Department of Human Settlements on its 4 Quarter 15/16 & 1 Quarter 16/17 performance

Meeting report

Department of Human Settlements: Fourth Quarter Report (January-March 2016)
Mr Neville Chainee, Acting Chief Operations Officer: Department of Human Settlements (DHS), took the Committee through the presentation, focussing on the review and development of policies and programmes involving the consolidation of Development Finance Institutions (DFIs), delivery of housing opportunities, administration, implementation of sector capacity-building initiatives, overall departmental expenditure and recommendations.

He said that a beneficiary allocations policy had been developed for consultation; the pre-emptive clause on beneficiary ownership was under revision for consultation; the Community Residential Unit (CRU) policy had been revised for consultation; a revision of the house code had commenced; a policy for a coherent and inclusive approach to land for human settlement had been developed; and the social housing programme and Integrated Residential Development Programme (IRDP) was, at the time of reporting, subject to an evaluation.

A tax proposal for exempting the single DFI from income tax had been tabled and supported by the Minister of Finance and the process of drafting the enabling legislation for the single DFI had commenced. A total of 63 catalytic projects, in terms of delivery of housing opportunities, were being evaluated for technical and project execution. 12 553 Peoples’ Housing Process (PHP) units in five provinces had been delivered.

With regard to mining towns revitalisation, 36 informal settlements in North West, Free State, Gauteng and Limpopo had received full upgrading, 96 informal settlements in North West, Limpopo, Mpumalanga, Gauteng and Northern Cape had received interim services, and 89 informal settlements in North West, Free State, Limpopo, Mpumalanga, Gauteng and Northern Cape had received emergency basic services following relocation.

In terms of sector capacity-building initiatives, 1 800 youth had been trained through the Youth Brigade Programme in artisan skills and real estate. Critical skills, including engineering and town planning had been provided to youths, who were being retained in various provinces and municipalities. Women contactors had also been trained. Students in built environment studies had been funded. 50 students were based at the Mongosuthu University of Technology, while a further 71 students were at different universities.

Ms Funani Matlatsi, Chief Financial Officer: DHS, referring to departmental expenditure, said that R30.5 billion had been allocated to the DHS, and 98% of the budget had been spent. She provided an overview of provincial financial performance for the period ending 31 March 2016.

Mr Chainee said that the overall performance of the Department stood at 80% of targets achieved. 18% had been partially achieved, while two per cent had not been achieved.


Department of Human Settlements: First Quarter Report (April-June 2016)
Mr Chainee said that a significant number of stakeholders had been consulted on the draft discussion document, and that a round-table discussion on finance and human settlements had also been held to enhance process and content quality. A consultation with the Department of Rural Development and Land Reform (DRDLR) on the Prevention of Illegal Eviction from an Unlawful Occupation of Land Amendment Bill, had been held. The required social economic impact assessment analysis had been conducted on the Property Practitioner’s Bill. Inputs had been received into the adjudication of disputes in the Housing Consumer Protection Bill, which had been submitted to the Office of the Chief State Law Advisor for preliminary legal advice.

Mr Chainee noted that the required amendments to tax legislation had been made to enable the conclusion of the buy-sell agreements to effect the consolidation of Rural Housing Loan Fund (RHLF)  and National Urban Reconstruction Housing Agency (NURCHA) into  the National Housing Finance Corporation (NHFC).
With regard to housing opportunities, 52 out of 75 feasibilities had been conducted in various municipalities, including the Breede Valley, Amathole, Knysna, Mbombela and Alfred Nzo; 26 out of 100 informal settlements upgrading plans had been developed; and 9 279 households had been upgraded and 16 906 subsidy housing opportunities provided.

