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ATC210517: Report of the Portfolio Committee on Human Settlements on Budget Vote 33: Human Settlements, and on the revised Strategic Plan for the coming Medium Term Expenditure Framework (MTEF) period and Annual Performance Plan 2021-22, dated 14 May 2021.

Human Settlements, Water and Sanitation

Report of the Portfolio Committee on Human Settlements on Budget Vote 33: Human Settlements, and on the revisedStrategic Planfor the coming Medium Term Expenditure Framework (MTEF) period and Annual Performance Plan 2021-22, dated 14 May 2021.

 

The Portfolio Committee on Human Settlements, having considered Budget Vote 33: Human Settlements, and the revised strategic plans for the MTEF period and the annual performance plans of the Department of Human Settlements (later referred to as the Department) and its entities, referred to it, reports as follows:

 

1.         Introduction

The Constitution of the Republic of South Africa (1996) places an obligation on the State to provide access to adequate housing to its citizens. As the custodian of the housing sector, the Department derives its core mandate and responsibilities from section 3 of the Housing Act (1997), which allows the Department, in collaboration with provinces and municipalities, to establish and facilitate a sustainable national housing development process.  The Department does this by, determining the national policy, national norms and standards for housing and human settlements development, setting broad national housing delivery goals, and monitoring the financial and non-financial performance of provinces and municipalities against these goals, building the capacity of provinces and municipalities and promoting consultation with all the stakeholders in the housing delivery chain, including civil society and the private sector. 

 

In order to ensure the progressive realization of its mandate and the goal of sustainable and integrated human settlements, the Department has subsequently developed strategies, policies and programmes. The comprehensive plan for the development of sustainable human settlements, approved in 2004 and the revised Housing Code, published in 2009, mark a conceptual shift away from the mandate of providing shelter, to supporting the residential property market. The Housing Code allows for access to housing and services for low-income families and ensures greater choice in quality, location and ownership. Subsequently, chapter eight of the National Development Plan (NDP) provides a roadmap for the achievement of sustainable human settlements in South Africa by 2030. The Department has thus strategically aligned its plans with the NDP.

 

To ensure its oversight role, the Committee received briefings from the Department of Human Settlements and its Entities on their strategic plans, budgets and annual performance plans.The oversight mandate of the Portfolio Committee on Human Settlements, Water and Sanitation, are underpinned by constitutional imperatives, budgets and strategic plans of respective departments and entities; and national and international policy, legislation and strategy documents such as the National Development Plan (NDP), the Public Finance Management Act, Sustainable Development Goals, amongst others. 

 

2.         Policy imperatives

           

2.1        National Development Plan

 

Chapter 8 of the NDP focuses on transformation of human settlements and the national space economy. Its human settlements trajectory anticipates that by 2050 South Africa’s human settlements would have transformed into equitable and efficient spaces with citizens living in close proximity to work, and having access to social facilities and essential infrastructure. It also envisages that by 2030, measurable progress towards breaking apartheid spatial patterns would have been made. The Department is therefore responsible for addressing the issue of transformation in the housing sector, and to ensure that the fractured housing and land markets are addressed.The national strategy for spatial transformation is, according to the NDP, guided by the need to:

 

  • Respond systemically over time to entrenched spatial patterns across all geographic scales that exacerbate social inequality and economic inefficiency;
  • Implement strategically chosen catalytic interventions to achieve spatial transformation in a manner that supports local driven spatial governance;
  • Achieve a creative balance between spatial equity, economic competitiveness and environmental sustainability;
  • Expand the personal freedoms by providing residents of South Africa with a greater choice of where to live;
  • Support individuals, communities and the private sector in engaging with the state on the future of spaces and settlements in which they live and work, while streamlining processes to enable local governments to implement strategic spatial interventions.

 

2.2        Medium Term Strategic Framework 2019-2024

 

 The Medium Term Strategic Framework 2019 - 2024 (MTSF), as a medium term plan to systemically achieve the overarching vision of the NDP, identified three key, interrelated outcomes to achieve spatial transformation, namely:

  • National frameworks and guidance towards coordinated, integrated and cohesive national spatial development;
  • Regional-level interventions to unlock opportunity, ensure redress and respond to environmental; risks and vulnerabilities;
  • Interventions to ensure integrated service delivery and transformation in all places.

In terms of the importance of addressing housing needs, the MTSF notes that South Africa has the largest housing delivery programme in the world, with important and redistributive spin-offs. One of the key concerns, however, is that the form and location of land developments, human settlement projects and informal settlement upgrades do not often respond directly to government’s commitments around spatial intent and transformation.

 

Despite significant efforts to address the issue of spatial inequality, human settlement patterns remain inequitable and dysfunctional across South Africa where the former homeland areas are typically densely settled and where insecure tenure remains a challenge. Housing demand has increased, while household sizes have reduced and urbanisation has rapidly increased.For this reason, the MTSF 2019-2024 is focused on three specific interrelated outcomes related to the human settlements sector specifically, namely:

  • Spatial transformation through multi-programme integration in priority development areas;
  • Adequate housing and improved quality living environments; and
  • Security of tenure.

 

2.3        State-of-the-nation address (SONA) and the Budget Speech

 

During the State of the Nation Address in February 2021 (SONA 2021), the President referenced housing projects that will provide homes to almost 68 000 households in Gauteng. These projects were launched after the announcement of the Economic Reconstruction and Recovery Plan and similar projects are planned for the other provinces as well. The President stated that the master draft plan for the Lanseria Smart City was completed in November 2020 and was available for public comments. Once completed, the city would be home to between 350 000 and 500 000 within the next decade.

