Extracts from a speech delivered in the Gauteng Provincial Legislature by Janet Semple, December 1 2010:

It is my honour to deliver my maiden speech in this house today, and to be able to address one of the most pressing issues facing the majority of our people: housing. It is vital for us to have a functional, rational housing policy and an effective, well managed, well run Department of Housing that meets its targets and provides tangible benefits for our people with the money it spends. I believe the new MEC has a huge task ahead and I wish him well.

Departmental Performance:

In 2009/10, the Department of Housing under spent on its budget by R245 000, from a total appropriation of just over R3-billion (R 3 187 086 000). This represents an under expenditure of just 0, 0076%. The Department also received an unqualified audit, which is to be commended. Looking at these two factors, one would expect that in the actual performance of the department in terms of service delivery, that the targets would have been met or just missed.

Sadly, this is not the case, and the service delivery performance of the department cannot be commended by any measure. The department set a target of having 3179 serviced stands in mixed housing developments, but only delivered 1319 serviced stands. That is a delivery rate of just 41%. With regards to rental accommodation units, similarly, the department underperformed, with a delivery rate of just 61% of its target.

Even though the department exceeded its targets regarding the eradication of informal settlements, when compared to the 2008/9 outputs, the real performance of the department declined. In this regard, the department built over 5000 fewer houses and serviced over 12 000 fewer stands in 2009/10 than in 2008/9. What this tells me is that the targets set were too low, and that the departments delivery standards are dropping, not improving.

Financial Performance:

The departments' under expenditure was statistically insignificant, and the Auditor General gave the department an unqualified audit. However, the Auditor General raised some serious alarm bells over the financial performance and expenditure of the department that must be addressed. The accruals amounted to almost R 170 million (R169 341 000).

 GRAP is to be implemented within the coming years and accruals should be budgeted for so that they do not carry over into the next financial year. One wonders how the department is going to manage this with the massive accruals that are accumulated year in and year out. The irregular expenditure of R 2 248 569 due to the department exceeding its budgeted employee costs and non-compliance of supply chain management is similarly unacceptable.

The department should adequately budget for staff, and ensure that salary increases are linked to inflation and that performance bonuses are given based on merit. It is simply unacceptable that the department overpaid its staff by R 794 000 in the last financial year. One might be forgive  for questioning whether  the department is  incapable of administrating something as simple as an automated payroll?

Additionally, one cannot comprehend how the department paid out just over R3 million (R 3 021 000) in performance bonuses to staff when not a single key service delivery performance target was met, such as the number of houses built, number of beneficiaries allocated houses, etc. This needs to change.  Bonuses must be linked to outcomes ie performance based.

Gauteng Partnership Fund and Gauteng Housing Fund:

The Gauteng Housing Fund received a qualified audit from the Auditor General, for amongst other reasons, departmental properties being rated as having a value of 0. How is it possible that the department cannot carry out simple evaluations of properties? Furthermore, the auditor general found that the financial and performance management of the Gauteng Housing Fund was lacking.

Relevant information was not identified and captured in a manner that would support financial reporting, the statements shown to us in the annual report were not reviewed for completeness and the systems in place at the fund do not facilitate the preparation of financial statements. How can we trust what has been shown to us in the report in this regard, when the auditor general cannot trust the information that has been supplied?

All in all, the Gauteng Housing Fund made a loss of R 48 323 000 in 2009/10 financial year, and R 67 988 000 in the previous financial year. It has become a net drain on the provincial government, and its performance and expenditure should be urgently reviewed. The Gauteng Partnership Fund, by contrast, had a squeaky clean audit report, and its stellar performance demonstrates the key difference between state led development and public-private partnerships.

The Gauteng Partnership Fund is operating on a massive surplus, and its model is in line with international best practice, focusing on rental units and social housing. It is ironic that the provincial government is disestablishing the one functional unit in the housing department, one that for most of its existence saw a consistent upward trend in performance and meeting its targets.

General State of the Department:

It is clear that the Department of Housing is good at spending money while not performing adequately in terms of delivery. Additionally, the department is bloated on the administration side and has poor capacity on the delivery side. The Accounting Officers report on the spending trends in the department confirmed this: there was consistent under spending across the board in housing needs, research and planning, housing performance and subsidy administration and housing asset management.

But, there was also consistent overspending on departmental administration. What does this say about the state of the department and its priorities? Is the department concerned with building houses and researching and implementing new models for social housing, or is the department concerned with administration? Gauteng is plagued by service delivery protests, and the departments performance has to bear some of the blame for this. A massive increase in the delivery of houses would do wonders to quell the service delivery protests that have become the norm in our province. This is provided they are properly built of course.

International Best Practice:

Internationally, the models pursued by governments for housing include a mix of subsidies and low income rental units, with housing provided in high rise units in urban centres, due to their cost effectiveness n terms of land acquisition, servicing and maintenance.

This model has been pursued to great effect by the governments of Mainland China, Hong Kong, Singapore, Austria, Finland, Australia, etc. Additionally, rental subsidies of properties already on the market is a practice that has been shown to work across the world, it is a model that even the United States uses to provide housing to those who cannot afford it.

If the department is adamant on providing individual stands, then, as has been demonstrated the world over, providing a serviced stand, building materials and training, and allowing the beneficiaries to construct their own houses, to their own specifications, allows for maximum freedom of the beneficiaries within the housing model to construct the house that they want to live in and is suitable for their own family, and provides them with skills.

This is international best practice. These are models that work, regardless of the size of the economy of the country or its average household income. It would be wise for us to investigate the implementation of such models in South Africa

Changes in Policy:

I believe that politics, particularly in the legislative branch, is a contestation of ideas, and that the best ideas should win, regardless of where they come from. In this house, the DA always provides alternative ideas, and I have just provided the house with some alternative ideas for housing policy. The policy we have in place, as it stands, is not working.

Even if we continue with the current model, we need to open the housing waiting lists to public scrutiny. This would allow individuals to inspect the lists and raise the alarm when there is evidence of gerrymandering of lists by officials. Additionally, we need to prioritise people and communities who have been on the waiting lists since the early 1990's.

We cannot allow for a situation where people spend their entire lives living in squalor. We need to change the way our housing system operates.

Conclusion:

In conclusion, I would like to paraphrase the U.S Declaration of Independence, and regardless of what you think of it, the US remains the most prosperous nation in the world, where access to housing is available for all income groups. The Declaration of Independence states that all men and women have certain inalienable rights, namely, life, liberty and the pursuit of happiness.

The DA wants all South Africans to be able to enjoy their rights, and housing is essential to advancing people's lives, their liberty and affording them the opportunity to pursue happiness in a manner they see fit. The longer people are denied housing due to poor performance by the department, the fewer opportunities they will have to advance their lives and pursue happiness.

And this, honourable members, is unacceptable. We demand that in the next annual report tabled before this house, that the Department of Housing meets its targets, that it does so within the budget, that the houses given to people do not fall apart after 3 or 4 years and that the Department takes seriously its constitutional mandate.  The honourable MEC and all housing officials must  understand that the hopes, dreams and aspirations of millions of people are on their shoulders.  Please do not let them down.

Issued by Janet Semple, MPL, DA Spokesperson for Housing in Gauteng, December 1 2010

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