Minister of Social Development; Minister of Small Business Development Executive Undertakings: progress report

Meeting report

The Acting Chairperson explained that they have invited the Department of Social Development (DSD) particularly the Executive to give progress reports on the executive undertakings the Minister made in the House. He acknowledged and accepted the apology from the Deputy Minister who had to attend another special engagement. He welcomed the Minister of Social Development who just arrived for the meeting.

Part of the mandate given to this Committee in Chapter 8 of the National Council of Provinces (NCOP) Rules provides for hearing matters of public importance affecting the provinces. Chapter 9 provides for systems, functions and powers of the NCOP Select Committees. He is flagging this rule so Members are aware that they are empowered by the NCOP Rules. Chapter 4 and 5 of the Constitution empowers the NCOP to do oversight of the Executive. The NCOP is a House of Parliament and without the NCOP, there is no Parliament in essence. They are representing the provinces and the interests that affect the provinces. Therefore, they have called this meeting to do oversight on the Executive.

The Chairperson said the Minister made a number of Executive Undertakings during her budget speech. Noting that the Committee is empowered to deal with the Executive Undertakings, the NCOP Chairperson referred these Executive Undertakings to this Committee saying that the Committee must do oversight on these Executive Undertakings made by the Minister in the House. The Committee has sent DSD and the Minister the matters requiring a progress report. On that note, he handed over to the Minister.

Minister of Social Development comments
Minister of Social Development, Bathabile Dlamini, noted that the Deputy Minister could not attend due to other commitments and as Minister and the Department, they thought it important that they come before the Committee so as not to be seen as disrespecting the Committee. There are three areas that are clearly stated in the Committee’s communication with them: early child development, food and nutrition as well as rollout programme on child and youth care services through the Isibindi model. Firstly, their responsibility on ECD is the first 1000 days of the child, which goes up to age 4. So, their responsibility is from 0 – 4. It is supposed to be from gestation but they have not yet started on that as research says they should look after the child from gestation so that a child will have good outcomes. They do not start from age 18 but start from there so that the child is well protected. At the age of 5, those children at ECD centres cannot have their attendance terminated but their obligation is 0 – 4 years.

The Minister said the Department of Health is looking after the fetus from gestation because they have to check that the hospital provides medication and gives HIV positive women antiretroviral drugs which are meant to be taken before giving birth.

The Executive has declared ECD as a public entity, which meant that it is no longer a private entity. Right now they are of formalising that role and it is not easy. But they could say that gradually they have been getting the grant to improve the state of ECD centres. One other area which is important is that there are few children attending ECD centres and they thought that DSD should have campaigns throughout the country because it is easier to monitor children if they go to ECD centres. But also it is a gain for the child as well as the nation because that is where they start with human resource development and build a strong foundation for the child. 

The Minister said they have done a lot of work on child and youth care workers. The child and youth workers are not able to describe the work they are doing, but they are like mothers and fathers of child protected households – households where there are challenges. The procedures they follow are waking up in the early morning and going to child headed households, preparing the children for school and taking them to school, and later picking them up and help them with homework. This is a lot of work for a sibling in a child headed home and a huge difference from those children that are looked after by the parents. But these children perform much better at school because of the help they get from the child and youth workers.

The Minister said they are also growing in the area of food and nutrition. They have signed agreements with cooperatives to buy products that are much cheaper rather than buying from private companies. 

Department of Social Development (DSD) briefing
Ms Conny Nxumalo, DSD Deputy Director-General: Welfare Services, spoke about the Early Childhood Development programme based on the Executive Undertakings made on 26 May 2015. She will zoom-in on the progress made since May 2015. That year an ECD policy was approved by Cabinet. All provinces were capacitated on the National Integrated ECD Policy - 1051 people from different departments and civil society attended. The Draft National Integrated Implementation Plan was compiled and consulted with partner departments since 8 December 2016. Process is underway to ensure the inclusion of outstanding inputs from some departments in the Integrated Implementation Plan. The Final Plan will be submitted to Cabinet for approval before the end of the 2017/18 financial year.

