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SOCIAL SERVICES SELECT COMMITTEE FINANCE SELECT COMMITTEE 6 March 2006 DIVISION OF REVENUE BILL 2006/07 HEARINGS - NATIONAL DEPARTMENTS: EDUCATION, HEALTH, SOCIAL DEVELOPMENT AND NATIONAL TREASURY Chairperson: Mr T Ralane (ANC, Free State) Documents handed out: National Department of Education presentation National Department of Health presentation PowerPoint presentation by the Department of Social Development on budget PowerPoint presentation on Provincial Infrastructure Grant SUMMARY The National Department of Education stated that there was a substantial increase in the baseline allocation from R12 billion to R13 billion for the 2006/07 financial year. Significant increases were in the Higher Education Block Grant with a further R350 million being allocated as a subsidy to higher education institutions. An amount of R50 million had been put aside as the first payment for a new office building for the Department. There was an allocation of R144.471 million for the HIV/AIDS grant. The Department envisaged that in the 2006/07 year, 600 master trainers would be trained on the integration of Life Skills and HIV/AIDS programmes across all learning areas of the curriculum. The National Department of Health stated that the Department administered seven conditional grants. The health conditional grants constituted about 95% of the National Department’s total budget of about R10 billion. The Forensic Pathology Services was a new grant after a cabinet directive to place forensic services under the Department of Health. Some of the challenges faced by the Department included having to receive 84 monthly and 28 quarterly reports from provinces while enforcing the strict due dates. There was a high staff turnover in the provincial and national offices and the conditions attached to the grants were so numerous that some staff chose to spend the equitable share first. The Committee was briefed on the Department of Social Development's budget with much focus on the HIV/AIDS grant and social assistance. The Social Assistance Budget would now form part of the national sphere’s share in terms of the equitable division of revenue. Social assistance would no longer be a conditional grant. Social assistance funds were specifically and exclusively earmarked in the Appropriation Bill. The HIV and AIDS conditional grant had been incorporated into the provincial equitable share. The Integrated Social Development Grant (previously known as National Food Emergency Grant) was also incorporated into the provincial equitable share. This would allow the Department and the South African Social Security Agency (SASSA) to focus entirely on the management of the social assistance function. The Committee was also briefed on the Provincial Infrastructure Grant. Under-spending was persisting. There were problems relating to planning (no long term, and forward project planning), budgeting (not based on prioritised projects) and performance. There were weaknesses in institutional arrangements for delivery (client/agency relationship) and delays in procurement processes. Capacity in departments and public works remained a major challenge. There was an Infrastructure Delivery Improvement Programme to help with the development of appropriate capacity for infrastructure delivery and infrastructure plans that would provide a clear measure of needs, supply, backlogs and prioritisation. There would be a development and enforcement of contracts or service level agreements. The Committee raised a number of issues including the following: - why the HIV/AIDS grant was incorporated into the provincial equitable share despite the fact that they had not been able to use the grant over the years. - whether SASSA would be able to discharge its mandate without problems. - what could be done to encourage provinces to plan ahead. - whether provinces had indicated which skills were in short supply. MINUTES Department of Education Presentation Mr P Benade (Chief Financial Officer) said that there was a substantial increase in the baseline allocation from R12 billion to 13 billion for the 2006/07 financial year. Significant increases were in the Higher Education Block Grant with a further R350 million being allocated as a subsidy to higher education institutions. Additional funds of R20 million for the 2006/07 year were allocated for Human Resource Systems and Development, and an amount of R15 million was also allocated for the implementation of a National Curriculum Statement. The total grant allocation for higher education institutions was R11.7 billion, of which R10.2 billion would be allocated subsidies, R568 million would be part of the restructuring programme of these institutions, and National Student Financial Aid Scheme would receive R926 million. In conditional grants, the allocation for the National School Nutrition Programme (NSNP) was R1 098 million. This was a substantial increase from last year’s amount, even excluding the R200 million that had been allocated later on in the year. The increase in the HIV/AIDS grant was nominal to factor in inflation. An amount of R50 million had been put aside as the first payment for a new office building for the Department. There was an allocation of R144.471 million for the HIV/AIDS grant. The Department envisaged that in the 2006/07 year, 600 master trainers would be trained on the integration of Life Skills and HIV/AIDS programmes across all learning areas of the curriculum. Also, 25 000 educators would be trained to integrate the programmes across all learning areas of the curriculum. Some of the outputs expected from the NSNP were that about 5.5 million learners targeted from 17 000 schools. Targeted learners at schools would be fed for five days of the week in all of the provinces and the Department expected 4 500 schools to have small food gardens or small stock projects. Some of the achievements in 2005/06 were