Service Delivery public hearings Day1

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Cooperative Governance and Traditional Affairs

01 February 2010
Chairperson: Mr S Tsenoli (ANC)
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Meeting Summary

The South African Human Rights Commission opened the hearings stated that the South African government had a constitutional duty to uphold the right to dignity of all citizens and that poverty was found to be one the biggest obstacles to this right. Parliament had to, through initiatives such as these public hearings, “connect the dots” between issues such as co-operative governance, local capacity, corruption and global trade and economic choices, including the private ownership of basic rights such as water that prevented poor people in South Africa accessing their fundamental human rights.

The Department of Cooperative Governance and Traditional Affairs said that the root causes of municipal problems included systemic, legislative and political factors in addition to a lack of performance management systems and capacity in rural and smaller municipalities. The number of service delivery protests had increased drastically from a total of 106 for the period 2004 – 2008 to 101 for 2009 alone. Still, only 25% of all municipalities had seen protests. Some of the causes of service delivery protests included a high and ever-growing demand for infrastructure development and housing; open discontent with, and accusations of, nepotism and maladministration; rising utility costs (most notably electricity); local power struggles; and a perception, whether real or not, that peaceful and legitimate platforms were not available, or, when there, were deliberately not used. The Department’s strategic priorities included the building of a developmental State in provincial and local governments that was efficient; strengthening of accountability; and accelerating service delivery and supporting the vulnerable. The objectives of their Local Government Turnaround Strategy were to restore people’s confidence in municipalities as the primary machine of the developmental state at a local level and, re-build and improve basic requirements for a functional, accountable, responsive, efficient developmental local government. Other key actions were the establishment of a Ministerial Advisory Committee and a Civil Society Reference Group and the preparation of an annual assessment process.

The Office of the Auditor-General said that for 2008/09 an average of 30% of all entities were non-compliant with regulatory requirements The average for usefulness of reported performance information stood at 22%, while the average for reported information not being reliable stood at 19%. There was a need for leadership awareness of the importance of performance information. The role of oversight needed to be emphasised, particularly the role of internal audits, audit committees and councillors.

 National Treasury stated that the biggest challenge facing the accountability cycle was the non-alignment of the required documents. The 283 municipalities each had different budget documents which should be standardised to make it easier to understand what these municipalities would like to achieve through its budget and expenditure. National Treasury had introduced In-Year Reporting which had seen all 283 municipalities reporting. If municipalities conformed to the legal requirements and produced quality, aligned documents and placed in on their websites it would reduce the amount of extra reporting needed.
The Division of Revenue Act (DORA) was the legal lever which governed resource allocation. Funding allocated via the Act had to be part of the budget process of local municipalities. In addition, there had to be a payment schedule.

The Ministry of Rural Development and Land Reform said that it had developed the Comprehensive Rural Development Programme (CRDP) as a guiding framework in the implementation of rural development, which was one of Government’s key priorities. It defined a rural area as all areas outside of urban areas – including former homelands. It was working together with the Departments of Transport, Energy and Water Affairs towards developing and sustaining effective infrastructure. It had also linked skills training and capacity-building to its job-creation model to build sustainable livelihoods. To this end it was engaging with rural universities and further education and training colleges to offer practical programmes that would develop skills. The response from these universities had been very positive. In order for the programme to succeed all the relevant stakeholders – especially departments – would have to work together.

The National House of Traditional Leaders said that it was pinning its hopes on the Local Government Turnaround Strategy. They looked closely at the report on the state of local government which had identified the challenges and then he listed the proposals for better service delivery.
 
Questions and comments by Members during the hearings included:
▪ How the Department of Cooperative Governance and Traditional Affairs planned on mobilising all the necessary vehicles of delivery and whether the grant system was not fostering a culture of dependency.
▪ What action was taken against non-compliant municipalities and what
National Treasury’s plan was in getting answers from non-compliant municipalities.
  Was Treasury satisfied with the competency levels of those handling the finances of municipalities.
▪ What was the Department of Rural Development and Land Reform’s strategy for sustainable development in rural areas and whether the scope could be expanded so that people living in rural areas could see more/ better service delivery.
▪ Further Education and Training colleges should be linked to labour markets in their area.
▪ Did traditional leaders feel excluded from the participatory processes and to what extent they worked together with ward committees.

Meeting report

Introduction by South African Human Rights Commission (SAHRC)
Providing the opening message, Ms Pregs Govender, SAHRC Deputy Chairperson, said that the South African Constitution enshrines fundamental human rights and the Government has a clear constitutional obligation to uphold these rights. The biggest obstacles to these rights were poverty and discrimination. A study conducted by the University of Cape Town had found that South Africa was now one of the most unequal societies in the world. In the former homelands, less than 40% of adults were in some form of employment, with the result that geographic apartheid continued.  Those living in rural areas, former homelands and informal settlements were among the poorest citizens. Parliament should, as it was doing through these public hearings, “connect the dots” between issues such as co-operative governance, local capacity, corruption and global trade and economic choices, including the private ownership of basic rights such as water that prevented poor people in South Africa accessing their fundamental human rights.

