Department of Human Settlements Budget Vote Report

Meeting report

The Chairperson greeted the Members and support staff, noting that a quorum was formed and the meeting could commence. He expressed the need to start the meeting promptly to allow colleagues to attend to other matters. He welcomed everyone and opened the meeting, requesting a moment of silence or meditation. The Chairperson then asked for the attendance of Members and any apologies.

Apologies were received from three Members, and the attendance of others was confirmed as follows:

Present:

• Mr A Seabi (Chairperson)
• Ms Z Abader (ANC)
• Ms M Bartlett (ANC)
• Ms M Dlamini (EFF)
• Mr M Gana (Rise)
• Ms T Magagula (ANC) (Alt)
• Mr C Poole (DA)
• Mr L Mphithi (DA)

Absent with Apology:

• Ms M Pholwane (ANC)
• Ms B Kegakilwe (ANC)
• Ms S Buthelezi (IFP)

The Secretariat displayed the agenda on the screen after confirming the attendance of Members and noting the apologies.

Adoption of the Agenda

The Chairperson mentioned that the agenda contained two main items: the consideration of the minutes from the last meeting and the consideration of the draft committee report on the budget. He asked for a mover for the agenda if there were no amendments.

Ms T Magagula (ANC) moved to adopt the agenda, and Mr C Poole (DA) seconded the motion.

The agenda was adopted.

Adoption of Draft Minutes

Minutes dated 10 July 2024

The Committee Secretariat noted an omission: Ms S Buthelezi (IFP) had submitted her apology, which would be included in the minutes.

Ms Magagula moved to adopt the minutes, and Mr M Gana (Rise Mzansi) seconded the motion.

The minutes were duly adopted.

The Chairperson mentioned that the minutes of the second meeting would be prepared and sent to Members well in advance to allow time for review. The Secretary confirmed this.

The Chairperson referred to the report on the budget, stating that it needed to be adopted. The report had been sent to Members the previous day, and they were requested to provide inputs. He asked the Secretary to take them through the report.

Report of the Portfolio Committee on Human Settlements on Budget Vote 33: Human Settlements, and on the Strategic Plan for the coming Medium Term Expenditure Framework (MTEF) period and Annual Performance Plan 2024/25

Mr Tshepo Makhanye, the Committee Researcher, addressed the Members, explaining that he would present the report of the Portfolio Committee on Human Settlements concerning Budget Vote 33, the Strategic Plan for the upcoming Medium Term Expenditure Framework, and the Annual Performance Plan.

He summarised the introduction, explaining the Department's mandate as stipulated by the Constitution: everyone has the right to adequate housing, and the state must take reasonable legislative and other measures within available resources to progressively realise this right. The report is underpinned by policy imperatives, particularly the National Development Plan (NDP), which aims to transform human settlements and the national spatial economy. By 2050, the NDP envisions efficient spaces with citizens living near work and accessing social facilities and essential infrastructure.

Mr Makhanye elaborated on the NDP's guidance: responding systematically to spatial patterns exacerbating social inequality, implementing strategic and catalytic interventions for spatial transformation, and balancing spatial equity with economic competitiveness and environmental sustainability. Additionally, the NDP aims to expand personal freedoms by providing residents with greater choice of where to live and supporting their engagement with the state regarding future spaces and settlements.

Medium Term Strategic Framework (MTSF)

He highlighted the Medium-Term Strategic Framework (MTSF) from 2019 to 2024, which aligns with the NDP's vision by identifying three interrelated outcomes for spatial transformation: national frameworks for cohesive spatial development, regional interventions to unlock opportunities and address environmental risks, and integrated service delivery transformation.

Referencing the State of the Nation Address in February 2024, Mr Makhanye noted the priorities on human settlements, including a R100 billion infrastructure fund allocation over ten years. He mentioned that 34 of the 50 strategic projects were in implementation, accounting for R281 billion of the total budget of R240 billion. Several catalytic projects worth R21 billion were set to commence in 2024, with R26 billion contributed by government and the balance from the private sector and development finance institutions.

Performance Analysis

In the performance analysis, Mr Makhanye discussed the capital subsidy model in place for over two decades. New priorities emerged due to exponential population growth and changes in household formation, necessitating a hybrid delivery model. This model involves the public sector-driven "Breaking New Ground" (BNG) programme, People's Housing Processes (PHP), housing cooperatives, and informal settlement upgrading. The Department aimed to finalise macro policy foundations, align norms and standards, and consolidate these into a National Housing and Human Settlements Code.

Budget Analysis

Mr Makhanye then proceeded to the budget analysis, highlighting that the Department received an allocation of R33.1 billion for the financial year 2024/25, a nominal increase of 4.4%. However, after accounting for inflation, this represented a real decline of 0.32%. He noted that the Integrated Human Settlements and Development Programme received an above-inflation increase of 2.37%.