that 5 million learners were fed on recommended menus on a minimum of 156 days while there were 3 107 sustainable food projects in progress in schools. In the coming year, R470 million would be allocated to the provinces for the FET College Recapitalisation. The Department expected 100 practical workshops to be carried out at 50 FET colleges with new equipment being delivered and installed. About 200 campuses would be rehabilitated, with 2 000 college staff being trained for curriculum development and programme delivery. In conclusion, the total budget had increased by R1 732 million or 13.97%, which was a substantial increase. The Higher Education Block Grant increased by 10%, which was 75.42% of the total budget allocated to the Department. The total allocation to conditional grants increased by 63%, which was 12.12% of the Department’s total budget. Discussion Mr E Sogoni (ANC, Gauteng) asked if the teachers trained as part of the Department’s HIV/AIDS programme understood their role after training, and whether they had enough resources to utilise those new skills. Ms N Pandor (Minister of Education) replied that the Department was concerned about the impact of the training, and more could still be done. Mr C Goeieman (ANC, Northern Cape) asked how the Department had arrived at the figure for the number of children that were going to be feed in the NSNP, and how much this would cost them per child. Ms Pandor replied that the cost came to about R200 per child. The Department was also encouraging schools to have gardens to reduce their reliance on the Department. Some schools were doing so well that they no longer required the Department’s help and were actually selling some of their excess produce to earn more income. Mr D Botha (ANC, Limpopo) asked what the Department was doing to help the provinces spend their money effectively and if all the provinces had submitted their business plans. He wanted the Department to furnish the Committee with those business plans to help the Committee with its oversight function. Mr Benade replied that all the provinces had submitted their business plans for 2006/07, and would have received some feedback from the Department by now. Ms Pandor said that she would not give the Committee access to their business plans as they already had access to the Department’s annual strategic plan which was a public document. She would not give the Committee access to those the Department received from provinces as they were sent at her request. The Chairperson asked what the reason was for the sharp decrease in the numbers of learners and educators trained in the HIV/AIDS programme. In 2003/04, 12 989 learners and 34 470 educators were trained. In 2004/05, this had increased to 64 014 and 102 822 respectively, but the number dived in 2005/06 to 35 136 learners and 17 022 educators trained. Ms Pandor replied that a large proportion of people had been trained but the problems lay in the amount of materials they had. The lower figure was a result of a change of focus to provide more support material such as work-books and so forth. There had to be an assessment of whether the HIV/AIDS interventions were working. Mr B Tolo (ANC, Mpumalanga) asked if the Department could guarantee that all the children entitled to food in schools would be fed. Ms Pandor said that it would not be possible for her to give such a guarantee. At best, she could say that it was her "expectation" that the children would be fed, considering the funding available and the criteria laid down. Department of Health Presentation Mr G Muller (Chief Financial Officer) said that the Department administered seven conditional grants. The health conditional grants constituted about 95% of the National Department’s total budget of about R10 billion. The conditional grant system had evolved since 1998. The Division of Revenue Act had become stricter, the duties of transferring and receiving accounting officers were extended and payment schedules were added. The rules on the withholding of funds were tightened, more classes of grants were created, instructions to the Auditor-General were added and risk management procedures were added. But, as the conditions became stricter, flexibility was sacrificed. The Department administered the following grants: National Tertiary Services (NTS); Health Professions Training and Development (HPTD); Hospital Revitalisation (HR); Hospital Management and Quality Improvement (HMQI); HIV/AIDS; Integrated Nutrition Programme (INP) and Forensic Pathology Services (FPS), which was a new grant. The spending level in the NTS was at 82%, whilst that in the HTPD was 81.8%. He said that the Hospital Revitalisation Grant was the most difficult one to administer. It was centred on capital expenditure and increased substantially from R1.2 billion to R1.4 billion. The HMQI Grant was going to be incorporated into the HR Grant from 2006/07. The INP Grant was fairly small and was being discontinued from the end of the month. Any further funding will be incorporated in the Equitable Share for 2006/07. The FPS was a new grant after a cabinet directive to place forensic services under the Department of Health. Some of the challenges faced by the Department included having to receive 84 monthly and 28 quarterly reports from provinces while enforcing the strict due dates. There was a high staff turnover in the provincial and national offices and the conditions attached to the grants were so numerous that some staff chose to spend the equitable share first. Auditing was problematic and there were problems in having multiple implementation departments for the HR Grant. Discussion Mr Botha and Mr B Mkhaliphi (ANC, Mpumalanga) asked, since the Department had identified challenges, what was being done to solve them. Mr T Mseleku (Director-General) said that there were ongoing measures being taken by the Department in conjunction with other Departments such as Public Works. In