Department of Human Settlements 2019/20 Quarter 3 Performance

Human Settlements, Water and Sanitation

28 February 2020
Chairperson: Ms R Semenya (ANC)
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Meeting Summary

The Committee was briefed by the Department of Human Settlements on its 2019/20 Quarter 3 Performance. The presentation stated that the Department has seen the worst performance in Quarter 3 across all municipalities. Various targets, such as asset management, corporate governance of Information and Communications Technology and new title deeds, were not achieved. The registration of title deeds was highlighted as one of the weakest performing programmes. The Free State and Gauteng were the lowest performing provinces in the delivery of houses or units. Some of the grants have been cut and reallocated to provinces that are performing. Even after funds have been reallocated and transferred to provinces, the spending has remained low. The percentage spent against transferred funds in municipalities was also highlighted as a challenge. Except for the City of Johannesburg and Buffalo City, all the metropolitans were struggling in terms of expenditure performance. Other challenges include the issue of governance in municipalities, lack of assistance to households in emergency situations and navigating the intergovernmental space when it comes to providing housing.

Members raised concern on the low performance of the delivery of houses and units, lack of assistance to households in emergency situations, lack of urgency in filling vacancies and the prevalence of Reconstruction and Development Programme (RDP) houses that remain incomplete since 2014. Members asked for timeframes on the planning and implementation of catalytic projects. Members also asked for clarity on the environmental problems facing the Department, its anti-fraud processes and the implications of the reallocation of funds in the provinces. On the issue of old distressed mines, it was asked what the contribution is of the mining sector who have left land with sinking holes. Other concerns raised was the inability of people to qualify for bonds, the multiple structures and roles in the process of delivering houses and the fraudulent sales of RDP houses. The Committee also raised concern on the management of beneficiary lists, occupation of houses and the declaration of townships. It suggested the need to put measures in place at the provincial level to address these issues.

Meeting report

Briefing by the Department on its 2019/20 Quarter 3 Performance

Mr Joseph Leshabane, Deputy Director-General: Project and Programme Management Unit: Department of Human Settlements (DHS), said the presentation includes an overview of the Department’s financial performance, risk areas, action plans to improve performance and recommendations. The Department has seen the worst performance in quarter 3 across all metropolitans. On the Administration programme, it only achieved 23% of the target to implement the internal audit plan. The targets of new title deeds, corporate governance of Information and Communications Technology (ICT), asset management and the monitoring of human development grants were not achieved. On the 50 informal settlements to be assessed, the Department was met with hostility so no feasibility studies could be concluded and the completion of the work is delayed. On the 100 upgrading plans for informal settlements, it has only developed 36 because it is faced with environmental factors beyond its control. On the delivery of housing opportunities for military veterans, the reason for underperformance is due to the contestations over bona fide beneficiaries.

Mr Leshabane said the registration of title deeds is one of the weakest performing programmes within the Department. It has only been able to register 4770 out of the 15 740 targeted registrations for pre-1994 title deeds and only 22 053 of the 91 778 post-1994 title deeds. The majority of the budget is spent in the Housing Development Finance programme. The Free State and Gauteng are the lowest performing provinces in the delivery of houses or units. Some of the grants have been cut and reallocated to provinces that are performing. The reallocations have been signed off by the Minister. A major challenge in the metropolitans is the issue of governance. When governance in the metropolitan is not stable, it impacts service delivery. Except for the City of Johannesburg and Buffalo City, all the metropolitans are struggling in terms of expenditure performance. There is a massive move from the National Treasury (NT) to stop the transfer of grants to these metropolitans. The Department has proposed for the risk of weak performance to be mitigated by reducing the grants to these metropolitans. However, the NT has taken a drastic step and the Department is waiting on these processes to be completed.

Mr Leshabane said the Department made its transfer of funds to the provinces but there is only 21% expenditure of the grant. Even after funds have been reallocated and transferred, the spending remains low and this shows in the performance of the deliverables. The percentage spent against transferred funds in municipalities is also troubling as it sits at 26%. A major concern is the households that were not assisted in their emergency situations. The Department is going to revisit the emergency fund model to guarantee assistance to these households. The crisis in the municipalities and difficulties of underperformance in the provinces requires a revisit of the delivery model. Housing remains a concurrent function. The challenge is navigating the intergovernmental space. When a province or municipality is failing there is a very long process to trigger interventions. The soft interventions provided by the Department have reached their sell by date. Soft interventions include advising, reviewing and creating a recovery plan. This is not effective because it is ultimately up to the authority in the province. The Department is encouraged by the President’s introduction of a district development model which offers opportunity for the totality of government to be responsive to a particular district.