To enhance the implementation of the ECD policy, Treasury has allocated R812 million as a conditional grant (R319.828m for 2017/18 and 2018/19 R493.065m). This is to enable National DSD to better control and ring-fence expansion of ECD in the country in line with the approved Integrated ECD Policy. The allocation will be used to increase coverage of children accessing ECD services through the ECD subsidy to poor children as well as assist to improve the conditionally registered ECD centres to meet basic requirements in order to be fully registered.

The grant is divided into two: Subsidy component to cover 104 000 children by 2018/19 and ECD maintenance component to upgrade 4000 sites by 2018/19. Five national workshops were held with provinces to prepare for the implementation of the Conditional Grant. A comprehensive document was sent to the provinces on 25 May 2016 which included: Submission to HODs on the grant including timelines for implementation; criteria for assessment of ECDs; the assessment tool; and the database template.

Ms Nxumalo said the key conditions for the ECD conditional grant include: A. Subsidy Grant – The grant will assist registered centres that are not fully funded from the equitable share, fully registered centres that are not funded or conditionally registered partial care facilities not funded offering Early Childhood Development programmes. The subsidy is targeted for qualifying children from birth to 5 years or until they enter Grade R. The value of the subsidy is at a rate of R15 per child for a maximum period of 264 days to equalize and standardize number of days.

B. Maintenance Grant – Partial care facilities offering ECD programmes that are registered conditionally will be eligible for the maintenance grant. ECD centres must be conditionally registered. Minor building and maintenance improvements aimed at ensuring ECD centres comply with health and safety norms and standards, as identified by the National DSD will be funded. The maximum value to be spent per ECD centre for maintenance improvements is R100 000. Initially, it was R32 000 which was increased following assessments done by provinces. Prior approval for any amount exceeding R100 000 should be obtained from the HOD and CFO. The exceeding amount should not be more than 30% of R100 000. Provinces must conduct assessments of conditionally registered centres and cost them in order to qualify for maintenance grant funding in 2018/19. All maintenance projects must be recorded on the National Treasury Infrastructure Reporting Model (IRM). The categories for maintenance are Health and Safety; Minor Building improvement; Early Learning Material; and Equipment.

The responsibilities of National DSD are:
- Monitoring of implementation, progress and compliance to conditional grant framework;
- Provide the guidelines and criteria for the development and approval of Business Plans;
- To approve the Business Plan submitted by provinces;
- Monitor implementation through project site visits and provide support on a monthly and/or quarterly basis;
- Submitted the allocation criteria for MTEF provincial allocations to National Treasury;
- Comply with Division of Revenue Act (DoRA) conditions of the national transferring officer;
- Submit monthly financial reports to National Treasury 15 days after the end of the month;
- Consolidate and submit quarterly performance reports to National Treasury within 45 days each quarter;
- Monitor utilisation of the grant against set outcomes and take action in cases of non-compliance;
- Submit an annual evaluation report after the end of the 2017/18 financial year;

The responsibility of provinces include:
- Appointment and management of service providers;
- Develop Business Plan and submit after signed off by Head of Department to national DSD;
- Implement Business Plans as approved by national (which should be notified in writing about deviations before implementation can take place);
- Comply with terms and conditions of the receiving officer outlined in DoRA;
- Submit monthly financial reports to National Treasury 15 days after the end of the month;
- Submit quarterly performance reports to National DSD within 30 days after the end of each quarter;

Ms Nxumalo spoke about national progress to date (see document). In terms of the way forward for the conditional grant, National DSD will continue to meet with provinces and provide technical support such as the meeting planned for early July 2017.

Statistics on children benefitting from ECD services as at the end of 2015/16 are: Total number of registered ECD Centres 28 058. Total number of children subsidized:  940 909. Total number of children accessing ECD Services: 1 456 804. Figures for 2016/17 are still being consolidated.

