Department of Human Settlements on its 2012 Strategic Plan

Meeting report

The Chairperson noted that this was the first introduction to the strategic plan and the Department would be invited to return later with a provincial business plan. The Department also needed to provide the Committee with a response to the National Planning Commission’s Diagnostic Report and National Development Plan and after the constituency period there would be a workshop to consolidate the two reports.

During introductions the Chairperson commented that all those present were members of parliament and should not state what party they belonged to. Once they left the Committee they were able to identify according to parties but in this Committee they were merely Members of Parliament. Decisions that came from the Committee were a ‘portfolio committee position’ and not stemming from any particular party.

Mr S Mokgalapa (DA) said he understood the Chairperson’s position but this was still a political committee.

Department of Human Settlements (DHS) 2012 Strategic Plan
Mr Thabane Zulu, DHS Director General, reminded the Committee that the Department had gone through a journey of revising its strategic focus. This had led to some very interesting developments and the Department hoped to be provided an opportunity to brief the Committee soon on how far it had got with implementing the revised strategy which included a new structure for the Department. The programmes DHS had had in previous years had changed due to the revised strategy focus.

Mr Neville Chainee, DHS Chief of Operations, presented the purpose and objectives of DHS programmes and sub-programmes including Administration; Human Settlements Delivery Frameworks; Human Settlements Strategy and Planning; the new Programme and Project Management Unit to oversee the execution of human settlement programmes and projects; plus the
Office of Chief Financial Officer and Office of Chief Operations Officer.

Human settlement priorities included:
▪ upgrading of 400 000 households in informal settlements

▪ affordable rental housing stock of 20 000 units per annum
▪ a national bulk infrastructure programme and increased access to basic services

▪ acquisition of 6250 hectares of state-owned land
▪ supply of affordable housing finance to 600 000 households.


Ms Funani Matlatsi, Chief Financial Officer, went through the indicators and targets for 2012/13. DHS still had to undergo the process of budget structure change and would thus still have to present on the five programmes. However the committed R25.2 billion budget also funded the new Programme and Project Management Unit in that programme structure. The Department was in the process of finalising the budget structure to align the structure and strategy of the Department. This was done so when auditing was done the Department could talk about each SMART principle as laid down in the strategy.

Risks and Challenges
Mr Zulu stated that the Department was confronted with risks however they were very excited with the strategic movement seen in the Department. The Department was now working very closely with the different spheres of government as the strategy called for that. The DHS mandate did require that there was proper monitoring so that there was appropriate spending. Capacity was very important in all spheres of government. The issue of sustainability within human settlements required a shift of focus onto socio-economic factors. Thus it was important that human settlements were placed where opportunities were created, particularly economic opportunities. It had been the case in the past that many people who had received a government subsidy could not sustain the delivery made because there had been a lack of a proper economic analysis of place. Where there was a shortage of bulk infrastructure, DHS would take it upon itself to deal with this effectively. The Department was happy that there had been a shift by government to focus on infrastructure which would provide a platform to focus on this issue more effectively than it had done before. Another challenge was DHS needed to align provinces and local authorities to Outcome 8 as per Cabinet decision. It had started doing this last year.

Discussion
Unblocked projects and hostels
Members commented that there was nothing in the budget about unblocking projects nor about hostels, many of which were in bad condition.

Mr Zulu replied that allocations for unblocked projects and hostels would emerge more clearly in the business plans of the provinces. The Department sought to see how the various provinces would prioritise blocked projects in terms of their budget allocation.

Ms Matlatsi said the business plan would speak to the issue of the unblocking of those blocked projects. The Department was willing to return to the Committee with a detailed business plan and then report back to the provinces.

Special and designated group and sector focused programmes
A member asked how many houses had been completed according to special and designated groups and sector focused programmes such as “Youth Build”, “Women’s Build” and “Each One, Settle One” ?

An ANC member argued that there needed to be a clear plan on how these special and designated groups and sector focused programmes were to be rolled out to all the provinces equally.

Directorate for overseeing human settlement strategic and planning services.
A member asked if a directorate had been attached to the problem of overseeing human settlement strategic and planning services.

Professionalizing Enterprise Architecture.
Ms Njobe asked what was meant by professionalising the enterprise architecture.

Mr Chainee replied that one of the cornerstones of a department working efficiently and effectively was to have an efficient operating structure or architecture. What DHS had not had within it in the past was that operational architecture. What the enterprise architecture did was put in place and imbed an operation framework that allowed one of the Deputy Directors General to be able to manage the strategic and policy related issues. It was putting together the systems processes and plans within the organisation. This had never received attention in the past.

