Western Cape Adjustments Appropriation Bill: Human Settlements
Human Settlements (WCPP)
28 November 2022
Chairperson: Ms M Maseko (DA)
The Standing Committee met to deliberate on Vote 8: Human Settlements, in the Schedule to the Western Cape Adjustments Appropriation Bill, 2022. The Committee would also consider the adoption of the Draft Committee Report on Vote 8: Human Settlements, in the Schedule to the Western Cape Adjustments Appropriation Bill, 2022.
Members asked which municipalities returned the money, and the reasons why they returned the money regarding the title deeds. Why did the municipalities not use the money? Members also asked what the Department was doing to help the municipalities that had not been able to roll out their title deeds programme.
The Chairperson opened the meeting and informed Members that the agenda of the meeting was to deliberate on Budget Vote 8: Human Settlements, and to consider and adopt the draft Committee Report on the Budet Vote. The Chairperson asked the Members to introduce themselves, followed by the Western Cape Human Settlement Department officials.
She informed Members that they had received an infographic.
The Western Cape Minister of Human Settlements, Mr Tertuis Simmers, indicated that the Department provided an infographic that is a summary of the intent for the adjustments.
The Chairperson said she would not go on the main book, but she would use the infographic.
Members agreed to go with the infographic.
Mr D America (DA) asked which municipalities returned the money, and the reasons why they returned the money regarding the title deeds. Why did the municipalities not use the money?
Mr S August (GOOD) asked what the Department was doing to help the municipalities that had not been able to roll out their title deeds programme. Was the Department giving any assistance or reallocating the funding to those municipalities?
Mr P Marran (ANC) welcomed the budget of the Department. What courses of work have been completed for the new Department? What is the organogram going to look like? He asked about the potential of the Department rental stock units. What measures were in place to increase the Department’s revenue by ensuring that people paid market-related values?
Minister Simmers replied to the question on the budget. He highlighted that it is an adjustment budget, and it is going to carry them until the end of the financial year vote 8. The new Department is going to go live on 1 April. The new budget is going to be structured, and the programmes are going to be communicated to the Standing Committee.
Ms Phila Mayisela, Head of Department, (Acting), replied that the rollover was the money returned by the municipalities that did not use the money for title deeds. There was a reviewed implementation plan that the municipalities were going to implement going forth in the financial year. The R63 million was related to COE (compensation of employees) increases. They did not have funding for that, and it is going to be coming back into the budget. Going forward, the COE for 2023/24 will have to deal with a baseline envelope, and per warm bodies that are permanently on the establishment of the departments.
Mr Francois de Wet, CFO, replied on the transfer of the restoration project, in 2017/18 and 2019/20. The Department had transferred a lot of money to the municipalities concerning the programmes. The municipalities did not spend all the money, and there is now a rollover process. Therefore, they cannot roll over a rollover. The municipalities had to turn over the money to the Department. The Department was re-appropriating the money to the Department, based on a reviewed implementation plan. The municipalities that returned the money to the Department were, amongst others: Swellendam (R172 million); Saldanha Bay (R1.474 million); Mossel Bay (R3.961 million). He confirmed that all the municipalities had contractors contracted to do that, and the transfers would take place. The Department is appropriating the money so that it could go through parliamentary oversight. He empathised that the money had not been lost but the departments were just reallocating it.
On the cost incurred in establishing the new Department: the Department said it had not incurred any cost. It highlighted that there were two phases. The first phase was ensuring that it has the necessary capacity, and that was done by the department of development of the CC. That was done, and there was an entire process that had to be followed. The CC and the Department of the Premier did most of the work and liaised with National Treasury via the Provincial Treasury, in respect of the budget structures; and with the Department of Public Service and Administration in respect of the creation of the new establishments. Various working groups were working on the financial systems, and they were working as a team with a clear plan going forward, with oversight at the highest level to ensure that they met the deadlines.
The rollovers were in terms of the NAS project in Mossel Bay, where there were procurement delays and community dynamics that had delayed the projects. The R5.196 million was in terms of the conditional grant-the informal settlements upgrading support grant that National Treasury approved. The other rollovers were R1.348 million, which was in respect of computer equipment. There was a delay from SITA, on the delivery of the equipment, which has since then been sorted out. An amount of R760 000 was part of the bailing upgrade of the rental tribunal offices. R588 000 was rolled over for the hearing rooms, which had been paid for the service. The increase in legal costs included the transfer cost of all the units sold to the people who qualify for affordable housing. The Department had implemented a rental turnaround strategy, which had been bearing fruit from the R16.8 million appropriated in addition to the adjustments budget.
Ms Kahmiela August, Chief Director: Human Settlement Planning, replied on the title deeds. She said that there had been a massive capacity constraint at the municipal level as well as the provincial level. It had been a challenge for many years, and the Department put in place a title deed business and restoration operational plan to begin to identify how to change the tide. The Department would have three positions advertised through the HAD, for a title deed programme manager. The main purpose of the person was to provide additional support to the municipalities. In addition, the Department planned to advertise a provincial resource team to plan and deal with the gaps at the municipalities that had shortages. The Department had also identified seven municipalities that had most of the backlog, and they were engaging with them directly through their administrative team. Dealing with the problem in the seven municipalities would break the problem in all the provinces.
