The Portfolio Committee on Social Development held public hearings into the South African Social Security Agency Bill (B51 – 2003) and the Social Assistance Bill (B57 – 2003) on 22 and 23 September 2003. Submissions addressed both broad policy issues and specific clauses in both Bills. This report should therefore be read in conjunction with the Committee’s report on the Social Assistance Bill. The report will first summarise the policy and general matters relating to the social security system in South Africa raised during the hearings. It will then deal with submissions as they address specific clauses. Submissions are arranged alphabetically. Where different organisations made submissions as part of a coalition, similar recommendations are made by various organisations. These are not repeated.

Submitted by Accenture

The first part of the submission by Accenture provided an analysis of some of the challenges currently facing the Department of Social Development in administering social assistance. The submission noted that the Social Security Agency Bill would have to respond to challenges such as:

• The fragmentation of the social security system
• Inefficient processes
• Skills shortages at human resource level
• Poor management of third party payment contractors
• Poorly integrated and user-unfriendly information systems
• Problems in the interface between different government departments
• Social dependency challenges
• The absence of a performance management culture

Therefore, the submission argued, the proposed establishment of a specialist social security agency would have to take into consideration issues such as the most appropriate skills required in the most appropriate institutional framework. Care would also have to be taken that the necessary institutional transformation and re-orientation takes place with as little interruption as possible for beneficiaries. In addition, there would have to be mechanisms to measure the effectiveness of the new agency.

Submitted by the Alliance for Children’s Entitlement to Social Security (ACESS)

ACESS recommended that the Portfolio Committee reject the Social Security Agency Bill and encourage the Executive to engage with the Taylor Committee Report. This would facilitate the formulation of a comprehensive social security policy; whereafter the drafting of comprehensive social protection legislation will be appropriate.

Submitted by COSATU and NEHAWU

The COSATU submission supported by NEHAWU, BLACK SASH and Socio-Economic Rights Project of the Community Law Centre reiterated the views highlighted in the general remarks to the Social Assistance Bill.

The submission called for the suspension of further consideration of the Social Security Agency Bill by parliament until meaningful engagement takes place with stakeholders around the policy framework and legislation.

Submitted by COSATU and NEHAWU

The submission argued that the long title fails to specify whether the Agency would be the sole deliverer of social security or a contracting agency. COSATU proposed the insertion of the word "sole" before agent to read, "…to act as sole agent for the consideration and payment of social assistance…".

Submitted by COSATU and NEHAWU

The COSATU submission proposed the deletion of [private] in the proposed definition in the Bill of social security, and substituting it with all.

Clause 2 – Establishment of Agency

Submitted by Accenture

The Committee asked what Accenture saw as the crucial difference between an agency and the current social security administration. Accenture replied that the establishment of a specialist agency gave Government the opportunity to create an entity with the right people and the right systems, and would allow for the introduction of focused and appropriate service delivery mechanisms. Experience suggests that reform of service ethics within a government department is not effective; overseas models confirm this.

Members asked how Accenture saw the interaction between the national department and the provinces. Accenture replied that the Agency could not operate only on a national basis. However, the role of the provinces would change drastically. Provinces might have to refer cases to the Agency; for example, when a social worker finds a child in need of care, and recommends that a parent, foster parent or care giver apply for social assistance in relation to such a child. However, the application process and payment of grants should be the responsibility of the national department in the guise of the Agency. Accenture saw the Agency as a national structure with a reach into provinces. The focus should be on ensuring that benefits reach beneficiaries. Some of the contracts with payment contractors would have to be retained and possibly renegotiated. Accenture also felt that it would be important to ensure that the transfer of staff from provincial departments would not mean the transfer of bad service delivery.

Submitted by Accenture

Accenture submitted that the Bill was vague on the exact nature of institutional arrangements. The submission argued that such detail in the Bill would go a long way to ensuring that the establishment of the new Agency does not merely replicate the problems in the current delivery system.

Submitted by Action on Elder Abuse (SA)

Action on Elder Abuse (SA) welcomes the introduction of the Agency and embraces the objects of the Bill, which should equalise the quality of service delivery in all provinces and standardise benefits. A national system of social assistance will streamline the transferring of grants in the case of beneficiaries re-locating to another province. Service delivery should, therefore, be improved as staff of the Agency will be more focused and better trained to attend to the needs of beneficiaries.