Migration Patterns
Ms Njobe asked if DHS had considered migration patterns? What determined the amount of the grant?

Urban Settlements Development Grant (USDG)
Mr Mokgalapa asked about the challenges in the implementation of the Urban Settlements Development Grant (USDG) as it was a new fund. What were the challenges and how would they be tackled in the new financial year?

Mr Mokgalapa asked for the criteria of the allocation of the USDG.

Mr Chainee replied that if a municipality had not performed in terms of the USDG, then the Minister had the authority to withdraw it. However what was important was that it was understood that the goal was to build a developmental government and it was not about national being able to do everything. There needed to be a sharing of responsibility and this process was nationally driven.

Ms Matlatsi replied when the USDG was introduced it was introduced at a time when there was no money at all. Treasury thus had to look at the revenue of a particular metro, the money the Municipal Infrastructure Grant was funded with and then it came back to DHS to scale down the Human Settlements Development Grant. This was also based on the dynamics of the metros in specific areas. In terms of transfers, a cash flow method had been used to divide the money into three to disburse to the metros. The application formula that had been used in the past to give funds to the provinces looked at the population of the province as well as the issue of numbers of shacks.

Mr Chainee replied that USDG had teething problems and this was the first year of implementation. It was a new grant for DHS to manage it did have a history with multi-year commitments made by the Metro Municipalities. For this first year, there had been a concession that many of the commitments made by the Metros for former programmes needed to run their course. Hence when the end of the financial year came there would be programmes that did not gel with Human Settlements programmes but needed to run their course. If one looked at the grant framework for USDG for the upcoming year, one saw that the conditionalities set were far more stringent than for the year in progress. There was regular reporting that was required as was regular interaction with the metros.

Municipalities accreditation
Mr Mokgalapa asked if municipalities had the capacity for accreditation. What was happening in terms of capacity and how could DHS do more to tackle this capacity issue of municipalities?

A member asked what would DHS do if the accredited municipality was not performing.

Alignment
Mr Mokgalapa appreciated the fact that alignment would be happening and if it allowed DHS to align its intergovernmental relationships better, then it was welcomed.

Ms Njobe said the Committee appreciated a concerted coordination and alignment of strategic plan. This was what the Committee had been looking for.

A further member said that from what had been heard at the meeting, there had been an interaction amongst the provinces, national and metros and this was very good. This would go a long way towards allowing for effective monitoring.

Ms Njobe said the fact that DHS had acknowledged that it was the national department who had to take the lead was a good thing. Transfers and grants were planned at national level thus it was important that DHS ensured these funds were used properly.

Each One Settle One Campaign
Mr Mokgalapa said that the Committee would appreciate a progress report on the ‘Each One, Settle One’ campaign.

Programme Management Unit (PMU)
Mr Mokgalapa said he welcomed the Programme Management Unit (PMU) and hoped that next year ‘rectification’ was not mentioned again.

An ANC member said the Committee welcomed the PMU as what mattered was value for money. She hoped the Programmes would be properly monitored and managed.

In terms of the PMU, there seemed to be a great number of programmes and projects in the pipeline and was DHS managing them?

Mr Zulu replied DHS had taken a decision that rectification should be centralised. There had been a bold step to establish the PMU and the programmes that would be run under this Unit. The provinces had agreed that provincial allocations should be done at national level. They also agreed that part of the budget could be taken to manage the Rectification Programme. He argued that if the PMU could function at an optimal level, it could resolve a large number of Human Settlements problems countrywide. The PMU was conceptualising the programme and putting a plan in place.

Ms Matlatsi replied the detailed business plan would outline all the fine points and small print that the Committee was looking for. In time DHS would have been able to outline some of the projects.


Special investigation
Mr Mokgalapa asked if there could be a briefing on the progress of the special investigations.

Mr Zulu asked if it would be possible to do a presentation on the progress of the Special Investigating Unit as that was what DHS usually did. There had been challenges due to the change of leadership in the department however there had been progress. Updates could be provided in that presentation.

Sanitation Backlog
Mr Mokgalapa said that provision had not been made for the Rural Household Infrastructure Grant which worked on the bulk infrastructure and sanitation backlog.

Mr Zulu replied there had been an institutional capacity challenge in delivery of sanitation programme which had had a negative impact on the delivery of DHSs targets. They were conceptualising a new way of delivering sanitation and would be presenting that to the Committee. The lack of institutional capacity had had an impact on the programme and DHS was working to remedy that.

National Home Builders Regulatory Council (NHBRC)
Mr Mokgalapa said he welcomed the Technical Capacity and Regulatory Compliance Unit as it strengthened DHS. He asked what would be the role of the National Home Builders Regulatory Council (NHBRC) if there was a very well crafted internal unit.

