Children's Amendment Bill [B19-2006] Costing: Department & Treasury briefings

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE
29 August 2007
CHILDREN’S BILL COSTING: DEPARTMENT & TREASURY BRIEFINGS

Acting Chairperson: Mr B. Solo(ANC)

Documents handed out:
Children’s Amendment Bill [B19-2006]
Comments on the Costing of the Children’s Bill, National Treasury 28 August 2007

Audio recording of meeting

SUMMARY
The Committee received the legal opinion from the Parliamentary Legal Services on the questions whether further public hearings were needed on the Children's Bill. The legal advisors were of the opinion that the Committee needed to consider the context of the proposal not to conduct public hearings in other provinces and provide a basis for the ‘reasonableness’ of such a decision. The State Law Advisor advised the Committee at the very least to cover themselves legally by holding public hearings at the seat of Parliament in Cape Town, where there had been a specific call for them. Some Members believed enough had been done already. The issue would be debated further..

National Treasury advised the Committee of the costing of the Children's Bill, which it believed would be "astronomical", and alternative measures must be considered, including a phasing-in approach. The Committee had feared that allocations to provinces might not be used for their intended purpose. There were structural areas needing to be addressed, that included personnel constraints on the already-qualified and potential graduates, institutional arrangements with non profit organisations, and leverage of funding. Under spending was a problem as many provinces had already anticipated growth in their children's budgets. The Department of Social Development explained that there were savings costs on provincial budgets, and that the Department was already working on implementation plans and costings and was also looking at other options for child and youth care workers. The Departments were asked about the attitude to conditional grants, the setting of norms and standards, and the position of disabled social workers who were being refused employment. Members noted that stipends were not clear, and there was no certainty as to the number of NPOs. Treasury did not think that there should be commitments to fund, but commitment to deliver services. Members were concerned that the importance of these issues was not being noted by provinces and there must be a better monitoring system, and development of norms and standards.  

MINUTES
Mr B Solo (ANC), acting as Chairperson, reminded Members that Parliamentary Legal Services had been asked to advise the Committee on the legal implications of not holding public hearings  in those provinces not already visited. The technical stakeholders, National Treasury (NT) had been asked, with the Department of Social Development (DSD) to advise about the cost implications of the Bill. 

Parliamentary Legal Services opinion on public hearings
Adv Mukesh Vassen, Parliamentary Legal Services, summarised that after the last meeting, when Members were divided on whether there was a need for further public hearings , Legal Services had been asked for their opinion on the implications of not holding further hearings in those provinces where these had not already been held. There had been complaints from the public around the fact that the hearings took place in some areas and not others. He referred particularly to a letter of complaint from a Mr Smythe that he never received acknowledgement from the Committee of his request to make a presentation, and who alleged he was never given the dates of where and when the public hearings  were held. There had also been telephonic complaints.

Mr Mukesh further informed the Committee that the Constitutional Court could determine whether there had been enough public participation in the processing of any Bill, although it had not laid down specific guidelines and emphasised that Parliament could decide whether to proceed with public hearings . He referred to the Doctors for Life case and assured the Committee that what the  Court would consider adequate according to the Constitution varied from case to case. However, in general there should be reasonable opportunities for the public to have an adequate say. According to the Court  the ‘reasonableness’ context was important. Whether the legislature acted reasonably depended on the nature of the legislation and other factors. The amount of public interest, contentious and controversial factors, and the request for public hearings  all contributed. In the Doctors for Life case the Court ruled against Parliament, due to insufficient public hearings , and in the case of the Dental Technicians Amendment Bill the Court held that there was insufficient public interest, despite the call for public hearings , to warrant setting these up.

Mr Mukesh alluded to the fact that this Committee had held public hearings  targeting areas not previously covered in the NCOP process. The question remained whether the Committee had acted reasonably. In the light of many calls to hold hearings in Cape Town, there needed to be some explanations as to why no public hearings were held here. Under Section 59 of the Constitution the National Assembly(NA) and the National Council of Provinces (NCOP) held specific functions. Section 42(4) of the Constitution set out that the duties imposed on the NA and NCOP depended on their functions. It needed to be determined whether hearings, following a call for public hearings,  were held at the seat of parliament. This Committee needed to explain ‘reasonably’ why no hearings were held at the seat of parliament, given the nature of the bill, and the calls for public hearings . The Committee also need to decide and advise, why some specific areas and not others, were covered.

