Rural Household Voucher Scheme implementation: briefing by Department of Human Settlements

Meeting report

Rural Household Housing Subsidy Voucher Scheme Implementation
Mr Daluhlanga Mpendu (Eastern Cape Chief Director: Demographic Info at the Department of Human Settlements) presented on the implementation thus far of the Rural Household Housing Subsidy Voucher Scheme. He discussed the historical background, vision and concept of the programme, emphasising that it was beneficiary driven and that the model was intended to be replicated elsewhere.

Mr Mpendu explained the approach and benefits of the programme, saying it sought to empower local builders with a skills set that would be utilised for community upgrading and development. The initial investment would provide for human resources, infrastructure setup, training and certification. It was envisaged that the cost of management would be reduced over time as the beneficiaries passed the skill sets on to others in their communities, and that the programme would have a multiplier effect where every beneficiary would be able to further train others. It would provide the municipality with an opportunity to develop systems and procedures towards such programmes in the future, thereby further reducing overhead costs in the future. Documentation management and lessons learned would form a crucial part of the programme.

The institutional arrangements were set up in such a way that the beneficiary was central to the process. Also working with the Eastern Cape Department of Human Settlements were NURCHA Construction Finance and Support Services, the National Home Builder Registration Council (NHBRC), municipalities and traditional leaders.

Mr Mpendu briefly ran through the programme’s major milestones: stakeholder engagement; proposal and budget; legal agreements and appointments; systems development and appointments; technical preparation; beneficiary engagement; construction process; payment and financial administration; and monitoring and evaluation.

A summary of the budget allocation was provided. The budget per subsidy was R103 603, and 500 units were to be built. The programme therefore required a total of R51 801 500.

Mr Mpendu spoke about progress made to date. Stakeholder mobilisation had taken centre stage. Consultation sessions with stakeholders in the pilot municipalities had been facilitated by the National Department of Human Settlements (NDHS), Eastern Cape Department of Human Settlements (ECDHS) and the Rural Housing Loan Fund (RHLF). The MEC had launched the project in March 2012. Project steering committees were set up in the pilot municipalities. Housing consumer education was being conducted.
In terms of planning meetings with the Department, NURCHA had already been appointed as Programme Managers. Legal agreements were very close to finalisation. Beneficiary lists were in the process of being concluded, and the programme implementation plan was complete. A social facilitator had been appointed and the scope of services had been finalised. The Stabilized Soil Block (SSB) training provider had been appointed, briefed and were on site. The appointments of the building contractors had also been confirmed.

With regard to the provincial funding applications and beneficiary lists, Umzimbub’s pre-planning funding and the 158 beneficiaries had been approved; Mhlontlo’s and Intsika Yethu’s pre-planning funding application had been submitted for approval and the beneficiary list was being finalised. In addition, architect, GIS, civil and geotech providers had been procured.

NHBRC’s role was to provide quality control and assurance, to train local builders, and to enrol housing units. A Memorandum of Understand outlining this was awaiting signature. Progress had been made with the recruitment of Provincial Programme resources. A site based programme manager had been appointed and Building Quality Control Officers were to start soon.

If successful, the DHS would be able to replicate a similar model in other Provinces and Municipalities. Dedicated Programme Management Units were to be set up together with appropriate institutional arrangements. The 16% programme management fee would be further reduced as the systems and procedures from this pilot were deployed to other provinces. The role of NHBRC and the Construction Education and Training Authority (CETA) would be crucial in ensuring the successful training and accreditation of beneficiaries. It was hoped that much would be learned from the experience which would inform future rollouts.

It was therefore important for the pilot programme to search for replicable solutions. A credible and efficient fund management was important to fully account for the use of public funds. An appropriate quality management approach should be anchored around NHBRC. Finally, the cost of the managing programme should be kept at acceptable levels.

In his concluding remarks, Mr Mpendu emphasised that this was a focussed and well co-ordinated approach. It provided an optimal balance between rural building practices, the requirement to produce quality homes and acting in a responsible manner with public funds. The beneficiary participative approach allowed the beneficiary to remain in charge with sufficient support systems in place. Monitoring and support would be provided by an experienced technical team, allowing early problem identification and intervention measures to be implemented. An information technology platform was to provide live updates on progress, disbursements and reporting. Formalised communication channels were in place between all stakeholders, and the programme would be a direct contribution to the rural development priority of the government.

Discussion
Mr M Jacobs (ANC, Free State) asked what would happen to builders who had been trained through the project. Would they receive certificates?

Mr Viwe Gqwetha (NURCHA General Manager) responded that the training was accredited. The intention was that after the programme, the builders would pass the skills set into their communities and markets themselves in terms of those skills.