 

 

3.         Budget analysis

The overall budget allocation increased by R1.2 billion, from R29.07 billion in 2020/21 to R31.55 billion in 2021/22, presenting a real percent change of 4.15%. Programme 3 experienced the only increase in allocation, from R648.2 million in 2020/21 to R8.42 billion in 2021/22. This represents a nominal increase of R7.77 billion, or a real percent increase of 147%.

 

4.         Programme Plans

4.1        Programme 1: Administration

The Following are the Five Year Plans under this programme:

  • Outcome: Functional, effective and integrated government- Five Year Target: unqualified audit opinion with no material findings.

4.1.1. Annual Performance Plan 2021/2022

The following are the Annual Performance Plans for 2021/2022:

  • Outcome: Functional, efficient and integrated government – 2020/2021 Plan: Unqualified audit opinion with no matters of emphasis; 100% compliance with statutory tabling and prescripts; 100% implementation of the approved internal audit plan; 100% execution of the approved anti-fraud and corruption implementation plan; 100% implementation of the approved Risk Management Implementation Plan; 100% implementation of the HR Implementation Plan.

 

4.2        Programme 2: Integrated Human Settlements Planning and Development

 

The Following are the Five Year Plans under this programme:

  • Outcome: Spatial transformation through multi-programme integrated in PDAs development – Five Year Target: 94 implementation programme for PDAs developed.
  • Outcome:Number of title deeds registered – Five Year Target:  1 193 222 title deeds registered.
  • Outcome: Enabling policies and programmes developed – Five Year Target: Policy foundation for Human Settlements enhanced.
  • Outcome: Participation of the designated groups into the business of human settlements sector – Five Year Target: 40% of the Budget allocated to entities owned by the designated group monitored.
  • Outcome: Percentage of projects under implementation monitored (HSDG and USDG) – Five Year Target: 100% Projects under implementation monitored (HSDG and USDG).
  • Outcome: Percentage of entities programme monitored – Five Year Target: 100% of entities programme performance monitored.
  • Outcome: Number of performance assessment on human settlements grants conducted – Five Year Target: 52 performance assessments on human settlements grants conducted.
  • Outcome: Revised Finance and Funding Model developed – Five Year Target: Revised Finance and Funding Model developed.
  • Outcome: Percentage implementation of Human Settlements capacity assembly programme (IHSPDP) – Five Year Target: 100% implementation of the Human Settlements Capacity assembly programme (IHSPDP).

 

4.2.1. Annual Performance Plan 2021/2022

 

The following are the Annual Performance Plans for 2021/2022:

  • Outcome: Spatial Transformation through multi programme integration in Priority Development Areas - 2020/2021 Plan: 19 Implementation Programmes for PDAs completed; Project Readiness Matrix implemented in 9 Provinces; Revitalization of Distressed Mining Communities Programme managed in 6 provinces; Support provided to 9 provincial Departments to register, Pre and post 1994, post-2014 and new title deeds; Support provided to 9 provincial Departments to register, Pre and post1994, post-2014 and new title deeds; Approved National Human Settlements Development Plan (HSDG funded); 1 research report on integrated human settlements planning and development  drafted; 100% of projects under implementation monitored (HSDG& USDG); Approved Human Settlements Grants Framework; 12 quarterly performance assessments conducted on human settlements grants (HSDG, USDG and TDRG); Human Settlements Sector Capacity Programme developed.

 

4.3        Programme 3: Informal Settlements Programme

 

The Following are the Five Year Plans under this programme:

  • Outcome: Enabling policies and programmes developed – Five Year Target: Human Settlements Code: Volume informal settlements upgrading programmes developed.
  • Outcome: Participation of the designated group into the business of human settlements sector - Five Year Plan: 40% of the Budget allocated to entities owned by designated groups monitored.
  • Outcome: Percentage of projects under implementation monitored (UISP) – Five Year Plan: 100% of projects under implementation monitored (UISP).
  • Outcome:Number of evaluation studies completed – Five Year Plan: 2 evaluation studies completed. UISP Baseline Evaluation, ISUPG Design and implementation.
  • Outcome:Number of Financial performance assessments on ISUPG conducted – Five Year Plan: 24 Financial performance assessments on ISUPG conducted.
  • Outcome: Percentage implementation of the Human Settlements capacity assembly programme (Informal Settlements Programme) – Five Year Plan: 100% implementation of Human Settlements capacity assembly programme (Informal Settlements Programme).
  • Outcome: Number of Informal Settlements upgraded to Phase 3 of UISP – Five Year Plan: 1500 Informal Settlements Upgraded to Phase 3 of UISP.

 

4.3.1. Annual Performance Plan 2021/2022

 

The following are the Annual Performance Plans for 2021/2022:

  • Outcome: Adequate Housing in improved quality living environments -  2021/ 2022 Plans: Two (2) Research reports on informal settlements upgrading completed: the use of technology and community participation in informal settlements and a survey on informal settlements; 40% of the budget allocated to entities owned by designated groups; 100% of projects under implementation monitored (UISP); 1 UISP baseline evaluation study completed; 8 quarterly financial performance analyses conducted on ISUPG; 100% implementation of the UISP Capacity Assembly Programme;  and 130 informal settlements upgraded to Phase 3 of UISP.