Mr M Masutha(ANC) expressed that whether or not the Committee was legally correct would be answered by the questions the Legal Services had raised. Some Members had held the view that the Committee had fulfilled its duty through adhering to the normal practice of advertising in the public media to promote public access at the national level. Members felt that holding public hearings, as had been done historically, at the seat of Parliament would preclude the less affluent sectors of society from giving their views. The Committee had deliberately chosen to follow a different approach. The Committee was conscious that those who in the past had the capacity to go to Cape Town should be able to access venues of the public hearings elsewhere, and did not see the venues and their locations as potential constraints. He further expressed that the Committee’s understanding that parliament did not have to sit in Cape Town. No committee of parliament was obliged to hold formal procedures in Cape Town.

Mr K Morwamoche (ANC) totally accepted the legal opinion from legal adviser. However he did not support the idea of sidelining other provinces in terms of public hearings. All provinces were involved in the voting so there was no reason why they should not be involved in the public hearings. He pleaded with the Committee to go and finish its obligations.

Mrs X Makasi (ANC) supported Mr Morwamoche. She felt that in order to avoid a court action the Committee should go to other provinces.

Mrs M Gumede (ANC) expressed that the Committee should not create more expenditure through going to court and urged everyone to do the right thing.

The Acting Chairperson reminded the Committee that the purpose of the meeting was to engage in discussions, not necessarily to take a decision now.

Mr B Mkongi (ANC) expressed his concern that the media had apparently conveyed in the newspapers that the Committee was refusing to go to other provinces, and clearly this was not a true reflection of what was decided. The Committee had always been at pains to discuss everything at length and in the best interests of the child, even if there were delays to the process.

The Acting Chairperson concurred with Mr Mkongi about the issue of misreporting from the media. The Committee was really doing its best with the work and it certainly did not help to have misinterpretations confusing the public.

Ms H Bogopane-Zulu (ANC) informed the Committee that she had read the submissions from the recent rounds of Public hearings  and could say that half of the submissions referred to what was already in the 2005 law. There was very little public input about the amendments now before the Committee. She concluded that most of the submissions were informed by the media hype and therefore moved the focus of the public from the amendments.

Ms J Semple(DA) agreed with Mr Mkongi that the best interests of the child were paramount. She requested if the Committee might consider holding public hearings  at the seat of Parliament, instead of going to the other provinces, which may help with the costing.

Mrs I Direko (ANC) agreed with Ms Semple. She reminded the Committee that the thinking behind going to the provinces was to reach the ordinary person. She would support whatever was practical, and had supported the idea of trying to meet the people at their own places. 

Mr L Nzimande(ANC) emphasised Mr Masutha’s point that public hearings conducted so far were of a national nature. The Committee had decided to split the sitting of the committee, in order to broaden participation. In all of the six provinces visited so far, it was found that ordinary citizens and NGOs appeared, and had expressed their gratitude to the Committee for coming to hear their opinions. He asked the legal advisors to clarify his impression that the Committee needed to assess its work.

Mr Vassen indicated that there was no set formula applied by the Constitutional Court, and the context of each case was important. He stated that often, custom becomes practice and that in turn would become binding. He urged the need for ‘reasonable’ or logical explanations for the fact that the Committee had done outreach on six provinces, and if by doing so it had excluded those from the other provinces who might want to make submissions. He reiterated an earlier point that there was a need to have hearings at the seat of parliament because there had been calls for hearings there. He asked the members to consider whether there had  been calls from the public for further hearings in the provinces it had visited already. He also stated that the issue of cost would affect reasonableness, but not go the heart of the criteria for public consultation.