The challenge was updating the HSS because many title deeds had been transferred, but the records had not been updated, so they were going through the process of sanitising the information. The Department had put in place a system in which the HSS would be the main point to capture information. What was happening was that one municipality was using a spreadsheet, and the Department was using another. The implementation team was using a completely different spreadsheet. The team was engaged in getting data on a central platform to give them a clear perspective on where the true backlog was. The Department had also appointed a deputy director of title deeds, and it moved resources from another Department so that they could provide additional support to the municipalities. The Department anticipated that, in the next two to three years, it would break the problem of the title deeds to prevent the problem from continuing. If they did not transfer the title deeds for buildings built recently, the Department would perpetuate the problem. The Department had also put in place a standard operating procedure that would require the municipalities to develop how title deeds were going to be transferred. The ideal situation was that, as soon as a person entered the house, they would immediately get their title deed. But that was impossible because of the current systems. However, they were mechanisms to get the title deeds registered as soon as possible, which was what the Department intended to do with the title deeds. The biggest challenges were the dispute resolution process because a lot of the title deeds were given pre-1994 and most people had passed away. The Department had to focus on dispute resolution for the province.
Regarding the rental stock, they had put in place the rental turnaround strategy. The Department had been working on it for a year and a half, and it was bearing fruit. The Department was a lot firmer for people to pay rent. They had put in place a sliding scale in terms of what the household earns and how much they must pay. They had put in place a process in which they would try to get the people to sign the new lease agreements. There were challenges because people had been living in these places and did not have valid lease agreements. The Department planned to lodge many cases with the rent housing tribunal for failing to pay rentals, and some tenants needed to be evicted. 17 tenants owed the government an excess of R2 million. The Department had to decide how to proceed with the evictions. The Minister had asked the Department to prepare a presentation to take that to Cabinet, because the evictions would entail massive consequences and it would have to weigh that against financial viability. The Department was merging with the Departments of Transport and Public Works, and they were going to become the Department of Infrastructure. They were also working on emerging systems, and they were going to manage their staff jointly – which would improve collection and the capturing of service debt.
The Chairperson said that, during oversight, they had picked up that the challenge was the capacity for the title deeds and how to go about it. She asked if there was a municipality that had the best practices that could champion other municipalities before they proceeded with an official at HAD (Housing Development Agency). She highlighted that there were policies dealing with issues such as divorces and empowering municipalities. She asked if the Department looked into how it could prevent rollovers related to the title deeds. She also asked regarding the R15 million that was going for 2022/23 to provide capital to differed ownership. In Bredasdorp in Cape Agulhas Municipalities, the seed funding was R10 million, and the understanding was that it was going to be sustainable. However, for 2022/23, there was a capital going there. How long were they going to give the money until it became sustainable? Other municipalities were interested. What was the rationale for spending on the same municipality?
Mr Marran asked if evictions were the only option for the tenants that owed the government R2 million worth of rentals. He also asked about the duration the municipalities would have to spend the money on the title deeds. What would happen if the municipalities did not spend the money before the cut-off dates?
Minister Simmers replied in terms of the rental turnaround strategy. He said that the rule of law applied to all – all had to pay rent. They were supposed to have a rental agreement with the Department in place. He was expected to put mechanisms in place to keep the people accountable, whether a tenant or an official. Therefore, as part of the strategy, it was about how to increase the revenue and how they would deal with the variated payment structures of the various tenants. The Minister said he was dumbstruck to find out that people paid R100. The Department was going to engage with Cabinet about the way forward, because they knew they had to respect the rule of law regarding evictions. Cabinet would be engaged on the appropriate mechanism that they had planned to be put in place. The problem was that they dealt with a historical matter compounded over more than two decades. All the provinces were dealing with the title deeds they were unable to transfer. The Minister was going to engage with the national Department to find out if there was a mechanism in which one could deal with the issues, and determine how they would resolve the disputes. Some of the issues wear not easy to deal with because these were historical inadequacies in the administrative system, which was never looked at for many decades.
In terms of the deferred ownership, the seed funding was spelt out over two financial years, and this one of R15 million was the last one. The Department would make key announcements in the financial year because they had identified three pilot cities, but they could not say where. The return on investment of the specific timeframe was quite clear. The first seed funding was to build 50 units. However, given the data to measure the impact of affordable housing, the Department could not measure it with 50 units. The CFO and the team increased the quantity of the units to make the financial models sustainable, and for when they would approach other municipalities. They had made it clear to the municipalities that the Department would collect its money so that they could rejuvenate the programme in the other municipalities. A lot of municipalities were interested in the project. The Department was learning lessons, and it was their final transfer to the municipality.
Mr de Wet clarified the timeline for the availability of the money. He said the cut-off date was 20 June 2024, and the allocations were based on the reviewed implementation plans.
The Chairperson concluded the deliberations for vote 8 and thanked Members and the officials for their availability.
Mr August thanked the Department for its work and achievements during the year. The new plan had been rolled out, and he was looking forward to it. He wished them a good festive season.
Mr Marran wished the Members happy holidays.
Mr A Lili (ANC) thanked the Department and the Members of the Standing Committee, and wished them a good festive season.
The Chairperson said it was a rough year, and they had tried to pick up the pieces. They managed to mitigate the challenges, and the APP showed. She thanked all the Members for their work and wished everyone a good festive season. She then released the Department’s delegation.
Members considered and adopted the Draft Committee Report on Vote 8: Human Settlements, in the Schedule to the Western Cape Adjustments Appropriation Bill, 2022.
The Members moved to formally support the Vote and Committee Report.
In its reoslutions, the Committee agreed to thank the Department for its hrd work this year.
The meeting was adjourned.
Maseko, Ms M
America, Mr D
August, Mr SN
Lili, Mr A
Marran, Mr P
Murray, Ms C
Simmers, Mr T
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