 

4.4 Programme 4: Rental and Social Housing Programme

                                                                                                                          

The Following are the Five Year Plans under this programme:

  • Outcome: Enabling policies programmes developed – Five Year Plan: Human Settlements Code: Volume Social and rental programmes developed.
  • Outcome: Participation of the designated group into the business of human settlements sector – Five Year Plan: 40% of the budget allocated to entities owned by designed groups monitored.
  • Outcome: National and Rental Programme Plan monitored – Five Year Plan: National Rental Programme Plan monitored. This include 100% CRU Units, 100% Social Housing Units,100 % of Debt or equity funding, 100% CCG, 100% HSDG, and100% USDG.
  • Outcome:Percentage of projects under implementation monitored in the Rental and Social Housing Programme – Five Year Plan: 100% of projects under implementation monitored in the Rental and Social Housing Programme.
  • Outcome:Number of Evaluation studies completed – Five Year Plan: 2 evaluation study completed; Rental Housing Tribunal and Social Housing Programme.
  • Outcome:Percentage of entities programme performance monitored – Five Year Plan: 100% of entities programme performance monitored.
  • Outcome: Percentage implementation of the Human Settlements Capacity Assembly Programme (Rental and Social Housing)– Five Year Plan: 100 % Implementation of the Human Settlements Capacity Assembly Programme (Rental and Social Housing).

 

4.4.1. Annual Performance Plan 2021/2022

 

The following are the Annual Performance Plans for 2021/2022:

Outcome: Adequate Housing in improved quality living environments – 2021/2020 Plans: Policy Framework on Rental Housing developed; 40% of the budget allocated to entities owned by designated groups monitored; 100% of projects under implementation monitored in the Rental Housing Programme; 1 evaluation study completed (Rental Housing Tribunals); 100% of entities programme performance monitored; and 100% implementation of the Human Settlements Capacity Assembly Programme (Rental and Social Housing Programme).

 

4.5        Programme 5: Affordable Housing

 

The Following are the Five Year Plans under this programme:

  • Outcome: Enabling policies and Programmes developed – Five Year Plan: Human Settlements Code: Volume Affordable housing programme developed.
  • Outcome: Participation of the designated group into the business of human settlements sector – Five Year Plan: 40% of the budget allocated to entities owned by designated groups monitored.
  • Outcome:Number of evaluation studies completed – Five Year Plan: 2 evaluation studies completed; Implementation evaluation of FLISP and evaluation contribution of the human settlements sector to transformation.
  • Outcome:Percentage of projects under implementation monitored in the Affordable Housing Programme – Five Year Plan: 100% of projects under implementation monitored in the Affordable Housing Programme.
  • Outcome:Percentage of entities programme performance monitored– Five Year Plan: 100% of entities programme performance monitored.
  • Outcome: Number of quarterly performance assessment reports FLISP subsidies disbursed monitored – Five Year Plan: 20 quarterly performance assessments reports on FLISP subsidies disbursed monitored.
  • Outcome:Percentage implementation of the Human Settlements Capacity Assembly Programme (Affordable Housing) – Five Year Plan: 100 % Implementation of the Human Settlements Capacity assembly Programme (Affordable Housing).

 

4.5.1. Annual Performance Plan 2021/2022

 

The following are the Annual Performance Plans for 2021/2022:

  • Outcome: Adequate Housing in quality living environments – 2020/2021 Plans: One research report on Affordable Housing: completedFeasibility of Mortgage Default Insurance; One policy on affordable housing developed: Programmes for the entities; 100% of projects under implementation monitored in the Affordable Housing Programme; One evaluation study conducted - Implementation evaluation of FLISP; 100% of entities programme performance monitored; 4 quarterly performance assessments on FLISP subsidies disbursed; and 100% implementation of the Human Settlements Capacity Assembly Programme (Affordable Housing Programme).

 

5.         Human Settlements entities annual performance plan and budget

5.1        National Home Builders Registration Council (NHBRC)

 

The overall budget allocation has increased by R18.6 million from R855.8 million in 2020/21 to R874.4 million in 2021/22, although it translates to a real percent decrease of 1.94%. All three programmes experienced a real percent decrease.Programme 1 (Administration) received the bulk of the allocation, with an allocation of R325.8 million, although it experienced a real percent decrease of 0.93%.Programme 3 (Consumer Protection) received the smallest allocation out of all three programmes, with an allocation of R270.6 million, compared to an allocation of R266.7 million in 2020/21. This translates to a real percent decrease of 2.63%.The Following are the NHBRC’s Five Year Plans:

 

  • Outcome: Functional efficient and integrated government – Five Year Plan: Functional efficient and integrated government.
  • Outcome: Improved Accessibility and Visibility of NHBRC Products and Services – Five Year Plan: 100% implementation of communication plan.
  • Outcome: Financially sustainable organisation promoting economic inclusion – Five Year Plan: 19 Social transformation programmes.BEE spend of greater than 65%
  • Outcome: Improved regulatory compliance – Five Year Plan: 58,310 compliant homebuilders registered and 575,000 homes inspections completed.
  • Outcome: Competent homebuilders and technical professionals – Five Year Plan: 32, 000 homebuilders and technical professionals to be trained.
  • Outcome: Improved regulatory compliance – Five Year Plan: 100% homes enrolled.
  • Outcome: Greenhouse gas emission reduction – Five Year Plan: Evaluation and monitoring of Green-First Zero energy model house performance against set criteria.

