignment with making the public service and local government careers of choice. However the MTSF concentrated on the mandate of municipalities and did not concentrate on what the NDP recommended. The actions of the MTSF were not always in line with the sub-outcomes.

Outcome 10: Protect and enhance our environmental assets and natural resources
Achievement of targets sat at 29%.There was good alignment between the actions recommended by the NDP and the MTSF. Most of the targets to protect and enhance SA’s environmental assets and natural resources were set for 2018/19. In some instances progress had been reported against 2018/19 targets but were not taken into consideration for the 2014/15 financial year.

Outcome 11: Create a better South Africa; contribute to a better and safer Africa in a better world
Achievement of targets sat at 44%.There was alignment between the actions recommended by the NDP and the MTSF. Some areas not addressed by the cluster were focus on trade penetration and diplomatic presence in fast growing markets like Asia, Brazil and Africa. Attention also had to be given towards implementing a focussed regional integration strategy which would lead to a reduction in red tape, reduce corruption and reduce delays at border posts. The PBO pointed out that narrative reports on progress made evaluation difficult. The duplication of progress on targets, questions the relevance of some indicators.
 
Outcome 12: An efficient, effective and development–orientated public service
Achievement of targets sat at 39%. There was alignment between the NDP actions and the MTSF. Areas not presented in the MTSF included the need for enhancement in the role of the Public Service Commission to ensure that only competent and suitably experienced people were appointed to senior positions. There was also need for strengthening and resourcing the National Anti-Corruption Forum.

Outcome 13: An inclusive and responsive social protection system
Achievement of targets sat at 27%. There was alignment between the NDP actions and the MTSF. An area in the NDP not fully addressed in the MTSF was mechanisms and incentives to assist the unemployed to access the labour market. Areas that needed strengthening included community development interventions; the deepening of social assistance and expanding access to social security.

Outcome 14: Nation building and social cohesion alignment and progress
Achievement of targets sat at 42%. There was alignment between the NDP and the MTSF. A concern was that responsibility for the improvement of the enforcement of the Employment Equity Act was not represented by a member of the implementation forum. There were instances where progress reporting did not relate to the requirements of the indicator. The consolidation of some indicators could improve efficiency and results.

On the way forward, it noted that the DPME had indicated that departments had started a review process of indicators and targets reflected in the current 2014-2019 MTSF action plans. To ensure effective synergy between sectoral plans and performance budgets, the planning process would need to be fully integrated into the budget cycle. The PBO plans to do an alignment exercise of annual performance plans (APPs) with MTSF documents. This would allow the reconciliation of performance with expenditure. Another possibility is to suggest specific indicators that will assist Members to oversee the implementation of the NDP.

Discussion
Mr A Shaik Emam (NFP) asked how accurate was the assessment done by the PBO. By what percentage was the PBO inaccurate?

Ms Orlandi responded that the present effort by the PBO was its best ability to judge achievement against targets set. The PBO gave departments the benefit of the doubt.

Prof Jahed added that indicators were a true reflection. A report had been prepared for each indicator. The PBO provided reasons in instances where there was non-achievement. The Committee could take the PBO’s reasons for non-achievement by departments as a given. If departments disagreed then they could provide the Committee with their own reasons for non-achievement.

Dr C Madlopha (ANC) asked why the briefing spoke to information for 2014/15. Why was 2015/16 information not presented?

Ms Orlandi said that the PBO did not have information for 2015/16.

Mr Shaik Emam asked the PBO if it felt that the Committee should look at the National Development Plan and make changes to it where needed. It seemed as if effective monitoring of the NDP was not taking place. What measures should be put in place regarding the NDP? He asked what the challenges to the NDP were. Were resources, capacity, lack of oversight or a combination of these the problem with the NDP implementation?

On how to perform oversight on the NDP, Prof Jahed stated that one option was to have a special committee in Parliament. On who was responsible for oversight over the NDP he stated that there was an institutional organisation out there already. Those responsible needed to present their methodology to the Committee. The PBO had already presented its methodology to the Committee.

