EPWP Phase III job creation: Public Works briefing, with Deputy Minister

Public Works

05 March 2019
Chairperson: Mr H Mmemezi (ANC)
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Meeting Summary

The Department of Public Works briefed the Committee on the EPWP Phase III performance report and targets and expansion areas for EPWP Phase IV.
 
The EPWP performance to date was standing at 73.2% against the five-year work opportunities targets. There has been an increase of 0.4% as at the end of Quarter 3 of 2018/19 financial year. The EPWP had an overall shortfall of 1 610 484 work opportunities to achieve the five-year target. The programme has reported 4 389 516 cumulative work opportunities to date since the inception of Phase 3. This was equivalent to 73.2% of the 6 million work opportunities target. The least performing sectors were the Infrastructure Sector and the Non-State Sector’s Community Work Programme which have achieved 57.7% and 62.7% respectively.
 
Regarding the EPWP performance in terms of work opportunities for the 2018/19 financial year, the Department reported that by the end of the 3rd quarter of the 2018/19 financial year, 845162 work opportunities have been reported against a target of 1 455 840 which is 58% of the target. On the EPWP Reporting System in February 2019, the number of work opportunities reported was 864514 which translated to 59% of the annual target. The least performing sector was the EPWP Infrastructure Sector, mainly due to poor reporting by municipalities.
 
Key findings of the EPWP Phase III review indicated it was not feasible to provide training to all the big numbers of EPWP participants due to limited funding. It was suggested partnerships with the private sector should be strengthened for investments, placements, and training. It was also found that compliance with the EPWP principles has improved on EPWP reported projects. The review further revealed the targets were unrealistic and that many public bodies did not have the capacity to implement and report EPWP projects, and it was suggested the targets should be linked to MTEF allocations made to public bodies.
 
The Committee was also informed the cabinet has approved the Phase IV proposal for implementation from 1 April 2019 to 31 March 2024. Lessons were taken from the Phase III review for the development of Phase IV proposal. The Department and its implementing agents were ready for the roll-out and implementation. The Cabinet Committee for the Economic Sectors, Employment and Infrastructure Development Cluster (ESEID) recommended there should be an expansion of the scope of the EPWP; stronger pursuance of private sector engagements; vigorous assessments of EPWP Phase III to consider lessons learnt and prepare future planning; and utilisation of TVET and Community Colleges for artisan development among the youth to advance maintenance work.
 
The EPWP Phase IV would target the reporting of at least 5 million work opportunities across the different sectors of the EPWP. Its scope of work would be expanded through existing programmes such as Safety Programmes, Early Childhood Development, Chefs programme, Youth Participation Programmes, Tourism Safety Programmes; and consolidation of Public Employment Programmes (PEP) to include non-participating departments and new programmes to ensure the mainstreaming of EPWP.
 
Members wanted to understand how poor reporting was determined because it appeared that poor performance of the programme was around reporting; wanted to establish if there was a plan for the 4th industrial revolution because it was seen to be eroding the labour intensive approach; asked if the national minimum wage has been implemented in the new phase (Phase IV) or if it was going to be implemented; wanted to find out why the department was dropping the targets; wanted to understand how the expansion of EPWP was going to be done to other spheres of government; and suggested there should be a quota system for Phase IV because it was important for people to graduate so that they were not EPWP material forever. 
 

Meeting report

Briefing by Department of Public Works
Mr Ignatius Ario, Chief Director: EPWP, DPW, briefed the Committee on the EPWP Phase III performance report and targets and expansion areas for EPWP Phase IV. Lessons have been taken from Phase III to plan for Phase IV and the Department was looking at broader value add, transformation and youth development.
 
