DHS Annual Performance Plan 2020/21: discussion with Deputy Ministers

Meeting report

Deputy Minister Pam Tshwete responded to Committee member questions raised in the virtual meeting of the previous day. As she was responsible for title deeds, military veterans and upgrading of informal settlements in particular, she would thus respond to these questions:

Title Deeds
The previous budget allocated R577 million for title deeds; however, this would not continue in the coming years. In provinces, if this amount was not used, they would have to apply for a rollover of funds. The primary reason for underspending in this area was due to a lack of township establishment approvals. This meant that houses were not built (without approval). Where there was a lack of delivery of title deeds, this was often due to delays from those who did not work properly with land use management regulations. Title deeds are necessary and important. One cannot have a house and land, without title deed proof that it belongs to one.

Military Veterans
Military veterans had become a DHS priority in 2020. Lockdown had hindered the delivery of title deeds to military veterans.

Upgrading of Informal Settlements
Approximately 29 informal settlements had been identified for upgrading projects, of which five had already been implemented. This included Duncan Village (Eastern Cape), Dunoon (Western Cape), Kennedy Road (eThekwini) and Diepsloot (Gauteng). These projects were co-ordinated between the three levels of government as this was critical to the success of upgrading informal settlements. The current service delivery model used by DHS assisted in ensuring co-ordination between provinces and municipalities.

Statement response to ‘Delivery only when close to Elections’
The Deputy Minister rejected the notion raised that DHS “only delivered when it is close to elections”. When provinces were ready, DHS would deliver title deeds when necessary, irrespective of elections.

Budget cuts
A concern had been noted about budget shortages, particularly in 2023. The Deputy Minister “promised” that DHS had money that they would use, should they run short of the budget. Much effort had been directed towards working with provinces and municipalities to ensure budgets did not run short. Previous accusations of lack of delivery were noted, though the delivery by DHS during lockdown had been commended.

Comments on de-densification
Buffalo City, including surrounds, was being considered for de-densification projects. The land had already been identified, though there was a concern about the impact of Covid-19 on this project. Before anyone would be taken from one area to another, DHS would ensure that there was proper water and sanitation – this would require collaboration with other departments, such as the Health MEC, to limit the spread of Covid-19. Reports would be given to Parliament on this, as de-densification would be carried out.

Deputy Minister David Mahlobo was invited to comment and advised that he would provide comments at a later stage as guided by the Committee. This was because the Chair had been clear the previous day that comments and the way forward would be provided after the Committee had reviewed both presentations and statistics of the previous day. He would remain in the meeting to note further questions and concerns, and would provide a Department of Water and Sanitation (DWS) report at a later stage.

Mr Joseph Leshabane, DHS Deputy Director General: Project and Programme Management Unit, continued with responses:

Strategic Plan (2020) and Annual Performance Plan (2020)
While the spatial transformation objective was 94 areas within the next five years, all of these areas would be gazetted within the next five weeks. A report on this could be given to Parliament. DHS would be directing its capital grants to these designated areas, and would be partnering with private developers, industrialists etc. to generate coherent special form in those areas. The usual tensions of inclusivity and exclusivity would be addressed in this process. Ultimately, this referred to ‘urban renewal’ which denotes smart and sustainable developing of urban settlements in these designated areas. This was a joint effort between national, provincial and municipal government, as well as non-state actors.

Rectification Programme
The Rectification Programme and Blocked Projects Programme remained available to provinces. An MEC is required to write to the Minister to request approval to implement these projects. What had been done is to ensure that new resources are not used for ‘old failures’ (i.e. blocked or poorly built areas). For this, individual responsibility would need to be extracted for these failures. It is this approach to resource allocation and failures that necessitated the requirement of MECs having to write to the NDHS should they wish to proceed with such a project, including written motivation and plans for rectification.

Title Deeds
The capacity to deliver title deeds relied on strong governance. This involved the Deeds Office on the one hand and the Surveyor General on the other to approve submissions made towards a settlement. The formalisation of townships was required in order to develop township registers, which would ultimately enable the transfer of property. The backlog arises on many grounds. Whereas in the past, settlements were developed; however, formalised work was never finalised with the Office of the Surveyor General. As such, the work done by DHS was to conclude these processes. In some cases, households reside in the houses, and the municipality becomes hesitant to provide clearance certificates for property use because municipal services have been consumed - this was being attended to. The Committee was assured that there is national, provincial and municipal capacity, supplemented by consultation with surveyors and land planners, to be able to generate title deeds.

