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 & Public Administration

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

 

 

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