Analysis and Critique of Expanded Public Works Programme: briefings

Meeting report

PUBLIC WORKS PORTFOLIO COMMITTEE
02 November 2005
ANALYSIS AND CRITIQUE OF EXPANDED PUBLIC WORKS PROGRAMME: BRIEFINGS

Chairperson: Mr F Bhengu (ANC)

Documents handed out:
Department of Public Works Environment and Culture Sector Power Point presentation
Saldru UCT School of Economics: A Critical Appraisal of the EPWP
DBSA: Analysis of EPWP impact
Department of Public Works Annual Report 2005 [see www.publicworks.co.za]
Construction Education and Training Authority

SUMMARY
The Department of Public Works Social Sector summarised the briefing from the previous meeting. Training was the most important component for expansion in the social sector. All relevant departments, provinces and stakeholders had approved an integrated Social Sector Plan for the Expanded Public Works Programme (EPWP).

Environment and Culture Sector EPWP reported that National and Sector co-ordination structures met regularly. There had been improved information flow and reporting between provinces and national structures. Five provinces had already developed draft sector plans and implementation plans. Courses offered in the sector were now being accredited and meetings had been held with various Sector Education Training Authorities (SETAs).

The Committee discussed the need for Public Private Partnerships, better community understanding of EPWP guidelines, increased involvement of local authorities, and the need for improved use of the Building Maintenance Programme to provide EPWP job opportunities.

Ms A McCord presented a critique of the EPWP component of the Department of Public Works’ Annual Report to the Committee. Ms McCord questioned whether ‘labour based techniques’ were being utilised as had been intended. Were workers receiving work experience, training, further work and education opportunities, and SMME development? She argued that the programme would not be able to address the structural large-scale unemployment in South Africa. The Committee resolved to organise a workshop with the Development Bank of South Africa (DBSA) and Ms McCord to discuss the issues raised.

The DBSA provided the Committee with an analysis of the impact of EPWP. The Bank had a triple role of providing funding, advice and partnership. It had integrated the EPWP into its broad-based development support, and integrated the EPWP labour intensive principles into its business and appraisal processes. The Committee raised the issue of capacity building regarding technical skill shortages at local level and how best the nation could address the problem.

Mr T Dlamini, CEO of CETA gave short briefing to the Committee on the contribution of CETA to the Expanded Public Works Programme. He mentioned that the CETA did not enough funds to train enough people, they had asked for more funds from the National skills Fund. Members concerns included the insignificant number of women who were trained by the CETA. The emerging contractors were dissatisfied with the way that CETA operated.

MINUTES
Summary of Social Sector, Department of Public Works (DPW) briefing
Ms J Msiza (Director Social Sector DPW) summarised the briefing, which had been handed out at the previous meeting. Training was regarded as the most important component for expansion in the social sector. In the social cluster the initial focus of the Expanded Public Works Programme (EPWP) was on the expansion of Home and Community Based Care, community health workers, and Early Childhood Development (ECD). These programs were highly labour intensive.

The work opportunities would consist of skills programmes and learnerships during which care givers, health workers and ECD practitioners would undergo formal training while also doing practical work in those areas. All relevant departments, provinces and stakeholders had approved an integrated Social Sector Plan for EPWP. The integrated ECD plan included a more holistic approach to child development, greater expansion through budget allocation by the Departments of Health, Education and Social Development, and pilot training programmes in a number of provinces. A caregiver audit to determine the scope of care given had been undertaken as well as a study funded by the Development Bank of South Africa (DBSA) and Social Development to look at expansion opportunities in social sector and capacity constraints. Leadership and capacity training was being provided to NGOs so that they could learn to become independently funded.

A national Social Sector workshop had been planned for 21 – 23 November in Bloemfontein to create a common understanding of what EPWP in the social sector meant, as well as having provinces present their business plans so that Treasury would allocate budgets. A training framework for the sector had now been approved. Most training programmes would start in January 2006.

Discussion
The Chairperson requested a detailed copy of that report.

