Update on improving the management of employment opportunity data; with Deputy Minister

Meeting report

Opening remarks by the Chairperson
The Chairperson observed that it was the last day of Women’s Month. She paid tribute to the women who had fought for emancipation throughout the years. She said that the majority of beneficiaries of the Extended Public Works Programme (EPWP) were women. But were they really benefiting? Were they gaining skills? Was there a uniform way to account for the use of EPWP grants? She noted that the acting Director-General (DG) in charge of the programme was retiring and asked who the new DG would be.

Opening remarks by the Deputy Minister
Ms Noxolo Kiviet, Deputy Minister of Public Works and Infrastructure, appreciated that the Committee was holding the Department accountable in terms of data management. The Department of Public Works and Infrastructure (DPWI) along with the EPWP was doing well in the social sector, such as home-based care and childhood development. These were areas that fed into social cohesion. The EPWP was not just a poverty relief programme but it also contributed to the development of the people of the country. It built and strengthened families and contributed to the development of communities. She confirmed the retirement of the incumbent DG. She was not able to say who would take over from him but expected that the Minister would make an announcement imminently.

Briefing by the DPWI
Ms Carmen-Joy Abrahams, Deputy Director-General (DDG): EPWP, DPWI, explained that the purpose of the briefings was to update the Portfolio Committee on the management of EPWP opportunity data, efforts to achieve a clean audit through the use of innovative strategies to improve data collection and to clarify the role of DPWI and other departments involved in the EPWP from a budget and accountability perspective. She outlined the responsibilities of DPWI as the coordinating department. The DPWI was also the transferring officer for the EPWP incentive grants of R1.6bn for 2022/23. This was about 8% of the total expenditure on the EPWP, with the remainder coming from public bodies’ own equitable shares and conditional grants. Phase IV of the EPWP was targeting five million work opportunities. She reported that the EPWP had developed an online reporting system to collate performance data. It incorporated biometric features (facial recognition of participants), uniform data collection templates, and a linkage between the EPWP reporting system and other public body systems such as the Employment Services of South Africa (ESSA) database.

Ms Abrahams said that The DPWI have taken measures to deal with its adverse audit findings over the last few years. These included the development of a standard operating procedure based on guidance from the Auditor-General and the refinement of the medium-term strategic framework (MTSF) indicator so that it reflected EPWP work opportunities created by all public bodies, not just DPWI. The Department of Planning, Monitoring and Evaluation (DPME) had also recommended various measures be taken to improve accountability for EPWP projects.

(See the presentation for further details)

Discussion
Ms M Hicklin (DA) said the presentation approached the EPWP as a numbers game as opposed to a way of changing the lives of people by giving them access to job opportunities. Since the year 2019, the DPWI had been saying that the EPWP was a saving grace for the jobless in South Africa, but it was not. The EPWP had a budget of R1.6 billion in 2022/23. Its basic premise should be skills transfer and the upliftment of the poorest of the poor, especially youth, women, and persons with disabilities. It should consider the true, meaningful way to create worthwhile job opportunities. The EPWP had merely become a numbers exercise, a way to spend budgets and create work opportunities in terms of meeting targets. For example, Phase III of the EPWP had achieved 4.52 million work opportunities against a target of six million, but instead of finding ways to increase job opportunities, DPWI had lowered its target to five million. This was worrisome. The Executive Authority of DPWI should engage with the Department of Higher Education and Training (DHET) to create a platform for certifying EPWP participants so that they can be capacitated and empowered for genuine upliftment. She had spoken to her constituents who had moved between various menial jobs within the EPWP environment for seven or eight years, but they had not achieved any upskilling. There was no development of their skills in what they really wanted to do. There was no certification at the end of their six-month work period, that might have allowed them to progress. DPWI and the Department of Higher Education needed to develop a curriculum for people who are part of the EPWP to be elevated to a higher level of work at the end of a six-month EPWP work period. For example, someone who worked peeling potatoes in the EPWP might actually want to open a restaurant. They should be offered a course in basic business or entrepreneurial skills that would allow them to escape the cycle of poverty. The state should provide stepping stones for upliftment, but the EPWP was currently offering just one step beyond being a beggar. South Africa needed out-of-the-box thinking to solve its poverty problem.

Ms S Graham (DA) observed that many of the issues at hand were not within the DWPI but with the public bodies that made use of the programme. She asked for clarity on the extent of use of the EPWP reporting system by users. Was it mandatory that all grant recipients used it, and could this be enforced? In the end it was the beneficiaries who suffered the most from non-compliance by bodies responsible for reporting. She approved of the idea of having the bodies that received grants be audited to ensure responsible reporting. She asked about the threshold for administrative costs for a body that was implementing an EPWP programme. She observed that 30% of Municipal Infrastructure Grants (MIGs) would be used to create EPWP work opportunities. Were administrative and equipment costs included in this percentage or did it mean that 30% of the grants would be paid to EPWP workers? She recalled that the Community Work Programme (CWP) had originally had an element of upliftment and skills transfer and it had tried to lift people out of poverty by creating ecosystems of work opportunities, but it seemed to have lost this element and become a provider of temporary low-skilled jobs. How could its original function be restored? More generally, what was the percentage of funding that was used in the skills transfer versus the number of beneficiaries? She approved of using biometric data for reporting but noted that it might face challenges in rural areas. She also supported greater standardisation of reporting.