other instances it might be useful to go beyond Public Works and work with other service providers. Ms J Masilo (ANC, North West) asked if there was an allowance in the budget for the upgrade of provincial clinics. Mr Muller replied that the HR Programme only dealt with the upgrade of hospitals. Individual provinces had to make allowance within their own budgets for the upgrade of clinics. Mr Tolo asked, since it was the Department itself that imposed the conditions, why did they not relax them to allow provinces to spend. He questioned the reasons for such a high labour turnover. Mr Mseleku responded that the conditions for the grants were set by the National Department along with National Treasury. Some provisions, such as the reporting systems were not as detailed as those relating to the management of budgets. There was some manoeuvrability in this area. He said that the issue of staff turnovers was a complex one as the staff involved in the HR programme had to possess special skills for instance. Such people were in demand in Government generally so there was competition from other Department’s for their services and the private sector. The Chairperson asked if the Department had achieved its goals regarding the INP. Mr Mseleku said that as an integrated programme, other issues such as the fortification of food and the ensuring of the correctness of menus were included in the programme. Now that the NSNP had been shifted to the Department of Education, there was no need for a grant. The Health Department would still concern itself with the health aspects of school nutrition as the responsible Department, so in that regard, not all of the objectives had been met. It was an ongoing process. The meeting adjourned for lunch and on it’s resumption the Committee was briefed by the Department of Social Development. Department of Social Development briefing Delegation: Mr C Phakade (CFO), Mr F Makiwane (CEO- SASSA), Dr M Mabetoa (Chief Director: Children and Families) Mr S Jehoma (Acting Deputy Director General: Social Security, Dr C Kganakga (Chief Director: HIV/AIDS), Mr B Nel (MEC: Treasury-Eastern Cape), Mr P Makgoe (MEC: Finance- Free State), Ms T Xasa (MEC: Social Development- Eastern Cape) Mr S Sekoati, MEC for Health and Social Development- Limpopo) and Mr H Morule (North West Head of Department: Social Development). Mr Phakade delivered the presentation. (See document attached). He focussed on the Department's strategic priorities, the National Department’s share of budget and the Social Assistance Function. The Social Assistance Budget would now form part of the national sphere’s share in terms of the equitable division of revenue. Social assistance would no longer be a conditional grant. Social assistance funds were specifically and exclusively earmarked in the Appropriation Bill. Discussion Ms J Masilo (ANC)[North West] noted that the HIV/AIDS and the Integrated Social Development grants would be incorporated into the provincial equitable share. She asked if provinces would have enough capacity to manage the grants. She questioned who monitored the National Development Agency (NDA). There had been cries about funding to non-governmental organisations (NGOs) by the NDA. She also asked if there was a link between Lovelife Groundbreaker and HIV programmes. Mr Phakade admitted that there was still a lot to be done in relation to the funding of NGOs by the NDA. Dr Kganaga replied that the Lovelife programme was part of HIV/AIDS programme but the focus for Social Development was on informal settlement and the farming communities. The Department had a monitoring tool for the programme. Mr E Sogoni (ANC)[Gauteng] said that provinces had not utilised the money when the HIV/AIDS grant was a conditional grant. The grant would now form part of the equitable share and was not ring-fenced for HIV/AIDS. He asked how the Department would ensure that the money would be used for the intended purposes. Provinces would have the discretion to allocate the money for something else once it had been incorporated into the equitable share. He asked if there were other mechanisms that the Department or SASSA would employ to ensure that services would continue to be rendered to people. An amount of R10 million has been set aside for the oversight of SASSA. He asked who would conduct the oversight. During its engagement with the Department of Education, the Committee had raised certain issues like the relationship between the Department of Social Services and Education. It seemed like there was no relationship between the two Departments. He asked if the Departments were intending to establish some relationship. It would be interesting to know who looked after school going children who were affected or infected by HIV/AIDS. Mr Phakade replied that the R10 million was estimated to be the amount that would be required to establish the relevant components. There was a requirement for an Inspectorate and an Appeal Board to be in place. The National Department had been complaining about weakness in monitoring and a special programme had been developed to deal with oversight and the regulatory framework. The R10 million was just kick start funding. Dr Kganaga replied that the Department was working with other government Departments (Health and Education) as a cluster. The Department of Health had finalised guidelines for dealing with children across the board. The guidelines covered HIV/AIDS and opportunistic diseases. Most children could survive on just being treated for opportunistic infections/diseases. Mr Makiwane replied that the establishment of the Agency was not an event but a complex process that would go through a number of phases to ensure an effective and efficient machinery to manage the social grant programme. He assured the Committee that people would receive their benefits as usual. The Agency had mapped out the critical steps that should be taken to ensure a seamless