WC Appropriation Bill: Office of the Premier

Meeting report

Introductory remarks
Mr Alan Winde, Premier of the Western Cape, noted that there were two documents on the table, the Annual Performance Plan (APP) and the Blue Book (Vote 1). The 2024/25 budget of R2.008bn was a 1.78% reduction from the previous year. He highlighted the energy crisis in the country. He said the province had budgeted R104m to generate an additional 5700MW of power, including energy packs for the indigent and learners in low-quintile schools. The Department of the Premier would be completing its Provincial Integrated Resource Plan (PIRP) to plan the energy mix for the province going forward. The PIRP outlined that as much as R7bn would be spent on energy over the next few years between the provincial government and the municipalities. Another key area was support enabling municipalities to put out service tenders. He also highlighted the broadband 2.0 programme, cybersecurity, and the need to embrace artificial intelligence (AI) for potential savings. He said the culture of the Department needed to be correct to maintain clean audits and provide citizen-centric services. He was proud that the Top Employers Institute recognised the Western Cape Government (WCG) as a top employer.

Dr Harry Malila, Director-General (DG), WCG, said this was the last year of the 2019/24 strategic plan and the Department wanted to complete all of its commitments. He was proud of the province’s broadband rollout programme. The province’s contribution to the R7bn was about R1bn of which about R760m remained to be spent over the rest of the medium-term expenditure framework (MTEF) period. The results of the Barrett survey would be rolled out, and the Department had designed certain principles for better service delivery and good governance and to institutionalise the e-citizen approach.

Discussion
Mr C Dugmore (ANC) said that opposition parties had raised serious concerns about the lack of representivity in the senior management. In fact, it was getting worse. There appeared to be no commitment or concern noted in the APP or the Blue Book. The Department was one of the least representative departments in the province. There did not seem to be a plan. He noted the gradual decline in education outcomes and the poor performance of no-fee schools compared to other provinces. He asked for an update on whether the province had declared an inter-governmental dispute on how public service wages were negotiated. Could the Premier give a commitment that that wage agreement would be honoured in the Western Cape?

Premier Winde did not agree with Mr Dugmore’s statements about the lack of representivity. On the issue of educational outcomes, he said that there would be more details in the education vote, but there had been an increase in the matric pass rate over the past three years. It was also important to look at the outcomes indicator together with learner retention rates. The province had been measuring learner retention at various grades in the system to ensure that as many grade 1 learners as possible made it all the way to matric. The performance target on this indicator was 70%. On the inter-governmental dispute, he said that a declaration of a dispute was in process. Mediation, the next step, would take place on 19 March. The budget deficit meant that services would have to be cut, and this was the trigger for the dispute.

On the issue of lack of representivity, Dr Malila said that a diverse workforce took one further. The key issue was that the Department had lost people in senior positions. Three Deputy Directors-General (DDGs) and some chief director positions were now vacant and would be advertised soon. The Department was committed to creating a diverse workforce.

Mr Dugmore said he wanted a reference in the Blue Book or APP that spoke to making the Department more representative. He also asked how much of the energy budget would be spent on consultants in 2024/25. When would the 5700MW be available, and what would the cost be to the consumer?

Premier Winde said that the employment equity plan had already been given to Mr Dugmore but it would be given to him again. He said the energy programme had a three- to four-year horizon. In 2024/25, 2000MW was in the pipeline, procured by municipalities, and this amount was due in 18 to 24 months. 3000MW in private sector investment was also expected. In Darling, for example, there was a 100MW development, of which 99MW was going to private sector buyers. On electricity costs, he predicted that electricity costs would be lower than the rest of South Africa and presumably, at some point, they would be less than Eskom’s tariffs because Eskom’s price increases kept going up astronomically every year, while competitive private sector costs were on a downward trajectory. They currently sat at 8-15 US cents per kilowatt hour, having been at 40 US cents three years ago.

Dr Malila said that discussions of employment equity could be found on pages 55-56 of the APP and pages 128-129 of the Annual Report. Pages 53-55 of the Overview of Provincial Revenue and Expenditure dealt extensively with the energy plan.

