Housing Budget: briefing

Meeting report

HOUSING PORTFOLIO COMMITTEE
8 March 2000
BUDGET BRIEFING BY THE DIRECTOR GENERAL

Documents handed out:
Programme and 2000/2001 Financial year Budget
Explanatory Memorandum (email [email protected] for this document)

Relevant information
National Expenditure Survey on Housing 1999
Department of Housing website

SUMMARY
The budget allocation for the Department of Housing for the 2000/2001 financial year amounts to R3 333 371 000. That is against R3 529 827 000 that it was allocated for in the 1999/2000 financial year - a decrease by at least R196 456 000 (5.56%). However, the decrease in the money allocated for the department is not to the detriment of South African Housing Fund (Housing Subsidies). The figures show that the South African Housing Fund allocation has an increase of R56 436 million in the 2000/2001 financial year.

As a deviation from the previous year's budget, this year's budget has also put aside R3 million for the resettlement of the Doornkop community. It is the responsibility of the Housing Department to resettle this community, as the problem that they find themselves in, is attributable to a professional error committed by the Department of Housing officials. This is a special case and the department does not normally put aside funds for purposes of this nature.

Another change in the budget is the transfer of payments. Previously the department used subsidy funds for provinces. This resulted in provinces submitting claims irrespective of whether they needed the money or not (only because they were entitled to it). In the light of this, the department has decided on making the transfer payments conditional. Conditional in the sense that:
• any province making a claim has to prepare a proposal which clearly shows that there is a need for the fund;
• the department will conduct its own needs assessment.
This is a protective requirement that will ensure that the Housing Fund is protected and the transfer of payments fund is not abused.

Presentation
The Director General, Ms MZ Nxumalo-Nhlapo, first cited the aims of the department, which she said is the determination, financing, promotion, co-ordination, monitoring and communication of policy for housing and human settlement. This broad aim of the department is expounded as follows:
• To conduct the overall management of the Department;
• to develop, integrate and build capacity for the execution of national housing and human settlement policy and strategy;
• to monitor housing sector performance, manage housing information and special projects, render secretarial support housing institutions;
• to manage the funding of national housing programmes; and
• to support a sustainable housing process through effective communication.

The department could only achieve these stated aims through the funding that it receives for the following activities within its department: administration, policy development, housing performance, South African housing fund and communication. The allocations for 2000/2001 financial year are:

Administration R36 237.000
Policy Development R43 782.000
Housing Performance R217 046.000
South African Housing Fund R3 027 937.000
Communication R8 369.000

The activities that have seen an increase, albeit the general decrease in the budget, are Administration and the South African Housing Fund. Others have experienced a severe cut of their funding, due to mainly the decrease in the budget allocation for the Department of Housing as a whole. The Director General added that it was a matter of prioritisation by the department that the department has cut the budget allocations of other activities to the benefit of Administration and Housing Fund.

Questions and Comments arising from the Presentation
Mr T D Lee (DP) asked if the Director General could provide a provincial breakdown of the funds that are transferred to provinces. He further commented that the moment he hears something about consultants he gets scared, and asked the rationale behind increasing the consultants' fund.

The Director General replied that the provincial breakdown is only the prerogative of the Minister, any such pronouncement by the Director General is inimical to her role. However, she pointed out that such information is not impossible to get as the Minister will provide it soon to the Administration Secretary.

Mr W M Skhosana (ANC) asked how far the Department of Local Government and Provincial Affairs has assisted in the reallocation of the Doornkop community.

The Director General responded that the case of Doornkop is a special case. It is entirely the responsibility of the Housing Department as what occurred in Doornkop is a result of a professional error from Housing Department officials part, the Director General said.

Mr Mtikrakra (UDM) asked if there are specific projects directed at rural communities.

The Director General reminded the committee of the R2 billion worth projects that are conducted in rural areas as the department's effort to see to it that rural people are not forgotten.

Ms M P Coetzee-Kasper (ANC) reiterated the question as to why there has been an increase in the services of consultants.

The Director General said that this year there is a lot of work that the department needs to do and that has prompted the demand for the services of consultants. Furthermore, due to the anticipated workload, the department has increased its members of staff, which according to the Director General, automatically meant an increase in the number of consultants assigned to different staff members. (See Appendix below for detail from the Explanatory Memorandum on Consultant Services).

Ms R M Southgate (ACDP) asked if the department has considered the services that would go before or after the building programme.

The Director General responded that the department is still looking at a spectrum of services, but maintenance of roads will definitely go after the actual building programme.

Ms Southgate asked if the department conducts the assessments itself or depends on this service from other departments or private institutions.

The Director General responded that the department has established a new component with its new directorate to conduct any assessments (needs assessments) before the department embarks on a housing programme.

Ms Southgate enquired whether the department has a disaster management fund as is the case with the Department of Welfare.

The Director General replied that there is no fund set aside for disaster management because of the rarity of disasters in the context of housing. However, when circumstances warrant departmental intervention, the department is able to exercise this role as has been the case with the recent flood crisis.

Ms Southgate asked how much the department has received from international donations.

Due to the shifting of focus by the department from financial to expertise assistance, the Director General said the department is not receiving any financial assistance, but expertise (especially in the form of free international consultants) from the international community.

Appendix 1:

CONSULTANT SERVICES

Consultants have been identified for the following tasks:

NATURE OF TASK

· Maintenance of the debtor system.

 

· EstabIishment of an Internal Audit component.

 

· Compilation of financial statements for the SA Housing Fund.

 

· Investigate, monitor and implement transformation objectives.

 

· First line support services on local area network (on site).

 

· Develop a rental housing subsidy programme.

 

· Develop a social housing subsidy programme.

 

· Develop policy for joint ownership option.

 

· Amendment of Project Linked Subsidy Programme: Progress

Payment System.