A report on the feasibility study has been finalised. The feasibility study supported government coordination with political support and additional capacity regarding human and financial resources. The National Interdepartmental Committee for ECD is meeting bi-monthly to enhance coordination and integration.

On Comprehensive ECD Programmes/Services: The comprehensive programme has been aligned with the ECD Policy; five training sessions were done on the Parental/primary Caregiver Capacity Building Training package for six provinces in 2016/17 and May 2017, capacitating 147 master trainers for the rolling-out of the Parental Programme. Trained master trainers are expected to develop a roll-out plan to capacitate parent and primary caregivers in 2017/18.

The human resource plan for the ECD sector being developed - led by the Department of Basic Education - and consultations are taking place in provinces. ECD HRD will guide the process of registration of ECD Practitioners. The Department of Higher Education and Training (DHET) has developed a policy on minimum qualification requirements for practitioner/teacher education through a qualification framework to accommodate prior learning, experience, and progression in career advancement. This policy was approved and published in the Government Gazette on 31 March 2017.

The communication strategy was outlined. A draft national registration plan has been developed to call for all service providers to register their ECD centres and programmes. Provinces are driving awareness campaigns during national health and protection awareness campaigns.

Discussion
Ms B Engelbrecht (Gauteng, DA) thanked the Minister for appearing before the Committee. She asked the Minister for clarity with regard to the Executive Undertaking in May 2015 where the Minister clearly mentioned that Early Child Development (ECD) is from 0 – 5 years, but a few minutes ago the Minister said it is 0 – 4 years.

Ms Engelbrecht asked how many new ECD centres were registered since 2015 because in terms of the Minister’s Executive Undertaking she said they would increase the number of registered facilities.

Ms Engelbrecht asked where the 81 projects are located, when they will take place and when completed.

She asked for clarity about the 30% procurement the Minister spoke about in her Executive Undertaking.

She asked why in Gauteng they have only 15 ECD centres supported by DSD compared with other provinces, and why the financial support in Gauteng is lower than other provinces.

Mr M Monakedi (ANC, Limpopo) acknowledged the presence of the Minister. He asked whether there is a way to ensure that mothers of children were brought on board so that they are given basic training skills on how they can effectively raise their children

Mr Monakedi asked how many of the 81 projects have been developed so far because in the presentation they mentioned two projects that have been developed.

Mr Monakedi asked for clarity about the registered facilities that existed – whether they are still operational or they have opened new ones and the old ones have collapsed.

The Chairperson said they acknowledged the Minister has already made a written progress report on some of the issues. However, the Minister was called to come and report to the Committee so that the Committee could report back to the House. The Minister has given statistics. Members have asked some questions based on those statistics.

The Minister said it must be repeated that the first 1000 days is from 0 – 2 years. They also take responsibility from 3 – 4 years. But children that are 5 years they do not send away because they have to build and ensure that those children become stronger and stronger.

The Minister said there are programmes for mothers and fathers because children come from both parents. They have trained their officials on parenting though it is not easy. They look at the age cohorts that are having children right now. There are also youths between the ages of 13 and 15 who are mothers but at the same time they are children, and the child becomes the responsibility of a grandparent. And this is where they have more challenges because young children give birth to babies who become grandchildren of their mothers.

The Minister replied about the 81 projects that it is not their responsibility to build ECD centres. But because they have seen slow progress on this, government had to come in and try to bring back the grant from elsewhere such as the Department of Sport. Perhaps the NCOP could ensure that money that is meant for the construction of ECD centres is used correctly because at the present moment it is misused. They have covered most of the ECD centres through partnerships with entities such as National Development Agency (NDA), and also partnered with business to build ECD centres or renovate centres, and capacitate ECD practitioners. There is one ECD centre they have launched this year in the Eastern Cape for farm workers who were forcefully removed from where they stayed. Women and children were scattered around but one farmer assisted in building an ECD centre. They have formed a partnership and built an ECD centre. But what is important is that one of the women in that centre is a graduate from that farming area.