Rental stock delivery
Social housing can only be delivered in restructuring zones declared by the Minister. There was a fair spread across provinces and municipalities – this information could be given to the Committee going forward.

Upgrading of Informal Settlements
This programme recognised that people have settled on a piece of land, thus creating the need to formalise and upgrade it (for example by improving roads and layout, securing tenure, resolving underlying land questions). The end state of settlement upgrading is proper settlements, where individuals have title deeds and developments take place. Unless settlements were formalised and upgraded, permanent services like infrastructure could not be provided – this was a key motivating factor behind the formalisation of informal settlements. The process was incremental, and would take some time such as in the case of Greenfields projects. This was why some settlements could be formalised within five years, and others would take longer – but they were always community orientated. There were also some cases where the land occupied was uninhabitable such as due to dolomite, flooding and wetlands. In those instances, settlements would not be upgraded but rather the community would be relocated from the dangerous area to mitigate risks. It was for this reason that geological studies were also taking place.

Rural Housing on communal land
There should be an agreement between the municipality and traditional leadership on communal land to release a portion of land so that houses could be built, especially in the case of township style houses. In instances where people already own land from traditional leadership, the programme allows for the identification of those households that require better structures. The approval of the subsidy is to build the houses on the land that is already allocated by traditional leaders. On the whole, there were no major challenges with this process; however, there was a need to consolidate the services. The Minister had been specific on the need to ensure the provision of water to these villages. Community engagement and mobilisation was a policy requirement in this process.

Allocation of Land in Tribal/Communal Areas
Where it was not conducive or in the best interests to have special consolidation between the municipality and the local traditional leadership, there was a conversation to see if it was possible to contract the traditional leaders and the municipality to harmonise questions around land and special development. Through the Department of Land Reform and the Department of Traditional Affairs, commonality and harmony had been fostered to an extent.

Budget Cuts
The plan of a three-year window for the funding of title deeds was ultimately to bring focus to this programme. By isolating the title deeds from the mainstream of planning and programme management, duality was created. Title deeds funding would still be done through the main grant, that is, the Human Settlements Development Grant. Therefore there is no loss of funding - only the funding location is changing.

Budget reduction was due to government expenditure needing to be cut to balance expenditure versus revenue to the state. The programme to deliver service sites remained a robust one. The target for the following year was to deliver approximately 330 000 serviced sites. This is to be able to release land to households that only want to access a piece of land to build their own homes – this is how households could be empowered. That being said, it was noted that the grant from the department was inadequate to meet the entire housing need, which has brought about the shift in allocating households that so qualify. The Zenzeleni Programme, for example, would thus run on the back of the service programme as indicated. These plans are available per province. Wherever needed, the breakdown was available.

The increase in the budget for appointment of consultants was a necessity. This was because the national department assumed the responsibility to intervene, requiring specialised professionals (town planners, engineers, surveyors etc.). Therefore, most programmes supported were specific to unlocking delivering specific outputs. On the other hand, the public service wage bill had been kept steady, meaning that DHS was not simply allowed to employ more and more people, rather capacity needed to be assembled differently.  The use of consultants for these objectives was unavoidable in these circumstances.

Assembly of land
The assembly of land across all programmes was described as a key ingredient. For this reason, through the Housing Development Agency and various municipalities and provinces, provision had been made for identified and secured land to support these programmes. The practice of communities orchestrating unlawful occupation of land undermines these efforts. DHS was comfortable with the law taking its course in these cases. However, instances where community support was enjoyed was also noted. This included the community understanding the integrated development plan (IDP) of the municipality, knowing when the services would get to them and therefore when new housing opportunities would open.

Budget cuts
A DHS official answered whether the budget cuts were a response to grant performance, saying the answer was both yes and no. Yes, in that the budget cuts were greater than non-expenditure in the previous year, meaning the previous performance of the grants had been considered. In the prior three to four years, the Urban Settlements Development Grant (USDG) which is transferred to metros was not performing well.

The fiscal performance of the country’s economy was the other factor. The announcement by the Finance Minister in the Mid-Term Budget Policy Statement indicated the suffering of the country as a whole, and thus the loss to DHS of approximately R14.6 billion.

On the impact on the grants, the allocation to provinces and municipalities was based on an allocation formula taken from the 2011 census information done by StatsSA. Population size, poverty and inadequate housing per population share were also factor. By using this formula, it ensured that cuts would be carried out equally, and one province would not be ‘robbed’ in comparison to another province or municipality. A breakdown would be forwarded to the Committee.