Ms M Themba (ANC, Mpumalanga) asked how many jobs would be created and how many women, youth and people with disabilities would benefit. Were women going to take part in the training programmes for builders as well?

Ms Themba asked if the presenters could clarify who formed part of the steering committee.

Mr Gqwetha replied that members of the steering committee would include members from the beneficiary community, local municipality, Department officials and programme managers.

Ms Themba asked which Eastern Cape municipalities were selected for this project?

Mr Gqwetha replied that these were Umzimbubo, Mhlontlo and Intsika Yethu.

Ms Themba asked if traditional leaders were engaged, if they were satisfied and what their comments were?

Mr Gqwetha replied that the traditional leaders were fully involved and satisfied with the programme. When the programme was launched the king of the area visited to show his support.

Mr Morris Mngomezulu, NDHS Chief Director, added that the Department had several meetings during the concept stage of the programme with the House of Traditional Leaders and received a blessing from that House to pursue this as a pilot.

Ms Themba asked whether there would be quality checks on the builders? 

Mr H Groenewald (DA, North West) also asked about quality checks. He commented that on paper everything looked good, but that he was worried about this entity. He was concerned that people were being paid through tenders, but that contractors were not pitching up. He was concerned that the quality of houses was sub-standard. Millions of Rands were spent on these housing projects and at the end of the day it was not completed. He referred to the quality control methods outlined in the presentation, saying that on paper they looked effective but he suspected they were not happening on the ground. It was the Department’s role to ensure that contractors were on site, that quality was assured, and that houses would not incur excessive maintenance costs later.

Mr Mngomezulu responded that all strategy players were on board, including the NHBRC so that quality was not compromised. Stakeholders were identified and given meaningful roles. The NHBRC had recently had a new board appointed, and had given a presentation on how they intended to enhance their own capacity. Quality assurance was therefore guaranteed by the NHBRC.

Mr Groenewald also asked about the title deeds of the houses, saying it was important that they were distributed and this had often not been done.

Mr Martin Maphisa (Deputy Director General: Policy Research and Monitoring, National Department of Human Settlements) acknowledged that there was a backlog with the distribution of title deeds. Part of the problem was traditional as there were areas where there were no township establishments, but there were houses built and people living there. In some cases it could have been poor management that caused the backlog. A new monitoring structure was included within the National Department. Most of the problems had been identified and it was hoped that with the new structure, a lot of ground would be covered. In rural areas there were often no title deeds at all, and Permission to Occupy papers were being used instead. This was a challenge for the Department; however, it was being addressed in cooperation with a number of other departments.

Mr Jacobs asked if there was a Memorandum of Understanding with the local authorities. He asked what kind of infrastructure would be built as part of the programme.

Mr Gqwetha replied that the areas were rural and the infrastructure was part of the scope that would be provided, including internal gravel roads, storm water drainage, and rain water tanks.

Ms L Mabija (ANC, Limpopo) asked why the pilot project had been allocated to the Eastern Cape, particularly as other provinces such as Limpopo were poor and in need.

Mr Mngomezulu responded that this was not the only province with rural poor, but that the Department was avoiding a ‘big bang’ approach, and rather following an incremental approach to minimise risk. While they were beginning in one province, lessons from this would be carried on to others.

Mr Gqwetha added that the pilots were pronounced by the MEC, and her main consideration was that these municipalities were rural and had a problem with access to services. In addition, they were on the eastern side of the province, which was important as there had previously been a bias towards the western areas, and the programme sought to correct this.

The Chairperson asked why these areas were chosen for the pilot projects, as they had very little infrastructure, in particular the roads were very poor, and this would be a difficulty in implementing the project. He asked about the funding model of the voucher system. The DHS stated in 2010 that the RHLF would be entitled to a 5% fee calculated on the growth cost.  He was concerned about this.

The Chairperson asked what the plans were after the pilot project was completed, as Ms Mabija had said, Limpopo was in urgent need. Where would the project be extended to? The most rural and disadvantaged areas should not be left out.

The Chairperson asked what mechanisms were in place to ensure that people did not apply for the subsidy when they already had another application for housing lodged in a different area.

Mr Maphisa responded that the system, Housing Subsidy System (HSS), had been put in place to deal with this. This used the South African ID number to trace applications nationally, in the Provinces, and in the Municipalities.

Mr Feldman (Cope, Gauteng) asked if the subsidy was necessary, and if it was a training subsidy or a service.

Mr Mngomezulu reiterated that this was a pilot, the first of its kind in the country, and so it was testing the waters. With regard to whether it was necessary, he said that the country as a whole had not paid sufficient attention to rural development. From a human settlements perspective, there could have been no better project than this one. This was why technical capacity should be provided to ensure that the pilot was able to make necessary interventions. The subsidy would improve the lives of the people.