Department of Cooperative Governance and Traditional Affairs submission
Mr Yusuf Patel (Deputy Director-General:
Free Basic Services and Infrastructure) said that service delivery was an outcome, the scale and quality of which depended on factors such as: clear and realistic policies; appropriate allocation of powers, functions and financial resources; performance and accountability of State organs to implement policies; coordination between organs of State; public participation and involvement as well as the level of self-reliance of communities.

Some of the root causes of municipal problems included systemic, legislative and political factors as well as lack of performance management systems, lack of capacity in rural and smaller municipalities, fragmented national and provincial support and grant dependency. The number of service delivery protests had increased drastically from a total of 106 for the period 2004 – 2008 to 101 for 2009 alone. Although this was seen as a cause for concern, these protests were experienced by only 25% of municipalities. In addition, these protests did not take place across entire municipalities, but rather in specific wards. Although Gauteng remained the province most affected by protests, there were a growing number of protests in Mpumalanga. The number of protests in the Free State and North West provinces had reduced, while 56% of protests in Mpumalanga and Limpopo took place outside of the metros. The Western Cape remained significant in 2009, as it did in previous years.

Some of the causes of service delivery protests included: a high and ever-growing demand for infrastructure development and housing; open discontent with, and accusations of, nepotism and maladministration; rising utility costs (most notably electricity); local power struggles; and a perception, whether real or not, that peaceful and legitimate platforms were not available, or, when there, deliberately not used.
The Department’s strategic priorities include the building of a developmental State in provincial and local governments that was efficient; strengthening of accountability; and accelerating service delivery and supporting the vulnerable.

The objectives of the Local Government Turnaround Strategy (LGTAS) were to, firstly, restore people’s confidence in municipalities as the primary machine of the developmental state at a local level and, secondly, to re-build and improve the basic requirements for a functional, accountable, responsive, effective and efficient developmental local government.

The LGTAS’s pre-2011 priorities included addressing immediate financial and administrative problems in municipalities; implementing regulations to stem indiscriminate hiring and firing; ensuring and implementing a transparent municipal supply chain management system; and strengthening the Ward Committee System and implementing a new ward governance model.

The LGTAS’s Vision for 2014 included: a single election; universal access to affordable basic services; the eradication of all informal settlements; clean cities; the significant reduction on infrastructure backlogs; reduction on violent protests; and reducing municipal debt by half.

Its Key Turnaround Interventions include having National government organise itself better in relation to local government; having provinces improve their support and oversight responsibilities over local government; ensuring municipalities reflect better on their own performance in addition to developing their own tailor-made turnaround strategies; improving all three intergovernmental relations in practice; having political parties promote and enhance the institutional integrity of municipalities.

In terms of its Governance Actions, it planed to undertake a legislative reform programme for local government, which would necessitate Constitutional amendments. It also planned to undertake to urgent steps to strengthen the professionalisation on local government as well as establishing a Window of Coordination for the support, monitoring and intervention in local government. This was in addition the deepening People-Centred Government through a Refined Model of Ward Committees.

Among its Planning, Service Delivery and Local Economic Development (LED) Actions were the following: ensuring that the necessary resources were allocated in order to address service delivery Millennium Development Goals (MDG) 2014 priorities; strengthening community oversight and monitoring over service delivery projects; restructuring the Municipal Infrastructure Grant (MIG); and the establishment of a Special Purpose Vehicle for infrastructure development.

The Department would also be establishing a ‘Command Centre’ which would ensure implementation as well as be responsible for monitoring and reporting. The Centre would consist of a Rapid Response Team, a Technical Support Unit as well as an Intelligence Team. There would also be a team of specialists, each focusing on different areas such as governance, finance, operational development, technical services. A critical aspect of the TAS was the Provincial Sector Performance, which would look at better spending and outcomes and municipal and public participation. Other key actions of the TAS include the establishment of a Ministerial Advisory Committee and a Civil Society Reference Group and the preparation of an annual assessment process.

Discussion
Mr A Williams (ANC) asked how the Department would facilitate the mobilisation of all vehicles of delivery.

Mr Patel answered that coordination was an issue that was looked at in the TAS.

Mr W Doman (DA) asked what the Department’s legislative proposals were. Councillors needed to carry more responsibility and needed to be held up to account more.

Mr Patel replied that the Department wanted to look into the legislation, clarifying roles and processes as well as transparency in committees in the awarding of tenders.

Mr T Botha (Cope) asked whether the grant system was creating a culture of dependency.