Mr Dugmore repeated his question about how much power would be fed into the grid from Western Cape government initiatives by the end of this year. The Premier spoke of predictions and presumptions but he wanted evidence. He said that because the city added its own surcharge to electricity, it meant that it was cheaper to buy power from Eskom directly than through the city.

Premier Winde said that 2000MW were out on tender and would be fed in between 18 and 24 months from now. On the pricing, he said that Cape Town had by far the cheapest electricity cost and the biggest indigent allocation compared to all other cities.

Western Cape Appropriation Bill 2024

Discussion
Ms D Baartman (DA) asked what the scope of the incorporation of AI would be. Would it improve service delivery and make government cheaper? Did the costing include the infrastructure needed for AI and the maintenance and upgrades that would be necessary in the future? Had the Department spoken with the South African Revenue Service (SARS) regarding pulling in data with the aim of making the provincial government more efficient? On broadband services, she asked whether the re-adjusted budget included an allocation for broadband service renewal. Was there a commitment to the renewal of the State Information Technology Agency (SITA) services? How many loadshedding packs had been distributed to households?

Mr G Pretorius (DA) asked whether SITA had contributed to the development costs of broadband 2.0 in view of the budget being cut by 10.2%. How would the ordinary citizen benefit from it? Had the Department received value for money from the citizen perception surveys it undertook, and to what extent did the feedback influence the Department’s planning?

The Chairperson asked which non-profit organisations (NPOs) were being spoken about in the sections dealing with the Family Strengthening Project.

Dr Malila said the Department had developed a draft policy paper on AI. AI was already being used in certain areas and the Department wanted to strengthen its use. SARS was already sharing massed data with the province. On broadband inventory, he said that R67m was the amount set aside for loadshedding packs. On the broadband tender, he said SITA was advertising the tender and he hoped that it would be concluded by the end of the year. On the energy plans, he said that R759m had been allocated and the details could be found on page 55. He said that 4000 loadshedding packs had been procured this year and most had been distributed. The new loadshedding packs would be provided to matric students and grade 1s of 2024. The packs provided a charging facility and provided lighting.

Mr Drikus Basson, Chief Financial Officer (CFO), Department of the Premier, explained that the increase in the budget for the loadshedding packs from R60m to R67m was due to the fact that the Department now had better data on pricing. He said that polling gave real-time insights on what citizens wanted to know about services and which channels they got information through. It was useful to adapt the brand messaging.

Mr Hilton Arendse, DDG: Central Innovation, Department of the Premier, said a transition committee was overseeing the broadband transition. The current contract allowed for an extension should the new contract not be in place, so services would not be affected. He said SITA did not contribute to development costs. On how the ordinary citizen would benefit from the new broadband contract, he said it was about expanding services to schools, hospitals, public Wi-Fi, and e-centre services. The previous contract focused on technology, and the new one focused on services to citizens.

On the Family Strengthening Programme, Ms Hildegarde Fast, Director: Policy and Strategy, Department of the Premier, said the Programme had three phases. The first was working with NPOs on referral pathways, so that the NPOs could identify when they needed to refer children elsewhere. Different NPOs were doing things differently and not always following best practices, so a set of guidelines had been developed through workshops. Now the Department would be supporting the implementation of these guidelines. She gave a list of names of the NPOs the Department was working with. In terms of nutrition, she said that the Department had an excellent ‘first 1000 days’ programme. It wanted to leverage community-based workers in the care economy and they wanted to improve food nutrition opportunities, programmes that provided support to caregivers and children, the targeting of vulnerable caregivers and young children, and to establish a provincial young child forum that focused on developing a more coherent sector approach.

Premier Winde said the Department had had an opportunity to engage with AI Sweden, a Swedish national centre for applied AI, on using AI as a checks and balances mechanism. One area where AI might help improve services is in the health services space. The Department currently had teams doing triage at hospitals, going down queues of people with the government’s health app. As people started to realise that the app even from home, AI would help reveal where there were blockages or gaps in the province’s healthcare coverage.

Ms Baartman noted that there might have been some rollover of the previous year’s budget for loadshedding packs. She asked for clarity on whether this year’s R67m budget was the amount added this year or the amount available. She was already aware that the Department obtained business information from SARS. She wanted to know whether the Department could ask SARS to collate information to give an overview of what was happening.