However, Action on Elder Abuse (SA) was concern with the following:

• The Bill does not provide sufficient protection for beneficiaries, as there is no formal body to which complaints of poor service can be addressed.
• A set of timeframes for the transition or handover period and the maximum time allowed between application and payment of grants should be stipulated. Failure to do so will result in suffering and increased poverty for beneficiaries.

Submitted by Age in Action

Age in Action supports, in principle, the formation of a single authority for the following reasons:

• It will establish uniformity where currently diversity exists not only between provinces but also even within provinces with respect to information, quality of service and accessibility.

• It will be easier for beneficiaries who move between provinces to get their grants transferred.

• There will be a dedicated staff who should be better trained and equipped to provide an improved service than is presently the case.

However, concerns about the Bill include the following:

• The public in general and beneficiaries in particular do not have adequate protection or avenues to lodge complaints to ensure that issues of poor service are addressed.
• There is no provision for and timeframes for the handover or interim measures. This could lead to considerable dislocation and to suffering for beneficiaries.

Submitted by the Coalition on Social Assistance

The Coalition recommended that the Portfolio Committee reject the Social Assistance and the South African Social Security Agency Bills. The Coalition also called on the Committee to encourage the Department to engage with the Taylor Committee Report in order to formulate a comprehensive social security policy whereafter drafting of comprehensive social protection legislation will be appropriate.

Submitted by COSATU and NEHAWU

The submission proposed that clauses 4(2)(a) and 4(3) be deleted. The motivation is that the continued use of private contractors has been a failure as demonstrated by the repeated violations of service level agreements.

Submitted by Professor Olivier

The present Bill deviates in substantial respects from the recommendations of the Taylor Committee. The Committee proposed that:

• The scope of the Agency would include all social security programmes, i.e. social assistance, social insurance, social relief, social services as well as private sector regulation.
• The primary functions of the Agency would be research and monitoring, co-ordination, information and IT services. It would, importantly, act as an interface between the public and all parts of the whole social security system.
• The Agency would be regulated by a Board that would be a representative board as opposed to individual appointees of the Minister, as proposed in the first draft of the Agency Bill. The current Bill does not at all provide for the Board.

• Functions relate to all social security payments. However the Social Security Agency Bill provides that other administrators may also be involved in the same.

Submitted by Accenture

Accenture argued that the provision in Clause 5 for the appointment of a Chief Executive Officer (CEO) signalled the intention to establish a professionally managed institution.

Submitted by Accenture

Clause 6 provides that the CEO would be accountable to the Minister, which, according to Accenture, is a healthy democratic principle. However, Accenture argued that the functioning of the institution depended to a large extent on achieving an appropriate balance between accountability to the Minister and managerial autonomy. In addition, the submission argued that the chapter should contain broader governance mechanisms for the agency, since in terms of current provisions in the Bill, the Minister remains responsible for ensuring that the agency functions effectively. Accenture proposed that the Bill provide for the establishment of an independent Board that would report to the Minister. The members of the Board could be drawn from a broad and representative stakeholder base that should also ensure that the team encompasses the necessary skills. This would ensure that there is a clear separation of responsibilities.

Submitted by Age in Action

The submission raised concern that the Chief Executive Officer is responsible only to the Minister – the Department has no powers to oversee the Agency.

Submitted by the Black Sash

Black Sash stated that ministerial accountability for the exercise of powers and performance of functions assigned by the President is firmly established in the Constitution (section 92 (2)), which requires members of Cabinet to, inter alia, "provide Parliament with full and regular reports concerning matters under their control" (section 92 (3)(b)).

The Agency would be subject to the principles applicable to public administration, among which is the requirement of accountability (section 195 (1)(f)).

In terms of the South African Social Security Agency Bill, the Agency would, "subject to the direction of the Minister of Social Development ("the Minister"), be managed by a Chief Executive Officer ("the Agency CEO") appointed by the Minister (clause 6 (1)(a)). It is explicitly provided that the Agency CEO would be "accountable to the Minister and must report to him or her on the activities of the Agency" (clause 6 (2) of South African Social Security Agency Bill).

In addition, the Agency (through the Agency CEO) would be required, each financial year, to submit to the Minister for approval, "an annual report on its activities and a statement of its income and estimated expenditure for the following financial year" (clauses 11 (1) and 6 (1)(b) of the Bill).

