Question NW3697 to the Minister of Human Settlements

Reply:

(a) Actions taken by the National Department of Human Settlements to help create jobs and spend resources on procurement for black persons and vulnerable groups.

On 27 January 2022, Cabinet recommended that, all sector departments and State entities should prioritise mass employment. In response to this call, in February 2022, the Department issued a Circular to the Heads of Provincial Departments of Human Settlements and Chief Executive Officers of Human Settlements entities, advising them on the requirement to prioritise the Mass Employment Programme in their respective Annual Performance Plans.

At National Department Level:

• In terms of procurement spending allocation, the national Department of Human Settlements is targeting the procurement of goods and services from Broad-Based Black Economic Empowerment (B-BBEE) Level 1 to 4 firms. The B-BBEE Level 1-4 firms are mainly small-medium- and micro-enterprises (SMMEs). It must however be noted that due to the nature of competition and services required, it is not always practical to purchase goods and services from the targeted B-BBEE levels.

• The Department’s procurement is done in terms of the Preferential Procurement Policy Framework Act in terms of which for procurement less than R50 million, bids are scored a maximum of 20 points for Historically Disadvantaged Individuals while for procurement of more than R50 million the maximum score is 10 points.

(b) The department’s contribution to social and economic transformation through job creation and allocating a share of its budget to historically disadvantaged individuals was done through the procurement process as follows:

• For 2019/20 financial year, the National Department of Human Settlements procured forty five percent (45%) of goods and services from suppliers and service providers who are on B-BBEE Level 1-4. The procurement allocation is shown below:

2019/20
TOTAL SPENT	R 130 728 311,00	%
Women-Owned Enterprises	R 30 263 319,21	23,15%
Young Persons Owned Enterprises	R 10 998 341,15	8,41%
Military Veterans	R 455 156,07	0,35%
People with Disabilities Owned Enterprises	R 1 146 564,90	0,88%
	R 42 863 381,33
Level 1	R 51 841 046,61	39,66%
Level 2	R 3 644 208,69	2,79%
Level 3	R 2 600 000,00	1,99%
Level 4	R 836 187,50	0,64%
	R58 921 442,80	45,07%

• For 2020/21 financial year, the National Department of Human Settlements procured forty two percent (42%) of goods and services from suppliers and service providers who are on B-BBEE Level 1-4. The procurement allocation is shown below:

2020/21
TOTAL SPENT	R118.901.737,52	%
Women-Owned Enterprises	R15.218.642,06	12,80%
Young Persons Owned Enterprises	R6.676.519,21	5,60%
Military Veterans	R22.570,00	0,02%
People with Disabilities Owned Enterprises	R252.611,25	0,21%
	R22 170342.52	18,6%
Level 1	R36.816.605,46	30,96%
Level 2	R3.828.546,14	3,22%
Level 3	R2.569.319,93	2,16%
Level 4	R6.569.319,93	5,52%
	R49 783 791,46	41,9%

• For 2021/22 financial year, the National Department of Human Settlements procured over fifty five percent (55%) of goods and services from suppliers and service providers that were on B-BBEE Level 1-4. The procurement allocation is shown below:

2021/22
TOTAL SPENT	R111.024.641,19	%
Women Owned Enterprises	R26.683.931,58	24,03%
Young Persons Owned Enterprises	R18.926.372,73	17,04%
Military Veterans	R0	0,00%
People with Disabilities Owned Enterprises	R1.555.614,17	1,40%
	R47 165 918,48	42,5%
Level 1	39.381.810,68	35,47%
Level 2	14.753.893,24	13,29%
Level 3	3.914.289,44	3,53%
Level 4	2.938.823,60	2,65%
	R60 988 816,96	54,9%

• For 2022/23 financial year, the National Department of Human Settlements procured ninety seven percent (97,68%) of goods and services from suppliers and service providers who are on B-BBEE level 1-4. The procurement allocation is shown below:

2022/23
TOTAL SPENT	R134.338.215,89	%
Women Owned Enterprises	R50.739.311,49	38%
Young Persons Owned Enterprises	R75.168.797,70	55,95%
Military Veterans	R0	0,00%
People with Disabilities Owned Enterprises	R535.252,00	1,05%
	R126 443 961,19	94,1%
Level 1	50.147.760,18	37,33%
Level 2	69.859.296,11	52,00%
Level 3	6.170.453,66	4,59%
Level 4	5.055.854,34	3,76%
	R131 233 364,29	97,68%

• For 2023/24 financial year April to August 2023, the National Department of Human Settlements procured ninety nine percent (99.45%) of goods and services from suppliers and service providers who are on B-BBEE level 1-4.