A total of 1 750 youths had received training on artisan development in various provinces, and the DHS had facilitated the provision of specialised professional skills, including the intake of 900 real estate learnerships through the Estate Agency Affairs Board (EAAB), and the funding of more than 70 students through the departmental scholarship programme. The minimum 30% allocation quota of housing projects to women had been implemented within the existing government’s procurement policy framework.
Mr Chainee said that the overall Departmental performance had been 48%. Most of targets that had been achieved related to Medium Term Strategic Framework (MTSF) delivery targets that were accumulative. Delivery targets that had not been achieved included the title deeds restoration programme, the informal settlements upgrading programme, affordable rentals, and the anti-fraud and corruption strategy. At the time of briefing the Committee, the audit plan had not been approved.
With regard to Departmental expenditure, Ms Matlatsi reported that a R30.6 billion budget had been allocated to the DHS, and 17% had been spent. Operational expenditure by programme –administration, human settlements policy, strategy and planning, programme delivery support and housing development finance -- was highlighted. 28% of the R18.3m allocated to the human development grant had been spent, but none of the funds allocated to the urban settlements development grant had been spent.

Mr Chainee concluded by recommending that the Committee should note the presentation on preliminary performance information and related expenditure.

Discussion
The Chairperson remarked that there was a need to agree that the provincial departments should attend so that the Committee could have understanding of the challenges the Department was facing.

Mr K Sithole (IFP) sought clarity on the Director-General’s comments made in the previous meeting, in which he had stated that R300 million would be allocated to Ekurhuleni. With regard to the title deeds issued to new owners, he sought clarity on how many houses had been delivered.  A more detailed report on the revitalisation of mining towns per province was needed. Clarity was sought on the expenditure of the municipal human settlements capacity grant.

Mr H Chauke(ANC) expressed his concern over general service delivery – in particular, the revitalisation of mining towns. The picture provided by the DHS was different to the one provided by Amnesty International. He recalled that the mining companies had made a commitment to provide houses to mine workers, and sought clarity on whether these companies were honouring their pledges.

Mr S Gana (DA) agreed with the Chairperson that the provinces ought to come and report to the Committee on their financial performance, especially Gauteng. Where had the budget allocated to it to upgrade informal settlements gone? Why had it not spent the money allocated to it? Gauteng was a province which received a huge budget, and was the first province to perform poorly. On the consolidation of DFIs, he sought clarity on the establishment of the Human Settlements Development Bank (HSDB), as he could not recall any briefing in which the possibility of establishing such a bank had been discussed. What was the progress in establishing a central housing data? What progress had been made in the Nelson Mandela Bay interventions? Why were houses still occupied illegally in Marikana?

Mr H Mmemezi (ANC) was happy that the DHS was empowering the youth through providing them with critical skills. His concerns were the DHS’s failure to meet its targets. The DHS should not invest its time in justifying failures, but should rather show the Committee how it intended to mitigate its poor performance. Since 2010, the DHS had failed to meet the target to restore title deeds, and people were dying without receiving them. The Director-General should be blamed for the poor performance, because he was failing in his duty to manage those employees who were failing to deliver. He agreed with Mr Gana that Gauteng should be invited to come and brief the Committee on provincial expenditure. Budgets were allocated to provinces, but nothing was done about delivery. 

Ms T Gqada (DA) sought clarity on issues related to the provision of scholarships at different universities, catalytic projects, municipal human settlements capacity grants, and rectification reports. There was supposed to have been an announcement of the Minister on the catalytic project, and but this had been postponed and it appeared that the postponement was indefinite. The person in charge of the catalytic project ought to come and report on the status of the project. She was interested in knowing why the boards of the RHLF, NHFC and NURCHA were proposed for consolidation. A report on the upgrading of informal human settlements was required.

Ms V Bam-Mugwanya (ANC) was concerned about the revitalisation of mining towns, and remarked that it was painful to see poverty in these areas. It was apparent that the people who worked in the mining sector were neglected. It was of concern to her that youths who completed their studies in the built environment were also hunting jobs down like any other graduates. They were struggling to find jobs because it was difficult to enter into the labour market. These youths were supposed to graduate and thus be retained in the industry as an employees.