Environment and Culture Sector EPWP: briefing
Ms C Makunike (Director Training and Environment DPW) noted that the Environmental Sector included the Departments of Agriculture, Science and Technology, Arts and Culture, Water Affairs and Forestry, and Environmental Affairs and Tourism. The Departments contribute to the development and implementation of business plans, progress reports and sector plan improvements in areas that related to EPWP.

National and Sector co-ordination structures met regularly with three sub-committees for monitoring and evaluation, training, and communication. There had been improved information flow and reporting between provinces and national structures. Five provinces had already developed draft sector plans and implementation plans. Courses offered in the sector were now being accredited and meetings had been held with various Sector Education Training Authorities (SETAs).

The environmental sector for the first quarter showed a R95.6 million expenditure, with 13 581 job opportunities been created within 371 projects. Challenges faced included outstanding implementation plans from four provinces, lack of provincial, and metro or municipality reports on environmental sector issues, creating environmental co-ordination structures within provinces, lack of dedicated capacity and budgets in provinces for EPWP, need for improved information flow, a training framework and improved delivery.

The Department had made five recommendations to address the challenges. Project Managers were to follow up on province sector plans not yet submitted, provinces, metros and municipalities were to be invited to sector co-ordination structures, environment sector guidelines were to be developed for EPWP, waste management was to be targeted, and the training framework was to be finalised.

Discussion
Mr L Maduma (ANC) asked if caregiver training included bookkeeping skills as those organisations would be involved in fundraising. Ms Msiza responded that book keeping, as well as areas such as entrepreneur and life-skills courses, were included in learnerships alongside the core course.

Mr Maduma raised the importance of caregiver training, encouraging job commitment to sustain the programme.

Mr C Wang (ANC) suggested that communities did not understand the guidelines for the EPWP. Ms Msiza noted that workshops had been held in rural and urban areas to communicate EPWP to communities. District Managers needed to become more involved.

Mr S Opperman (DA) asked if there were Public Private Partnerships (PPPs) in the area of ‘Working For Water’ given the huge threat of global warming. Interested private parties had approached him, wanting to become involved if the Department was able to ‘kick start’ the process. Ms Makunike said that private landowners should get in touch with the project and organise such ventures.

Mr J Blanché (DA) argued that unemployment could not be measured, as the report had not included benchmarks. He added that provinces were relying on social sector caregiver jobs, when in fact that was not job creation.

Ms Msiza responded that different provinces had different exit strategies. Caregivers were being exited into scarce skills, training as pharmacy assistants and nurses. In ECD, learnerships were available for Grade R teachers’ training courses and even BA Education training. The need for caregivers would lessen as people had more access to the health care system. The Department of Labour had confirmed it would fund the training programmes. There was the challenge of having few accredited trainers available in rural areas.

Ms Makunike outlined the example of ‘Working For Water’ teams as a model of skill development. Teams of fifteen people trained for specific tasks from contractor/leader and supervisor, to chain saw operator, brush cutter, health and safety officer and driver. They received advanced accredited courses in specific areas.

Mr Blanché suggested the Department investigate the possibility of local authorities being involved in the plan to alleviate the maintenance backlog of R12 million. DPW would be better placed to create more jobs in the area of maintenance than any other programmes being run. Mr B Gxilishe (DDG DPW) responded that this had been discussed in the infrastructure report, with projects already underway. Municipalities were not allowed to use the Municipal Infrastructure Grant (MIG) for maintenance. The difficulty arose in that there was no legal means to force municipalities to use their own funds for maintenance.

Mr N Gogotya (ANC) asked if national government buildings could be utilised in the programme. Mr Gxilishe noted that building maintenance, which falls under public works, was being used in EPWP. Currently, the Independent Development Trust (IDT) had been commissioned to manage that programme for the Department. There have been problems with the IDT’s performance. The Department felt IDT did not have the capacity to assist with the Building Maintenance Programme. In the last meeting with them, they asked for a last chance to prove themselves and a meeting to be held on Friday would determine that decision.

Mr Gogotya asked the Department to commit to time frames concerning the Building Maintenance Programme. Mr Gxilishe reiterated that Friday was the deadline for the Department’s decision.

