ATC210602: Report of the Select Committee on Cooperative Governance, Traditional Affairs, Water, Sanitation and Human Settlement on 2021/2022 Annual Performance Plan and Budget Vote 33 of the Department of Human Settlements: dated1ST June 2021

NCOP Cooperative Governance & Traditional Affairs, Water and Sanitation and Human Settlements

Report of the Select Committee on Cooperative Governance, Traditional Affairs, Water, Sanitation and Human Settlement on 2021/2022 Annual Performance Plan and Budget Vote 33 of the Department of Human Settlements: dated1ST June 2021

 

The Select Committee on Cooperative Governance and Traditional Affairs, Water, Sanitation and Human Settlement having considered Budget Vote 33: Department of Human Settlements, the strategic plans for the MTEF period and the 2021/2022 Annual Performance Plan of the Department of Human Settlements reports to the National Council of Provinces as follows:

 

1.         Background and Introduction

 

1. The Money Bills Amendment Procedures and Related Matters Act (2009) empowers Parliament to recommend, reject or amend budgets of National Departments and Organs of State. The Act also enjoins Committees of Parliament to compile and adopt Budget Vote Reports, based on interactions with the relevant Departments - and Entities reporting to them - on their Strategic Plans, Annual Performance Plans and Budgets.
2. On the 28 May 2021 the Select Committee on Cooperative Governance and Traditional Affairs (Water, Sanitation and Human Settlement) had virtual meeting with the Department of Human Settlement to consider the 2021/2022 Annual Performance Plan and the budget allocation.

 

1. Briefing on 2020/2021 Annual Performance Plan and Budget Vote of the Department of Human
2.  

 

1. The Department of Human Settlement briefed members on 2020/2021 Annual Performance Plan and Budget allocation as aligned with the five- year Strategic Plan and Medium Term Strategic Framework and 2020 State of the Nation Address. The presentation focused on departmental programmes such administration; Integrated Human Settlements Planning and Development; Informal Settlements; rental and social housing and affordable. Housing. Each of these prgrammes are discussed in terms output; outcome indicators and budget allocation for the financial period 2021/2022

 

1. Programme 1: Administration

 

1. The purpose of Programme 1 (Administration) is to provide strategic leadership, management and support services to the Department. Over the medium term, this programme will contribute to the performance of the Department through the provision of effective and efficient administrative services to the line function to implement policies and programmes aimed a delivering sustainable human settlements.
2. This programme is subdivided into number of sub-programmes. These include the Ministry, Departmental Management, Corporate Services, Property Management and Financial Management

 

1. Some of the planned departmental output indicators for this programme during this financial year include, attainment of unqualified audit opinion with no matters of emphasis; 100 % compliance with statutory tabling and prescripts; 100% Implementation of the approved internal audit plan; 100% implementation of the approved anti-fraud and corruption plan ; 100% implementation of the approved risk management plan; 100% implementation of the Human Resource Plan; reports on the development of legislation as per Legislative Programme and approved ICT implementation plan as well as the communication strategy .

 

1. The total budget for Programme 1 has increased from R 483.4 million in 2020/21 to R488.4 million in 2021/22, representing a real decrease value of 3.04%.

 

 

1. Programme 2: Integrated Human Settlement Planning and Development

 

1. The purpose of Programme 2 (Integrated Human Settlements Planning and Development), is to manage the development of policy, planning andresearch in the creation of sustainable and integrated human settlements, to oversee the delivery of the integrated residential developmentprogramme, and to coordinate intergovernmental partnerships with stakeholders.

 

1. The main output indicators planned for 2020/2021 financial years include completion of researches on Agri-village and rainwater harvesting and exemption of Holding cost for state land earmarked for housing development; development of a draft Property Transactional Support Centres (PTSC) and Informal settlements upgrading macro policy
2. The other output indicated planned by the department include monitoring of budget allocated to entities owned by designated groups; approval of 2022/23Human Settlements Grants Framework; assessment of human settlements grants (HSDG & USDG); implementation of the Human Settlements Capacity Assembly programme (IHSPDP); and development of 2022/23 National Human Settlements Development Plan

 

1. Programme 3: Informal Settlements Upgrading

 

1. The purpose of Programme 3 is to provide for policy, planning and capacity support for the upgrading of informal settlements, and to oversee the implementation of the informal settlements upgrading programme.  From 2021/22, informal settlements projects will be funded from the newly created Informal Settlements Upgrading Partnership Grant (ISUPG). The provincial allocation to the grant amounts to R12.3 billion over the medium term and the allocation for metropolitan municipalities amounts to R12.5 billion.

 

1. These grants are expected to be used to upgrade and formalise 300 settlements in each year over the medium term and deliver 180 000 stands with access to municipal services. Spending under Programme 3 is therefore expected to increase at an average annual rate of 143%, from R648.2 million in 2020/21 to R9.3 billion in 2023/24.

