Beauty hub gets R64m subsidy
BUDGET: MONEY FOR AGED, PEOPLE WITH HIV SLASHED
Funding to this entity and another exceeded that of any other organisation.
Gauteng’s department of social development has awarded grants of over R56 million to two skills development organisations in a year in which funding to other sectors – including the elderly and community care – has been cut.
The two nonprofit organisations are the Beauty Hub Academy, which was allocated R30 million, and a former shelf company Daracorp, which was allocated over R26 million for the 2023-24 financial year.
Both also received tens of millions of rands in grants in the previous (2022-23) financial year. Beauty Hub got R33.7 million and Daracorp R23.9 million, respectively. This totalled a combined R113.7 million over two years.
In April last year, the department proposed deep cuts in key funding.
Lisa Vetten, a research associate at Wits University’s Southern Centre for Inequality Studies, said the proposals would have meant R418 million would have been cut from nonprofit organisations (NPOs) providing welfare services.
This money was to be redirected to the department’s research and development programme and its poverty alleviation initiatives.
The department later backtracked and revised its budget. The amount then allocated to NPOs was cut by R233 million.
Sectors that were hardest hit were older people – where the budget for NPOs was cut by R54 million compared with the previous year – HIV services (cut by R98 million) and community care (cut by R26 million).
But Daracorp and Beauty Hub’s funding was almost unaffected.
Funding to the two outstripped that of any other organisation in 2022-23. Most of them got less than R1 million out of the almost R2.3 billion funds paid to NPOs.
Beauty Hub Academy, which has branches in Johannesburg, Pretoria and Lenasia, offers training in hairdressing and beauty therapy for people on social security. It is registered as a private, for-profit company and an NPO.
It received R33.7 million from the department’s women’s development, welfare-to-work, poverty alleviation and youth development programmes in the 2022-2023 financial year, said Nkosana Mtolo, spokesperson for the MEC of social development.
It will receive over R30 million in four quarterly tranches over the 2023-2024 financial year.
Mtolo said the department had funded Beauty Hub to train 565 people receiving social security in 2022-23, with a further 565 targeted for training in 2023-24
This means that over the two years, Beauty Hub will have received funding to train 1 130 students at an average of more than R56 000 per person.
Mtolo said Beauty Hub trainees who are beneficiaries of social security are fully subsidised – the whole course fee is covered by the department – and get a daily meal and travel allowance.
Joel Nkomo, one of Beauty Hub’s two directors, said: “Once these beneficiaries exit, we assist them to find employment opportunities so they can participate in the economy. The mandate of the programme is to provide employable/entrepreneurial skills for the individuals… to either find employment or start their own businesses so that they no longer depend on the welfare system.”
Daracorp, which offers training for small-scale rural and urban farmers, was first awarded a grant of R3.75 million by the department in 2021-2022, within a year of being registered. It got almost R24 million under the women’s development programme in 2022-2023 and another R26.1 million in the current financial year.
Thomas Ngubane, chair of Daracorp NPO, said the organisation used a “coop model” to produce at higher scales, while people who received daily state meals at community nutritional development centres participated in Daracorp’s food gardens programme.
“The programme is designed to assist the beneficiaries to produce their own food, equip them with farming skills and create enterprises that allow them to make money out of farming while using state land that is under-utilised or not utilised at all, for free.”
Questions have also been raised about the difference in the size of the department’s grants to these two companies compared with other nonprofit organisations offering skills training.
Vetten said: “Unemployment is alarmingly high, especially among young women, and it is extremely important that we try to create decent work which ensures that people do not live in poverty.
“However, the question raised by the size of the subsidies to Beauty Hub and Daracorp is how we do so without creating new inequities in the process.”