In his report for performance against five-year work opportunities targets, he said performance to date was standing at 73.2%. There has been an increase of 0.4% as at the end of Quarter 3 2018/19 financial year. The annual performance against target has been recorded at 59.4%. A 1% increase has been reported since the end of Quarter 3. The EPWP programme has reported 4 389 516 cumulative work opportunities to date since the inception of Phase 3. This was equivalent to 73.2% of the 6 million work opportunities target. Overall, the EPWP has a shortfall of 1 610 484 work opportunities to achieve the five-year target. The least performing sectors were the Infrastructure Sector and the Non-State Sector’s Community Work Programme which have achieved 57.7% and 62.7% respectively.
 
The work opportunities were achieved through the implementation of 69 891 projects across all provinces. Of the work opportunities created, 2 million were created for the youth, 2.9 million for women, and 55 346 for people with disabilities. A total of R36 billion has been transferred to participants as wages for those in poor communities. This transferred income not only reduced poverty but was also a form of economic stimulus, targeted directly at the poor. The increased focus on Community Works Programmes was also allowing this stimulus to address spatial inequality, target the poorest areas, and strengthen productive activities in marginalised local economies. The assets and services provided include 40 000 km of routine road maintenance carried out and 17 644 km of water reticulation installed. These assets have got transformative impacts on development through various sectors.
 
Mr Ario reported that by the end of the 3rd quarter of the 2018/19 financial year, 845162 work opportunities have been reported against a target of 1.455.840, which is 58% of the target. On the EPWP Reporting System in February 2019, the number of work opportunities reported was 864 514, which translates to 59% of the annual target. There is, currently, a big push with public bodies to ensure there is optimal reporting for the 2018/19 financial year. In terms of Full Time Equivalents (those working full year), 250 481 Full Time Equivalents were reported against a target of 591 846 for the financial year. During February 2019, on the EPWP Reporting System, 265 017 Full Time Equivalents have been reported against a target of 591 8446, which translates to 45% of the target. The least performing sector was the EPWP Infrastructure Sector, mainly due to poor reporting by municipalities.
 
Provincial Departments have achieved 82% of their work opportunity target for the 2018/19 financial year. The Eastern Cape has already achieved its work opportunity targets. In terms of municipalities, 40% of the work opportunity targets have been achieved by the end of the 3rd quarter of the 2018/19 financial year. Generally, municipalities were performing worse than provincial departments. The Eastern Cape, KwaZulu-Natal and Western Cape were on track to meet their annual targets considering the 3rd quarter reporting for the 2018/19 financial year. The least performing province in the 2018/19 financial year after the 3rd quarter was Gauteng. This was mainly due to the poor performance of metropolitan municipalities in Gauteng.
 
On the integrated grant to provinces, of the 95% allocation transferred to eligible departments, 67% was expended. The Free State had the highest expenditure of 85% while the Eastern Cape had the lowest expenditure of 34%. About the integrated grant to municipalities, 96% was allocated to eligible departments. Expenditure was standing at 68%. KwaZulu-Natal had the highest expenditure at 78% while Limpopo had the lowest expenditure at 50%.  99% of the Social Sector grant has been transferred to eligible departments. Expenditure stood at 71%. The Free State had the highest expenditure at 78% while Limpopo had the lowest expenditure of 50%.
 
Mr Ario reported that stated targets were unrealistic and that many public bodies did not have the capacity to implement and report on EPWP projects. It was proposed that the targets should be linked to MTEF allocations made to public bodies and be adjusted where budgets are reduced. Also, there was insufficient technical and managerial capacity for EPWP implementation among many implementing public bodies’ officials. While the PEP-IMC has raised the profile of the EPWP, it was found that this structure could have an even more impactful role on the EPWP. Even though EPWP is a public sector programme, the review recommended that EPWP should identify opportunities for increased involvement or partnerships with the private sector. Further, it indicated there was limited commitment for using own funding for implementation of the programme due to lack of legislation. There was a need for the programme to look outside the fiscus for additional funding and develop a policy to enforce implementation.
 