On personnel numbers, Mr Pretorius observed that there had been a personnel reduction over the three-year period. What was the reason for this and did the Department foresee personnel expansion in the future?

Dr Malila replied that the reduction was because of the fiscal environment. This was the subject of the inter-governmental dispute. For the current year, the Department had not received R1.1bn, so the salary increase had had to be covered by the salary base. The Department had a budget committee and every programme had to make submissions to fill posts. Personnel numbers had moved from 1038 to 1021 to 996 and to 993 because it did not have the money. There was probably a similar trend in other departments. On the loadshedding pack budget, he said that the Department had gone out three times on tender and had had many issues. For example, successful bidders had not been able to supply the loadshedding packs. All three tenders had been cancelled but the packs were expected to get delivered in this month. The allocation for the previous year was suspended and the money was made available for 2024/25.

On the SARS data, Ms Zeenat Ishmail, Chief Director: Strategic Management Information, Department of the Premier, said that the Department was looking at the SARS data on full-time employment in particular and comparing it with Stats SA data and informal employment numbers for the Department to use in decision-making.

Mr Dugmore asked what the purpose of the departmental strategy was. Why did it need a 10% increase in its budget, while there had been cuts in the budgets of executive council support, the office of the DG and communications? Which “priority groups” were being referred to in the APP under Human Rights-based Transversal Programmes? Were they among the strategic programmes found on page 30 which would receive an increase of more than 300%? On earmarked allocations, he asked where the budgets for other strategic programmes were. On the People Management and Practices programme, he asked what people management meant in practice. On the summary of payments and estimates, he observed that legal services had had a 10% increase in budget. Was it because of an increase in the output of bills or was the Department expecting further litigation? All the bills being considered were legislation that was not going anywhere.

Ms Baartman asked how far the drafting of the PIRP was. She observed that the audit costs for the external auditor were increasing by 9% while inflation was only 4-6%, while the Department had been getting clean audits for the past nine years. What was the Department paying the external auditors for?

Dr Malila replied that audit costs had come down from R6.4m to R6.2m and the figure of R6.2m was a provision that might not all be used. In the previous year, only R5.7m had been spent. The issue of audit costs had been raised by the transversal audit committee and, together with Treasury, it was looking at the issue across government. On the PIRP, he said it was a work in progress and a draft was in place. He expected it would be completed this year. The municipalities were also involved in the process, as it needed to draw in all the issues around energy provision. Collectively, the Department would contribute R1bn while municipalities would contribute R6bn. He explained that the legal services budget increase was in response to a bleeding in capacity. The aim was to build capacity across the entire system. It was not to deal with legislation but to strengthen the system of legal advisory services. He explained that People Management and Practices were at the heart of the day-to-day running of human resources. The budget increase had been only 2.2%, which was not much relative to inflation. There was a reduction in staff numbers. The 300% increase for strategic programmes was primarily for loadshedding packs and some funding for internal energy projects. On the Children’s Commissioner, he said that R6m had been allocated for operations and a small portion for accommodation, which was still being procured. The other strategic priorities of safety, jobs and well-being fell under Programme 2. He explained that the priority groups referred to were women, children and the elderly. He said the departmental strategy budget was a jump from a very low base. The main appropriation was R6.1m, which was adjusted downwards to R5.8m. The strategy unit mainly dealt with occupational health and safety matters. Its capacity was bleeding and the increase was intended to deal with this problem.

[There was a break for tea and livestreaming resumed with Premier Winde speaking]

Premier Winde said the Department needed its fair share for health and education and it could not be delayed for a few years. The province’s numbers were totally skewed with regard to the amount of money received from the national government. The highest risks citizens faced were still energy and safety. He thanked the DG and his team for the work they had done.

Dr Malila thanked the Committee, his team and the Premier.

The Chairperson offered his congratulations to Ms Ishmail on the conferral of her doctorate.

Committee business
Ms Baartman moved to support the vote on the appropriations bill.

Mr Pretorius seconded the motion.

Mr Dugmore asked that the ANC’s minority view against the vote be registered.
 
The draft committee report for the appropriations bill was adopted.

The meeting was adjourned.