transition. One of the issues was that there should be a well-capacitated Head Office to drive the transition throughout the country. The Chairperson asked if the Department was shifting the goal post because there was so much under-spending on the HIV/AIDS grant. He asked if the Department had achieved what it had set to achieve with the grant and why it was transforming the grant to become part of the provincial equitable share. He could not understand why there was that transformation, given that people were not able to spend the money on the basis of business plans that they had submitted. Making the grant part of the equitable share would give them the discretion to allocate the money to something else. He wondered why the Department had not adopted a phased in approached based on whether the grant was achieving its purposes. In January there were clear patterns of under-spending and the Department was going to make the grant part of the equitable share despite the clear patterns. He asked if the Department was convinced that the set measurable objectives would be met by making the grant part of the equitable share. The only province that was doing well was the Western Cape. There was a problem that had to be addressed. There were a large number of NGOs. He asked if the NGOs had been transferred to SASSA. Some of the challenges were the issues of training, capturing of data and payment of NGOs. The Department of Education had the responsibility of developing skills in terms of their HIV/AIDS grant. He asked if the number of learners and educators who had been trained had any direct link with home-based care. He asked if, in essence, the Department of Social Development was able to use the skills developed to achieve its mandate. On the shifting of the funding mechanism and the under-spending, the CFO replied that there were robust discussions around the matter during the Medium Term Expenditure Committee (MTEC) hearings. This was one grant that had performed badly until 2003 when there was an improvement in terms of performance and real capacity was built at a provincial level. There were serious debates on the merits and demerits of conditional grants. Conditional grants secured some level of certainty around the flow of funds over the MTEF. There was a serious argument that in the long run the function should be performed at a provincial level. The programme itself had matured enough for province to run it with a level of certainty. The home based care centres were currently running across the country. The Department had changed the funding mechanism over the years. The funds that were channelled towards the last quarter were the ones that were probably not spent. The Department had changed its funding approach and had given the bulk of the money earlier in the financial year. The issue of capacity had always been raised and given the magnitude of the work the question was whether programme should not be phased in into the equitable share. The MTEC had decided to incorporate the money into the equitable share. Mr Makiwane replied that NGOs would not be transferred to the Agency but would be dealt with by the Department. NGOs were part of the welfare services environment. Dr Kganaga replied that provinces had to beef up their monitoring and evaluation capacity and this was factored into their budgets. Provinces would continue to send their business plans and quarterly reports to the national Department so that the Department could be able to monitor service delivery. In anticipation of problems, the Department had thought that it would be better to develop norms and standards for home-based care. The norms and standards would enable the Department to evaluate how service delivery was taking place across the country. One of the causes of under-spending was the capacity of NGOs to deliver on their mandate and the capacity to deal with funding. The Department had assumed the responsibility of building the capacity of NGOs to deliver on the mandate and handle finances better. The Chairperson noted that as from the 6th of March 2006 social assistance functions had shifted to the national government. He asked if everything was ready and what were the conceivable challenges the national government would have to deal with in relation to social assistance. Mr Makiwane replied that there was a division of revenue between now and the end of the financial year. The monies were already in the provinces. There was a Memorandum of Understanding (MOU) that regulated the administration between the national Minister and the MECs. This arrangement should continue whilst the Agency was getting everything in place. Mr D Botha (ANC)[Limpopo] asked if the Department could assure the Committee that there would be no vacuum between the Department, provincial governments and SASSA. Any vacuum would result in problems and suffering for the people. Mr Sogoni said that there was always the problem of capacity. The social assistance function had been taken to the national government due to the challenges faced at the provincial level. The Minister of Social Development had indicated that there was a number of government officials who were receiving grants to which they were not entitled. SASSA would be responsible for ensuring that funds went to the right people. He asked if the Agency could say whether such kind of things would be dealt with in a way that people who were not supposed to get money would not get it in future. Mr Makiwane replied that the Agency would ruthlessly deal with the issue of fraud. This was one of the issues that the President had alluded to in the State of the Nation Address. All officials who were fraudulently receiving grants should be followed through and weeded out. There was an alliance with the Special Investigative Unit and the Agency was also interfacing with databases of other government Departments to ensure that it could pick up the anomalies in the system. The