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PUBLIC SERVICES SELECT COMMITTEE; HOUSING PORTFOLIO COMMITTEE: JOINT MEETING
17 October 2001
INTERGOVERNMENTAL FISCAL REVIEW: HOUSING
Documents handed out
Intergovernmental Fiscal Review - Housing Presentation
Intergovernmental Fiscal Review 2001 [Chapter 6 Housing]
The focus of the meeting was the chapter relevant to housing in the IGFR. Many of the presentations used the figures in the IGFR to demonstrate their successes or failures in service delivery.
The meeting demonstrated that the departments of housing, both nationally and provincially had made rapid strides in delivery. The department was getting on top the situation to ensure that all South Africans were given their constitutional right to proper shelter.
The IGFR did raise a number of problems that the department was busy finding solutions too. Predominantly these problems revolved around the quality of houses being built. It was also acknowledged that corruption was a major problem in the tender and building processes.
Opening comment on IGFR by Auditor-General
The Auditor-General made it clear that the compilation of a document such as the IGFR was dependent on accurate information. This accurate information would ensure that fiscal control and effective financial management would be prevalent. Accurate information would also ensure a reduction of risks and the sustainability of projects.
The AG pointed out that a properly controlled fiscal environment had only been established in four of the nine provinces. All provincial departments needed to ensure they stuck rigidly to the Public Finance Management Act deadlines. Some provinces also needed to improve the quality of their financial statements. Overall, better strategic planning on the side of the provinces would ensure that service delivery increases.
The AG concluded by saying that from time to time reports relating to provincial service delivery are tabled in Parliament. Members of the committees present should show more interest in these reports.
Input from Minister of Housing, Ms S Mthembi-Mahanyele
· The Minister said that much of her focus would be on policy development since 1994. The overall aim of the national department was to determine, finance, promote, coordinate and monitor the policy for housing and human settlement across South Africa.
· Since 1994 the department had made a commitment to the building of one million houses. Today, 1,2 million houses have been built and provide shelter for five million people. Originally the focus was on quantity rather than quality. This was the case as there was a massive need to address the diverse housing needs of the population.
· More recently, there was a greater focus on the promotion of efficiency in housing delivery and a sharpening of administrative processes.
· A potential problem area had surfaced with the increase in land invasions. These invasions demanded a change in policy. The Rapid Land Redistribution Programme was the response to these demands.
· There are a number of other focus areas: the creation of higher quality housing, the reduction of dependency on the housing subsidy andaddressing the backlog in service delivery in a number of provinces.
· There was a need for the promotion of participation with other government departments to ensure effective coordination with the financial and NGO sectors.
· Furthermore, the Minister stressed that there needed to be more emphasis on monitoring policy impact, expenditure and delivery.
· The Minister outlined a number of expenditure priorities. These focused on a need to plan towards areas where there was a future. The department had to be sure that it was not perpetuating old apartheid policies.
· National priorities included:
- Peoples' Housing process
- Promotion of Marginalised Women in Housing
- Promotion of Special needs housing programme
- Rental Housing
- Upgrading of informal settlements
- Provision of Emergency housing needs
- Integrated development
· The Minister then went on to discuss the budget overview per province. She commented that despite early under-spending, the provinces had over the last three years generally kept pace with their respective allocations.
· The impediments influencing delivery were identified as the following:
- Delays in land transferal processes
- Bureaucratic problems. This included municipal delays in approving new housing projects; lengthy planning and project approval processes and inflexible progress payment systems.
- Unfavourable weather patterns and recent associated flooding.
- Changes in local government structures
- Capacity constraints for small municipalities and small provinces
· The Minister also outlined a number of important financial management issues. These revolved around the successful implementation of the PFM Act. This would ensure improvements in financial reporting and the alignment of the budget with other strategic planning. A new cash flow management process was also being introduced.
· The Minister concluded by stating that broad government programmes guided national policy. For example, the urban renewal project and integrated rural development programme aimed to develop the whole country rather than one or two provinces. The Minister asserted that all future policy perspectives would require coordination through different levels of government and across all sectors.
· A key priority for the department of housing was improving the efficiency of housing delivery at both national and provincial levels.
· The department had been successful in the creation of jobs, estimated at 45 000 over the last year.