 

1. In terms of the output indicators, the Department has planned to complete two rresearch reports on informal settlements upgrading; develop of policies on Social Facilitation and empowerment of designated groups; complete UISP baseline evaluation study and; implement the UISP Capacity Assembly Programme

 

1. Programme 4: Rental and Social Housing

 

1. The purpose of Programme 4 is to promote the provision of affordable rental housing, monitor the performance of the Social Housing Regulatory Authority, and develop capabilities in the rental housing sector through intergovernmental collaboration and evidence-based research
2. The primary objective of this programme is to promote the delivery of affordable rental housing by conducting research and developing policies and programmes as and when required, accelerate the provision of affordable rental housing and to strengthen cooperation and collaboration by facilitating intergovernmental forums and stakeholder partnerships on an ongoing basis.
3. Some of the planned outputs and performance indicators include development of policy framework on Rental Housing; monitoring of implementation of projects under Rental Housing Programme; completion of evaluation study on Rental Housing Tribunals; implementation of the Human Settlements Capacity Assembly Programme.

 

1. Programme 5: Affordable Housing

6..1.      The purpose of Programme 5 (Affordable Housing), is the provision of affordable housing finance, monitor market trends, to develop research and policy that respond to demand and to oversee housing finance entities that report to the Minister

 

6.2.       Key objectives of the programme include acceleration of affordable housing finance through provision of capital and operational funding to the National Housing Finance Corporation for the administration of the Finance-Linked individual subsidy programme; research and development of policies and programmes that promote the provision of affordable financing or households

 

6.3.       Some of the planned outputs and performance indicators include completion of one (1) research report on Affordable Housing: completion of feasibility of Mortgage Default Insurance; development of One (1) policy on affordable housing; completion of evaluation study on affordable housing and;implementation of the Human Settlements Capacity Assembly Programme

 

1. Budget Allocation for the 2021 MTEF

 

1. This section provides information of budget allocation for 2021 financial year. The focus is on human settlement development; informal upgrading; urban settlements development; and informal upgrading grants per provinces and municipalities as well as METF budget allocation per economic classification

Table 1: Informal Settlement Upgrading Grant

Provinces	2021/22	2022/23	2023/24
R`000
EASTERN CAPE	432 428	458 151	478 343
FREE STATE	228 001	241 563	252 209
GAUTENG	1 109 179	1 175 155	1 226 950
KWAZULU-NATAL	714 375	756 868	790 226
LIMPOPO	254 336	269 465	281 341
MPUMALANGA	259 233	274 653	286 758
NORTHERN CAPE	76 709	81 272	84 854
NORTH WEST	358 028	379 324	396 042
WESTERN CAPE	457 429	484 638	505 998
Total	3 889 718	4 121 089	4 302 721

 

Table 2: Urban Settlement Development Grant

Provinces	Metros	2021/22	2022/23	2023/24
EASTERN CAPE	Buffalo City	499 705	496 166	518 034
	Nelson Mandela	593 145	588 945	614 902
Sub Total		1 092 850	1 085 111	1 132 936
FREE STATE	Mangaung	495 267	491 760	513 434
GAUTENG	Ekurhuleni	1 291 347	1 282 202	1 338 713
	Jo'burg	1 213 099	1 204 509	1 257 596
	Tshwane	1 051 557	1 044 111	1 090 129
Sub Total		3 556 004	3 530 821	3 686 438
KWAZULU-NATAL	eThekwini	1 288 158	1 279 036	1 335 408
WESTERN CAPE	Cape Town	972 431	965 545	1 008 100
Grant Total		7 404 711	7 352 273	7 676 316

Table 3: Municipalities Informal Settlement Upgrading Grant

Provinces	Metros	2021/22	2022/23	2023/24
EASTERN CAPE	Buffalo City	266 258	282 122	294 556
	Nelson Mandela	316 045	334 876	349 635
Sub Total		582 303	616 998	644 191
FREE STATE	Mangaung	263 893	279 617	291 940
GAUTENG	Ekurhuleni	688 066	729 065	761 197
	Jo'burg	646 375	684 888	715 075
	Tshwane	560 301	593 685	619 851
Sub Total		1 894 742	2 007 638	2 096 123
KWAZULU-NATAL	eThekwini	686 369	727 265	759 318
WESTERN CAPE	Cape Town	518 140	549 012	573 210
Total		3 945 447	4 180 530	4 364 782

 

 

 

 