Chairperson said that he had visited a certain hall in his Constituency. The hall did not have water or a toilet. It was full to capacity with disabled people and it was not properly ventilated. He asked who would become responsible for such matters now that SASSA had taken over. Some of the elderly people normally slept on the street overnight so that they could be the first people to get their pay outs the following morning. He asked if the Agency was ready to deal with such matters in the context of caring for the elderly. Ms Mchunu (IFP) said that children were entitled to grants up to the age of 14 years. She asked what happened when they turned 15 but were still in school. The Chairperson asked if SASSA had a well capacitated Head Office. MECs were still pleading incapacity. The CEO agreed that the Head Office was well capacitated. Provinces would be phased in this year. There was a function run under programme 2 which was a function social security officials who captured information and ensured that applications and payments were done. Provinces would have no support staff if the Agency was to hive off this element. This was one reason why the Agency would not just jump and say every body would from that day fall under the Agency and that there would be no role for provinces. Provinces were giving back to the Agency. There should be an agreement at a political level whereby the giving back of agencies would be well managed. Nothing would change except that officials in provinces would have to report to the national Head Office. It was important not to interfere with the grant system as it currently stand. The Agency had ring fenced and isolated all people who should move to the it. The parent Departments would still be involved in terms of support services. He conceded that there would be no improvements by the 1st of April 2006. The infrastructure that was required could not be put in place over night. It would take some years before one could see better pay points and infrastructure. The Chairperson requested the Department to go back and evaluate the issue. The Committee was of the view that there was a huge under-spending hence the question whether there had been value for money in the programme. Provinces like the Eastern Cape had managed to effectively deal with corruption in the system. The Agency was assuming that it would be able to deal with all issues in a proper manner than it had been the case before. He was worried about the confidence of the Agency and hoped that it was not just a publicity stunt. The CFO welcomed the views expressed by the Chairperson. They emphasised the views expressed by Mr Makiwane that the establishment of the Agency was a process and an overnight thing. Things could improve for the better. The system in the Eastern Cape was being rolled out nationally. The plans were in place but the real issue was how to manage and monitor them. The Chairperson asked the MECs to express their views on problems that they were experiencing in relation to the HIV/AIDS grant. Mr Sekoati said that his province would support the Agency until it could fully function on its own. He noted that there was no mention of the period within which the Agency would be able to full function on its own. Provinces would still remain with the challenge of dealing with some of the problems that the Agency would experience. People would still direct their problems to the provincial Departments even though the Agency would be in charge of the function. He conceded that there were capacity problems in certain areas. It was important for the organograms of Departments to be restructured so that they remain relevant following the coming into operation of the Agency. Ms Xasa agreed that provinces would remain relevant after the Agency had come into operation. It would be important to restructure the provincial Departments and put more emphasis on monitoring and evaluation of programmes. Most reports had focussed on the expenditure side and not on the real impact of the expenditure. Mr Morule said that more clarity should be given in writing particularly on the roles and responsibilities of provinces in relation to oversight and dealing with issues raised by communities. Presentation by National Treasury on Provincial Infrastructure Grant Mr L Fuzile (Deputy Director-General: Intergovernmental Relations) made the presentation. (See document attached). He focussed on the following issues: - trends in the allocation of the infrastructure grant - the grant framework - Schedule 4 grant - the allocation criteria - conditions and administration of the grant - performance/impact of the grant - growth in budgets and expenditure trends and - intervention to improve planning and spending capacity Discussion Mr Sogoni noted that the grant was flexible but had certain guidelines. He asked if this meant that provinces could come up with infrastructure programme in education and the Treasury would not be interested in knowing the details. Instead, it would just approve the programme as long as it was under education. The Chairperson asked what superseded the other guidelines referred to by the presenter and section 9(3)(a) of the Division of Revenue Act. He thought that the section superseded the guidelines. Mr Fuzile replied that the idea of the grant was that most of the executive decision rested with the provinces. The reason this approach was adopted was that provinces were closer to the conditions that prevailed within them. There was the understanding that one should give more flexibility to provinces to take certain decisions on the basis of what had happened. If a province had decided to use a lot of resources to wipe out all education related backlogs, there would be no need to continue to channel more money to education if the infrastructure were of the required standard. The guidelines and the Act were not contradictory. Mr Z Kolweni (ANC)[ North West] asked if