· In terms of the reduction of the housing backlog, the Minister pointed out that financial constraints were the biggest problem. A budget of R4,8 billion was needed and this was double the current budget. The success in addressing this backlog was dependent on attaching housing to all infrastructural needs e.g. water, electricity and sanitation.
Presentation on IGFR - Housing
The Powerpoint presentation was presented by Mr K. Brown of Treasury [see document].
· Before the commencement of the presentation the treasury expressed its thanks to the housing department in providing information that assisted in compiling this particular chapter in the Review.
· In conclusion the presenter acknowledged that marked improvements were evident in housing service delivery. The challenges facing the department had been adequately addressed by the Minister.
Provincial Report-backs - MECs and departmental representatives
Western Cape - representative for MEC
· The major problem identified by the province was in the procurement process in awarding tenures. Other problems included; the need for social services and not just houses; the need to integrate efforts at provincial and national levels, lack of capacity amongst small municipalities and general lawlessness and corruption in the awarding of housing programmes.
· Another problem identified was the issue of farm workers housing with the increase in evictions. The Western Cape called for national and provincial government to join hands in dealing with this problem.
Gauteng - representative for MEC
· Much of the report revolved around the question of subsidies. It was felt that the subsidies were too low and thus could not provide an adequate quality of housing.
· Other factors blocking delivery in the province were outlined. Firstly, 20% of people living in informal settlements were ineligible for housing subsidies, as they had received them in other provinces. Secondly, the local authorities did not have the authority to collect revenue.
· One recommendation mentioned was the increased cross-subsidisation to ensure the rich helped the poor.
Eastern Cape - representative for MEC
Three issue areas were identified:
· Conveyancing. The recommendation was that this responsibility should be taken to the municipalities.
· Deeds Offices. The problem was that there were only two in the province - one in Umtata and King Williams Town. To make matters worse sometimes applications had to be lodged through Cape Town offices. This was both costly and time-consuming and it was recommended that the two offices be upgraded.
· The Rapid Land Release Programme was identified as having an important role for fast-tracking delivery. It was also a positive step for the growth in Public-Private Partnerships (PPPs).
Northern Province - representative for MEC
· A major problem identified was the recent flooding disaster that affected 40 000 houses. The provincial department had repaired 27 000 of these but there was still a backlog of 13 000.
· Other problems were the eviction of farmworkers, the inadequacy of traditional dwellings as well as lack of capacity in certain areas.
Discussion - Questions for Minister and Director General
- Who was responsible for the funding of SERVCON?
The Minister responded that the issue of SERVCON was proving a major problem. SERVCON was primarily funded by governments and banks. The problem for SERVCON was that people who were earmarked for eviction refused to leave. Further, when evicted they kept coming back.
The solution was to ensure that social development assistance was tied to any evictions.
- Who is responsible for houses that are of an inadequate standard and collapse shortly after being built?
The Minister responded that the department had a new set of structures to ensure that standards were met. This included the compilation of a red book that carefully outlined the standards required. This was done in tandem with the home builders registration council. The responsibility lies with the developer that built the inadequate structures. If complaints are received the developer is suspended until the remedial work is completed. The Minister continued by saying the department was constantly in the process of improving quality. Developers that are deregistered are not allowed back into the industry. The Minister admitted that there was a problem with corruption but assured that perpetrators would be caught and the relevant structures would be informed if criminal charges needed to be laid.
- Are their mechanisms within the department that can deal with corruption?
The Minister responded by saying that the issue of corruption was a countrywide problem. To ensure it is dealt with adequately the Minister said the provinces must keep national government informed about any irregularities. The issue of better houses being allocated to family and friends had come to the attention of the department. In dealing with these the Minister commented that it was largely an ethical and moral issue. The Minister made a plea for openness and transparency throughout the housing allocation process.
- In reference to page 75 of the IGFR, it was asked as to why 1,3 million subsidies had been granted yet there were only 1,2 million houses.
The Minister responded by saying that the gap in the statistics was as a result of housing projects still being approved and the time it took to actually construct the houses.
- It was asked if more emphasis and resources could be placed on hostel redevelopment projects. Many hostels were not been used and the provincial and local departments did not have the resources to buy them or redevelop them.
The Minister responded that hostel redevelopment was a priority of national government, but overall the issue of resource allocation fell into the provinces hands.
The meeting was adjourned after the chairperson commended all those that presented and said that a full report of proceedings would be compiled.
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