Discussion

Mr L Basson (DA) said there needs to be a consideration into other ways of building houses because it is not the core business of municipalities. The core mandate of municipalities is to deliver services and maintain those services. If municipalities or provinces fail to do this it causes suffering to the people of the country. There is money available and it is not being utilized.

Ms L Arries (EFF) said she is aware of a Finance Linked Individual Subsidy Programme (FLISP) project in George where banks have not been willing to finance people’s bonds due to the poor quality of the houses. Can the Department look into this?

Mr M Mashego (ANC) said the Department is facing the same problem as the Department of Water and Sanitation (DWS) where offices don’t have posts officially filled and instead have acting delegates. The presentation fails to show any urgency in filling these posts. This is a problem because it creates the possibility for tasks to be left incomplete and people being overworked and underpaid. On old distressed mines, most of these places have housing that is vacant or occupied by Zama Zamas. What is the Department’s position on this? In the Thaba Chweu municipality there are people who are permanently employed by wood farmers but their salary structure does not allow them to qualify for bonds. They apply for a Reconstruction and Development Programme (RDP) house instead. What is the Department’s approach on this?

Mr Mashego noted the issue of transferred funds and said the Gauteng percentage is a bigger number than what was targeted for. What are the implications of reallocations? Can the Department introduce mechanisms to circumvent the numbers in relation to the percentages? When looking at the expectations and vastness of the area, Mangaung is not a metropolitan. It cannot be expected to function as a metropolitan. Members must understand the politics of eThekwini as the mayor is suspended. The people whose houses were affected by disasters are still experiencing an emergency situation. Many are staying in churches and other places that are not healthy and sustainable living spaces. The urgency of this should not be ignored. There must be a way to punish the municipality but still help the people in need.

Mr Mashego said the issue raised by Mr Basson is two-pronged. When a house starts to crack or the roof is damaged, a person reaches out to councilors for help. In KwaThema, people still go to councilors to complain about asbestos roofs. Councilors are wasting time and energy in building houses. Municipalities must still answer to the needs of the voters whether or not this means building houses. These issues can be addressed by filling vacancies so that people are skilled and can become comfortable in their positions.

Ms S Mokgotho (EFF) said the Department has stated that it is doing everything it can to capacitate metropolitans and municipalities that are not delivering. It has also stated there are provincial and municipal authorities in place to ensure compliance with plans and deliverables. On the issue of houses that were supposed to be built, nothing is happening but the Department stated it is doing everything it can. Why is it not acting upon the provincial and municipal authorities to compel areas to do their work so that there is delivery on the ground? She noted the catalytic projects which are mostly in their planning stages. Can the Department provide timeframes on when the planning started and when it is due to be completed? Can timeframes also be provided on its implementation?

Ms Mokgotho asked why the performance is so low on the achievement of houses and units delivered in Gauteng. Gauteng is over-populated. Why has the Department not spent more money in light of this? The presentation refers to environmental problems. Can clarity be provided on what this means? On slide 19 of the presentation, it refers to “to deliver”. What is meant by this? There is a challenge in ward 5 in the Mamusa municipality because there is a prevalence of RDP houses that have been incomplete since 2014. The residents say they have made complaints to the municipality and they are being told that the project would be completed but the walls and foundations have been erected without a roof. When is the Department going to ensure that these houses are completed?

Mr M Tseki (ANC) asked whether Quarter 4 and the annual report will be presented differently. On non-spending, it’s a good idea to withhold money to encourage provinces to spend. On the anti-fraud processes, what is the Department doing? Members report on experiences from where they each come from. In Atteridgeville there are reportedly houses being sold for R14 000 each and the person who reported this matter in 2018 says there is still nothing being done.