provinces had indicated which skills were in short supply. There were provinces that were in advance in terms of taking stock of what was stopping them from delivering services. It had been shown that there was no harmony between various Departments and the Department of Public Works. Mr Fuzile replied that most provinces had identified the required skills in the education sector. Treasury had assisted in the identification of the skills that were lacking. Some provinces could not attract the required skills because they were seen as predominantly rural and lacking top class infrastructure. Some provinces had people in post but those people did not have the necessary training. Another problem had to do with the division of responsibilities between Public Works and line function Departments. It was like Departments were chained to a dysfunctional relationship. It was important to tackle the issue of the relationship. The question was why Departments should still be chained to the relationship if it was not producing results. Mr Botha said that provinces had the tendency to wait for money to be transferred to them before making plans on how to spend it. Provinces should have provisional plans by July and finalised plans should be submitted by the end of September or beginning of October. He asked what happened should provinces not submit their plans by end of September or beginning of October. Mr Fuzile replied that the obvious thing was to withhold the money if the plans were not submitted. No less that R1 billion from the infrastructure grant had had to be delayed at some time. Treasury would also ask the technical assistants as to what they were doing to assist provinces in ensuring that the plans were on the table. Ms Mchunu said that in some provinces the Expanded Public Works Programme (EPWP) was not under the provincial Department of Public Works. Mr Fuzile replied that the EPWP had various components scattered across all government Departments. Mr Goeieman (ANC)[Northern Cape] said that every financial year the Committee heard about lack of capacity especially in relation to public works. He asked if Departments that had capacity could not be allowed to be in charge of their projects on condition that they would give the projects to the Department of Public Works once it had acquired the necessary capacity. It had been said that under-spending was there but was not as reported. Under-spending was bad given the annual increase in the prices of products. Mr B Tolo (ANC)[Mpumalanga] said that the Committee had always raised the problem of provinces not planning ahead. The Department of Health had indicated that it was too simplistic to say one could plan ahead but the presenter was saying that it was possible. It seemed like the Departments were not buying the notion that one could plan ahead. He asked what should be done to ensure that Departments could believe that it was possible to plan ahead. He also asked what was the attitude of Treasury towards Departments acquiring their on expertise to equal that of the Department of Public Works. Mr Fuzile believed that there was much that could be done in terms of planning without committing a Department to a particular course of action. For instance, a Department could plan ahead without binding itself by contracts. The Chairperson asked for comments from the provincial MECs for Finance. Mr Nel said that provinces were unique. The debate over backlogs would go on ad infinitum. What the National Treasury deemed as a backlog might not necessarily be deemed as a backlog by the province's Executive Committee. The tendency was to cut spending on infrastructure when there was financial difficulty in a province. A lot of budgets were based on emotions and not integrity. For instance, if Agriculture was given a 10% increase, people would not disagree because it produced food. It was important to look at the Department's capacity and one could always make adjustment to the budget should it become necessary. The roads function had been moved from Public Works and funds had followed the functions. Some people had complained why the budget of the Department of Public Works had been reduced despite the fact that roads were not in good condition. They tended to forget that, although moved to another Department, the budget for roads had been increased. People were very quick to react even though they had little knowledge of the facts. He said that the province was fortunate to have Coega (a co-ordination agency) assisting in the co-ordination and planning of infrastructure. The province was aiming to establish its planning and co-ordination agency. There would be no problems in provinces if there were Public Works Departments that were working well. There was a lot of jealousy and lack of trust within Departments. Mr Makgoe said that provinces were facing the problem of shortage of skills but there was a tendency to overplay the problem. The Free State had managed to build a high quality casino within six months. There was a tendency to say there was lack of capacity whilst in fact the problem was with the management. It was important not to fall into the trap of competing Departments. In some cases one would find that the problem was supply chain management and not skills. It was important to critically analyse the problem so as to come to the correct decision. It was interesting that Departments wanted to have their own experts. The Northern Cape was struggling to attract just one engineer. One wondered how it would be able to recruit engineers for each and every Department. He said that there were people who were not used to the idea of planning ahead. Some of the people who were Directors in Departments were from the era of one-year planning. The Strategic Plans were not being used as tools for fore planning. It seemed like people made their Strategic Plans just to comply with Treasury requirements. The meeting was adjourned.