Mr W Thring (ACDP) welcomed the presentation. He agreed that there should be skills transfer so that workers could progress from EPWP jobs to other jobs. Could the Department expand on the criteria that the sister departments would need to adhere to for the new digital reporting system to become viable? Would the many struggling municipalities have the capacity to comply with the requirements of these systems, and did the Department have any other ways besides withholding funds to ensure that they become compliant? Did the reporting system have a backup component that would save data in the event of a system crash?

Ms M Siwisa (EFF) compared the quality of the presentation unfavourably with the splendid job done by the researchers within the Committee. She observed that the percentage of women had increased by only 5% from Phase III to Phase IV despite the fact that the majority of citizens in South Africa were women. Not enough was being done for the youth or people with disabilities either. She was also concerned that the intended beneficiaries of the EPWP were being exploited, especially by non-profit and non-governmental organisations (NPOs and NGOs). They were not being paid enough. Did the Department monitor them, and what interventions did it take when they did not deliver? She asked the Department to elaborate on the work seeker programme that was being run in collaboration with the Department of Employment and Labour (DEL). If someone registered their details for this programme, would they be offered permanent employment if there was an opportunity or would they still have to go through a process of selection and interviews? Were people aware of this programme? She observed that the presentation only dealt with the 2023/24 financial year. It would have been nice if it had been possible to compare the information with the previous year. How much of the grant money would go to public bodies? How much would be given to each province? What criteria were used to allocate the grant money within provinces? This was important because of the high unemployment rate and barriers to education, for girls especially, in rural areas. The maintenance of municipal roads was another important problem. How would funds be allocated for this? The report had not provided much detail on these issues. The exploitation of EPWP beneficiaries remained the biggest concern. The administrators of the programme were enriching themselves at the expense of the intended beneficiaries, who were expected to be grateful for any work. Work like street sweeping and grave cleaning would always be required, so these jobs should be insourced and the workers be given permanent positions with benefits. At the very least, the six-month period should be increased to a year.

Mr T Mashele (ANC) thought that the DPWI was moving in the right direction. What was the Department’s plan to up-skill EPWP participants and ensure that they were absorbed by the end of the work period? Did the DPWI have plans to prevent participants from being exploited by institutions? There should not be a situation in which our people are being exploited instead of them getting proper jobs in a particular space. What would the DPWI do in the event that institutions did not comply with the reporting system? The simplest thing would be to withhold funding but the beneficiaries would be the biggest victim of this, rather than the non-compliant institution, so it would not be the best solution.

Ms S van Schalkwyk (ANC) maintained that the EPWP was an excellent programme but agreed with other members that the fact that participants left without recognised skills was a problem. The state was not in a position to employ all these people and the private sector needed to be on board to help. Developing the skills of these participants did not mean anything however if there was a mismatch with the job market. This might be a reason for the fact that the EPWP struggled to attract and retain the youth. She suggested looking at the tourism industry in this regard. She noted that people claimed that foreigners were taking jobs, so the government should look at the services that foreigners were offering. While South Africans were busy cleaning graveyards some immigrants were repairing phones, for instance. The Department could look at ways of providing South Africans with the skills to compete in this area.

The Chairperson noted the challenges the EPWP was facing but also commended the Department for the improvements it had made over the years, especially in management. At the same time, the issue of skills transfer remained important, in order to ensure that people were provided with the means to generate their own income.
 
