The Western Cape Department of Human Settlements presented its adjustment budget to the Standing Committee on Human Settlements in a virtual meeting.
The Department had significant cuts made to its budget in order to reprioritise funds towards for the Covid-19 relief. The operational budget was cut by R10 million.
The budget cuts mean that the equivalent of 4000 sites, or 1600 top structures, cannot be done in the financial year, as planned.
The Department has now prioritised de-densification.
Members of the Committee wanted to know exactly which projects would be impacted by the budget cuts. They wanted to know what would be done regarding projects that are close to completion.
Members expressed some concern about possible chaos/unrest due the cuts happening so close to the local elections.
The Budget Vote and Report were adopted.
Introductory remarks by the Minister
MEC Tertuis Simmers: Western Cape Department of Human Settlements, said the Department’s budget has been cut by more than R200 million and this needs to be taken into account going forward. He introduced the Department’s Chief Financial Officer, who would be presenting to the Committee.
Presentation on the adjustment budget
Mr Francois de Wet, Chief Financial Officer, Western Cape Department of Human Settlements, said the Department’s budget has been cut by R44 million. This was part of the initial R130 billion for the R500 billion relief announced by the President.
He said the Department received R33 million from the province to deal with Covid-related pressures. The Department has realised R13 million in savings. The budget cuts come up to a total of R226 million.
He said the Department is currently busy reprioritising its business plan. He also said the Department’s operational budget was cut by R10 million.
He said the impact of the budget cuts was equivalent to 4000 sites, or 1600 top structures, that now cannot be done. He also said de-densification has also increased in importance, and parcels of land have been identified.
Charts and tables showed the exact figures
Mr A van der Westhuizen (DA) said it was sad to see the cuts happening at the Department of Human Settlements. However, he said that he hopes the Deeds Office would work efficiently to address the backlog created by Covid-19. He wanted to know how the time can be used to prepare the Western Cape for an increase in the budget in the future.
Mr D Smith (ANC) said it would have been good to have the amended business plan in order to see which projects have been affected and which have not. He said there is potential for chaos, as frustrations are increasing. He wanted to know if there could be a focus on those sites where there are only the top structures that need to implemented. He said the local government elections are next year, and this could be a big issue, especially when it comes to land invasions.
Mr D America (DA) made the comment that the land invasions are ‘orchestrated’.
Mr P Marran (ANC) said that if this was the case, then evidence was required.
Mr Marran wanted clarity on ‘4000 sites vs 1600 top structures’. He also asked about municipalities that did not spend their USD grants. He said Breede Valley had returned an amount of R80 million. He said the City of Cape Town sent back R95 million. He asked why the monies were not spent.
Mr de Wet said the amount would either be enough for 4 000 sites or 1 600 top structures, or a combination of both. The R80 million that was returned was actually a technical adjustment. The municipality of the Breede Valley did not actually lose any money. The Department cannot depend solely on the HSDG. The Department is currently looking at alternative sources of funding.
Mr America wanted to know exactly how the actual budgets are taking place.
Ms Jacqueline Samson, HOD: Western Cape Department of Human Settlements, said the budget cuts would be to the HSDG budget. Non-financial deliverables were also cut. The revised business plan was submitted to the National Department, and this is under review and cannot be shared until it is approved. She said the Department does consider and monitor those projects that are close to completion.
MEC Simmers said he is glad to hear that Members can see the potential for unrest that can occur as a result of budget cuts. The Western Cape Housing Development Fund is lying dormant, but this can be re-activated.
Ms Samson said the Department had requested the USDG be converted to the HSDG, but this request was declined.
The Chairperson asked why the request was declined.
Ms Samson said this was because the grants have different budgetary frameworks, and it is not possible to utilise one instead of the other, as certain conditions have to be met.
Mr Marran said he was not satisfied with the answer to the Breede Valley question.
Mr Smith wanted to know if it was possible for an Implementing Agent to complete a project without the requisite permissions, and then get paid at a later date. Can this process be revived and regulated?
Ms Samson said it would not be possible to revive the process because all funding is allocated on a per-project basis. Implementation is the municipality’s responsibility.
Mr de Wet reiterated that the process cannot be revived as it presents too great a risk for anybody to do it that way.
The Chairperson asked about the sewerage system in Citrusdal. Until when is that funded? How much has been spent on that project?
Mr de Wet said the Department has contributed about R14 million to the project, with the MIG (Municipality Infrastructure Grant) providing additional funding, but the additional funding was never received. However, the Department has received a letter from the municipality indicating it has an amount of R11.1 million allocated to their bulk infrastructure and the project should be completed within the financial year if there are no delays in terms of construction.
Consideration and adoption of Budget Vote
Mr America supported the Vote.
Mr van der Westhuizen seconded this.
Mr Marran expressed the minority view not to support the Vote.
Mr Smith said it was cannot be that people be expected to build their own houses when it should be government that should be doing this.
He said it appears the Committee needs to learn about the Freedom Charter.
Mr van der Westhuizen said he hopes this applies to central government. He said ‘they must use the money they have stolen’.
Mr Smith asked if the R85 million that was returned by the City of Cape Town was also central government’s fault.
Mr van der Westhuizen said at least the money was not stolen.
The Committee Report on the Budget Vote was adopted.
Mr Smith requested that the amended business plan be made available to the Committee as soon as it becomes available.
It was agreed that the minutes of the current meeting would be considered and adopted on the meeting to be held on 28 July 2020.
The Chairperson thanked everyone and the meeting was adjourned.
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