Funds for the Informal Settlements Partnership Grant are ring-fenced within the two grants, Human Settlements Development Grant (HSDG) and USDG. Both of these grants were transferred to the province which included various municipalities (metropolitan, district and local) which shows the urgent need for integrated planning between the metros and provinces. As such, they were requested to submit information on the status of informal settlements per province, taking into account informal settlements in metros, districts and local municipalities. Between these three, an agreement would need to be reached which settlements would be selected for an upgrading plan submission.

Rectification Programme
Mr Neville Chainee, DHS Acting Director General, confirmed that the rectification programme existed in the policy. However, in terms of the revision of the approval process, MECs must make a substantive motivation to the Minister to justify why a rectification allocation should be made. This is particularly in response to the criticism over a period of years, about inadequate controls being in place. It remains the responsibility of the province, along with the National Home Builders Registration Council (NHBRC) to ensure that where a rectification process is initiated, it is done with proper justification.

Social Rental Housing Units
The Social Housing Regulatory Authority (SHRA) would be appearing before the Committees shortly as an entity of DHS. They are the implementing agent for social rental housing. Its entire strategy therefore forms part of the DHS Strategic and Annual Performance Plan.

N2 Gateway Challenges
The N2 Gateway had been a ‘pilot project’ for a more integrated, fast-tracked and sustainable approach. A number of challenges had come up in the process of this project and these were being addressed. These challenges included the identification of land and compliance with court judgements, particularly about consultation with communities.

Northern Cape
Mr Chainee requested details on the exact industrial area where houses were built. The Northern Cape province could then respond when they appear before the Committee.

Provincial role in Availing Land
The Inter-Ministerial Committee (IMC) on Land Reform had been established in 2018, chaired by the Deputy President, and a key focus was the release of state- and private-owned land. This was in response to criticism about the state being lethargic in releasing land, resulting in accusations against public and private sectors. Substantial progress had been made. In particular, a departmental joint committee had been established with DHS and Rural Development, Public Works, Public Enterprises, Transport and CoGTA.

Department Performance
In reply to how the 2019-2024 Medium Term Strategic Framework (MTSF) was developed, this was born out of an evaluation by DHS, Department of Planning, Monitoring and Evaluation (DPME), National Treasury and the Presidency. This factored what had and had not been achieved in the 25 Year Review of government. Areas not achieved had been included, with a substantial amount of better oversight – as was the case with title deeds.

Intra-province Co-ordination
Provinces, along with metropolitan municipalities, would be appearing before the Committees. They would detail, in clear and unequivocal teams, how they would be spending DHS allocations in local, district and metropolitan municipalities. This would be available as and when required.

Allocation of Land in Communal/Tribal Areas
Allocations from provinces would be based on a formula received from National Treasury. This considers poverty levels as mentioned. This formula would need to be amended to factor in out-migration and in-migration. Urbanisation, in many instances, included the urbanisation of poverty – as included in informal settlements upgrading.  On the People's Housing Process (PHP), the provinces not implementing this included Gauteng, Eastern Cape and the Northern Cape. This challenge has been addressed with the Zenzeleni Housing Campaign programme and the release of serviced stands, ensuring that provinces make submissions.

BNG (Breaking New Ground) House Ownership
An evaluation was conducted of BNG subsidy house recipients. The detailed analysis had looked at the impact of the subsidy programme in terms of development and asset ownership. The finding was there was a very small percentage of people that had sold their house. Sometimes, what occurred is that where houses were sold, this was to be enable the purchase of another house – bringing about secondary market activity. The lack of title deeds also hampers individuals from engaging in the secondary market.

Land Allocation and “Missing Middle”
The integrated residential plan ensured that in any integrated development all income groups were catered for. Over a number of years, DHS had not performed well in the support for the households that do not qualify for a housing subsidy, that is, the ‘missing middle' group. The Finance Linked Individual Subsidy Programme (FLISP) ensured that households could utilise this to decrease their bonds or as deposit.

Analysis of DHS Performance
Mr Hassen Mohamed, DPME Head: Local Government Performance Assessment, replied about the analysis of DHS performance. A fair amount of analysis was done through the 25 Year Review, with a special emphasis on the last five years ending in 2019. Further analysis was done to evaluate key projects in DHS. In October 2019, a DHS performance overview with a view to the new MTSF was presented at the Taj Hotel for DHS. All of these pieces of analytical work compose the Human Settlements components of the new MTSF, including helping to frame the baseline and shape the targets and outcomes for DHS.

