Eastern Cape NGOs ask high court to overturn severe ‘unilateral’ budget cuts

After losing between 56% and 87% of their subsidies to unknown organisations in “rural areas”, a group of NGOs has asked the Makhanda High Court to review and set aside budgetary decisions by the Eastern Cape Department of Social Development.

The cuts were made in the 2017/18 and 2018/19 financial years.

After an intervention by the Social Development committee in the Eastern Cape Legislature, a few adjustments were made to the subsidies, but many organisations remain in dire straits because of the cuts. 

Advocate Ori Ben-zeev, acting for the Eastern Cape NGO Coalition, argued that the decision was irrational and taken without proper consultation. The NGOs claim that they were not consulted about the drastic cuts.

The NGOs have asked the court for an order from the court that the decision to reduce or terminate the subsidies given to NGOs in the 2017/18 and 2018/2019 financial years was unlawful and unconstitutional. They have also asked the court to order that the department compensate the NGOs for the difference between the amounts that should have been paid.

In his argument before court, Ben-zeev said it was unclear when the department took the decision because it had never been communicated to any of the affected parties. The decision was discovered by the affected NGOs in or around April 2017, when the department failed to renew service level agreements with them. Some of the affected NGOs found out about the decision only when it was reported in the media on or about 16 June 2017.

The affected NGOs provided a range of services to vulnerable people dependent on social welfare and support. This included, among others, rape and domestic violence survivors, children, orphans, disabled people, the elderly, the homeless, people struggling with substance abuse, military veterans and people living with HIV/Aids. Some organisations provided child protection services on behalf of the state.

Ben-zeev said in his argument that in the absence of any information [from the department] relating to funds required in rural areas, or to any indication of which entity or entities would provide these services, gave rise to the inference that the funds were not used to serve rural areas, but instead were lost to corruption. 

“[Such information] would have created a rational link… instead they say ‘we gave it to a set of nameless NGOs in rural areas’.”

He argued that it was irrational not to consult with the affected parties. 

“The department did not have the skills or the capacity to deal with the files they inherited,” he said, referring to the cases that had to be transferred to departmental social workers after the budget cuts. “The [department] themselves indicate that they could not provide these specialised purposes, so they had to pass it back to an outside organisation.”

“It cannot be said that these were mere teething problems. They would have known if they had consulted. Beneficiaries were treated as the proverbial hot potato, taken from an NGO, passed to the department and then passed to another NGO.” 

He said there were organisations affected by the budget cuts that were not coming forward due to fear of reprisal. “We believe they will come forward once an order is made.” 

Advocate Anusha Rawjee, acting for the department, said the department denied and would continue to deny that NGOs were being intimidated or threatened as they were “in partnership”.

She said that after a decision had been taken to focus on rural areas, there were meetings in August 2016. “There was ongoing discussion and consultation.”

“It is not the case that the NGOs were not performing. The decision fell squarely in the transformation bracket. The department wanted to focus on rural areas and prevention — and early intervention programmes.

She conceded that the minutes in which these consultations were recorded were “thrifty”, but said it was proof that budget constraints had been discussed. 

Ben-zeev said the reasons provided for the decision by the department were that the sectors that received most government subsidies were well developed formal NGOs that “tended to be more active and established [in] urban working class and middle-class communities rather than in poorer communities”.

The department also alleged that the NGOs “catered more for the white sector of society” and that social service delivery needed to be redirected to areas of greatest need and highest priorities such as rural and marginalised communities. 

“The department failed to demonstrate that it considered any factual or scientific basis at all for making the decision that it did. Rather, its decision appears to have been premised on sentiment,” Ben-zeev said. 

Rawjee, however, argued that there had been a policy decision to redirect funds to rural areas in the province and to insource all child protection services. She said that given the high numbers of children incarcerated on drug-related charges, the department wanted to focus on its “Prevent and Early Intervention Programmes”.

Rooks Moodley from the Eastern Cape NGO Coalition said the state had a constitutional obligation to render social assistance to children, older people, people with disabilities (including intellectual and mental disabilities) and other vulnerable groups. 

“The core of the irrationality argument goes to the fact that the Department of Social Development had little regard for how its decision to cut subsidies would negatively impact vulnerable beneficiaries whom the state had a constitutional obligation to assist.

“This case raises important questions about whether the state can unilaterally change funding patterns without consultation and without regard to the rights of the beneficiaries of such social services. As this case will demonstrate, it is ultimately the beneficiaries who suffer when organs of state take decisions without thinking through their consequences or consulting with NGOs at the coalface of rendering services,” said Moodley.

Acting judge Avinash Govindjee has reserved judgment. DM/MC

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