Total allocation R`000	2021/22	2022/23	2023/24	Total
Departmental Operational	927 655	941 406	943 712	2 812 773
Compensation of employees	403 193	403 094	403 176	1 209 463
Goods and services	520 655	534 328	536 373	1 591 356
Payment for Capital assets	3 807	3 984	4 163	11 954
Grants and transfer payments	30 730 303	31 677 878	33 052 116	95 460 297
Grants	29 121 481	30 012 973	31 348 987	90 483 441
Human Settlements Development Grant	13 402 961	13 857 905	14 481 903	41 742 769
Informal Settlements Upgrading Partnership Grant Provinces	3 889 718	4 121 089	4 302 721	12 313 528
Provincial Emergency Housing Grant	311 118	325 764	340 122	977 004
Urban Settlements Development Grant	7 404 711	7 352 273	7 676 316	22 433 300
Informal Settlements Upgrading Partnership Grant Municipalities	3 945 447	4 180 530	4 364 782	12 490 759
Municipal Emergency Housing Grant	167 526	175 412	183 143	526 081
Entities	1 596 832	1 652 487	1 690 665	4 939 984
Social Housing Regulatory Authority: Operational	70 248	72 738	73 073	216 059
Social Housing Regulatory Authority: Institutional Investment	22 725	23 534	23 623	69 882
Social Housing Regulatory Authority: Consolidated Capital grant	764 646	791 144	825 958	2 381 748
Community Schemes Ombuds Services	24 022	24 817	24 912	73 751
National Housing Finance Corporation: FLISP	460 988	478 028	479 865	1 418 881
National Housing Finance Corporation: FLISP support	18 824	19 510	19 585	57 919
Housing Development Agency	235 379	242 716	243 649	721 744
Departmental Transfers	11 990	12 418	12 464	36 872
Bursaries Scheme	8 220	8 472	8 344	25 036
UN Habitat	3 050	3 192	3 333	9 575
City Alliance	720	754	787	2 261
Total	31 657 958	32 619 284	33 995 828	98 273 070

Table 4: MTEF Budget allocation per Economic Classification

 

1. Observations of the Select Committee
   1. The Select Committee has noted that the revised 2020/25 Strategic Plan and 2021/22 Annual Performance Plans were approved by the Executive Officer and tabled in Parliament on the 15th of March 2021.The Department has finalized and approved its 2021/22 Annual Operational Plan in line with the Revised Framework for Strategic Plans and Annual Performance Plans.

 

1. The Select Committee has also noted that the Cabinet has introduced total budget cuts of the Department of Human Settlement amounting to R486.9 million over the 2021 MTEF period.The compensation of employees was cut by R188.3 million over the 2021 MTEF period.  Goods and services was cut by R100 million over the 2021 MTEF period. The Social Housing Regulatory Authority: Operational was cut by R13.7 million over the 2021 MTEF period of which R107 000 is on compensation of employees

 

1. The Social Housing Regulatory Authority: Institutional Investment was cut by R4.3 million over the 2021 MTEF period.  The National Housing Finance Corporation: FLISP Capital was cut by R89.3 million over the 2021 MTEF period. The Community Schemes Ombudsman Services: Operational was cut by R4.8 million over the 2021 MTEF period of which R246 000 is on compensation of employees. The Scholarship Programme of the Department was cut by R2.3 million over the 2021 MTEF period

 

1. Though the 2021/2022 Departmental Annual Performance Plan and Budget allocation was welcomed, the Select Committee however,  raised concerns related to incomplete housing projects, non- communication with the Buffalo Municipality on the accreditation process and outcomes, backlogs of titled deeds, slow process of filling vacant positions of board members of the Public Entities accounting to the department ,  increased budget allocation for the utilization of consultants, monitoring of quality of houses built before 1994 and post 1994, lack of integrated approach to human settlement that takes into account the provision of housing, clinics, schools and other social amenities .

 

1. Recommendations of the Select Committee
   1. The Department of Human Settlement should provide the Select Committee with the provincial breakdown of titled deeds in the municipalities
   2. The Department of Human Settlement should investigate and provide support to Matlosana Local Municipality on the problems relating to completion of housing projects including the company that has been contracted to provide the services and also provide support to Batloung Local Community in North West Province
   3. The Department of Human Settlement should fast-track the process of filling vacancies of members of the board servicing in Public Entities accounting to the Department
   4. The Department of Human Settlements should provide timeframes on all the planned research as contained in departmental programmes and performance indicators
   5. The department of human settlement should fast-track the accreditation process so as the enable Metro Municipalities to effective and efficiently implement to Urban Settlement Development Programmes and utilization of grants
   6. The Department of Human Settlement should provide quarterly reports on the progress and challenges relating to the achievement of the performance indicators contained in the 2021/2022 Annual Performance Plan and MTEF budget allocation
   7. The Select Committee should as part of ensuring executive accountability and performing oversight, aligns its 2021 parliamentary programme with the outputs and performance indicators of the 2021/2022 Annual Performance Plan of the Department of Human Settlement
   8. The Select Committee should during the 2021 financial period conduct proactive oversight visits to selected provinces in order to monitor the implementation and completion of the housing projects and the titled deeds in the local municipalities

 

Report to be considered