The Minister said they have not “thrown away” ECD centres, but there were those that have partially registered because they did not meet all the requirements. There are areas that DSD has said they will not compromise on such as an area where children do their projects. They have not closed any facilities instead they are going to try and focus on the partially registered ECD centres when disbursing the grant. For now they are pushing to R15 per child per day. And they are also pushing to full days for school in ECD centres. Another important issue is that when they started, provinces were funded differently in rural areas but they have tried to equalize funding this time around. Cabinet has improved its investment in children in provinces such as KwaZulu-Natal, giving R17 per child per day.

Ms Nxumalo replied about Gauteng’s 15 ECD centres, saying they have worked with provinces to come up with the conditional grant framework, which informed how the business plan should be packaged. Each province is allocated based on the information it submitted after it has done its own assessment looking at the amount available. Gauteng received R38.4m. Gauteng opted to do 15 with this grant. However, Gauteng also continually does work with its own equitable share, but for the purposes of the grant it is only 15.

Ms Nxumalo replied that the number of ECD centres registered since 2015 will be submitted immediately they finish the meeting as she needs to access her laptop which is currently being used for the presentation.

The Chairperson agreed and asked Members to take note of the statistics, numbers and allocations given to them.

Ms Engelbrecht appreciated the information given by the Minister, but one should be careful of the phenomenon of Ministers coming to the House and making promises. These promises were made in 2015 but for not a single one of these Executive Undertakings have they been given direct answers, and she would like direct answers from the Minister about her questions.

Ms T Mokwele (EFF) said the Minister noted that establishing ECD centres is not their responsibility. She asked how then DSD would develop an African child if it were not its mandate to establish ECD centres.

Ms Mokwele asked for clarity about the capacity building of ECD practitioners who received certificates of attendance that are not accredited. Do those people go to that training of their own accord or is DSD paying for such training? If DSD is paying, how come it contributes to something that is not benefiting the ECD practitioners as such?

Mr Monakedi requested the Minister be direct and short when answering questions because most of the questions are straightforward and direct questions.

The Minister said she was sorry for starting in Gauteng before they arrived at Limpopo. And also she requested that Members should be patient. On the 0 – 4 years, they as a department maintained that it is 0 – 4 years.

Ms Mokwele interjected that the Minister cannot tell them to be patient, but rather tell them when they will increase the number from 4 – 5 years.

The Minister complained that Ms Mokwele must not use a gesture like that.

Ms Mokwele apologized to the Minister.

The Minister continued that in terms of capacity building, the Department of Basic Education (DBE) is responsible for training ECD practitioners. This matter was raised and a decision was taken that this must shift to the Department of Higher Education and Training. They have agreed that they will start with community colleges for women that are already in the system.

Secondly, now that government has decided that ECD should become a public good they had to go through all the certificates and requested the South African Qualifications Authority (SAQA) to confirm those certificates, and close to half were endorsed and another half have not yet been endorsed. They have requested DBE to investigate what the problem is. But they had a conference with ECD practitioners and they raised the challenge of service providers. Service providers do it for profit and not for improving the education standards of ECD practitioners. Therefore, DSD accepts this issue of certificates of attendance and they will make a follow up with the colleges and ask why they are issuing certificates of attendance because even programmes done by the NDA get proper certificates. DSD will have to check throughout the country the kind of certificates that are issued by colleges because internationally ECD practitioners are highly qualified people.

The Minister replied about the extension of ECD and noted that when they started, the amounts of funding were different. But currently it is R15 per child per day. From that R15, R5 goes to development. Another R5 goes to administration. And the last R5 goes to things to be done like renovations.