He said the review of EPWP Phase III has given birth to the development of an EPWP Phase IV proposal which is aimed at providing work opportunities and income support to poor and unemployed people through the delivery of public and community assets and services in order to contribute to development. This proposal has been consulted with the following departments: National Treasury, Environmental Affairs, Social Development, Transport, Tourism, Cooperative Governance, Human Settlements, Health, Agriculture, Forestry and Fisheries, Arts and Culture, Minerals, Energy, Basic Education, Higher Education, Labour, Presidency as well as all provincial departments of Public Works and other relevant provincial departments, all metropolitan municipalities, and a large number of district and local municipalities.
 
Cabinet has approved the Phase IV proposal for implementation from 1 April 2019 to 31 March 2024. The Department and its implementing agents were ready for the roll-out and implementation. The Cabinet Committee for the Economic Sectors, Employment and Infrastructure Development Cluster (ESEID) recommended that there should be an expansion of the scope of the EPWP; stronger pursuance of private sector engagements; vigorous assessments of EPWP Phase III to consider lessons learnt and prepare future planning; and utilisation of TVET and Community Colleges for artisan development among the youth to advance maintenance work.
 
The EPWP Phase IV was focusing on strengthening the monitoring of the core EPWP principles to improve compliance to the EPWP guidelines; expansion of the programme through replication and improvement in programmes across all sectors; improving the EPWP coordination and institutional arrangements including the PEP-IMC; strengthening impact evaluation of the EPWP and ensure greater transparency and accountability through the introduction of Social Audits; and strengthening partnerships with the private sector and TVET Colleges.
 
The EPWP Phase IV would target the reporting of at least 5 million work opportunities across the different sectors of the EPWP. The EPWP Infrastructure Sector was expected to contribute the highest number of work opportunities followed by the Community Work Programme component of the Non-State Sector.
 
The scope of work for the EPWP Phase IV would be expanded through existing programmes such as Safety Programmes, Early Childhood Development, Chefs programme, Youth Participation Programmes, Tourism Safety Programmes; and consolidation of Public Employment Programmes (PEP) to include non-participating departments and new programmes to ensure the mainstreaming of EPWP.
 
Pertaining to training and enterprise development, training interventions would be aimed at providing participants with skills required for EPWP projects and enterprise development. Enterprise development partnerships would be expanded through sectors and provinces, with the DPW providing the strategy for enterprise development. Sourcing of external funding would be dedicated to expand sustainable programmes like Learnership Programmes and Artisan Development Programmes. Public and private partnerships with TVETs, SETAs, community colleges and companies would be identified for placement and further training opportunities.
 
Finally, on improving EPWP coordination and institutional arrangements, he stated the Department would continue carrying out its overall coordinating role and report on progress through the relevant clusters and the Inter-Ministerial Committee on Anti-Poverty. Existing partnerships would be strengthened and new partnerships should be created to leverage resources and implement projects. Furthermore, as a means of ensuring accountability by public bodies, it was proposed that senior officials responsible for coordination and implementation of EPWP projects must have EPWP performance targets included in their performance agreements. The EPWP Co-ordination structures would be reviewed in the EPWP Policy development process. Recommendations from the policy development process would be implemented in year 2.
 
Discussion
Dr Q Madlopha (ANC), first, wanted to understand how poor reporting was determined because it appeared that poor performance of the programme was around reporting, and asked if the decline in the number of work opportunities was because the Department was working with different people who were reporting incorrectly. Second, she wanted to establish if there was a plan for the 4th industrial revolution because it was seen to be eroding the labour intensive approach. The machines were taking over the work of people. Third, she remarked that the training that was being provided by the public bodies was not empowering the participants for the future so that they do not remain poor forever, and asked if the training was accredited or not.
 
Mr Jeremy Cronin, Deputy Minister of Public Works, stated they need to adapt training to the reality of the people doing the work. For example, he said young people do not want to work on the roads. As a Department they needed to look at programmes that were going to meet or cater for the needs of young people like sports coaching, helping children with homework, art, music, etc. Training was important because they were dealing with 9 million unemployed people. That is why it has to be tailored to the needs of the participants.
 
