Financial and Fiscal Commission Comment on Human Settlements Annual Report 2009-10 Portfolio Committee of Human Settlements 14th October 2010 14h00 Financial and Fiscal Commission

1. FFC recommendations for 2006-07 to 2009-10 (1) The FFC is of the view that the delivery of human settlements needs to be done in an efficient, integrated approach and in a sustainable manner. This requires resolving institutional bottlenecks that exist in the system. Consequent to its findings on institutional bottlenecks, the Commission recommended that suitably capacitated municipalities be accredited for direct receipt of housing subsidies and responsibility for low income housing delivery. This recommendation was reiterated for 2009-10 to 2012-13. This is in line with: the framework of IHHSD grant contained in the DoRA for 2008; and the Housing Act of 1997

1. FFC recommendations for 2006-07 to 2009-10 (2) In response to this recommendation, the government indicated that it would review the powers and functions of provinces and local government. Although this was not a direct response, it implied that such a review will address the institutional bottlenecks experienced within the human settlements sector. An accreditation panel was established by the NDoHS last year and tasked with assessing the readiness of municipalities to be accredited by provincial MECs for housing / human settlements.

1. FFC recommendations for 2006-07 to 2009-10 (3) The NDoHS annual report for 2009/10 reports that six metropolitan and four [urban] local municipalities have been assessed for accreditation capacity (p 97, para 7). While this has been a positive development, it has not contributed much to attaining the desired results, as municipalities including metros have not yet accredited at level three. MECs should speed up the process as they are ones to make final decisions on whether to accredit a municipality or not.

2. FFC recommendations for 2006-07 to 2009-10 (4) The second recommendation advised that policy and norm changes be accompanied by financial assessments of the implications on unit costs and annual delivery of dwellings. This recommendation was accepted by the government. Human Settlements does not report on delivery output by programme or province in its annual report. Early this year it was reported that around 40 000 RDP houses would have to be replaced as a result of poor workmanship, costing roughly 10% of the human settlements budget.

3. FFC recommendations for 2006-07 to 2009-10 (5) The fourth recommendation suggested greater co-ordination of the Integrated Housing and Human Settlements [capital] grant with the Municipal Infrastructure [capital] grant and the Local Equitable Share [operational] grants for basic services to low income households. The department is anticipated to report on how such co-ordination in terms of issues such as project qualifying criteria, division of roles between bulk and reticulated infrastructure and the sequencing of projects, might be effected in the frameworks for its IHHS grant published with the Division of Revenue legislation.

4. FFC recommendations for 2006-07 to 2009-10 (6) The final recommendation identified housing delivery backlogs in planning approvals from local government, environmental affairs and transport departments; insufficient project management capacity and delays in [especially traditional] land registration. The department’s annual report does not report on average duration of planning or delivery processes over a medium- to long-term (3 to 7 year) period.

5. Conclusion The FFC thanks the Portfolio Committee and the Department of Human Settlements for the opportunity to comment on the department’s annual report for 2009-10 in terms of its recommendations on human settlements over the past four years.