Ms H Bogopane – Zulu took the Committee back in the history of the Bill. It was introduced to Parliament in 1997. In 1999 it was put aside. The new Portfolio Committee called for public hearings in 2004. Public hearings were conducted.  The Bill then again was put aside as the government changed and the new Portfolio Committee had again conducted public hearings on the same issues, and went in to the provinces. The current Committee started with this Bill in 2004, and split it into Sections 75 and 76 Bills. The Section 75 portion was finalised in 2005, and public hearings were held in all provinces. The Committee was now dealing with the NCOP Bill. She thought that the matter must be considered against its full history. In deciding which provinces to visit, this Committee looked at the schedule of NCOP, and decided that, given the cost constraints, it would be best to cover areas that the NCOP had not visited. She was worried that the process was taking too long. The NCOP could also pass the Bill if it took too long. She thought there was no need to go to additional provinces.

The Acting Chairperson reminded the Committee again that the exercise of this meeting was to get legal opinion from legal advisors whether to go to more provinces and what the challenges would be if the Committee did not carry that out. A decision would be made based on those opinions.

Mr Masutha requested clarification from the Legal Advisor about his earlier statement of practice or culture becoming law, as he believed it was not the case. He understood that the NCOP existed primarily to represent provinces. NCOP therefore had the responsibility to ensure provincial involvement. The Committee insisted that it had acted reasonably by publishing a notice detailing location, times and dates and also spreading the venues across different locations. He urged the legal section to go back and look at the questions, and to come back with specific responses.

Mrs H Weber(DA) supported Mr Masutha that answers were needed on the exact questions specified by the Committee.

Mrs M Gumede agreed with both Ms Weber and Ms Bogopane-Zulu.

Mr Morwamoche asked what the purpose of the public hearings was, and urged that the Committee should not again enter into that argument where they had already been conducted.

Mr Vassen again reminded the Committee that the Committee must think of the context and there had been specific calls for hearings in Cape Town. He believed that the Committee should at the very least cover itself legally by holding hearings in Cape Town. He agreed with Mr Masutha in terms of the NCOP and NA functions, but again the considerations for the calls to have hearings in the seat of parliament counted. It there were many calls for oral hearings in other parts of the country then he would feel that there was a need to go there as well.

The Acting Chairperson informed the Committee that this matter was closed for discussion. He  asked the legal advisor to look into these issues raised and give a specific response to the Committee in writing.

Mr Masutha noted that if the public hearings were to be held in Cape Town then the Committee could probably only reconsider the bill next year, and asked for clarity that this was what Parliament would want. 

Mr Nzimande expressed his view that the Committee had conducted public hearings according to the objectives it had set for itself.

Ms Bogopane – Zulu wanted the legal opinion written down. She also expressed her concerns about the lengthy process as the bottom line was that those children who were struggling needed the services that would only be available when the Bill was made law.

Costing of the Bill: National Treasury (NT) briefing
Mr Brenton van Vrede, Social Development: National Treasury informed the Committee that NT did not have a large team working on this bill and that there was originally a consultant who had worked on the costing of the Bill, but became an employee within the department.

Mr Masutha clarified that the Committee had wanted to know the financial obligations arising from the various functions that government needed to fulfil under certain clauses of the Bill, especially at the provincial level. He informed the Department about the concerns of the Committee, particularly the separation of powers, and the fact that the allocation might not be used for its intended purpose. He requested the Department how to make the provisions clear so that all relevant parties understood their legal obligations. The Committee did not want to distort the allocation of resources.

Ms Bogopane – Zulu requested clarification about the consultant who costed the bill having become an employee. She hoped that the knowledge had been passed on. She was also concerned that the Committee had not received any feedback on the workshop to discuss costing.  

Mr van Vrede informed the Committee that he would be giving a short overview of how NT saw the Bill. NT had tried to consult many people within a short time frame, and this might not be a conclusive view.

The costs were "astronomical" and would range from R11 billion to R70 billion. If implemented, the Department would be running a programme equivalent in value to the entire social grant budget and health budget. He suggested there was a need to consider an implementation plan for costing by the Department over a much longer period. It would be good to use norms and standards currently in place. The children’s budget was currently R1 billion to R2 billion. He Doubling a norm over a  particular period was an enormous exercise. NT was therefore concerned that the Bill's implementation was too ambitious, and the Committee would have to consider the implications if the Department could not deliver on expectations. He asked whether the expectations could be lowered. Consultation with those on the ground was vital.

