Department of Human Settlements Quarter 2 performance; High Level Panel recommendations

Meeting report

Second quarter performance: DHS

Mr Mbulelo Tshangana, Director General (DG) Department of Human Settlements (DHS), said he would start with the bad news – the Department had not been able to meet the senior management service (SMS) employment equity (EE) threshold, and the figure was sitting at 57% men and 43% women. There had also been a significant number of employee cuts, and the Department had wanted to employ people on contract in the vacant positions. This had not gone down too well, as permanent employees were risk averse and did not want to work under a contract. The vacancy rate had gone up because they had not been able to fill those positions. They had taken a decision that all new positions would be filled as permanent positions, without wasting any finances.

Ms Nelly Letsholonyane, Deputy Director General (DDG): Corporate Services, DHS, said that on governance and administration on statutory tabling and prescripts, there had been 70% compliance. She listed a number of reports that had not been submitted on time. Only five invoices out of 375 had been paid after the 30-day deadline, and the Department was working to reach 100%. There had been 76% implementation of the human resources (HR) plan, which included full achievement of the implementation of the human resources administration (HRA) conditions of service and benefits, the analysis of exit interviews, the annual leave audit, implementation of the approved Work Skills Plan initiatives; convening the Public Service Women Management Week session; and convening the Batho Pele Change Management Engagement Programme session.

She gave details of activities not completed by the end of Quarter 2, which covered issues like recruitment processes, updates on the vacancy reduction rate, consequence management for late leave submission, procurement of service providers for competency assessments and skills audits, coordination and submission of SMS annual assessment reports, and the establishment of the task team on the Batho Pele service standards pilot project.

She reported on progress on legislation and policy changes. With the Human Settlements Development Bank Bill, the business case was in the process of being finalised. The Department had commenced with the appointment of capacity to draft the Human Settlements Bill. For the Prevention of Illegal Evictions (PIE) Amendment Bill, a special legal forum was hosted to consult and agree on the processing of steps for any review of the Act. Relevant action had been taken to process the Property Practitioners Bill. The Minister was in the process of requesting approval for the submission of the Housing Consumer Protection Bill for public comment. The Minister was also in the process of submitting the Home Loan and Mortgage Disclosure Act (HLAMDA) Bill to Parliament, and was awaiting approval by the Cabinet. The Rental Housing Amendment Act regulations had been drafted and the next phase would be to develop the norms and standards and thereafter commence steps to have the regulations approved.

Ms Letsholonyane said the Department relied heavily on intergovernmental and international relations. It coordinated intergovernmental fora in line with human settlements priorities during the period under review, including the joint coordinating committee on land, which was a critical area for the DHS’s success, as well as the Expanded Public Works Programme (EPWP), the Community Workers’ Programme (CWP) and the National DHS Forum. There was also the Department of Science and Technology partnership, because in the 20th century technology was critical, and there was need for the DHS to appraise themselves about technology going forward.

There were also actions and initiatives on international cooperation and serviced aligned to the Human Settlement priorities. There was a high level UN engagement on Agenda 2030 and the New Urban Agenda. The 2018 High Level Political Forum on Sustainable Development was convened under the auspices of the Economic and Social Council of the United Nations. There was knowledge exchange through attending or arranging conferences, workshops or study visits, including astudy tour by the Portfolio Committee to Singapore. There had been a BRICS Summit, in partnership with the Department of Cooperative Governance and Traditional Affairs (COGTA) on the BRICS Friendship Cities.

On policy and planning actions, the draft multi-year land assembly plan for human settlements development was compiled. The acquired land was 990.6187 ha, and the land released was 52.7817ha. Work had commenced on the development of a framework for the policy and regulatory institutionalisation of a Human Settlements Ombudsman. A draft benchmark report on management of homelessness was compiled.