The Minister said ECD centres are indeed buying from cooperatives. But what they will have control of is the R100 000 approval upgrade of the ECDs being upgraded throughout this process or through the R812m grant they have received from the Department of Basic Education. They have stipulated that 30% of the work is done by small business and cooperatives. They have experience of this but that does not mean they will not work with small business and cooperatives. They should be hands on and give proper guidance because with SASSA they work with small business and pay money and they have difficulty with some of their people. Therefore, they will look at any company that has some experience that will do social investment.

The Minister said indeed the building of ECD facilities is the responsibility of Local Government and it is very clear. Whatever is done now is done because they have been working hard with other partners including LOTTO. The work that is done by LOTTO is through DSD intervention. The work done by NDA in adopting an ECD is through DSD efforts because they thought it is important for them to escalate the work of ECDs, This is why they have already started with mobile ECDs to ensure that in far flung areas children have access to early child development.

The Minister said that Ms Nxumalo has already indicated that they will submit figures for ECDs. The reason they ended up agreeing to partial registration of ECDs is because they have found that it is their people that are not meeting the ECD requirements. They have even assisted them to reach that partial registration because if they had increased the status of requirements, they would not be where they are today. However, they have done an audit of ECDs and there are other things they thought they should introduce but she will not talk about that for now.

The Chairperson thanked the Minister for her responses. He informed Members that there is a second DSD presentation which could not be presented because of time constraints. The presentation covers the question on the 81 projects, which is not yet answered. 

Ms Mokwele suggested that the presentation should be forwarded to the Committee. She thanked the Minister for her responses and the commitment she has made to the Committee. Her only concern is that the different departments are working in silos and they should try to resolve that issue in their Cabinet sittings.

Mr Monakedi thanked the Minister for her responses but in future the Minister should focus on those Executive Undertakings.

Ms Engelbrecht thanked the Minister for her commitment to the Executive Undertakings. She requested that the presentation be forwarded before the end of the week.

Minister Dlamini thanked the Chairperson and Members for a good engagement.

Minister of Small Business Development comments
Ms Lindiwe Zulu, Minister of Small Business Development, said that it is a pleasure for her department to present to the Committee because they take the work of the NCOP very seriously and take seriously Members who represent their constituencies. This is their first meeting with the Select Committee in the three years they are in office. It seems like a very long time but it is not a long time when they try to build afresh an entire institution. And in that three years in office they are very satisfied with the days they have created as a department because they believe what is important is that there is no way they could operate properly if they do not have a solid base. And from that solid base they are now completely independent from the Department of Trade and Industry (DTI). As many of the Members are aware, it used to be just a small unit in the DTI and now it has formed into a fully-fledged Department of Small and Medium Enterprises.

Minister Zulu said they are there to speak on the specific areas the Committee requested them to deal with. It should be pointed out that all the areas are critical areas for small and medium enterprises, for instance, the 30 day payment rule to ensure that small and medium enterprises are not impaired. One is aware that in the main the small and medium enterprises which suffer especially are those of black owned, women owned and youth owned because these are the enterprises that have just entered into the economy of the country. She would not even calculate the 23 years but rather the 10 years that there has been some attention to small and medium enterprises, and therefore, their development is really still having a long way to go.

The Minister said the other important issue is the Implementation of the Informal Business Upliftment Strategy. They take this strategy very seriously because they are aware that at the lowest level of entry of small and medium enterprises and cooperatives are men and women who are selling something on the streets to ensure that their families survive. They know that their coming in and exiting is usually not something they could say it will remain because some of them enter and make a little bit of money and then they exit which becomes a problem for DSBD since it is expected to give some attention to such challenges.

Minister Zulu noted that the figures in the presentation are a far cry from what is supposed to be happening in terms of supporting informal businesses.

In terms of working with the metros and there being no coordination within the three spheres of government, this is one of their targets as DSBD they want to change because they see a lot of wastage of resources. Therefore, they are working together with provincial structures because they believe they could not just zoom-in in the local structure leaving the provincial structure. They are trying their level best through the Provincial Premiers and the MECs of Economic Development to have a very strong coordinated approach to packaging the support they need to give to small and medium enterprises.