Mr Mngomezulu added that the programme came about because people who lived in deep rural areas had not been accessing the subsidy because of the way it was delivered - usually via a project linked type of process. In certain areas accessibility had thus become almost impossible. This was why it was decided to allow individuals to access the subsidy on an individual basis. That was how the subsidy was born and why it was being piloted.

Mr Mngomezulu asked his colleagues to comment on the number of jobs created. He explained that DHS was in the process of consolidating their housing financial institutions into one; this would then become much more resource focused. This could help in terms of financial strategy for projects of this nature.

Mr Mngomezulu discussed the question of land owned by other department, such as the Department of Public Works and the Department of Agriculture. There was a steering committee consisting of all these departments, and DHS had made requisitions for land parcels that had been identified as human settlements. There was a process and the steering committee was looking into public land.

Mr Groenewald asked if the amount of the subsidy had been set, and what the maximum per household was. He commented that in the deep rural areas, the land belonged to traditional leaders, who allocated the land. This was where the problem had started with relation to the title deeds. His question had been addressed to some extent but he was still concerned about this, as people were not in ownership of their homes.  He noted that 2010 was the year of implementation, and the amount budgeted was R8 million for the first year. Thereafter it was added, for the next three years, to R25 million. He asked if it had increased since then.

Mr Mlenzana (Cope, Eastern Cape) requested the minutes of the meetings with traditional leaders.

Ms Mabija asked if the consultation with traditional leaders had been properly done. While support had been secured from the House of Traditional Leaders, she asked if similar relations had been established with traditional leaders on the ground, who often were neglected.

Mr Jacobs reiterated his question about the Memorandum of Understanding.

Mr Maphisa responded that they not yet entered into a MOU with the traditional authorities. There had been consultations, both at a national and a local level, but since this was the pilot, once they were ready to roll it out, they would consider the suggestion that a formal MOU be written up.

Mr Jacobs asked how building materials would reach the areas if there were no roads, pointing out that access to roads was therefore crucial.

Mr Maphisa said the Department had a policy were graded roads in category B (access roads) could be created by the Department where necessary. There was a policy and guidelines on how this could be implemented. They were also able to mobilise other stakeholders, such as the Department of Transport, to come on board and assist with that.

Ms Mabija asked if they were going to prepare roads to access the areas, or would they use sub offices only? Would they make roads within the area as well?

Mr Thabane Zulu, NDHS Director General, responded that access roads could be created, there were no legal or policy challenges in this regard. They did not want to create reasons not to go to rural areas. They were willing to deal with these challenges, and policy was in place to enable this. The structural challenges were some of the reasons why these areas were underdeveloped. Other departments were invited to join in the effort. But there was a competitive advantage in that they did not have to rely on other departments to provide roads.

Mr Jacobs pointed out that it often happened that a women would apply in a rural area while her husband applied in the urban area, and asked how the HSS would detect this, especially with regard to polygamous marriages and unregistered marriages.

Ms Mabija responded that in the case of polygamous marriages, each wife had a right to a house for her own children. The allocation should not be tied to the men as the women needed protection if the man passed away or did not return from the urban areas.

Ms Themba reiterated her question about how many jobs would be created.

Mr Mpendu responded that the exact number of jobs created was not available at the time. Once these numbers were finalised they would be shared with the Members, and there would also be a breakdown of numbers with regard to women, youth and disabled persons.

The Chairperson commented that some questions had already been addressed. In terms of the budget allocation, in phase one, direct and indirect costs, the budget per subsidy came to R23 403, and the total budget was R11 701 500. In phase two there was an increase to R57 980 per subsidy, with a total of R28 990 000. He asked again about the 5%, pointing out that it was very difficult for some people to raise this money. He asked if it would make any difference to the budget if that money was paid from the national budget.

Mr Jabulani Fakazi (Rural Housing Loan Fund CEO) responded to the question of 5%. The initial figure was 5%, but the reason for the pilot was that they needed to understand the cost implications of the project. He emphasised that the fee was not going to come from the beneficiaries, but from the Commission.

Mr Gqwetha emphasised that this was a pilot and a learning process, and many of the questions being raised were the ones that they hoped to answer during implementation. In terms of access and geotech designs, they intended to plan for the worst-case scenarios.

Ms Themba requested that Members be kept informed of the progress, even when the Department had not been called to present to the Committee.

The Chairperson thanked the Department for presenting. He advised that they should publicise that this was a pilot project. There was the potential that this could be politicised – about which areas were developed and which were not. Certain people had expressed concerns that politicians were developing their own areas. The Department should therefore make it clear that this was a pilot project which was ultimately to be implemented in a number of areas.

Other Business
The committee programme for the third term of Parliament was adopted.