Mr Blanché argued that the DDG should explore the avenue of involving local government in maintenance happening at a local level.

Ms Msiza concluded that the mandate of expanding the programme lay with the three Departments of Social Development, Health and Education and there were numerous challenges. She argued that the Department needed assistance from the Members. There were cases of provinces not utilising budgets earmarked for assisting communities. Members could assist the EPWP in expansion and creating an enabling environment. The Chairperson agreed that that related to other clusters as well. He made a commitment that all effected clusters would brief the Committee early next year. It would form part of the Committee’s programme.

Saldru, UCT School of Economics: briefing
Ms A McCord presented a critique of the EPWP component of the DPW Annual Report to the Committee. She presented an overview of unemployment in South Africa, stating that even with the current growth path over the next ten years, unemployment among low and unskilled labour was likely to remain above 30 percent. In addition, unemployment in the country was structural and had been rising rapidly since the 1970s. Large-scale employment creation was required.

Ms McCord asked what the management, admin and material costs, and percentage spent on labour wages of EPWP projects was. She noted that it was important to know the cost of a workday.

Ms McCord outlined the stated EPWP objectives of temporary job creation and training opportunities alongside the provision of public goods and services. She emphasised the important objective of public works programmes need ‘to facilitate exit strategies to build ladders between the second economy and the first economy.’ ‘Ladders’ are usually provided through wages, infrastructure and training. Ms McCord noted however, that in South Africa, temporary wages had little impact on poverty and infrastructure would have been created anyway. Training was therefore the most important component. Training would create long term improved labour market performance by participants. Only three percent of EPWP participants had access to learnerships.

Ms McCord noted that there were some inconsistencies in the given figures regarding actual employment in EPWP. The potential job creation impact of EPWP was extremely limited in terms of the unemployment problem. There had been problems with work experience. The construction industry accounted for 71 percent of EPWP employment. There was a risk of substitution in the construction industry as EPWP participants could simply replace those who had been employed. EPWP participants were not able to meet the artisan skill shortage in the industry.

Ms McCord questioned whether ‘labour based techniques’ were being utilised as had been intended. Were workers receiving work experience, training, further work and education opportunities, and SMME development?

The indicators in the Annual Report did not, in Ms McCord’s opinion, provide performance measurement against objectives. There were no impact/outcome indicators to provide evidence of EPWP’s success.

Discussion
The Committee agreed that Ms McCord had provided an important critique that needed thorough discussion and time constraints would hamper that. A workshop would be organised to discuss the issues raised, to be attended by the Committee, the Department and Ms McCord. The Department had a response to the critique, but would present it at the workshop. DBSA asked to participate in the workshop and the Committee agreed.

Development Bank of Southern Africa: briefing
Mr L Mashaba (Executive Manager DBSA South Africa Operations) provided the Committee with an analysis of the impact of EPWP. The Bank had a triple role of providing funding, advice and partnership. It had integrated the EPWP into its broad-based development support, and integrated the EPWP labour intensive principles into its business and appraisal processes.

The DBSA experience with initiatives linked to development funding such as EPWP, was hindrance due to lack of capacity at national, provincial and in particular municipal level. In the context of integrated development plans (IDPs), service delivery and systems development DBSA had provided municipalities with capacity building grant funding and technical assistance to plan and implement investment projects effectively. The DBSA had been involved in many projects throughout the country.

The Bank had suggested that audits be conducted for all municipalities on availability of skills, institutional systems, and human capacity. The findings should be developed into a co-ordinated strategy for implementation at national, provincial and in particular municipal level.

Discussion
The Chairperson said that they had requested the briefing form the DBSA because the Committee had been concerned that the issues had not been covered in the DBSA Annual Report. The report had also referred mainly to Ms McCord’s research, and he had wondered if there was any other available research in that field. However, he felt that after the briefing that day, the DBSA seemed to have a more positive approach.