The procurement allocation is shown below:

2023/24 April - August
TOTAL SPENT	R35.653.241,02	%
Women Owned Enterprises	R23.787.507,04	66,72%
Young Persons Owned Enterprises	R18.066.659,29	50,67%
Military Veterans	R0	0,00%
People with Disabilities Owned Enterprises	R71.317,46	0,20%
Level 1	R31.657.270,38	88,79%
Level 2	R3.674.984,78	10,31%
Level 3	R0	0,00%
Level 4	R123.675,86	0,35%
	R35 455 931,02	99,45%

(b) Details of sector achievements of the specified categories of disadvantaged populations since 2019

• The National Department further coordinates sector-wide information on employment and training, which is subsequently on a quarterly basis consolidated and reported on mass employment and training issues.
• The Human Settlements subsidy programme is broad, as it caters for both rural and urban communities which township communities. As such, value chain opportunities particularly for business owned entities such as Contractors, Material Suppliers, Professional Resource Teams are spread across the various Subsidy Programmes.
• Since 1 April 2022 of the lapsed 2022/23 financial year up to the end of Q1 of the current 2023/24 financial year, a total of 259 275 job opportunities have been created within the sector. These figures are however not audited.

(b)(i) Military Veterans: During 2021/22:

• KwaZulu-Natal: The Province was supported to train thirty (30) Military Veterans companies, jointly with the National Home Builders Registration Council (NHBRC), on construction and related fields. After completion of training, successful companies were assisted with the NHBRC registrations. Prior to this, KZN had appointed a Military Veteran’s company in 2016 to build houses for Military Veterans. The same company was also provided with technical and administrative training to ensure that they deliver, however the Province had to appoint three additional contractors in 2022/23 Financial Year to scale up performance.

• Eastern Cape: The Province was supported in the establishment of a Military Veterans Cooperative called Matrosov, which works closely with the contractor to build Military Veterans houses in the Chatty 491 Project in Port Elizabeth. A Military Veteran was also appointed as the CLO and some of the Military Veterans were responsible to provide security to the project.

b)(ii) Provinces and Metros on Human Settlements Conditional Grants

• The National Department continuously encourages Provinces and Metros to annually set aside and allocate at least 40% of their annual conditional grants allocations to business entities/ companies owned by designated groups, with specific reference to three grants, the Human Settlements Development Grant (HSDG), Informal Settlements Upgrading Partnership Grant (ISUPG), and the Urban Settlements Development Grant (USDG) 2021-2022.
• Provinces and Metros are continuously supported to ensure transformation in this regard, including on prioritizing allocation of human settlements projects to business entities of designated groups. The National Department monitors Provinces’ and Metros’ compliance in this regard, with the performance information consolidated, analyzed and reported on, on a quarterly basis.
• The sector performance in job creation through awarding of contracts for human settlements projects to designated and vulnerable groups since 2019 to 2023, as submitted by Provinces, Meros and Human Settlements Entities, is as outlined below. These figures are however not audited.

Human Settlements Development Grant (HSDG)

• For 2021-22 financial year, R2 billion was allocated to businesses of designated groups, yielding 46% achievement of the 40% set aside.
• For 2022-23 financial year, R3.4 billion was allocated.
• For 2023-24 financial year, since April-June 2023, R1 136 861 has been allocated.

Urban Settlements Development Grant (USDG)

• For 2021-22 financial year, R1.4 billion was allocated for companies of designated groups, yielding 36% achievement of the 40% set aside.
• For 2022-23 financial year, R1 164 345 million was allocated, which included April-June 2023, which is the last quarter of the Metros financial year, with R30 494 spent.

Informal Settlements Upgrading Partnership Grant (ISUPG)

• For 2021-22 financial year, R1 million was allocated to companies of designated groups, yielding 36% achievement of the 40% set aside.
• For 2022-23 financial year, R2 million was allocated.
• For the current 2023-24 financial year, since April-June 2023, R98 346 has been allocated.

