Western Cape Department of Human Settlements Adjusted Budget 2021/22

Meeting report

Opening remarks by Chairperson
The Chairperson welcomed the Human Settlements MEC and senior department officials to present the Vote 8 adjusted budget appropriation for the Western Cape Department of Human Settlements. The Western Cape Provincial Parliament (WCPP) rules on online conferencing would apply and Members and officials had adjusted well to this new normal.

Opening remarks by MEC
MEC for Human Settlements, Mr Tertuis Simmers, noted the Vote 8: Human Settlements adjustment came from additional funding and internal shifts in funding. The Committee had been furnished with a one-page infographic which was a summary of the complete adjustment for Vote 8.

Human Settlements Adjusted Budget 2021/22
Mr Francois Smit, Chief Financial Officer of the Department, reported on the upward adjustment of R57.08 million and the internal shifting of R15.5 million. The Department's overall budget increased from R2.353 billion to R2.410 billion. These funds had been allocated as follows:
- R8 million for security costs to protect a particular project against further invasions.
The Department viewed this as “rather unfortunate" as these funds could have been used to unlock creating more housing opportunities.
- R4 million to Department of Environmental Affairs and Development Planning.
- R500 000 to assist municipalities in conducting housing market studies in preparation of municipal inclusionary housing policies. The Department championed cooperation with other departments. Cooperation that had benefited the Western Cape.
- R49.58 million would go towards the Department's main priorities of affordable housing programmes.

The MEC announced that in future the Department would utilise all funds derived from the sale of units and stands, through departmental investments from the Human Settlements Development Grant (HSDG) into affordable housing projects. The Department would reinvest into affordable housing and that would make the Department less dependent on the national fiscus. It intended to allocate R49.588 million for this.

Discussion
The Chairperson appreciated the infographic; "it's going to make our life easier for the limited time that we have for this engagement”. She also pointed to Vote 8 in the Schedule to the Western Cape Adjustment Appropriation Bill [B6 of 2021]. She noted the unavailability of interpreting services for the meeting and requested that Members use the medium of English. The meeting was being broadcast live on YouTube.

Mr A Van der Westhuizen (DA) referred to page 172 in the Schedule, under Programme 3.2  Financial Interventions: Goods and Services. The Department spoke of the reclassification of the R15.5 million savings realised due to the new legislation. He asked for clarity on the new legislation and how come the reclassification of the saving has opened up funding for other expenditure.

Mr P Marran (ANC) asked the same question about the new legislation.

On the funds shifted from Goods and Services, he asked if this would not impact on the municipalities that had need of these monies. R49 million would be allocated to main priorities with R900 000 for the Garden Route District and R48 million to City of Cape Town. He asked if these were the only priorities.

Mr Marran recalled that when the Standing Committee had visited Langeberg Municipality, the information provided was R2 million had been allocated to the main budget and the reason furnished was that the municipality had not submitted a housing or a business plan. This justification had however been refuted during that oversight visit as the Langeberg Director for Housing proved beyond reasonable doubt that indeed a housing or business plan had been submitted. This incident had happened in front of the then Head of Department.

Mr Marran thought that with the R57 million upward adjustment, some of that money would be channelled to Langeberg municipality. He reminded the Committee of a previous oversight visit early last year to a housing project there where about 170 plots had already been provided with bulk services. Only the funds for the top structures were outstanding.

He thus thought as a priority that some of the monies would be directed to municipalities and specifically Langeberg municipality. He lamented the decision to allocate R8 million for security against invasions. Instead of allocating money to build the top structures, it spent money for security services to stop people from invading. His fear is that particular housing project within the community might be invaded sooner or later.

The Chairperson stated Langeberg was a concern as it had only one housing database. This despite the fact that Bonnievale, Montagu and other towns fell under the municipality. This led to concerns that beneficiaries from the other towns had been excluded. The Department allocated the money to the municipality and the projects tend to be in one area and other towns such as Bonnievale and Montagu were left out and did not have the chance of also having housing within their towns.

Human Settlements MEC & Department response
The MEC replied that he headed the provincial Department of Human Settlements. He had listened attentively to Mr Marran. Local government had a specific function as outlined in the Division of Revenue Act. The grants allocated towards bulk infrastructure for housing would never be enough. Certain Members thought that his department provided for bulk infrastructure. He explained that this function had not been allocated to provinces in the Housing Act. He hoped that the clarity provided would also be communicated to the municipality concerned .

Ms Phila Mayisela, Acting Head of Department for Human Settlements, replied that as part of the adjustment for 2021/22, the Langeberg municipality allocation had increased by R7.1 million. The total allocation now stood at R9.1 million. This would enable it to start on the top structures.