Mr Stanley Henderson, Deputy Director-General: EPWP, DPW, added they would like to see participants undergoing training, but the challenge was limited funding. They would like to see each public body setting aside money for training. The participants were getting certificates for taking part in the projects so that they could get the next job.
 
Ms Lindiwe Nkuna, Chief Director: EPWP Convergence & Sustainable Livelihoods, DPW, reported that poor reporting has been confirmed by the AGSA during the auditing. The AGSA picked up there were projects implemented, but they have not been reported. As a result, this has forced the Department, when it is doing oversight visits, to go to the public bodies to check the projects implemented and their status quo. The Department has also introduced a project register that was looking at projects to be taken up and implemented.
 
Mr Henderson explained that the 4th industrial revolution should not be seen to fight technological developments, but the approach should be on how to optimise technology for young people. He added that there is a programme that would be providing an opportunity for young people to police spaces where women and children usually get hurt.


Mr Ario added that the 4th industrial revolution was one of those things that provided elements which were necessary for developing and looking at business plans and providing tools to make reporting less tedious. For example, in the City of Tshwane they were rolling out free wi-fi by making use of young people to help adults to get connected to the wi-fi.
 
Ms P Adams (ANC) remarked that the EPWP was always visible in communities. This programme should be a reflection of the Department and government, and it must exceed expectations and be successful. But it has not achieved much. People must not be allowed to suffer just because a concurrent relationship between the provinces and municipalities was not working. She then asked if the national minimum wage has been implemented in the new phase (Phase IV) or if it was going to be implemented.
 

Deputy Minister Cronin said the EPWP is part of the social security system which they were trying to contribute to but the contribution of the Department was not that great.  If the Department could pay the national minimum wage, the numbers would be reduced by 50%. Many people would be excluded from decent work. It has been agreed the participants should be paid 55% of the total agreed percentage of the national minimum wage.


Mr K Sithole (IFP) wanted to know if the Department has plans in place to assist the affected metros because there was a lot of underspending in Gauteng and Limpopo, and poor reporting from municipalities. He also wanted find out what was going to be done in future to improve infrastructure by municipalities because there was infrastructure underspending by the EPWP. Lastly, he wanted to establish what systems were in place to ensure failure to achieve targets was not re-occurring.
 
Mr Ario replied that there was work that was being done to assist the metros. For example, the Department had engagements with the city manager of Ekurhuleni on the implementation of the EPWP projects. This was done to ensure the metro has policies in place and a technical support team to help in the design of the projects. Concerning infrastructure, he said all spheres of government were expected to implement EPWP projects, but in the absence of legislation, this meant they had to engage with municipalities and provinces to use some of their budgets for EPWP projects.
 
Deputy Minister Cronin added that the EPWP was started as an infrastructure programme. The mainstream infrastructure was highly capitalised and hard. Some of their best programmes were on infrastructure maintenance because it was on-going and local. The Zibambele Project was a success story because work has been given to households, mainly women, to maintain small roads in rural areas.
 
Ms Nkuna explained that in order to ensure EPWP Phase III lessons did not get repeated, there were recommendations for Phase IV to develop a policy to enforce implementation because things were currently done through a convincing approach to force public bodies to do their work. For Phase IV, there were thorough consultations with public bodies on target setting and allocation. The targets that were presented represented what they were going to get from National Treasury.


Mr D Ryder (DA) remarked that the EPWP needed to find ways to counter the 4th industrial revolution and consider the 3rd industrial revolution where people were going to learn how to use technology. The EPWP was a lifeline for the poor because it was meant to create opportunities for people and introduce skills development. The Infrastructure Development Sector was poorly performing though it was supposed to up-skill people. He suggested the focus should be on the Infrastructure Development Sector. Furthermore, he indicated training provided to the EPWP participants was both accredited and non-accredited. He suggested people should be given certificates for projects they participated in like bricklaying, carpentry, etc. in order to get the next job. He greatly encouraged the Council for Built Environment (CBE) to train people so that they get skills and become entrepreneurial. He felt the presentation did not really achieve what it set out to do. Lastly, he wanted to find out why the department was dropping the targets while increasing the budget but knowing very well the returns would be low.