It is important that there be direct and proper accountability for the important functions and powers exercised by the Agency in implementing the constitutional right of access to social assistance. While it is clear from the above that some lines of accountability from the Agency CEO to the Minister are drawn in the Bills, these are thin and for the following reasons, raise concerns about the extent to which they provide for proper accountability.

No specific measures are indicated for the Minister’s "direction" of the management of the Agency. If the Minister is to "direct" the activities of the Agency, the Minister should be explicitly empowered to:

• Override decisions of the Agency CEO;
• Give directions as to how decisions should be made in implementing policy; and
• Call the Agency CEO to account for not following directions.

Furthermore, although the Agency CEO is required to compile an "annual report" for approval by the Minister, there is no provision for more regular and effective reporting which would enable the Minister properly to monitor all aspects of the Agency’s activities and to enforce the implementation of the relevant policy. The provision for reports by the Agency CEO to the Minister on the activities of the Agency may be interpreted as requiring nothing more than the annual report referred to above. Only if there is more substantial accountability from the Agency to the Minister, can the Minister meaningfully account, via Parliament, to the public. In order that the Minister is able to furnish "full and regular reports" to Parliament on the administration of social assistance grants, there should be provision for full and regular reports by the Agency CEO to the Minister.

The Black Sash, therefore, recommended that the Portfolio Committee reject the Social Assistance and the South African Social Security Agency Bills. The Coalition also called on the Committee to encourage the Department to engage with the Taylor Committee Report in order to formulate a comprehensive social security policy where after drafting of comprehensive social protection legislation will be appropriate.

Submitted by COSATU and NEHAWU

The submission proposed the inclusion of the following additional subclauses under clause 6 in the Bill:

• The Minister may override the decisions of the CEO
• The Minister will give direction on decision making in respect to implementing policy.
• The CEO remains accountable to the Minister

COSATU also proposed an addition to clause 6 (1) (b) to read "report on a quarter basis to the Minister".

It was further proposed that subclauses 6 (1) (c) and 6 (1) (d) be deleted. In addition, the submission argued that the staff should remain under the public service with the Agency as a public utility.

Submitted by Accenture

Accenture submitted that clause 7 was not explicit enough about the types of skills required from staff of the Agency. This could lead to the same skills deficiencies in the current system being transferred to the Agency.

Submitted by COSATU and NEHAWU

The submission proposed that in clause 7 (1) the words [as may be necessary] should be deleted, as the formulation has been uses as a euphemism for down scaling employment.

Also in clause 7 (1) they proposed that the wording [and such persons are employees of the Agency] should be deleted. They are of the view that the staff of the agency should be seconded from the public service and remain part of the public service subject to the Public Service Code.

The submission further proposed the deletion of [core] in clause 7 (2) (b) since in the public service there is no such a division between "core benefits" and "non core benefits".

With regards to clause 7 (3), COSATU proposed that the entire subclause be deleted. The Public Service Code should apply.

Submitted by COSATU and NEHAWU

The submission proposed that clause 8 (1) "on appointed" should be deleted as staff would on secondment from the public service.

Submitted by Accenture

Accenture pointed out that, because the Agency would be administering billions of Rands, there was a need to ensure sound financial management and operational efficiencies. In this regard, fraud required particular attention. While Chapter 4 addresses general financial management requirements, Accenture argued that the Bill needed to include more provisions setting out a clear accountability framework.

Submitted by Accenture

Accenture argued that the funding arrangements in respect of the Agency needed to be reviewed. The submission was of the view that the non-contributory social assistance scheme was not sustainable, and that Government would have to consider a model that combined contributory and non-contributory elements. This, the presenter argued, needed to be reflected in the Bill.

Submitted by COSATU and NEHAWU

The submission proposed that clause 22(b) should be deleted, as employment issues will be dealt with in terms of the Public Service Code of Conduct.

Submitted by Accenture

Accenture held that the transitional provisions relating to employees should be strengthened to include the principles that should underlie the transfer of staff and attract the appropriate skills to the Agency. While retaining jobs is an important issue, this should not undermine the importance of ensuring that the Agency is staffed on the basis of the key competencies it will require.

Submitted by COSATU

In subclauses 23 (1) (2) (3) all references to [transfer] should be replaced with secondment.

Submitted by COSATU

COSATU proposed the insertion of the following clause in the Bill:

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Report compiled by the Research Unit, Information Services Section, Parliament of South Africa.