 

5.1.1. Annual Performance Plan 2021/2022

 

The following are the Annual Performance Plans for 2021/2022:

  • Outcome: Functional efficient and integrated government – 2021/2022 Plans: Unqualified audit opinion with no material findings; 100% compliance with statutory tabling and prescripts; and 90% implementation of the approved internal audit plan.
  • Outcome: Anti-Fraud and Corruption Reports – 2021/2022 Plans: 90% implementation of the approved anti-fraud and corruption plan; 90% implementation of the approved risk management plan; and 80% implementation of approved compliance plan.
  • Outcome:Improved Accessibility and Visibility of NHBRC Products and Services -  2021/2022 Plans: 100% implementation of Communication Plan.
  • Outcome:Financially sustainable organisation promoting economic inclusion – 2021/2022 Plans:  3 Social transformation programmes implemented; Achieve BEE spend of more than 65%.
  • Outcome:Improved regulatory compliance – 2021/2022 Plans: 2,370 homebuilders registered; 9,050 registrations renewed; 100% of homes inspected in the non -subsidy sector; 100% of homes inspected in the subsidy sector; 80% of prosecutable matters suspended within 10 working days of receipt of instruction; 80% of prosecutable matters set down for hearing before the DC within 120 working days from date of approval to prosecute; and 90% disputes resolved within 90 days; 100% of compliant enrolment applications approved within 15 working days from date of receipt – subsidy; 100% of compliant enrolment applications approved within 15 working days from date of receipt – non subsidy.
  • Outcome:Competent homebuilders and technical professionals – 2021/2022 Plans: 1,700 homebuilders trained; 1,500 Youth trained; 1,400 Women trained; 100 Military Veterans trained; 200 people with disabilities trained; 690 Technical professionals trained; and 600 Artisans trained.
  • Outcome:Greenhouse gas emission reduction – 2021/2022 Plans: Appointment of a contractor to construct the “Green First, Zero Energy model house Design.

 

5.2        Housing Development Agency (HDA)

 

The overall budget allocation for the HDA has increased from R375 million in 2020/21 to R383.8 million in 2021/22, although it represents a real percent decrease of 1.78%. Programme 4 received the bulk of the allocation in 2021/22, with a total allocation of R184.8 million, compared to R184.1 million in 2020/21. This represents a real percent decrease of 3.67%. This was the largest real percent decrease experienced across all programmes. The largest real percent increase was observed in Programme 2, which received an allocation of R48.3 million in 2021/22, compared to R46 million in 2020/21, representing a real percent increase of 0.77%.The Following are the HDA’s Five Year Plans:

 

  • Outcome: Effective and Efficient Management and Good Governance of the HDA – Five Year Plan: Unqualified audit report for each financial year.
  • Outcome:Integrated and sustainable human settlements and Security of Tenure – Five Year Plan: 6 000 hectares acquired in PHSHDA’s and 4 000 hectares acquired; 100% hectares rezoned; 25 420 housing units delivered by HDA; 23 586 serviced sites delivered by HDA; and 35 499 Title deeds Registered.
  • Outcome: Integrated and sustainable human settlements and Security of Tenure – Five Year Plan: 94 Development Plans in PHSHDA’s completed; 1500 Informal settlements supported for upgrading to phase 3; 50 national and/or provincial priority human settlements catalytic projects provided with implementation support; 23 municipalities provided with technical implementation support.

 

5.2.1. Annual Performance Plan 2021/2022

 

The following are the Annual Performance Plans for 2021/2022:

  • Outcome: Functional, Efficient and Integrated Government – 2021/2022 Plans: Unqualified audit report for 2020/21; 60% of annual HDA procurement spend, targeted at businesses owned byBB BEE Levels1 – 4; 35%of annual HDA procurementspend, targetedat businessesowned byWomen; 15% of annual HAD Procurement spend, targeted at businesses owned by Youth; 5% of annual HDAprocurementspend, targetedat businessesowned by Persons withdisabilities; 5% of annual HDA procurementspend, targeted at businesses owned by Military Veterans;
  • Outcome:Integrated and Sustainable Human Settlements and Security of Tenure – 2020/2022 Plans: 47 Integrated implementation programmes for PDAs prepared; 1500 hectares of well-located acquired withinPHSHDAs; 30% of the 1884.6870ha of land acquired during 2014 – 2019 falling within PHSHDAs; 1000 hectares of land rezoned for Human Settlementsdevelopment; 750 of hectares of well-located land acquired or releasedfor human settlements development; 375 of Informal settlements supported for upgrading to phase 3; 4 of Informal Settlements upgraded to phase 3 (end to end); and 2 of Informal settlements assisted with relocation and emergency interventions; 50 Catalytic Projects provided with Implementationsupport;  and 6 of Catalytic projects assisted to raise capital for the infrastructure required for the projects; 23 ofMunicipalities provided with technical and implementation support for distressed miningcommunities; 780 of units completed; 2787 of IBT housing units delivered i.r.o.Projects implemented by the HDA; 1463 of Housing Units Delivered i.r.o. projects implemented by HDA; 2513 of serviced sites delivered i.r.o. projects implemented by HDA; 1389 of serviced sites delivered i.r.o. projects implemented by HDA; 500 serviced sites delivered i.r.o. projects implemented by HDA; 1554 of temporary residential units delivered; 40 HS Projects managed by the HDA; 100% completionof milestonesof all projectsmanaged by the HDA;62 HS Projects managed by the HDA; 100% completion of bucket eradication projects implemented by the HDA; 3 projects (Ellofspark, Queenstown and Hartebeesfontein) strategic Projects packaged for development; 1456 Title Deeds Registered; and 100% of spatial transformation planning, analysis and implementation support provided on projects / programs within 10 working days.