Ms Orlandi noted that one of the priorities was to capacitate the DPME. The DPME did present evaluations to Parliament; the problem was that there was not enough quality information. She stated that it was difficult to make judgement calls. She pointed out that evaluations should start with draft plans. There needed to be quality plans and after a period of 5-10 years then evaluations could be done. This was in her opinion a way to improve the process.

Mr M Figg (DA) commented that the Committee needed to evaluate the manner in which it operated. How was the Committee going to use the information that the PBO had presented to it. The information provided needed to be worked into the strategic plan of the Committee. He did not believe that the goals of the NDP needed to be relooked at. Efforts should rather be made to achieve the goals that had been set. There had after all been a purpose to set the NDP goals. He noted that achievements on some of the outcomes seemed to be on the low side. He hoped that efforts were going to be made to improve. On Outcome 2: A long and healthy life for all South Africans, he said that greater effort should be made to meet targets. Mistakes should not be repeated. On Outcome 5: A skilled and capable workforce to support an inclusive growth path, he noted that the National Student Financial Aid Scheme (NSFAS) should provide full funding to students who qualified for it. On skills, he felt that besides the focus on ICT skills, other skills should also be considered. An analysis should be done to determine what skills were needed in the economy and to direct students in that direction. On Outcome 9: Responsive, accountable, effective and efficient developmental local government system, he noted that many South Africans looked towards the public sector for jobs. Could SA’s budget afford to employ so many people? SA had been forced to dip into its contingency fund to cover its huge wage bill. On Outcome 11: Create a better South Africa, contribute to a better and safer Africa in a better world, the PBO had suggested that there should be a focus on trade penetration and diplomatic presence in fast growing markets like Asia, Brazil and Africa. He said that SA needed to be cautious in its efforts. SA for instance wished to increase duties on the importation of steel. Such actions could have consequences. He did however understand that SA wished to protect its local steel market. On social security, he felt that in most instances beneficiaries did not receive what was due to them. It was common for loan sharks to be in possession of beneficiaries’ social security cards. It was a problem that needed to be looked at.
 
Dr C Madlopha (ANC) was concerned that the information presented may not be as accurate and reliable given the challenges that had been identified during the presentation. She felt that the PBO did make an important point that there was no oversight done on the NDP. Was the Department of Performance, Monitoring and Evaluation (DPME) not supposed to do oversight over the NDP? She stressed that the objectives of the NDP needed to be realised. If no indicators were in place then how was achievement to be measured? She suggested that the Committee call upon the DPME to account to them on the NDP. Even if the DPME was not responsible to account for the NDP, it should nevertheless appear before the Committee to clarify the matter.

Prof Jahed said there was information fatigue as there was a great deal of information out there. The issue was about how to centralise information.

Ms S Shope-Sithole (ANC) thanked the PBO for the presentation which had been an eye opener. It was sad that no oversight was being done on the NDP. She agreed that the DPME should be tasked with oversight on the NDP and should appear before the Committee. The DPME needed to keep the Committee abreast of the NDP. The Committee needed up to date 2015/16 information. On the comment by Mr Figg on SA trying to protect its local steel industry, she pointed out that developed countries like the UK and the USA, had done exactly the same. It was common practice by developed countries to protect their local interests. She felt that the Committee needed to discuss these types of issues.

Prof Jahed agreed that oversight over the NDP was critical. The PBO and Members had been duped to think that when departments came to Committees they would account about the NDP. All that was received was piecemeal information.

Ms Orlandi noted that the work done by the PBO as reflected in the presentation was the start of the process. She said that when the PBO received new information then it would repeat the process. If the Committee informed departments that their achievements were low and that there were no quality indicators then it would be a wakeup call for them.

Dr Dumisani Jantjies, PBO Deputy Director: Finance, said that the quality of information was very important. He noted that the Auditor-General South Africa (AGSA) checked on the quality of information from departments.