Mr Neville Chainee, DDG: Strategy, DHS, said that the Department had prepared the presentation based on queries raised on the last quarter’s report. Actions on the assessment and categorisation of informal settlements had been undertaken, based on the following categories:

• Category A involved a full conventional upgrade consisting of full services, top structure and formal tenure, i.e. formalisation where appropriate, to make it affordable and visible.
• Category B included an incremental upgrade, with essential services leading to eventual formalisation, where informal settlement sites were viable and appropriate but where formalisation/ full upgrading was not imminent. There would be deferred relocation with emergency services for informal settlements sites where long-term formalisation was not viable or appropriate, but relocation was not urgent or possible.
• Category C included immediate relocation as a last resort for settlements where there were urgent health or safety threats that could not be mitigated, and an alternative relocation destination was readily available.

91 Informal settlements had been assessed and feasibility studies conducted in the City of Tshwane Region 2 (16), Region 3 (13), Region 4 (7), Region 5 (13), Region 6 (27) and Region 7 (15). A further 29 feasibility studies had not been conducted, mainly due to the organising and arranging of the households and socio-economic surveys, and service delivery protests within the informal settlements. The remaining plans would be completed in the third quarter. 60 informal settlement upgrading plans were developed in Buffalo City (20), Nelson Mandela Bay (29) and City of Johannesburg Region F (11).  A further 65 upgrading plans had not been completed, since the socio-economic surveys which needed to inform the plans were still under way.

Five provinces -- Eastern Cape, Gauteng, Mpumalanga, Northern Cape and Western Cape -- and five metros -- Buffalo City, Johannesburg, Tshwane, Ekurhuleni and Nelson Mandela Bay -- were supported in the implementation of the informal settlements upgrading programme.

The Department was in the process of assisting provinces in the delivery of 250 units in the quarter for military veterans. In Quarter 1, 11 houses were handed over in Chatty in Eastern Cape, and 20 houses were delivered in the Western Cape during Quarter 2. Here the DHS was not doing well. The issue was that the provinces and municipalities had houses set up there, but there had been no military approval. There had been high level discussions at the DG level to indicate to the Department of Military Veterans (DMV) the delays, because the DHS could not allocate without their approval.

There were six provinces and four metros which were supported in the implementation of the Peoples Housing Process (PHP) policy -- the Western Cape, KwaZulu-Natal, Mpumalanga, North West, Gauteng and Free State, and Mangaung, Johannesburg, Ethekwini and Tshwane.

Provinces had been supported in the implementation of the subsidy housing programme. In KwaZulu-Natal, a request for funding had been received and a response was provided. In Mpumalanga and the Free State, the project process guide on how to implement various national housing programmes was presented to the provincial Department of Human Settlements.

Progress on the consolidation of the financial entities of the Department was that the three entities were now consolidated within the National Housing Finance Corporation (NHFC). A final business case would be submitted to the Ministers’ Top Management (MinTop) forum and the Ministers and Members of Executive Councils (MinMec) processes, followed by submission to the Minister for the approval of the business case and the accompanying Human Settlements Development Bank Bill.

Provinces were supported in the implementation of the title deeds restoration programme through an analysis of the first draft of the business plan on the programme. 

Within the monitoring framework, 99.8% of projects were monitored and verified, involving 492 Human Settlements Development Grants (HSDGs) and 1 089 Urban Settlements Development Grants (USDGs). Three of the projects implemented in Gauteng could not be verified against the PHP. This matter had been taken up with the provincial Human Settlements Department.

The evaluation of the Upgrading of Informal Settlements Programme (UISP) three-year impact had been delayed in order to ensure compliance with procurement processes.

The Department continued to provide implementation support on the revitalisation of the distressed mining communities programme, including finalisation of the implementation protocols for all the provinces and metros. It also conducted an assessment of the 2019/20 first draft provincial business plans to ensure that the human settlements priorities of municipalities with distressed mining communities had been incorporated in the draft business plans. There had been provision of on-going programme planning and implementation support to all the local municipalities with distressed mining communities, in line with the HSDG ring-fenced funding and confirmed municipal human settlements priorities.

On capacity development, 195 practitioners were currently trained in human settlements programmes through the “Train the Trainer” programme on Batho Pele change management in human settlements delivery, instead of 18. The training programmes had been over-subscribed due to the interest shown by the participants. A total of 43 youths had received support from the scholarship programme through the payment of tuition, accommodation, books and stipends. In this programme, 28 were in engineering, eight were in building, five were in surveying, with one each in construction studies and architectural technology.