Ms N Sihlwayi (ANC) said that municipalities were given status to build houses in 1996. In the process, there is another structure that is building houses. The national Department and provinces provide the money. There may be a problem of the roles in this process. This raises the issue of the lack of value in building houses for communities. There might be a clash between all these structures that are meant to be building houses. In the Nelson Mandela metropolitan, 81 people have been staying in a hall with a small toilet from the beginning of December 2019. Who is who in the process of delivering houses? A meeting should be held with particular municipalities, head of departments, mayors and the municipal manager should come and account for these issues. It should be kept in mind that local government elections are nearby. As much as it may be important to look at a new model, the current model should be exhausted and those issues dealt with.

The Chairperson said she is encouraged by the performance of the Department. The structure of the report is commendable and allows members to interact with it and understand where the problems lie. The point raised by Ms Sihlwayi is important. The Committee needs to interact with the metropolitans, municipalities and provinces who are underperforming to assist the Department in making sure the work is done. The model of providing houses needs to be changed. If the capacities of municipalities have been exaggerated then this should be reviewed. There is a crisis at local government level as seen by the low performance on service delivery.

The Chairperson asked for clarity on the contribution of the mining sector who have left land with sinking holes. It is good that the Chamber of Mines are willing to discuss and be part of the Merafo programme. The Department should take advantage of this. All of these old mining companies have a social responsibility so it is important to look at what they have done in those areas and hold them accountable. As the Department looks at existing models of service delivery going forward, the occurrence of building houses in a township that has not been declared should come to an end. The proclamation of the town needs to be a prerequisite. The problem is that houses are occupied. Communities need to participate in the delivery of these houses. Can the Department create new mechanisms to resolve this issue?  

The Chairperson said the Quarter 4 and annual report are usually received at different times. The Committee can get them simultaneously to make sure its 1 presentation. This will be good in light of the Committee’s limited time.

Responses

Mr Leshabane replied there are vacancies that have occurred over time that need to be filled and there’s no excuse on this delay. Ms Funani Matlatsi, Chief Financial Officer of the Department, is off work because of long-term illness and one of her subordinates has been appointed to act in her place. The Department is committed to looking at the options to overcome the deficiencies in the current delivery system model. It remains sensitive to the powers and functions within different spheres of government. It has to respect the authority vested in municipalities and provinces. It can only decide to not send money to underperforming authorities. The delivery model is urgent work to conclude in order to put measures and mechanisms in place that can deliver the desired results. Details on the municipal areas, such as Thaba Chweu, will be provided to members. The programme on revitalizing distressed mining towns looks at the current mine operations but also acknowledges there are past operations with legacy assets. Often companies offer to donate the assets to municipalities and provinces but they should do more and rehabilitate it. It becomes complicated when the mine operations have ceased to exist.

Mr Leshabane replied the Department is consulting with provinces and municipalities about the best way to offload all of the hostel assets. There is no municipality that can take over a liability unless it is mitigated and this is work in progress. On emergency housing, the Department needs to agree with NT on whether funds given to municipalities is left to the municipality itself or to the agents that go and implement in the municipality. This may resolve the issue and can be implemented in informal settlements as well. There are limits to what the Department can do to enforce performance by another sphere of government. It can only rely upon the Committee and provincial legislature to extract accountability. It may be good for the Committee to sustain the programme of inviting metropolitans and provinces to come and account for themselves. On ward 5 in the Mamusa municipality, inspectors have been sent to look at the situation. The problem is not isolated to Mamusa because a lot of projects in the North West are blocked. There is a programme to complete these projects. This is a process as one has to ascertain project by project, who was the developer, how much and where is the money, what went wrong and who is liable. The best thing to do for these households is to allocate new projects while cleaning up the old blocked projects. The realities of the intergovernmental system and its limitations were designed with the assumptions that there would be functional provinces and municipalities. When these are not functioning, the resolution takes a long process.

An official from the Department replied the law allows the Department to withhold a portion of transfers for a period not exceeding 30 days. In order to withhold the transfers for a longer period, the Department would need to get approval from the NT. It has granted the approval of some of the requests in the metropolitans. If the transfers are withheld until the end of the financial year, the report will reflect a high under-expenditure. The last transfer will be in March so that all those funds that have been stopped will be reallocated to achieve national targets. If the money is transferred, authorities may apply for a roll-over. The challenge for the Department is that the NT has discretion in answering the requests for reallocation. It has proposed to stop R1.7 billion and have given the authorities 7 working days to submit in writing whether this money should be stopped and their reasoning. The metropolitans have submitted their representations and the Department will be sitting with the NT to confront where the R1.7 billion will be reallocated because there are only 2 metropolitans which are not affected.