Mr Zulu replied that some programmes were never enrolled in NHBRC and thus this stopped the entity being able to do its work effectively. Any new project needed to be registered however DHS had moved a step further to make sure NHBRC had sufficient capacity to undertake its own responsibility.

Mr Chainee replied that in terms of the NHBRC the government could not absolve their responsibility by outsourcing key responsibilities. The entity had been regulatory and if it was flooded with having to do training and the like, then it did not function effectively. This is what the Technical Capacity Unit sought to achieve, it would allow the government to give people capacity and take away that issue of ineffectiveness.

Mr J Matshoba (ANC) said he was worried about the effectiveness of the NHBRC.

Mr Chainee said that NHBRC had more than an obligation to DHS, it also had a regulatory statutory function in terms of the whole construction sector.

Province Budget Allocation
Ms D Dlakude (ANC) said that in areas that had been hit by a disaster in May last year, there were still backlogs in re-building the destroyed houses. She was worried about budget allocation to Mphumalanga and KwaZulu Natal as these were the provinces hit most by the disaster. She was also worried about the Northern Cape budget being low.

Another member asked what was the source of the money allocated to the provinces.

Mr Chainee replied that disaster and rectification projects should not be confused as disaster was immediate. Part of the money in the Human Settlement grant included a disaster response. The issue was that DHS had not had a national human settlements disaster management plan. DHS sought to assure the Committee that by the end of May they would have a consolidated Human Settlements Disaster Management Plan. It had been an issue of whether this was a matter for cooperative government or Human Settlements. What had been done now was the Disaster Management Act had said it was the mandate of the national department. Thus DHS had asked each province for a provincial plan. The Disaster Management Plan was soon to be presented.

Vacancies
A member wanted the assurance that all vacancies would be filled by the end of the year.

Ms Yvonne Mbane, DHS Chief Director: Human Resources, said that there were six programmes and only four Deputy Directors General meaning there were two vacancies.

Ms Mbane replied that DHS sought to ensure that coming into the first quarter the vacancies were filled to 94% capacity rate which was the norm in public service. DHS would be in the process of advertising before the end of the financial year. In the meantime interim arrangements had been made with people taking responsibility for acting positions.

A member pointed out that the Committee had been told that vacancies would be filled by the end of the last financial year. If DHS had known the positions would be required, why had the process not been started to fill the positions so that in April, DHS started with the vacancies filled?

Ms Mbane agreed that in previous meetings this had been indicated as the plan. However some things were not in the Department’s control. DHS had only received concurrence the day before Christmas. Once this was received, it needed Ministerial approval. Once this was approved, there were other process that needed to be followed prior to advertising the vacancies. However DHS would try rigorously to fill the positions.

Dip in the financial year
A member asked why there was a dip in one of the financial years. She was however unsure which year and said she would come back to the question.

Rural Housing Loan Fund (RHLF)
An ANC member asked about the more than R51 million transferred to the Rural Housing Loan Fund and then nothing would be transferred. What would be done with the Fund?

Mr Chainee replied that the RHLF had been capitalised but there had been criticism surrounding the question of the voucher scheme. Thus part of the R51 million was that but also the consolidation. There would be a briefing on that. The programme was not going to disappear, DHS simply wanted to achieve the consolidation of the programme in 2013/14.

Ms Matlatsi said it was an oversight not to indicate the Rural Housing Infrastructure Grant in the slides about the transfers but it was embedded in Programme 3. She also explained that this was an indirect grant as it differed in terms of Division of Revenue Act. In this financial year, R479 million was allocated to that. In the following year, there was R389 million. This would all be presented at a later date.

Bursaries
A member asked what had happened to the R4 million for DHS bursaries. If a person failed, did that person have to pay back the money or were they continually given money?

Ms Mbane replied there were two systems in terms of bursaries. There was a human resource development unit which was internally focused and looked at bursaries for and skills development of DHS employees. The bursaries alluded to in terms of transfers were part of the parcel of the technical capacity development which addressed capacity even at municipality level. The awarding of bursaries there was done in conjunction with the provinces which had to ensure that all learners, upon completion of studies, served a bursary obligation either at the provincial or municipality level. These bursaries were followed up as the standard practice was there must be a contract and people needed to give back. When people had failed in an internal bursary scheme, then the amount was simply deducted from their pay. For the external technical capacity building, DHS found it better to fund older students (such as those in second or third year) rather than first years as the chance of them dropping out was lower. It also addressed the capacity problem, as giving money to first years meant having to wait for four years for them to graduate, however an older student would take less time. Thus there was a formula used for first year entrants and those already in the system.

Meeting adjourned.