Mr Patel answered that within communities the role of broader economic development needed to be looked at, particularly programmes that focused on the building of local economics.

Auditor-General submission
Mr Paul Serote (Corporate Executive: Audit) said that the Auditor-General had a constitutional mandate to strengthen South Africa’s democracy by enabling oversight, accountability and governance in the Public Sector through auditing, thereby building public confidence. The main categories for poor financial reporting by government entities in 2008/09 were: Non-compliance with regulatory requirements, Usefulness of performance information, and Reported performance information not reliable.

The non-compliance with regulatory requirements was an average of 30% across all types of entities (national legislature, national constitutional institutions, national departments and national entities). The average across all entities for usefulness of reported performance information stood at 22%, while the average for reported information not being reliable stood at 19%.

For provincial departments and entities, 38% of provincial legislatures, 62% of provincial departments and 60% of provincial entities had issues of non-compliance. Usefulness of reported performance information stood at an average of 38% for these departments and entities, while an average of 36% was noted in the ‘reported performance information found not reliable’ category.

A different audit cycle was used for municipalities. The findings in the main categories here were as follows: No reporting of performance information (42%), Lack of internal auditing of performance information (41%), Inadequate content of the Integrated Development Plan (32%), and Performance information not received in time for audit (30%).

In terms of the way forward, the National Treasury guideline on performance information needed to be adhered to. There was also a need for leadership awareness of the importance of performance information. The role of oversight needed to be emphasised, particularly the role of internal audits, audit committees and councillors.

Discussion
Mr G Selau (ANC) asked what the difference was between ‘entities’ and ‘institutions’?

Mr Serote said that constitutional entities were bodies such as the SAHRC.

National Treasury submission
Mr Jan Hattingh
Chief Director: Provincial Budget Analysis in Intergovernmental Relations Division, said that the biggest challenge facing the accountability cycle was the non-alignment of the required documents. National Treasury had, every two years, published the Local Government Budget and Expenditure Review in which it highlighted its key challenges as well as actual performance information of the municipalities. Another challenge was the fact that each of the 283 different municipalities had different budget documents. The challenge lay in standardising these documents in way that made it easier for the public to understand what these municipalities would like to achieve through its budget and expenditure. National Treasury had introduced In-Year Reporting which had seen all 283 municipalities reporting. If municipalities conformed to the legal requirements and produced quality, aligned documents (and placed in on their websites) it would reduce the amount of extra reporting that needed to be done.

The Division of Revenue Act was the legal lever which governed resource allocation – re-channelling funds from the richer municipalities to the poorer ones. Whatever funding was allocated via the Act had to be part of the budget process of local municipalities. In addition, there had to be a payment schedule. Some of the challenges in service delivery included the issue of urban versus rural municipalities – as each municipality had to be addressed on its own merits, from a resource point of view.

Discussion
Ms M Wenger (DA) asked what action was taken against municipalities that were non-compliant with regard to the Division of Revenue Act (DORA)?

Mr Hattingh agreed that there was a need to lead by example.

Mr M Swathe (DA) asked what the status was of reports (municipalities claiming they did not get a fair share).

Mr Hattingh said that a minimum grant of R5million had been agreed upon for poorer municipalities.

Ms F Mushwana (ANC) asked what National Treasury’s plan was in getting answers from non-compliant municipalities.

Mr Hattingh answered that it was not in their mandate to take consequences forward. It could, instead, look at the root causes in the hopes of addressing it.

Ms G Borman (ANC) asked if Treasury had been satisfied with the competency levels of those handling the finances of municipalities.

Mr Hattingh answered that this was a complex issue. The turnaround of financial practitioners was high. Although it had put in place a number of support initiatives to deal with this, the final responsibility for this lay with councils. There was therefore very little it could do about this except raise the issue in its interactions. It had also started publishing a list of outstanding debtors, though this debt stood at only 4%. The biggest problem in this regard came from businesses and households.

Ministry of Rural Development and Land Reform submission
Mr Thozi Gwanya (Director-General) said that the Ministry had developed the Comprehensive Rural Development Programme (CRDP) as a guiding framework in the implementation of rural development, which was one of Government’s key priorities. It had linked its list of outcomes with its input in order to ensure to that it could implement the programme successfully. A critical consideration here was how its stakeholders would receive its services. To this end, the Ministry in the Presidency would be dealing with monitoring and evaluation.

It defined a rural area as all areas outside of urban areas – including former homelands. In the sites across eight provinces in which it had launched the CRDP it was found that there was an under-utilisation of natural resources, lack of access to socio-economic infrastructure, a need for water infrastructure, poor agricultural infrastructure, and decay of social fabric. Strategies for its programmes include social mobilisation (cooperatives etc.), strategic investment in infrastructure, increased economic activity as well as sustainable land and agrarian reforms. In terms of progress made, the CRDP had been rolled out through sites across eight of the nine provinces. Coordinating structures had been set up in all of these provinces. Spatial analyses had been completed. It had also worked together with different departments towards addressing the needs of the communities in which this programme had been rolled out. It would, within the next five years, be working with 150 municipalities.