The Acting Chairperson referred to slide 6 and said that Annual National Assessment results had always been poor. He could not recall a year when results had improved. Teachers often complained that the Annual National Assessment was a frustrating exercise. He asked whether the Annual National Assessment tool had been assessed. How could it be made easier for teachers to implement? On slide 12 referring to Outcome 5 and the establishment of a centralised application system for universities, he said that the announcement for the system had been made two years ago. Was the PBO suggesting that the system was not yet implemented or was not fully functional? On increasing the percentage of graduates with ICT skills, he asked whether universities were providing skills that were relevant to the economy. There was a huge challenge in SA of university graduates not being able to find work. He felt that the problem was that graduates were not being taught innovative skills and encouraged to pursue other employment opportunities. He agreed that an analysis of skills produced by universities needed to be done to take into consideration the needs of the economy as well as social needs. He felt that the PBO had made important observations on creating decent work through inclusive growth. He pointed out that many pronouncements had been made on targets. For example that the regulatory framework for the ease of doing business had to be revisited and that 30% of government procurement should be from SMMEs. In addition that 60% of jobs in infrastructure should be for youth. He asked whether there was any indication that there was progress with these targets. How could economic growth be facilitated either by regulation or legislation?
 
On skills, Dr Jantjies replied that government funded programmes which focussed on specific skills in which there was a shortage such as engineering. There was therefore a need to look at what programmes government had funded to date. Parliament could question whether the programmes funded contributed to the economy.

On whether the targets of the NDP should be revisited, Prof Jahed said that the targets had been set by experts. The problem was the manner in which indicators were defined. Other concerns were about the quality of information and whether the information was available. The NDP was up until 2030 and he was not sure how much had been achieved thus far. However from the PBO’s assessment it did not look as if much had been achieved. The fact was that delivery on the NDP was not taking place. If there was a need to relook at the objectives of the NDP, then it needed to be done.

Mr Shaik Emam said that announcements had been made that there would be no new appointments. What would be the effect of this? The NDP was up until 2030. At some point a decision should be made on what was most important in the NDP. He noted that perhaps there was a need to prioritise items in the NDP. He felt that whether the Committee liked it or not the NDP goals would not be met.

Mr Figg stated that the implementation of the NDP had taken place since 2013. It was much too early to change the goals of the NDP. The mindset should not be that the NDP goals would not be achieved. It was still far too early to revise the NDP. All efforts should be made to achieve the goals of the NDP.

Ms Shope-Sithole said that she agreed with Mr Figg that the NDP did not need revising. On the skills required in SA, the Committee needed to invite business, government and academia to speak on this. She said that government was doing a great deal on skills development. She personally felt that the culprit responsible for SA not having the right skills was universities. Universities were not aware of what skills the economy needed. Students at universities were being trained in skills that were not relevant to the needs of various industries.

The Acting Chairperson said that there were jobs in SA, it was only that students and job seekers did not have the skills that were needed. Skilled expats who returned to SA were able to find jobs.

Ms D Senokoanyane (ANC) felt that the achievement percentages on NDP outcomes were ridiculous. What seemed to be the problem? Departments after all had annual performance plans (APPs) to guide their work. From the presentation it seemed that departments had many challenges and shortcomings. She asked whether departments had reporting templates.

Ms Orlandi said that there were reporting templates for departments to report on. The issue was about various terminologies being used. Perhaps the Committee could recommend that everyone use the same terminologies in APPs, the Medium Term Strategic Framework and the Budget.

Prof Jahed said that perhaps it was the responsibility of the DPME to do oversight over the NDP. If the responsibility was the DPME’s then the Committee needed to ask them to address the Committee on the matter. The concern was how to define indicators. Everybody spoke different languages with one another. The problem was that the issues were over complicated. Even National Treasury complicated information. Even the PBO found it hard to understand things at times.  


Committee Minutes
Committee Minutes dated 11 and 15 March 2016 were adopted as amended. .

The meeting was adjourned.


 

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