Mr van Vrede further commented that there were some structural areas that needed to be addressed. Firstly, there were personnel constraints . There were no social workers to implement this Bill and it was unlikely that there would be enough in the next 5 years. He stated that, currently there were about 5 000 social workers in government and in Non Profit Organisations (NPOs). The current output from academic and technical institutions was about 500 per year and this was also unlikely to increase within the next few years. This was mainly the driver of cost. He suggested that the other alternative was to develop an alternative implementation strategy.

Mr van Vrede continued that the next  major issue was institutional arrangements with non profit organisations (NPOs). National Treasury was not convinced that the DSD had a good handle on partnerships with these institutions. There were more than 20 000 NPOs across the province and the magnitude of their involvement in welfare was hard to comprehend, particularly if the monitoring and evaluation systems were not good. The Committee might need to look at a funding model for NPOs.

A large portion of cost of the Bill was not borne by government, so there was a need to specify how much belonged to the government and to look at other creative ways to fund these activities. Perhaps, rather than government funding NGOs, it could help them leverage funds. They also needed a sense of what provincial budgets were like.

Mr van Vrede added that the budgets over the last three years had grown at 18% per year. Most of the growth attributed to the children’s budget was in the area of care and protection. Provinces had allocated a large part of their budget in anticipation of this Bill, and therefore there was a good chance of under spending of provincial budgets. It was not possible to grow the budgets much more than the current rate, and it would take a long time to reach the anticipated R60 billion needs.  The Committee needed to think realistically what could be done on the implementation side.

The Acting Chairperson thanked Mr van Vrede for his simple and straight forward response, which confirmed what the Committee had said before. Once provinces got the equitable share it was not known to what extent services would be aligned with the Bill. He agreed that there were currently problems with monitoring NPOs, yet there was a need to monitor partnerships.

Department of Social Development (DSD) Input
Dr Maria Mabetoa, Chief Director: Children's Unit, DSD, asked to give input.

Ms D Snyman, Chief Director, Financial Planning and Monitoring, DSD, explained that it was critical to note that there were personnel costs savings on the provincial budgets at the end of 2005. These were directly related to the difficulty in attracting social workers. DSD had already embarked on a process to address this. This must be seen as good spending overall, after the social security function had been shifted to the national sphere of government. There was a need to focus on auxiliary social workers.

Ms Mabetoa added that  the national office was working with the provinces on implementation plans and costings, and that these were now more realistic. Costing exercises raised awareness of under-budgeting for children’s programmes and this process would be sorted out over the next 5 years.. She elaborated that the norms and standards of provinces were not fully funded. Nevertheless, children of the country were adequately provided for. The Department was looking at options for personnel in terms of child and youth care workers and others working at community level. The Department had already generated business plans, and submitted these to National Treasury, to increase funds for children in children's homes. The Early Childhood Development programme was one priority, and the Department was also looking out for alternative ways of funding. The Head of Social Development had suggested that the Department look at adoption as a preferred permanent solution, that did not need regular interventions.  Much work had been done so far but it was still a process.

Mr Masutha requested clarification on the obligation of the MECs to fund, in relation to the terms ‘may’ and ‘must’ as they appeared in the current formulation in the Bill. He further stated that it was the Committee's fear that funds might be allocated, yet be spent on other programmes, not necessarily those of children, as had been the case in the past. He requested the Department if there should be a clause in the bill  to prevent that.

Mr Nzimande asked if Treasury’s dealings with underspending and resource allocations reflected a move away from conditional grants. He asked for comment on the attitude to creating conditional grants, and whether government was not assisting in funding structures as it would be engaged in setting norms and standards.

Mr Morwamoche supported Mr Masutha's comments on the MEC's obligation to fund. He said that social workers were not being well looked after by DSD.  A blind social worker in one case had requested materials to be able to work, but was told there was no funding for such materials.

Mr Masutha added that the Committee had also been addressed by another disabled social worker who claimed that the Department could not employ him, and he asked the Department to follow up if this particular social worker had been employed. 

Mrs Mabetoa responded that this person’s documentation was sent to the Province concerned, and the Committee would receive a response soon.