Implementation of the Finance-Linked Individual Subsidy Programme (FLiSP) faced several constraints, and the Department was not able to meet the target. Matters constraining performance includes the availability of affordable stock; poor credit records of people earning less than R15 000 per month; the Integrated Residential Development Programme (IRDP) not making provision for FLISP; private sector projects in distress; the restriction on the voluntary sale of state-subsidised housing provisions of Section 10A and 10B of the Housing Act 1997 as a condition of every housing subsidy being also applicable to FLISP; the impact of poor economic growth; and protracted approval processes. Major remedial action was required or the targets would not be achieved at all.

Ms Funani Malatsi, Chief Financial Officer (CFO): DHS, took Members through the Department’s expenditure report. Expenditure per programme was Administration 43%, Human Settlements Policy, Strategy and Planning 40%, Human Settlements Delivery Support 26%, and Housing Development Finance 38%, which averaged out at 38%.

There had been five grants in the first quarter, and the two that were added were the Provincial Emergency Housing Grant and the Municipal Emergency Housing Grant. There was a problem with the Social Housing Regulatory Authority (SHRA), as the information they remitted did not add up. The DHS had given the Community Schemes Ombud Service (CSOS) 80%, but some of the amount, totalling R6.1 million, was owed to SHRA. However, the DHS was not going to transfer the money as SHRA had enough funds for the financial year. The other was the National Heritage Council (NHC), to which it had transferred 100%.

On the HSDG, the Free State had a challenge, with invoices coming from accruals from other periods, and the Department did not see the Free State and Gauteng giving it 100%. For the second quarter, there had been delivery of 58 384 units from a target of 79 953, which was 73%. The DHS was running short, especially in Gauteng.

On the Deeds Restoration Grant, the Department had spent only 30%. There was a large expectation that this programme would pick up in December through to February.

On Emergency Housing Grant, the allocations for the 2018 /2019 financial year were as follows: Provinces received R260 million, while municipalities received R140 million. R4 million had been disbursed to Bitou Municipality in the Western Cape for relocation and transitional residential area units. An application was received on 5 November from Nelson Mandela Bay Metro for the provision of 322 temporary shelters following disasters, and was in process for approval.

Mr Tshangana said professional resource teams had been appointed to assist with programmes in provinces and municipalities to improve performance. The Accounting Officer had intervened in issues that impacted the delivery of houses for military veterans. The DMV had been placed on terms, to ensure the approval of beneficiaries. There would be a meeting with the DMV to make them understand that as the beneficiaries, their role was affecting everything. The meeting would also look into other issues, like invasion of military veterans in areas like KZN and others.

All targets affected by the internal factors had been prioritised, involving the reassignment of capacity. On approval and publishing of the revised standardised sector performance indicators, there would be consultations to ensure application in all provinces. There were branch coordinators awaiting appointment for documenting evidence of performance. There was a directive that all key posts must be filled. The Department recognises that human resource was a scarce skill and if one put people on contract, it was hard to get quality. It had got quality before, so now it would be offering permanent positions. Dedicated attention would be provided to Limpopo, North-West and Gauteng until improvements were noted. There was also a high-level meeting to determine whether Gauteng should be denied money, given that it had not been able to meet its targets. There would be focused attention to align APPs, business plans and Estimates of National Expenditure (ENE) indicators.

Management had reviewed the reported performance information for the first two quarters and were awaiting comment of the auditors. The Auditor-General (AG) had been requested to prioritise the audit of performance Information for the 2018/19 financial year, starting with Q1. There was a process to ensure verification systems were implemented to validate sector information on title deeds. The finalisation of Standing Operational Procedures (SOPs) for the current APP was in progress. There were interventions and bilateral meetings with under-performing provinces under way.

A MINMEC resolution was that an assessment on the reallocation of funds from poor performing provinces to provinces that could absorb additional funds should be done by the end of November. The grants framework review for the 2019/20 financial year was under way to ensure improved compliance.

Discussion

The Chairperson thanked the Department for their detailed presentation, and said that one needed to make a few observations that the report was generally improved as it went into details, such as the mining towns affected, and the SHRA not being able to meet its targets.