Responses
Ms Abrahams shared the EPWP Facebook page, which featured a recent initiative in Pella in the Northern Cape. Companies in the energy sector had transferred sewing equipment to a sewing co-operative there. There were various skills development initiatives taking place in the Northern Cape, involving the private and public sectors. She also spoke about the Department’s Artisan Development Programme, which trained people as boiler-makers, fitters and turners, diesel mechanics, hairdressers, carpenters and other trades. Programmes like this were fairly expensive and the Department would track the participants even after they graduated from the programme. She explained that the EPWP was currently looking at its policies. It was taking a programmatic approach, which meant that it was asking what exactly it was trying to achieve, beyond the numbers. She recognised that not all EPWP programmes would be able to provide pathways to stable employment, but in those that did involve marketable skills, training should be explicitly stated as a goal. She emphasised that the EPWP’s mandate was largely unfunded and that it was through the use of existing funds that it was intended to create work opportunities. Its most effective programmes need to be scaled up and an institutional arrangement with National Treasury needed to be put in place to enable this. The revised policies would reflect the fact that different EPWP sub-programmes varied considerably, they all had in common that they must provide income and work opportunities, be labour intensive, and deliver valuable services within communities. The policy revision process enabled partner departments to identify where they could provide funding from their own budgets. For example, DHET had made more than R200m available, which was being used to fund the artisan initiatives she had mentioned. There had also been engagements with the private sector to identify the skills that the country required. A task team had been established to find ways of strengthening the EPWP. The policy spoke to the objectives of income support, work opportunities, skills transfer and small, micro and medium sized enterprise (SMME) development. It was at the Cabinet stage and would be available for public comment shortly. She stressed that the incentive grant from the DPWI was only 8% of all EPWP funding, and that there were strict reporting conditions around the disbursement of funds: a project profile had to be created on the reporting system before any funds were disbursed, and the project was monitored monthly. The CWP management had been revising its policies too, and it was their opinion that the CWP was focused on work opportunities rather than training. There would always be a tug of war between the objectives of expanding work opportunities and expanding training, whether through learnerships or through small business development. Through a partnership with the International Labour Organisation (ILO), the EPWP was looking at accrediting government officials as trainers. She remained excited about the work being done to develop beneficiaries’ skills with a view to their eventually becoming able to support themselves independently of EPWP. The EPWP was also developing a framework for persons with disabilities, to enhance their participation. To prevent exploitation through the EPWP, it was important for the Department to provide technical support to public bodies. Public bodies were also encouraged to use the relevant laws, such as the Basic Conditions of Employment Act. The Department also provided technical support to municipalities to help them comply with reporting requirements. She welcomed Mr Thring’s comment on having backup systems and suggested that, subject to budget constraints, the old administrative platform not be decommissioned entirely, but be maintained to provide redundancy in the event of system challenges.

Mr Ignatius Ariyo, Chief Director: Infrastructure, EPWP, DPWI, said that the threshold for administrative costs was five percent of the incentive grant, and this included non-permanent staff and even equipment for data capture. He explained that the figure of 30% of MIGs to be used for EPWP projects was a minimum threshold, and it could be the case for a particular public body in a particular year that the percentage was much higher. The target for the percentage of the budget that went to labour was 20-30%, but this also depended on the nature of individual projects. In some cases, it could be as high as 70%. The Department provided technical support and held workshops and one-on-one consultations with public bodies that were not compliant with EPWP reporting requirements before withholding funding, which was the last resort. If this did happen, funding was reallocated to bodies that were performing well or had requested additional funding. To be eligible for the incentive grants, a body had to report on the EPWP project results for prior financial years and had to have created 13 full-time equivalents per R1m of expenditure. This is to encourage the efficient use of funds in the creation of longer-term work opportunities, which had a bigger impact on livelihoods. Many factors were considered when disbursing grants, including whether a municipality was in a rural area, the existence of backlogs in an area, the level of unemployment, and the population of a province. The DPWI monitored the use of funding for road maintenance in partnership with the Department of Transport (DoT).

Ms Thembakazi Maluleke, Office of the Director: Reporting & Data Management, EPWP, said that the DEL work seeker programme system, ESSA, used by the DPWI and EPWP, was an online recruitment system available to all South African citizens. It acted as an intermediary between job seekers and employers. DEL had also set up access centres in all nine provinces to help job seekers who did not have access to technology. DPWI had linked ESSA with the EPWP reporting system for the purpose of updating the current exit strategies that the department is implementing with regard to EPWP participants. The linkage would be automated, which means that EPWP participants would not have to take the initiative to register themselves on the ESSA system. The DPWI was in the process of communicating with public bodies to source all that information to ensure that all participants had access to opportunities when they exited EPWP programmes. If an opportunity arose and it matched with a participant’s details on the ESSA system, the participant would be informed thereof. The Department hoped that the new system, and its biometric features, in particular, would greatly improve the quality of the data collected. All public bodies would be migrated to the new system eventually, but there was currently a phased-in approach which meant that the old and new systems would be running in parallel for a time. The old system would be retained as a backup.

Deputy Minister Kiviet emphasised that the Department had improved its internal processes and communication systems. This would be seen by visiting the EPWP website. There was communication through social media and media briefings from time to time. Physical visitations to communities were also being done. EPWP staff were ambassadors of the work that they did. There was greater collaboration now with other departments. It was evident on the Facebook page that the DEL was also promoting the EPWP. She maintained that it was not a numbers game, it was about ensuring that it contributed to building cohesive communities. The goal was permanent employment, and hopefully, in the future, it would be a stepping stone to permanent employment. The DPWI would help the vulnerable and ensure that they are taken care of.

The Chairperson thanked the officials for their responses and the meeting was adjourned.