He explained that 96% of the budget, approximately R31.67 billion, was allocated to provinces, municipalities, and public entities implementing human settlements programmes. The Department reported a staff complement of 584, a decrease from the previous year's 587.

Observations and Recommendations

Mr Makhanye summarised the observations and recommendations from the Committee's deliberations. Observations included the disconnect between budget reductions and performance targets, housing application backlogs, illegal sales of RDP houses, unspent provincial grants, and the need for timely legislation on human settlements. Recommendations called for detailed progress reports on budget mitigation measures, a workshop to orientate committee members on human settlements policies, digitisation of beneficiary lists, prioritisation of struggling provinces, and enhanced communication of Department activities to the public.

To conclude, Mr Makhanye emphasised the importance of addressing these challenges and ensuring effective and efficient use of resources to achieve the Department's goals.

Discussion

The Chairperson thanked the Members and asked them to consider the report, especially focusing on the Committee's observations and recommendations. He requested their inputs before adopting the report.

Mr L Mpithi (DA) sought to clarify several points, particularly point number five on page nine. He clarified that his concern was not that the National Home Builders Registration Council (NHBRC) was involved in building the Victoria Building in George. Instead, he questioned whether the NHBRC had conducted the necessary inspections and approvals, which they were mandated to do to ensure the quality of buildings nationwide. He also inquired whether the third company involved was registered with the NHBRC and appeared in their database as a competent and registered company. This was important as many housing projects suffer from poor quality workmanship, resulting in houses falling apart within a year.

Mr Mpithi then pointed out a missing observation regarding the Community Schemes Ombud Service (CSOS) and its digital platform. This platform was meant to facilitate interactions for residents and homeowners within community schemes, especially concerning issues like levies. He noted that there was no mention of this R17 million platform in the annual plan or budget.

He raised concerns about provincial and municipal grant allocations, asking the Department to explain their strategy for assisting municipalities and provinces that fail to spend their grants. He acknowledged the Minister's statement that budgets would no longer be reappropriated from one province to another.

Lastly, Mr Mpithi requested a strategy to unblock the numerous stalled projects across the country. He emphasised the need for the Department to provide a clear plan for completing these mega projects.

The Chairperson thanked Mr Mpithi and asked the Secretariat to note his points for correction and inclusion in the observations. He then invited further views from the Members.

Mr Poole, whose network connection was poor and often inaudible, began by thanking the Chairperson and greeting everyone. He sought clarification on Observation 4.1, specifically bullet point four, questioning whether it included the Annual Performance Plan (APP) of the Department.

He then addressed the issue of budget decline, questioning whether inflation rates were considered when preparing the draft budget to avoid the current real decline.

Mr Poole reiterated his query, asking if the APP was included under observation bullet point four and sought further clarification regarding the real decline in the budget due to inflation.

Responses

The Chairperson expressed his thanks and asked if there was any further input. With no additional input from Members, he invited Mr Makhanye to make comments before the report's adoption.

Mr Makhanye responded that he could not comment on behalf of the Department of Human Settlements, particularly concerning Mr Poole's question. He stated that he could only note the Committee's concerns and ensure that the concerns raised by Mr Mpithi and Mr Poole were recorded. He suggested that these concerns could be raised again when the Department was present to respond appropriately.

Mr Sabelo Mnguni, the Committee Content Advisor, then asked for 20 minutes to review the report and make minor corrections. He proposed making the observations and recommendations consistent for clarity and coherence.

The Chairperson thanked Mr Mnguni and noted the importance of teamwork in future report preparations, acknowledging that Mr Mnguni was not part of the meeting. He then addressed the Members, incorporating the inputs from Mr Mpithi and Mr Poole, and asked for the report to be considered for adoption.

Adoption of the Report

Ms M Bartlett (ANC) moved for the adoption.

Ms Magagula seconded the motion.

The Chairperson confirmed that the report was adopted by the Committee. He acknowledged that some Members might still need mandates from their political principals for the debate but assured them that this would not be an issue. The report would be amended as per the inputs from the Members, with typos corrected, and then sent to the relevant offices for ATC. Once the report was ATC'd, it would become the property of Parliament, allowing the Members to debate with the knowledge that the report had been officially recognised.

See report here https://pmg.org.za/tabled-committee-report/5892/  

Closing remarks

The Chairperson proceeded to make closing remarks, thanking the Members for their commitment, especially given the short notice for the meeting. He apologised for the inconvenience but appreciated the dedication shown. The budget vote debate was scheduled for 17 July 2024, and the Members were advised to check the programme of Parliament. Members of the Committee would represent their different political parties in the debate and ensure the budget was effectively discussed.

The Committee Secretary stated that there were no further announcements.

The Chairperson reiterated thanks to the Members and the support staff, confirming that the report would be corrected and amended as needed before being submitted for ATC. The meeting was then officially closed, with the Chairperson wishing everyone an enjoyable weekend.

Meeting adjourned.