 

 

5.3        Social Housing Regulatory Authority (SHRA)

Overall, the entity experienced a budget increase of R30.9 million in 2021/22, compared to R47.3 million in 2020/21. This translates to a nominal increase of 3.6 %. Programme 4 (Project development and funding) received the largest share of the entity’s budget with an allocation of R802.0 million in 2021/22, representing 89.7% of the entity’s total budget. This programme also experienced an increase of R27.8 million, which is the largest compared to the allocation in 2020/21. This represents a decline of 11% in real terms. The second largest increase was experienced in Programme 3 (Sector development), which received an allocation of R29.7 million, representing 3.3% (Administration), with a real percent increase of 0.04%.The Following are the SHRA’s Five Year Plans:

 

  • Outcome: Functional, efficient and integrated government – Five Year Plan: Unqualified audit opinion, with no matters of emphasis.
  • Outcome: Quality affordable social housing for rental delivered in strategically located areas – Five Year Plan: 30 000 social housing units delivered.
  • Outcome: Enhanced performance of delivery agents and projects – Five Year Plan: 75% of delivery agents that received institutional grant support, at minimum, maintained their level of accreditation.75% of projects that received institutional grant support that are accredited for capital grant award.
  • Outcome: Increased capacity of municipalities and provinces to deliver social housing – Five Year Plan: 12 municipalities capacitated to deliver social housing.
  • Outcome: An effectively regulated and sustainable social housing sector – Five Year Plan: 20 fully accredited Social Housing Institutions;63 026 social housing units accredited; 58 288 social housing units under regulation.
  • Outcome: A transformed Social Housing Sector value chain – Five Year Plan: An improvement in the state of transformation across the social housing sector.

 

5.3.1. Annual Performance Plan 2021/2022

 

The following are the Annual Performance Plans for 2021/2022:

  • Outcome: Functional, efficient and integrated government -2021/2022 Plans: 100% implementation of the approved Internal Audit Plan; 100% compliance with statutory reporting requirements and prescripts; 100% adherence to the Anti-Fraud and Corruption Policy; 100% implementation of the approved Risk Management Plan; 80% achievement of the stakeholder management and communications strategy annual implementation plan; and Affordable rental housing policy position developed.
  • Outcome:A transformed Social Housing Sector Value chain – 2021/2022 Plans: 75% procurement spend to majority black-owned service providers; and 40% procurement spend on designated groups.
  • Outcome:An effectively regulated and sustainable social housing sector -2021/2022 Plans: 61% of reporting SHIs and ODAs achieving 3 or more performance benchmarks; 2 additional fully accredited SHIs; 5 of additional conditionally accredited SHIs with accredited projects; 3 300 of subsidised housing units' tenancy audits conducted; 10 of subsidised housing projects’ tenant satisfaction surveys conducted; and 15 of subsidised housing projects’ safety and security audits conducted.
  • Outcome:A transformed social housing sector value chain – 2021/2022 Plans: 85% of new project accreditation applicants that are black majority owned or controlled; and 40% of new project accreditation applicants that are majority owned or controlled by the designated groups.
  • Outcome:Enhanced performance of delivery agents and projects – 2021/ 2022 Plans: 2 of incubation programme participants receiving project accreditation; 75% of identified SHIs that received an IIG, of which the intervention is completed within the current financial year, at minimum, maintained their level of accreditation Indicator reframed; 75% of identified projects that received an IIG, of which the work is completed within the current financial year, are recommended for capital grant award.
  • Outcome:Increased capacity of municipalities and provinces to deliver social housing - 2021/ 2022 Plans: 7 provinces that achieve at least 80% of the criteria for supporting a functional Social Housing Programme; and 2 projects from municipalities in the municipal support programme accredited.
  • Outcome: A transformed social housing sector value chain – 2021/2022 Plans: 85% of Institutional Investment Grant (IIG) recipients that are majority black-owned or controlled; 40% Institutional Investment Grant (IIG) recipients that are from the designated groups; 33% of participants in the incubation programme that are women or youth owned or controlled.
  • Outcome: Quality affordable social housing for rental delivered in strategically located areas - 2021/2022 Plans: 3 500 of social housing units completed; 4000 of social housing units tenanted; 95% expenditure of the approved annual Consolidated Capital Grant cash flow projection; 20% spent by grant recipients on main contractors and professional teams that are from the designated groups.
  • Outcome: A transformed social housing sector value chain - 2021/2022 Plans: 75% of CCG awarded to black majority owned or controlled enterprises; 50% spent by grant recipients on black owned main contractors and professional teams; 30% of CCG awarded to enterprises that are majority owned or controlled by the designated groups; and20% spent by grant recipients on main contractors and professional teams that are from the designated groups.

 

  1.  