Mr Blanché asked whether, in the light of MS McCord’s research on job costs, the Bank felt it should have looked at that issue. Mr Mashaba agreed that it was important for the Bank to have a position on the matter, but felt it would form part of bigger issues to be discussed at the proposed workshop. He added that there was often a time delay between intervention, output and outcome.

While understanding Ms McCord’s emphasis, the Bank was aware that programmes took a long time, and needed to be viewed over at least three years. When the Bank funded infrastructure programmes, it looked at the number of households serviced by the programme and job creation. Short-term job creation was not sustainable. DBSA was currently working on models to ascertain job costs.

Mr Maduma noted that the presentation was very different from the Annual Report. He inquired if DBSA were assisting municipalities in complying with EPWP programmes. Mr Mashaba responded that the Bank was involved in a number of programmes providing assistance within their own mandate. The Annual Report had been a ‘bird’s eye view’ of the work, providing a few detailed examples. The Bank focused at municipal level in all avenues. The challenge was a lack of capacity for implementation at a local level. DBSA had introduced a Section 21 institution to assist with the gaps. The DBSA capacity building programme took care of local level broad-based needs.

Mr Maduma raised the issue of capacity building regarding skill shortages and how best the nation could address the problem. Mr Mashaba agreed that there was a shortage of technical skills at a local level. DBSA had programmes addressing those needs, but they were ‘a drop in the ocean’. A long-term strategy was needed to employ and retain skills on the job. The issue had been raised many times with the municipalities and the Bank provided an integrated multi-pronged package to address the gaps.

Mr T Dlamini (CEO CETA) proposed that a review of interventions be drawn up so that lessons could be learned on the capacity issue. A more integrated approach in addressing technical shortages was needed.

Ms J Thorne (DBSA Manager: Policy Research) noted that the report the Committee was referring to was DBSA’s Development Report and not their Annual Report. The Development Report had tried not to focus on DBSA’s role, but provided a more objective assessment of Government’s poverty programme.

The Bank had supported EPWP in many practical ways. The Bank had similar concerns to Ms McCord. The EPWP was a small-scale project and could not be seen to address such a big unemployment problem. What the Bank had therefore proposed was a separate initiative. A broad-based national employment programme, where people could stay in a programme for two to three years, enabling them to have more exposure to training and allow them to save money to start up there own small businesses afterwards. DBSA was not saying the EPWP had to achieve those objectives, as it was not designed to do so.

The Development Report had assessed many programmes, and therefore the EPWP had not been given extensive coverage. On the issue of research, many studies had been used including UNDP and World Bank research. However, the McCord study was the only one assessing the South African EPWP, and was therefore a focus in the report.

Ms J Nhlapo-Hlope (DBSA Senior Strategic Planner) noted that a study undertaken for the Social Sector EPWP would look at the most cost effective way of delivering services needed in the community.

Mr Mashaba added that the Annual Report was to be delivered the following week.

Construction Education and Training Authority (CETA): briefing
The Committee heard a briefing from the CETA’s role in the Expanded Public Works Programme, he said that the CETA had committed itself to train 3000 using a R50million budget. He said that the National Skills fund had contributed R37, 5 million there was a need for more funds. On way forward the CETA would forward a project proposal to the National Skills fund.

Discussion
Mr L Maduma (ANC) said that when Members embarked on oversight trips people complained that CETA was not visible on the ground. The emerging contractors also complaining. He therefore asked whether the CETA saw that as a challenge. He wanted to know if the 3000 learner-ships were trained on an annual basis and he enquired as to the number of women contactors that had been trained.

Mr Dlamini replied that some road building construction companies were not willing to use labour intensive methods. The nature of the construction industry was such that males were dominant part of the industry. He said CETA did not discriminate against women. The mentorship programme was another method used by the CETA to coach emerging contactors.

Mr S Opperman (DA) enquired about the number of people who were already been trained by the CETA.

Mr Dlamini COO replied that only 800 people had been trained thus far.

The Chairperson said that the Committee would like to interact with the CETA on the Gautrain and the N2 Gateway Project. He said that members had to rush to a house sitting

The meeting was adjourned.