In the prioritisation process for funding, the Department had entered into talks with that municipality to screen their beneficiaries because we want to prioritise the most deserving in terms of whether they are on the integrated waiting list. She conceded that Langeberg had indeed made its submission to the Department. It is going through that submission and the contractor was also already mobilised on site for that project.

On investments, R2 million had been earmarked for Bonnievale and Montagu. These projects should come online in the outer years and the Department had been assisting.

Ms Mayisela said the MEC had already indicated that it had been impossible for the Department to reallocate funds from the HSDG. The Department had previously applied to national government for approval, which had been granted, though capped at 2%.

The Department had resolved that as a sector it had to devise a mechanism to assist the non-metro municipalities through an increased percentage via the Division of Revenue (DORA) for bulk infrastructure. The current bulk infrastructure requirements far exceeded the Department's ability. Local government had to be roped in as well as "they" had calculated the formula and undercounted.

The CFO added that in the past the Department used to redirect funds from the equitable share to cover some operational costs. This had been disallowed.

Follow-up questions
Mr Marran noted the explanation about the R9.8 million for Langeberg. From what he saw in front of him, another allocation had been made after the budget had been presented in the House. He referred to the page in front of him. He disagreed with the argument by the MEC about bulk infrastructure. His only concern was that top structures were required. He asked why Garden Route District Municipality and City of Cape Town had been deemed priorities.

Mr Van der Westhuizen commented on a budget item missing in the budget – when would the Department facilitate the expeditious transfer of title deeds. This money had probably been taken away. He also noted reading in the media that the National Minister of Human Settlements had reported that 1.2 million house remained unfinished in South Africa. In that report the Minister had mentioned various provinces such as the Eastern Cape had 53 unfinished projects and the Western Cape was somewhere in between. He asked about the status of unfinished housing projects in the Western Cape.

MEC & Department response
The MEC appreciated the question from Mr Marran and complimented the tenacity with which he fought for his constituency. The province had 25 municipalities and all should be catered for. The Human Settlements mandate was not bulk infrastructure. The Department had to ensure that integrated spatial development occurred.

The Acting HOD noted a report from the National Department of Human Settlements that more than 650 projects had been listed as being blocked. Western Cape then conducted its own research and discovered that 525 of those projects had in fact been completed. 27 projects were in planning and 50 under implementation. Some also included emergency housing.

The Chairperson asked if the allocation of R12.4 million for title deeds would be sufficient.

Mr A Lili (ANC) took issue with the adjustment and asked if it would be sufficient. He referred to the protests in Forest Village in Eerste River. It seemed as if the Department focused only on areas that voted for it.

Mr Marran called on the MEC to refrain from casting aspersions and stated that he had not been appointed as the constituency member for Langeberg. As an MP, he had every right to exercise his oversight role.

Ms Mayisela, Acting HOD, replied that the Western Cape Department received about R2 billion annually and that it would take about R100 billion to deal with the entire backlog of 600 000 housing units. Government would never be able to reach this target given the financial realities. With its budget allocation, the Department could service 2 857 sites and erect 8 273 top structures.

Ms Mayisela replied that Forest Village was an interesting case. The Department's intel had been that some of the people who had invaded Forest Village were not even on the waiting list. That  begged the question: Why would you want to take an opportunity from somebody who has been waiting for some time? The Department had signed a social compact with that community and now people feel that it is okay to move in from elsewhere and invade houses that had been earmarked for people on the housing list who had been screened by the Department.

Deserving beneficiaries are crying and one of the issues raised was that they saw people allocated houses who the next day had put those houses up for rent. This remained a huge problem. It is heartbreaking since you literally see them the next day renting that house out. This defeated the purpose. Deserving beneficiaries received houses, premised on their need for a house. Beneficiaries had not been allowed to sell their houses and could only enter into a sale agreement after the department has provided approval. With the current backlog of 600 000 housing units, it would cost about R100 billion.

MEC Simmers said that the budget reflected the priorities of the province, and that discussions had to be entered into. These projects remained a collaborative effort across government. He thanked the Committee for its support and wished everyone a festive season.

Committee Report on Western Cape Department of Human Settlements adjusted budget
Mr Lili and Mr Marran objected on behalf of the ANC to the adjusted budget. They ask that the ANC's minority view be expressed in the Committee Report.

Mr Van der Westhuizen moved for approval of the adjustment and Mr D America (DA) seconded.

The Standing Committee approved the Vote 8 adjusted budget.

The Chairperson read the Committee Report into the record and the Committee approved the Report along partisan lines.

The Chairperson thanked Members and the support staff for their hard work during the year.

Meeting adjourned.