An official from the Department replied on the situation in Nelson Mandela metropolitan where 81 people are living in a hall, the community submitted a request for an emergency housing grant so that it can build a temporary shelter. The purpose of the emergency housing grant is to cater for such emergencies so the Department will be taking this issue on. On anti-fraud and corruption efforts, the Department has a unit looking at itself, provinces and their entities. As of yesterday, there was progress made on the internal audit plan. The Department made an arrangement with the South African Police Services (SAPS) to assist it with cases are pending or have been closed due to lack of evidence. This arrangement was made 2 years ago. It has been requested that such cases are made a priority by police stations.

Discussion

The Chairperson noted the fraudulent sales of RDP houses. The Department should get more details on this matter. The legislation stipulates that if the sale is made within 8 years then these houses should be reallocated. Only after 8 years the individual gains the right to sell the house. Consumer education is also important as houses are built so that the community can understand the whole process. When people think of selling the RDP house, it should not be below a particular margin. 

Mr Tseki said these RDP houses are not being sold by their owners. They are sold by other people and owners find their houses occupied by unknown people.

The Chairperson said Mr Tseki is referring to a criminal activity that should be directed to the relevant authorities with the correct information.

Ms Arries said even when beneficiaries of RDP houses retain ownership, they hire it out to foreigners and spaza shop operators. What is the Department’s approach on this?

Responses

Mr Leshabane replied the situation requires a combination of responses including broad consumer education as well as a second layer of enforcement. The Department engages with the beneficiaries and shares advice on managing the property. The second layer of enforcement is what needs to be strengthened. There is also community-wide mobilization that is required. There are places where before you even allocate a house, the community is supportive of the projected beneficiaries. It also seems that in some situations a person’s needs are exaggerated and they do not actually need a house. The matter goes into the regime of law enforcement broadly. From a land use control point of view, there is a level that manages this. If the municipality is not active or strong in enforcement of land use regulations then there is proliferation of criminal activity and informal trade.

Discussion

Ms Mokgotho said there is a concern in Moretele municipality where an old woman applied for an RDP house. The municipality came to build the house and started with the foundation. Instead of completing the house, it sent people to remove the materials. To date the old woman’s house has not been built. All the information on this particular matter will be emailed to the Department.

The Chairperson said the Committee invited the Gauteng province to explain their low expenditure. One of the challenges they raised is the increased population. The Department flags whether Gauteng performs or not. The Committee has agreed it will invite the Gauteng province because they have the highest expenditure and many problems. Cape Town, Gauteng and eThekwini are experiencing the mushrooming of informal settlements. The Department has to implement a measure to work with Gauteng. The Committee has told the Members of Executive Council (MEC’s) that they are not able to resolve their problems on their own. It is the country’s problem that they have experienced a doubling of the population over a 5-year period. Annually there are 350 000 people flocking to Gauteng. In Limpopo and Gauteng there are certain farmers who farm shacks instead of farming crops which creates another burden for municipalities and provinces. The Minister of Agriculture should be engaged on this and discuss it with commercial farmers. The retaliation for land expropriation is often about the misuse of property. Can the Department respond to these issues?

The Chairperson said there are issues around planning and monitoring. Internal auditors are at work but there needs to be measures in place at the provincial level for the management of beneficiary lists, occupation of houses and the declaration of townships. These are the issues the Committee has identified through its oversight. The issue in Tshwane is very frustrating because this municipality is in trouble. If the political parties involved don’t realize the consequence of their actions on the people of Tshwane it is going to be a problem. This issue would have been raised specifically if the Minister was in attendance. The situation is going to worsen as the country moves towards elections. Tshwane is a capital city and should be treated with extra care and protection. Legislation should be reviewed in light of this. She requested this matter to be conveyed to the Minister.

The Chairperson thanked the Department for its presentation and adjourned the meeting.

 

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