The Minister spoke about the development of an incentives programme to support enterprises that are owned by people with disabilities. This is one of the biggest challenges they have. What is of major importance for them here is not just identifying people with disabilities who are in small and medium enterprises; it is about fighting for their space at local, provincial and national levels, even with their institutions, the Small Enterprise Development Agency (SEDA) and Small Enterprise Finance Agency (SEFA). This includes basic things such as transport and accessibility. It is about broadening that and looking at them from the point of when they come and look for resources where they as a department will close their eyes and ears from the rest of other challenges faced by the department because they want to have a holistic approach, which meant that they must work very closely with the rest of the departments and with the three spheres of government. But also work with other interested parties because for them this is a national issue, which needs to be dealt with collectively by all.

Department of Small Business Development (DSBD) briefing
Mr Lindokuhle Mkhumane, Acting Deputy Director-General: DSBD, gave a progress report about the May 2015 undertakings by the Minister to deal with the 30-day payment delay; expedite the implementation of National Informal Business Upliftment Strategy (NIBUS); work with metros, municipalities, SALGA and the National House of Traditional Leaders to review by-laws that may be a hindrance to the advancement of township and rural economies; and the development of incentives and programmes to support enterprises owned by people with disabilities.

• On the 30 payment delay, DSBD, the Department of Planning, Monitoring and Evaluation (DPME), National Treasury and the Department of Public Service and Administration (DPSA) established a committee that visited "the worst offenders" in the national and provincial departments. They have identified challenges which include ineffective information technology systems, outdated business processes, unfunded mandates, legal judgments that forced departments to prioritise settlements of these legal cases over service delivery, and a comprehensive report is being developed. The SMME Payment Hotline operated by SEDA and monitored by DPME has managed to resolve invoices to the value of R523m since 2009. Between 1 April 2016 and February 2017, 1199 calls were reported, 1112 were resolved, leaving 87 pending.

• On NIBUS, in terms of non-financial support, for 2015/16 in partnership with the Wholesale and Retail SETA they have facilitated the training of 1035 informal businesses. Support is ongoing through the provision of tools of trade. In 2016/17 DSBD increased the targeted number of informal business trained to 7000 - the ultimate verified number is 8036. In 2017/18 DSBD will provide support to 1696 informal businesses. The Shared Economic Infrastructure Facility (SEIF) which leverages private and public funds to create an enabling environment, will ensure provision of warehousing/storage facilities, shelters/stalls. cold storage, exhibition spaces, child care facilities for traders, and business infrastructure.

On NIBUS financial support, DSBD, through its entity the Small Enterprise Finance Agency (SEFA) has provided support to informal businesses. During 2016/17 SEFA disbursed R189.260m to enterprises in the informal sector. SEFA has also set aside R25m for micro loans targeting informal businesses

• On working with metros, municipalities, SALGA and the National House of Traditional Leaders, Mr Mkhumane said the Red Tape Reduction programme is aimed at addressing administrative, compliance and regulatory processes. In 2017/18, eight municipalities will be identified with stakeholders to assess the implementation of the guidelines.

• On incentives and programmes to support enterprises owned by persons with disabilities, SEFA launched the Amavulandlela Scheme for Entrepreneurs with Disabilities in December 2016. Benefits include credit facilities ranging from R50 000 to R5 million at a fixed rate of 7% per annum. Repayment terms are up to 60 months - the actual duration of the loan duration is subject to the cash flow of the business. During 2016/17 SEFA disbursed R4.22m to 31 disabled entrepreneurs operating in the informal sector.

The Chairperson thanked the Minister and her department for the presentation. Due to time constraints the Committee would not be able to engage with the presentation. Questions by Members will be directed to DBSD and responses in writing will be forwarded to the Chairperson’s office.

Mr J Mthethwa (ANC, KwaZulu-Natal) thanked the Minister and DSBD on behalf of the Committee.

The meeting was adjourned.