Future projections in the light of COVID-19
The total ramifications and implications of the COVID-19 and the virtual shutdown of the economy had made it difficult to make future projections for DHS. What was certain was the R500 billion injection announced by the President in response to the pandemic, meant that R134 billion would need to be recovered from current budgets. DPME commended the Minister and her team for managing the budget cuts and retaining her team. However, the COVID-19 pandemic would have further implications. The construction industry was not operational, which would delay building activity for human settlements. Projections would become much clearer as information was given about budget reprioritisation and the phasing out of lockdown over time.

Further questions
Mr R Mashego (ANC) requested that DHS explain to community members about level three upgrading as a possible eradication of informal settlements was not seen.

Mr M Tseki (ANC) mentioned the disaster intervention that was due at an informal settlement yet had not been attended to by DHS for a year. He asked for comment.

Ms R Mohlala (EFF) repeated her question from the previous day about land and housing, stating it was important as a means to reduce poverty. However, there were instances where individuals and households were being evicted from their homes. What was DHS doing to ensure people enjoy land security?

Mr A Gxoyiya (ANC, Northern Cape) made a recommendation for those who do not need money or houses, but simply want land – however when they request land they were told that it was designated and secured for a particular category of houses. He suggested that DHS consider making land available for people who could afford to build houses. On title deeds, he recommended that DHS build its own internal capacity for conveyancing to ensure people do not wait many years for title deeds. He provided details of houses built in an industrial area stating this was on the N12 next to the Shell Ultra City in Kimberley.

Mr S Zandamela (EFF, Mpumalanga) raised his previous question about municipalities that did not receive RDP houses. He also requested that DHS make available its quarterly report on its performance.

Ms C Seoposengwe (ANC) asked about exorbitant conveyancing fees charged by private law firms. Did DHS have experience of the use of private attorneys in the Northern Cape? This was undermining the delivery of title deeds. Would it be possible for DHS to interact with these private attorneys on the spirit of ‘Thuma Mina’.

Responses
Deputy Minister Tshwete replied that evictions were not right because most of the time this impacted women and children the most. Where land invasions occurred, this presented its own challenges. The mushrooming of informal settlements was a problem that required the support of Members of Parliament to solve. Despite DHS efforts to eradicate poverty, some people were selling and renting their houses. While this was addressed in new policy, it was still a big issue. She replied to Mr Tseki that the KZN MEC had been working on re-housing individuals as required by the disaster intervention.

Mr Leshabane replied about the KZN disaster management. When the disaster struck, emergency housing assistance grants were allocated to both the province and the municipality to build emergency housing units. Both the province and municipality took long to deliver this, stating that they did not want to locate the units in the unsafe area, but rather wanted to relocate them. This was a problem as the community was left stranded and frustrated although the city and province has money – the matter was therefore of top priority, long overdue and extremely urgent.

He requested further information about the lack of RDP housing  from Mr Zandamela after the meeting. On the question of conveyancers in the Northern Cape, the province had registered better performance in registration of title deeds, and therefore this matter of exorbitant fees needed to be followed up urgently. There was little room to pay conveyancers any more, because any allocation towards this was quantified as part of the subsidy breakdown. He assured the Committee that where there was deviation on this, DHS would follow through. A cost driver at the moment was in tracking current conveyancers. The N12 Ultra City housing matter would be investigated specifically to identify the root causes.

Mr Neville Chainee, DHS DDG: Strategic & Planning, replied that the recommendation to inform the community about level three upgrades was noted, especially as it would mitigate frustration. The Gauteng rapid release of land programme was an example that in a housing development, there is nothing that prevents a member of the public from gaining access to a piece of land and constructing on it. Using all three levels of government in informal settlement upgrading was being used to allow DHS to determine if proper allocations were being made. DHS was not fighting the poor, but rather fighting poverty and this could not be done in an eviction process. He noted the comment about the spirit of Thuma Mina and shared sacrifice and he described it as an integral part of the DHS approach. That day, the Minister had held a stakeholder engagement and consultation and secured signatories from a community, which was used as a platform to say that ‘as government we will not do this alone’, and that private members from the community would be required to assist.

Mr Chainee left his contact details in the meeting chat (as requested) for Members to engage him after the meeting on human settlements, water and sanitation.

The Chairperson noted that the Committees would still receive the DWS APP and budget presentation as well as from entities that account to DWS. The Committees would need to report thereafter about the information made available.

Meeting adjourned.