Mrs Weber requested the Department to again look into the issue of having only 14 inspectors to serve more than 20 000 people, and noted that of this figure some may not be doing their work.

Mr Nzimande questioned NT whether it was working with DSD in terms of stipends and standardisation of them.

Ms Mabetoa responded that there was a disparity from one province to another in terms of stipends and budgets. There were higher level budgets in Gauteng and the Western Cape.  These same provinces were struggling to spend, as there were issues of human resources, infrastructure and others that needed to be sorted out. Early Childhood Development stipends were paid for by the Education department. HIV AIDS stipends were paid by the Department of  Health. The stipends would also depend on qualifications of those receiving them. Social workers who were managed by other departments would fall under different people; either MECs or Councils, and the conditions of employment would vary.

Mr van Vrede clarified that no one truly knew how many NPOs existed, but  there were 43 000 registered, not all by Welfare Services, and around 20 000 were in this sector. If government were not able to pinpoint the number, then they clearly could not gain knowledge on what the NPOs were doing. Although there was a system of intergovernment relations provincial government had their own powers.

On the issue of ‘may’ and ‘must’, Mr van Vrede did not think there should be commitments to fund, but rather commitment to deliver a service. The MEC and his/her department would decide how to split services up between children and older persons. The wording would not make much difference. The budgeting relationship between province and national was a difficult relationship to manage. Provinces were independent and they could develop their own budget. Services closest to the people must be delivered by local government. If the Committee really wanted to escalate all services to national level he did not think there would be any improvement in service delivery. There was a need to strengthen the obligation to deliver services. The Head of every department needed to be able to prove in the budget hearings that they could deliver a service. He thought it was Important to keep the divide between provincial and national and to consider that conditional grant had limits and sometimes tended to be under spent as well.
 
The Chairperson stated that when NT made the national budget, they tended to flag issues and asked whether the message went down to provincial level. He alluded to the crisis in the Early Childhood Development programmes and noted that monitoring and evaluation had been discussed for so long but things seemed to remain the same.

Mr van Vrede said that during a budget process, there were always attempts to get as much cooperation as possible between the provincial and the national levels. However, there seemed to be a lack of alignment in the sector itself. In the last budget process, there was discussion of national priorities and there were provincial meetings where these priorities were pointed out, yet many of the provinces did not come to ask for the money for these priorities. NT finally just gave them the money. There was a  need for the sector to be strong in what it saw as priority matters and to influence its counterparts to get full intergovernmental cooperation.

Mrs Mabetoa informed the Committee that regulations being developed would come with norms and standards and there would be a  monitoring system for the Children's Act that would ensure that provinces and service level agreements would be signed. The Monitoring System would ensure they adhered to norms and standards.

Mr Nzimande requested what would happen with a structure that should have a limit of 20 children but was instead looking after 48.

Mrs Mabetoa responded that the response would depend on the structure. She admitted to the Committee that there was a backlog in offices for social workers, secure care facilities, and children’s homes.

Mr Masutha commented on Mr Vassen’s revelation about provinces not coming forth for money to implement priorities.  He argued that it was the Committee’s view that grants had enjoyed this preferential treatment as it was mandatory, but because there was never an obligation on welfare services there had been a lax attitude.  He felt this was an opportunity to put the message right,  as the level of priority and urgency just did not seem to have filtered through. He lamented that maybe the Committee needed to call provinces in to see how they viewed this transition, and to stress that if they were not calling for funding this was not acceptable.  He sympathised with the NGOs who were unable to get funding. Money was not the issue, but delivery was. The Committee must take action to meet the desperate needs.

Mr Masutha concurred with other members on the issues raised on disability.

Ms Bogopane –Zulu expressed concerns about the NT presentation and the need for very specific advice. On the issue of monitoring, she related to an incident where the Committee visited a Children’s Home, which was paid to cater to 70 children, yet it only housed 7. She expressed that although the Committee agreed that there should be a phased-in approach, there needed to be some provision specifying what this would entail.

 Mrs Direko requested NT specifically to note Ms Bogopane-Zulu's comment about the Children's Home.

The meeting was adjourned.