Mr Henderson replied that target setting was a no-win situation. It has always been linked to budget allocation. If the targets are high, people will always say they are not realistic. But if they are low, you get whipped. Phase IV targets have been set out through what has come out of National Treasury. The budget has to be set first and then see how it was going to be distributed for the projects to the implementing agents. He went on to say the Department still needed to go beyond the numbers and focus on the developmental aspect.


Ms Nkuna noted the Department has been advised not to expect the private sector to absorb the EPWP graduates because it was shedding many jobs. Now the Department was trying to ensure that after graduation the students were able to stand on their own or form their own cooperatives.


Ms E Masehela (ANC) remarked it was disappointing to learn that EPWP performed highly during its inception, but declined for four consecutive years. This meant there were no strategies in place to improve the situation. She found it strange that provinces were performing very well while municipalities were not performing at all, and wondered if there two spheres of government were not supposed to work together on EPWP projects.  She suggested there should be a quota system for Phase IV because it was important for people to graduate so that they were not EPWP material forever.  She wanted to understand why the Eastern Cape had the lowest expenditure of 34% on provincial grant while it achieved 168% on work opportunities performance. Lastly, she wanted to understand how the expansion of EPWP was going to be done to other spheres of government.
 
Deputy Minister Cronin replied that the Social Sector was the area it could expand on because it was providing social care service like looking after toddlers or kids and it was one of their programmes that was providing stipend to those who were providing this kind of service because machines were not able to look after toddlers.


Mr Ario, regarding the Eastern Cape mismatching figures, said under-expenditure was on incentive grants that relevant departments were not expending, but the province was expending the funds earmarked for projects.

The Chairperson commented that EPWP projects were the life and blood for many communities because the rate of unemployment was very high. The projects need to be relevant for the rural areas. Training has to be given full attention. He was not happy with the lowering of targets because there was more demand on the ground, and that failure to report could not be blamed for not doing the work. He said there was a lot of infrastructure work that has to be done if only the Department could engage with the municipalities because there was a demand for EPWP services.
 
Deputy Minister Cronin stated that during the last five years they were getting cross political party agreement on the EPWP programmes because they have been seen as very important for the country. The frustration has always been to focus on work opportunities which could be anything from three weeks to a full year. The problem has been not to talk about the impact of work opportunities in communities. The over-focus has been on the number of work opportunities created. The presentation was supposed to reflect on work done and what needed to be done. The presentation did not tell the human story and about the uniqueness of the multi-sectoral EPWP which has been sustained for almost 15 years. There was a need for the department to get back to the surveys done three or four years ago by Stats SA where people were asked if they had participated in the EPWP programme and what they done after the programme. 80% of the respondents stated the programmes had improved their lives after graduation. These were the stories that deserve to be told.
 
The Chairperson indicated it was not acceptable for the Department to be informed by the AG about the work of the Department not reported on. The Committee had to be given a thorough detailed report on what the Department had done with regard to EPWP. On the budget item, he said there was always budget available, but the Department had to explore other avenues and be creative to get it because most municipalities were not using their budgets. He said the targets had to be set and the department should make use of the public bodies to help in securing extra funding for work to be carried out. Many Setas could help with training, and it was important to negotiate with them to train more artisans so that many could be empowered.

Adoption of Minutes
 
26 February 2019 minutes
 
The Chairperson took the Committee through the document, page by page.
 
Ms Masehela proposed for the acceptance of the minutes.
 
Mr Ryder seconded the proposition.
 
The minutes were adopted with no amendments.
 
The meeting was adjourned.
 

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