In terms of food security for all, it had targeted 60% of rural schools to have their own vegetable garden. In this regard it was working together with the Departments of Agriculture, Education and Water Affairs. It was also developing agri-parks and working towards having 53 of these by 2014, as they not only generated employment opportunities but also increased agricultural production. 

It was working together with the Departments of Transport, Energy and Water Affairs towards developing and sustaining effective infrastructure. With regards to natural resources management, it was working closely with the Department of Agriculture as well as National Treasury with a strong focus on disaster management. This was especially important as rural communities were often the most seriously affected by natural disasters. It had also linked to its job-creation model the issue of skills training and capacity-building. To this end it was engaging with rural universities and further education and training (FET) colleges in offering practical programmes that would develop skills for sustainable livelihoods in these communities. The response from these universities had been very positive. However, in order for the programme to succeed all the relevant stakeholders – especially the relevant departments – would have to work together.

Discussion
Mt T Botha asked what the Department’s strategy was for sustainable development in rural areas.

Mr Swathe asked whether the scope could be expanded so that people living in rural areas could see more/ better service delivery. What was the budget?

Mr Gwanya answered that the Department did not see its implementation of CRDP as narrow as it was currently working in 21 wards and planning to work in 160. There was a budget allocated to the Department. Reprioritisation was, however, the key.

Ms Mushwana said that FETs should be linked with labour markets in the area. People should also be trained so that they could one day own their own farms as opposed to simply working on them.

Mr Gwanya agreed that FET colleges were important because they could provide the relevant skills for where they were needed.

Mr Selau asked what security measures there were in place at agri-parks.

Mr Gwanya answered that as agri-parks were worked on by local people, they would feel a strong sense of ownership over it. Security would therefore not be a major issue.

The Chairperson asked the Department to elaborate on alternative energy sources.

Mr Gwanya replied that the Department encouraged the use of appropriate technologies (such as the use of oxen versus the use of tractors in rural areas).

National House of Traditional Leaders (NHTL) submission
The NHTL representative said that report on the state of local government had discovered a number of weaknesses in certain municipalities, including:
▪ Leadership and governance challenges with regards to accountability,
▪ Poor financial management,
▪ Inability to deliver basic services or to grow their local economies,
▪ The legacy of apartheid continuing to haunt municipalities especially with regards to spatial planning, and
  Inadequate skilled human resources and persistent labour relations problems.

The report had also noted that: local government was failing the poor by not working properly, some municipalities were unaccountable, local government was marred by corruption, fraud and maladministration, and municipalities were centres of factional conflicts, political in-fighting and patronage. Given the 15 years of rule the ANC had enjoyed, more could be done to deliver essential services to people effectively. This was especially critical as those who were worst affected by poor service delivery were those in the more rural provinces of Kwa-Zulu Natal, Limpopo, the Eastern Cape and Mpumalanga.  The House was pinning its hopes on the recently introduced Local Government Turnaround Strategy to provide services the way in which they were meant to be delivered.

Challenges in the current system of service delivery included the following: Poor or ineffective communication strategy by government and its implementing agencies – both among themselves and with communities, Poor alignment of programs between the district and local municipalities, Poor or no working relationship among the different service delivery structures within municipalities, Poor or no relationship between the service delivery structures in the municipalities with the structures of traditional leadership, and Poor clarification of roles of the various structures sometimes led to conflict. 

Its proposed solutions included the following: Improved communication among structures of governance and with structures of traditional leadership, Free flow of information to communities from government at all levels, Improved alignment between the provinces and local government and between district and local municipalities on matters of service delivery, Effective involvement of traditional leadership structures on matters of service delivery in traditional communities, Tightening of legislative gaps in local sphere of government to ensure the involvement of traditional leadership structures in municipal activities, Clear role clarification among structures, e.g. ward committees, traditional councils and Community Development Workers, Clear accountability mechanism of service delivery structures and personnel, and Capacity building programs for local government and traditional leadership structures.

Discussion
Ms Ngwenya-Mabili asked to what extent traditional structures were involved in ward committees.

The representative answered that traditional leaders did not feel included in their engagement with ward committees.

Ms Borman asked whether traditional leaders were feeling excluded from participatory processes.

The representative answered that traditional leaders appreciated this relationship. He felt, however, that there was a need to revisit these structures in order to ascertain whether it was proper for traditional leaders to participate in municipalities. He proposed a structure which allowed these leaders to discuss amongst themselves issues related to service delivery as well as the preservation of their cultures.

The meeting was adjourned.



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