 

The NHFC received an allocation of R1.04 billion in 2021/22, compared to R878.8 million in 2020/21. This represents a real percent increase of 13.9%. The FLISP programme (Programme 8 in the budget) received the bulk of the allocation, with an allocation of R479.8 million for 2021/22, compared to R349.7 million in 2020/21, representing a real percent increase of 31.6%. The largest real percent increase was observed in Programme 1 with a real percent increase of 32.6%. The allocation of R234.6 million was made for 2021/22, compared to R169.7 million in 2020/21. Programmes 3 (Strategic Investment), 4 (Rental Lending) and 6 (Developer Finance) all experienced real percent decreases in 2021/22. Programme 4 (Rental Lending) experienced the largest real percent decline of 22.35%.The Following are the NHFC’s Five Year Plans:

 

  • Outcome: Functional, Efficient and Integrated Governance – Five Year Plan: Functional, Efficient and Integrated Governance.
  • Outcome:Improved delivery of affordable housing – Five Year Plan: Number of Housing Opportunities facilitated through the disbursements: 4 529 Social Housing Units; 6 235 Private Rental Units; 3 300 Bridging Affordable Units; 3 275 Bridging Affordable Serviced Sites; 21 066 Bridging Subsidy Units; 144 325 Incremental Loans; 30 523 Housing Units Facilitated through FLISP Grant Disbursement.
  • Outcome:Increased access to affordable   finance to enable end-users to have appropriate, spatially just and adequate housing – Five Year Plan: 3 500 Value of leveraged funds in strategic partnerships; 2 218 Value of leveraged funds from the Private sector - Excluding FLISP; 17 606 Value of leveraged funds from FLISP; 1 512 Leveraged Units - Private Rental and Affordable (Strategic Investments); 9 of Provinces Covered by RFIs.
  • Outcome:Increased penetration and participation of low-to middle income households and businesses owned by PDIs in the housing market – Five Year Plan: 50% of portfolio comprised of PDIs; 50% of disbursements to PDI on managed programmes.

 

5.4.1. Annual Performance Plan 2021/2022

 

The following are the Annual Performance Plans for 2021/2022:

  • Outcome: Functional, Efficient and Integrated Government – 2021/2022 Plans: Unqualified audit opinion with no material findings; 100% compliance with statutory tabling and prescripts; 100% implementation of the annual Internal Audit Plan; 100% implementation of the approved anti-fraud and corruption implementation plan; and 100% implementation of the risk management plan.
  • Outcome: Increased access to affordable finance to enable end-user to have appropriate, spatially just and adequate housing -2021/2022 Plans: 50 million of NHFC’s contribution to strategic partnerships, 150 million leveraged from NHFC’s strategic partnerships, 10% incremental alignment of future financing activities to PHSHDAs; Approved framework for participation in the development of partnership between private sector developer and the NDHS and its entities.
  • Outcome:Improved Delivery of affordable housing –2021/2022 plans: Value of disbursements-  228 subsidy housing- bridging finance; 95 Social housing Finance; 124 Private Rental Housing Finance; Value of approval – 301 Social Housing Finance and 119 Private Rental Housing Finance; 180 Affordable Housing Finance; 183 Incremental Housing Finance; 143 Affordable Housing- Strategic Investment; 456 Affordable housing- bridging finance; 398 Incremental Housing Finance; 242 Affordable housing; 7 188 of subsidy applications; 7 100 of subsidy applications approved; 5 762 of subsidies disbursed; 460 of approvals of FLISP grant; 346 FLISP grant; 3 220 leveraged from financial institutions.
  • Outcome:Increased penetration and participation of low to middle income households and businesses owned by PDIs in the housing market - 2021/2022 plans:  284 disburse to B-BBEE companies; 365 disbursements towards designated groups; 242 disbursements to PDIs; 255 of project management.

 

5.5        Community Schemes Ombud Service (CSOS)

 

The Following are the CSOS’s Five Year Plans:

  • Outcome: Number of persons in the target market exposed to education programmes on various aspects of owning and renting a home – Five Year Plan: 80 training and education sessions conducted for schemes executives and owners; 20% of executive managing agents placed in community schemes that are from the previously disadvantaged groups; Conduct 20 stakeholder information sessions; 20 editions of Shared Living e-newsletters published; 20 marketing and communication campaigns executed.
  • Outcome: Transactional support programme implemented – Five Year Plan: Regional offices will be established based on the results of feasibility studies that will be conducted for sites identified by the Department of Human Settlements.
  • Outcome: Consumer protection programmes implemented – Five Year Plan: 75 800 of schemes registered by CSOS; 75% of registered schemes paying levies; R330k of levies collected; 85% of disputes resolved within 90 days.

 

5.5.1. Annual Performance Plan 2021/2022

 

The following are the Annual Performance Plans for 2021/2022:

  • Outcome: Functional, Efficient and integrated Government – 2021/2022 plan: 100% of the approved anti-fraud and corruption implementation plan implemented; 100% implementation of the approved risk management plan; 95% of implementation of audit remedial plan; 2 Business Automation Solution modules implemented; 100% compliance with statutory tabling and prescripts; 1 new transactional sites established (satellite office).
  • Outcome: Effective and Efficient administration and governance - 2021/2022 plan:100% implementation of the approved compliance plan.
  • Outcome: Effectively regulated Community Scheme Sector – 2021/2022 plan: R 239 398 000Revenue Collected.
  • Outcome:Transformation of community schemes advanced - 2021/2022 plan: 70% procurement spend to majority black-owned service providers (>50% black).
  • Outcome:An effectively regulated community scheme sector – 2021/2022 plan: 100% registration of community schemes that have submitted scheme registration documents; Finalisation of implementation protocol for schemes governance documents database; 80% quality assured schemes governance documentation; and100% compliance certificatesissued on all amended scheme documents.
  • Outcome: Effective disputes resolution – 2021/ 2022 plan: 85% of disputes conciliated within 90 days; and 85% of disputes adjudicated within 90 days.
  • Outcome: Empowered stakeholders -2021/ 2022 plan:20 training and education sessions conducted for schemes executives and owners; 8 training sessions conducted for adjudicators and conciliators; 12 stakeholder information sessions conducted; and 100% implementation of Marketing and Communications Plan.
  • Outcome: Transformation of community schemes advanced - 2021/ 2022 plan:20 previously disadvantaged individuals trained as executive managing agents; and 80% of community schemes’ requests for Executive Managing Agents awarded to previously disadvantaged individuals.