Ms M Nkamideng (ANC) said her concern was the invasion of Military Veterans’ houses because of delays in occupation. The DDG had indicated that the challenge was primarily with the beneficiary, and she wanted that explained. She asked about the scholarships – the number of students, and how they were recruited. She was worried about the Title Restoration Programme (TRP), and asked if they could fast track it.

Mr M Bara (DA) said various reasons had been given for why the FLISP was not doing well. However, he did not see anything the DHS was doing to make it more accessible to people. The other issue was Gauteng where 2 weeks ago the Committee had had an engagement, and they had made some undertakings. Now money might be taken away from them -- how did they reconcile this?

Mr L Khoarai (ANC) also described the situation with the military veterans as a major concern. The Committee had gone for site visit, and some of the houses were extremely dilapidated.

Mr M Wolmarans (ANC) said that given the part that it had to play, it seems the DHS was ready because if the houses had been occupied, that meant they had been ready. There was a need to talk to the beneficiaries. Title deeds would be a challenge if the Department was saying by January this would be done, as the deeds registry was closing any time from now. All the provinces could see the FLISP was not doing well. The demand was there, but the government was not advertising enough to encourage people and make it popular.

The Chairperson questioned the target of 5 000 houses that had been set for Military Veterans, and wondered whether the Department had been wise to set this target. This was because five years down the line, half that number had not been achieved and houses were being vandalised, and it now looked as if the Department and Members were failing. This said a lot about planning.

Regarding the 43 students, he did not know whether this number included the nine students that were sponsored at the Nelson Mandela University, but he had met with one of them and they were all sitting at home because the Department had not absorbed them. How should they be managed? It  was important to have clarity, to plan for the future.

Lastly, with the projects in Gauteng that could not be verified, what had happened since then? Regarding the performance of the provinces versus actual delivery, Mpumalanga had overspent by 8%, but delivery was at 120%, while the Western Cape had overspent by 8%, but had delivered only 68%. What was the explanation for this? The Department also had unspent funds of R1.7 billion in the USDG. What had the DHS done since it was identified ?

DHS’s response

Mr Chainee replied the 5 000 target set for Military Veterans had been on the basis of the list of the Vets who had been identified and agreed upon. This had been reduced to 4 000 after a consultative session with them. The problem was that both statutory and non-statutory members had been included. In the Western Cape, there were a lot of statutory members, and the non-statutory were not prioritised, and this had added a big number to the issue of invasions. As a result of the disputes, the Department had enlisted the help of the Premiers to resolve these issues. Ultimately, it was the DMV causing all these delays.

On the issue of SHRA, the DHS could confirm that there was a rental task team and SHRA had employed relevant people and was trying to meet its targets.

On question of the rapid land release programme, he had asked Gauteng whether there had been a drop in the number of community invasions. The issue was lack of empirical data, as they mostly relied on the media. If one looked at what was happening in Ekurhuleni in the Palmridge area, where expropriated land was being redistributed, this represented good practice and was something that must be encouraged. Ekhululeni had created a huge amount of hype.

Ms Letsholonyane said that at the beginning of the legislative programme, the Department had seven bills, but the Presidency had stated that this had to be trimmed down. It was already on progressing with the Property Practitioners Bill, and would have to deal with the others as from the next term.

Ms Sindisiwe Ngxongo, Chief Operations Officer, referred to training, and said the Department first needed to do a planning process and then improve its engagement with provincial departments so as to address the issue of graduates. The DHS was working on this and they would be absorbed.

Mr Tshangana said FLISP had changed twice. It was a partial subsidy and a demand side subsidy. It had a demand that had to be met. The Department had looked at the entire value chain. Banks had been frustrated by the turn-around time of the provinces, so what they had done was split the programme into two. One part would be managed by the Human Settlements Bank, which would be the National Housing Finance Corporation NHFC, starting from the coming term. They wanted to start providing transactional support and consumer education.

On issue of Gauteng, and reconciling taking money away from them, it was not a decision that had already been made. In fact, they had sent a report this morning which looked okay.

He wanted to make a commitment that the nine graduates would be absorbed. He would make this his priority, as there was no reason why they should not be absorbed.

The meeting was adjourned.