On an annual basis, Provinces and Metros have collectively allocated o:

• In 2021/22, R3.5 billion was allocated to companies owned by designated groups.
• In 2022/23, R3.7 billion was allocated.
• In 2023/24, R1 235 207 has been allocated.

b)(iii) Human Settlements Entities

National Housing Finance Corporation (NHFC) 2021-2022

• The National Housing Finance Corporation (NHFC) plays a major role in creating an enabling environment through provision of housing construction finance and enterprise development.
• For 2021/22 FY: The entity’s value of disbursements for business entities of designated groups was R284 million. 123 SMME’s were supported through the Enterprise Development Programme. R90.3m worth work packages for SMMEs were issued. Out of SMME’s that participated, 42 are women owned entities and 15 include youth owned entities through the NHFC interventions. In total, R374 million was set aside by NHFC.
• For 2022/23 FY: NHFC allocated R274 million through the value of disbursements for Designated Groups. The value of disbursements targeted towards B-BBEE compliant companies - Level 4, 3, 2, 1 Contributor (R'm) was R669 million. The value of disbursements targeted towards black owned entities (R'm). Moreover, women were the most beneficiaries of the First Home Finance (erstwhile FLISP) subsidies that were approved and disbursed. In total, NHFC allocated R1.186 billion.

Social Housing Regulatory Authority 2021-2022

• For 2021/22 FY: The 2021/22 training programme covering a wide range of topics in relation to the programme, saw over 1 201 participants enlisted, of which 572 of attendees were female, 395 youth and 11 were persons living with disabilities. Various awareness sessions were also held focusing on designated groups to ensure their participation in the future social housing development. The existing body of knowledge and information has been formally constituted into materials and toolkits and such unpacked for broader audiences. SHRA spent 81% of its budget on majority owned black business. 93% of the capital grant award were made to majority black owned and controlled businesses.
• For 2022/23 FY: Procurement spent for designated groups women (40%), youth (20%) PWDs (5%). On procurement spent for women was 48.49% and youth 3.42%, with nil expenditure on PWDs. Construction Procurement Spent for designated groups through the Capital Consolidated Grant (CCG) women (40%) yielding (48.9%) and youth (20%) yielding 6.39%, again with nil expenditure on PWDs. Construction Spent for designated groups through Institutional Investment Grant (IIG) target of (40%) yielding 41%. Construction Spent for Black Owned through CCG target of (70%) yielding 70%.

Housing Development Agency (HDA)

• For 2021/22 FY: Procurement spend for designated groups women (40%), yielding 8.12% youth (20%) yielding 2.92% PWDs (5%) yielding 0.53%. Procurement spend targeted at businesses owned by BBBEE level 1-4 (60%) yielding 70.7%.
• For 2022/23 FY: Procurement spend for designated groups women (40%), yielding 52% youth (20%) yielding 23% and PWDs (5%) yielding 5.56%.

National Homebuilders’ Registration Council (NHBRC)

• For 2021/22 NHBRC through the Social Transformation and Empowerment Programme (STEP) trained 9154 individuals on various technical skills. 61% of the total number of individuals trained are women. BEE spend target of 65% yielding 73.72%.
• For 2022/23 FY: NHBRC through the Social Transformation and Empowerment Programme (STEP) trained 8517 cohort of women, youth, people with disabilities and Military Veterans through the contractor training and development as well as the technical skills programme. Procurement spent for designated groups women (40%), yielding 43.24% youth (20%) yielding 34.08% and PWDs (5%) yielding 0.23%.

Community Schemes Ombuds Services (CSOS)

• For 2021/22 FY: CSOS conducted 73 training and awareness raising sessions against a target of 18. CSOS spend 77.05% of its overall budget on BBBEE level 1-2 (R42. 374 million) and BBBEE level 3-8 (R9.340 million) black owned or controlled companies and non-compliant R5.707 million). Collectively, the procurement spent is R 58,851 Rm.
• For 2022/23 FY: CSOS procurement spent for women owned entities for the target of (40%) yielding 41.5%, youth (20%) 9.1%.

Property Practitioner Regulatory Authority (PPRA) 2021-2022

• For 2021/22 FY: The PPRA was able to reach over 5000 through workshops and awareness raising physically and through virtual platforms. PPRA mobilized 2000 interns, predominantly youth through the Services Seta funding
• For 2022/23 FY: The PPRA introduced and reviewed number of transformation and empowerment programmes which includes amongst others, the Principalisation (Incubation) Programme; Regularisation Programme, Consumer Awareness Programme, Work Readiness Programme, Internship Programme – ‘one learner, one property practitioner”.