 

5.6        Estate Agency Affairs Board (EAAB)

 

The Following are the EAAB’s Five Year Plans:

  • Outcome: Functional, Efficient and integrated Government – Five Year Plan: Unqualified audit opinion with no significant audit findings.
  • Outcome:Satisfied and well informed estate agent stakeholders – Five Year Plan: 100% Implementation of EAAB stakeholder management plan; 100% of estate agent and consumer complaints / queries resolved within a 90-day period.
  • Outcome: Regulated and legally operating registered Estate Agents - Five Year Plan: 9 100 self- assessments received, evaluated and analysed for the 5-year period; 100% of compliant registrations processed; 100% Disciplinary Hearings held against completed investigations and outcomes enforced; 1 070 FIC Inspections performed for the 5-year period.
  • Outcome: Improved professionalism and ethical practices of Estate Agents –  Five Year Plan: Approval and implementation of skills programme and qualifications for the sector; 20% increase of registered Estate Agents with professional designation; 20% increase Retention rate of Estate Agents enrolled for PDE 4; 85% Increase of Estate Agents who are registered for CPD and have met CPD requirements in full.
  • Outcome:Transformed and inclusive Real Estate Sector – Five Year Plan: 10 000 interns placed with the real estate industry host employers through the one learner – one-estate-agency programme over the 5-year period; 100% Retention rate of youth intern placed with property industry host employers through the “One Learner - One Estate Agency” Programme; 60% Increased percentageof Full Status Black Women that have been supported through the Principalisation Programme; 1 000 Principals established through the implementation of the Principalisation Programme over the 5 year period.
  • Outcome:Transformed and inclusive Real Estate Sector – Five Year Plan: 125 SMMES placed through the incubation programme over the 5-year period; 100%   Implementation of developed financial incentive for transformation initiatives; 40% increase in participation of historically disadvantaged entities in the property sector; Minimum of R2 500 000 or equivalent raised for transformation funding initiatives over the 5-year period.
  • Outcome:Sustainable Fidelity Fund -  Five Year Plan: 100% implementation of an approved investment strategy; 98% interest receivable from estate agency trust accounts collected within 30 days of the due dates; 100% fully compliant claims paid within six months.
  • Outcome:Well informed homeowners and tenants around property transactions – Five Year Plan: 100% Implementation of a borrower, homeownership and tenant education programme in partnership with DHS entities and other stakeholders.

 

 

 

5.6.1. Annual Performance Plan 2021/2022

 

The following are the Annual Performance Plans for 2021/2022:

  • Outcome: Functional, Efficient and Integrated Governance – 2021/2022 plan: Unqualified audit opinion with no material findings; 100% implementation of Fraud prevention plan; 100% risk mitigation plans implemented; 100% compliance with statutory tabling and prescripts; and100% implementation of management action plans to address audit.
  • Outcome: Regulated and legally operating registered Estate Agents – 2021/2022 plan: 100% compliant new registrations processed against those received within 21 days; 80% compliant renewals processed those received within 5 days; and 100% of disciplinary hearings outcome enforced.
  • Outcome:Improved professionalism and ethical practices of Estate Agents – 2021/2022 plans: 14% of registered Estate Agents with professional designations; 9% of retention rate of Estate Agents enrolled for PDE 4; 90% increase of Estate Agents who are registered for CPD and have met CPD requirements in full.
  • Outcome:Transformed and inclusive Real Estate Sector -  2021/2022 plans: develop and strategy to transform the property sector by placing 2000 interns with the real estate industry host employers through the one learner- one estate agent or any other programme; and 45% retention rate of youth intern placed with property industry host employers through the one learner- one estate agent programme.
  • Outcome:Transformed and inclusive Real Estate Sector – 2021/ 2022 plan: 30% increase of full status Black Women that have been supported through the Principalisation programme; 280 principals established through the implementation of the Principalisation programme; 40% of implementable developed financial incentives for transformation initiatives; and minimum of 800 000 or equivalent raised for transformation funding initiatives.
  • Outcome: Transition of the Property Practioners Regulatory Authority – 2021/2022 plan: Established Property Practioners Regulatory Authority.
  • Outcome:Sustainable Fidelity Fund – 2021/2022 plan: 90% fully compliant claims paid within 6 months.
  • Outcome:Homeowner and tenant education programme and collaborating with NHFC and the Department to promote FLISP – 2021/2022 plan: 100% implementation of a borrower, homeownership and tenant education programme in partnership with the Department entities and other stakeholders and monitor on the number of people exposed to programme  and collaborating with NHFC and the Department to promote FLISP.

 

  1.  

 

The Committee, having been briefed by the Department and its entities on its revised strategic plans, annual performance plans and budget, deliberated and made the following observations and recommendations:

 

6.1 The Committee was concerned about the inability and delays to appoint incumbents to fill the vacant posts, which affects the achievement of Departmental outcomes negatively.Furthermore, the Committee noted that, in previous interaction with HDA, the agency indicated that it had a high vacancy rate in a number of provincial or regional offices such as Mpumalanga, Gauteng and the Northern Cape. The Committee also observed that there were a lot of officials in acting positions within the NHFC, and some contracts were to expire soon.

 

 

 

Recommendation:

  • Fust-track the filling of vacant posts in all provinces. The Department and its entities should provide timeframes within which these vacancies will be filled before the end of August 2021.