Ms M Mokause (EFF) asked about the challenges the DHS was facing with respect to mining towns and title deeds. What was the role of the DHS to ensure that the youth and woman to whom skills had been provided, were employed? What was the government’s role in ensuring that the Marikana housing project was resolved?

Ms LA Munganga-Gcabashe was unhappy with the fact that 98% of the allocation had been spent, but at least 90% of the targets had not been achieved. The DHS could cry foul, because it had performed poorly in terms of Departmental financial performance. She supported the proposal that provinces should be invited to come and brief the Committee on their performance. Essential provinces to be invited were Limpopo, Gauteng and Northern Cape. After the provinces, metros should also be invited, especially those who were not performing well. She sought clarity on why provinces were not setting out their targets.

Department’s Response
Mr Mbulelo Tshangana, Director General: DHS, responded on the question of the R300 million allocation to Ekurhuleni, saying the Department had been faced with two options. The first was to move the funds to Johannesburg, and the second had been to keep the funds in Ekurhuleni. It had been agreed that the funds be transferred, to be used on a number of projects. On the financial performance report, it was reflected as unspent. The funds were committed, however, and the Treasury was expected to approve such commitment.

The DHS could present to the Committee its strategies to achieve its projects. Plans per province could be presented on how each province intended to deal with housing problems. These plans had been devised in order to meet the 2019 targets. The DHS was ready to account, but not to give excuses on why it was performing poorly. Members could not believe that the Northern Cape was a province that was performing well. It was followed by Western Cape. Some provinces had managed to turn the situation around, but the picture was not yet looking good.

On the question about Marikana, Mr Tshangana responded that a total of 250 of the PHP units had been delivered. As a starting point, the government should not be delivering houses to the mining workers, as it was the responsibility of the mining companies, not government. The delivery of houses fell within companies’ social labour plans. Realising that there was a housing problem in Marikana, the DHS had partnered with the Lonmin company in an effort to solve the problem. The housing conditions were not good, but mining workers were receiving housing allowances to find a place to stay. Mineworkers were ending up building shacks for housing. The government had therefore come up with a plan to upgraded these informal settlements. The government had to conduct an assessment before upgrading them. A plan to upgrade an informal settlement had to be approved by a municipal council for it to become a project.

On the question of the FDI consolidation, the FDI was not a bank in the sense of receiving deposits. It was not a bank in traditional sense of word. It focussed on infrastructure investment and long-term objectives. It was a development bank.


On the question of the intervention in Nelson Mandela Bay, Mr Tshangana said he was planning to go there and meet with the team. There were two major projects – the Joe Slovo and Chetty projects -- which the DHS was concerned with. The human settlements problem in Nelson Mandela Bay was huge.

On governmental employees, he reported that the governmental employee schemes had been discussed with the workers unions. There were still major issues unresolved, including who would manage the scheme. He said that most of these employees took advantage of the Finance Linked Individual Subsidy Programme (FLISP), especially those who were earning between R3501 and R15 000. It was a part of an employee’s benefits package.

On the filling critical positions, a budget adjustment had been discussed and positions would be filled on contractual basis, but there was not enough money to fill all positions. Critical positions could not be filled permanently, because there was insufficient budget.

On the human resource development, Mr Tshangana said this was a statutory requirement which could be utilised to develop the human resources needed by the DHS. The programme could help the DHS, even if it did not have the funds to hire employees.

Mr Chauke proposed that the DHS should respond to questions in writing.

Mr Chainee responded that the catalytic projects were managed by the DHS. There was a process where these projects, which consisted of private and state projects, were advertised. There was analysis to determine whether they were meeting all the requirements, from a contractual, financial and technical point of view. The analysis ought to demonstrate that there was consistency. The problem was that some issues could be encountered in the implementation, when there was a disconnect between what was planned, what could be implemented and what was delivered. The catalytic project would be implemented as a national flagship.

On the question of title deeds, Mr Chainee responded that some of the problems were technical, and the others were related to corruption.

Adoption of minutes
The minutes of 5 May 2016 were considered and adopted with minor changes.

The meeting was adjourned.