6.2 The Committee was concerned about the increase in the allocation of funds to consultants. For instance,Goods and Services increased from R75 to R99 million. It is a 25% increase due tothe use of consultants increasing from R26 to R48.9 million. At the same time, the HDA is responsible for providing assistance to the Department.

Recommendation:

  • Use internal capacity to deliver on the mandate of the Department. Ensure the utilization of the HDA in project implementation. Use Public Private Partnerships (PPPs) to augment capacity within the Department. Provide the Committee with a report on actions taken to address the high vacancy rates in Mpumalanga, Gauteng and the Northern Cape. Appoint officials on permanent bases to ensure the stability of the entity.  The NHFC should provide the Committee with a report on actions taken to address the issue of acting in the entity.

6.3 Committee noted thatprovinces and municipalities were more likely to utilize the Provincial Emergency Housing Grant and Municipal Emergency Housing Grant because of demonstrated demand. However, the Committee was concerned that there were budget cuts for the mentioned grants in the 2020/21 financial year.

 

 

 

 

Recommendation:

  • Provide adequate support to provinces and municipalities in order to utilize the Provincial Emergency Housing Grant and Municipal Emergency Housing Grant economically. The Department should also provide assistance to prevent land invasions.

6.4 The Committee observed that Department suspended the HSDG transfer to Eastern Cape, North West and Free State due to non-compliance with reporting requirements. Furthermore, spending under Programme 5 was R198 million which was 51.5% lower than projected due to transfers not made on the NHFC FLISP allocation. This was also due to non-compliance with financial management processes.

Recommendation:

  • Ensure that the Eastern Cape, North West and Free State provinces    comply with theDivision of Revenue Act (DORA). Institute consequence management in case of non-compliance with reporting requirements and financial management processes.

 

6.5 The Committee wanted be furnished with a plan to address the title deeds backlog since the Title Deed Restoration Grant was declared a priority for the Department. There were issues of delays in township establishment plans.

Recommendation:

  • Provide the Committee with a detailed plan on how the Department would address the title deeds backlog. This plan must also address problems experienced in township establishments. This plan must be provided to the Committee before August 2021.

 

6.6 The Committee noted that not enough was done to monitor the prioritization of households headed by the elderly, children and disabled people.The Committee noted that there were areas in Johannesburg where people allocate themselves houses without going through proper standard procedures.

Recommendation:

  • Ensure the monitoring of the prioritization of households headed by elderly, children and disabled people. Beneficiary list of households headed by the elderly, children and disabled people should be made public to ensure transparency.

 

6.7 The Committee noted with concern that the Departmentconstantly had unspent funds. Part of the problem was that municipalities were unable to identify their key areas of focus to spend the allocated funds.

Recommendation:

  • Ensure spending of funds and assist municipalities in identifying their areas of focus to spend their allocated funds.

 

6.8 The Committee was concerned about the stability and continuity of the HDA as it was being managed by an Administrator, in the absence of the Board and the CEO.

Recommendation:

  • Ensure stability and continuity of the HDA by fast-tracking the appointment of the Board and the CEO.

 

6.9 The Committee noted thatNHBRC held 673 disciplinary hearings, resulting in 64 home builders being suspended in the 2019/20 financial year. These suspensions were as a result of the failure to rectify major structural defects.

Recommendation:

  • Continuously monitor home builders to ensure the rectification of major structural defects takes place.

 

8.10 The Committee observed that a number of NHBRC targets for the year had been reduced due to a poorer performance in 2020/21.

Recommendation:

  • Provide the Committee with plans to improve performance of the NHBRC.

 

6.11 The Committee observed that the bucket eradication programme was managed by the HDA. The Committee also noted that the programme has been in progress for a long time and need to be completed.

Recommendation:

  • Fast-track the completion of the bucket eradication programme. Provide the Committee with the update on the bucket eradication programme. This would include the number of bucket eradicated, their location and nature of the project.

 

6.12 The Committee noted that Kwa-Zulu Natal and Western Cape province for utilizing the USDG grant outside the grant prescripts. That the Western Cape received the R100 thousand of the grant, yet only R10 000 taken back to the Department.  The Committee indicated that this punishment was not sufficient.

 

Recommendation:

  • Institute appropriate and fair punishment when grants are used outside of grant prescripts.

 

6.13 The Committee noted the negative impact of the pandemic on the economy, that the NHFC was sensitive to interest rates and economic indicators that had an impact on housing projects that affected more than 90% of the NHFC lending portfolio.

Recommendation:

  • The NHFC should provide the Committee with strategies to improve its financial resilience and profit margin of the entity.

 

6.14 The Committee observed that most contractors involved in the incubator programmes were mostly white and male. The Committee wanted to know how NHFC planned to ensure that women, people with disabilities, and youths were enlisted in the incubator programme.

Recommendation:

  • Ensure transformation in the incubator programme. Provide the Committee with plans to ensure the involvement of women, people with disabilities and youth in the incubator programme.

 

6.15The Committee observed that there was problem with the backlog in the issuing of EAAB Fidelity Fund Certificate. That the ITC system was delayed for four years.

Recommendation:

  • Make feasible plans to eradicate the backlog of issuing of Fidelity Fund Certificate and fast-track the implementation of the ITC system.

 

6.16With regard EAAB, the Committee was concerned about the slow progress in the transformation of the property sector or real estate.

Recommendation:

  • Fast-track the transformation of the property sector.

 

Report to be considered.

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