Department; SALGA & LGSWETA: briefing

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Cooperative Governance and Traditional Affairs

24 April 2002
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Meeting report

LOCAL & PROVINCIAL GOVERNMENT PORTFOLIO COMMITTEE
25 April 2002
DEPARTMENT; SALGA & LGWSETA: BRIEFING

Documents handed out:
Institutional Reform & Support Capacity Building
SALGA Programme of Activities 2001/2002
Restructured Salga

Chairperson: Mr Y I Carrim (ANC)

SUMMARY
Department, Local Government, Water and Related Services and South Africa Local Government Association briefed the Committee. The Committee expressed concern about the lack of information on service delivery in-put. An appeal was made by the Committee to the department to give a result oriented presentation next year.

The Committee also expressed disappointment about the slow pace of capacity building. A resolution was made to bring all stakeholders together and workshop around the question of capacity building.

MINUTES
The Chair informed the Committee members that three groups would be briefing the committee. The first would be the continuation of the Department's presentation from last Tuesday followed by a briefing by LWGSETA and SALGA would come last.

Briefing by Ms Karen Harmaon from the Department
Ms Harmaon informed the Committee that the Department had embarked on a programme of Institutional Reform and Support together with Capacity Building.The Capacity Building Programme was necessitated by the fact that Local Municipalities are in dire need of capacity building and that earlier programmes in this regard were not targeted and thereby had minimal impact.The Department offered financial support to Municipalities to implement the Capacity Building Programmes.

Ms Harmaon noted that most programmes did not look at Municipalities holistically which was problematic. The Department had identified priority focus areas to measure output.
The Department had put in place specialised programmes and support mechanism to assist Municipalities achieve their capacity building needs.

Discussion
Ms Borman (DP) asked if the Department had prepared documents for the Municipalities or did the Department go to Municipalities to co-ordinate the training.

Ms Harmaon replied that the Department planned the implementation of the training programmes. It engaged the services of consultants to carry out the training. The Department played an important role of co-ordination of programmes since Municipalities carried out conflicting activities and this required rationalisation, which the Department provided.

Ms Borman inquired as to the sustainability of the training programmes.

Ms Harmaon replied that Municipalities often receive the programmes very well since hitherto there had been a vacuum in this vital area. In this sense, therefore, the programmes were sustainable.

Mr Magashule (ANC) asked about the impact of various training programmes on service delivery.

Ms Harmaon pointed out that the programmes the Department offered must be followed up with other capacity building instruments for it to impact on service delivery. In this respect, therefore, the Department was developing key performance indicators for monitoring progress in this area.

The Chair said that he concurred with the concern expressed by Mr Magashule on service delivery. The Committee was often treated to a generalised presentation but short on what had actually been achieved that far. He appealed to the Department to give a result-oriented presentation next year.

The Chair noted that the Department's focus was on technical training. Why was the political component absent? Municipalities should be community centred.

Mr Ngubeni (ANC) urged the Department to indicate what assistance it would require from the Committee. Were training programmes properly accredited to ensure that the standards and quality of the programmes were sufficient?

Ms Harmaon said that the Department had so far cultivated good working relationships with various standards boards. The
Department had identified about 500 service providers in training and it utilized the very best.

Mr Ngubeni (ANC) inquired if the offered training was relevant to the needs of the Municipalities to which Ms Harmaon replied in the affirmative. She said training was targeted and that reputable consultants carefully prepared the curriculum.

Mr Ngubeni noted that it is common cause that politicians do not take these training programmes seriously and asked what the
Department was doing about the negative attitude among Counsellors.

Ms Harmaon agreed with Mr Ngubeni that getting Councillors to go for training had been quite a challenge for the Department. The Department had introduced a range of incentive structures such as attendance certificates to help motivate the Councillors.

Mr Ngubeni faulted the timing of the training programmes which he lamented were not well co-ordinated. He gave an example of training programmes being run near election time yet it was not known whether those trained would come back or not.

Ms Harmaon acknowledged the difficulty and frustration the Department had with the timing of training programmes. She blamed this bad state of affairs to the many political priorities that filled the Municipalities' calendar in that training was normally relegated to the very periphery of activity. She said the Department is trying to address the issue of planning in its programmes.

Mr Lyle (ANC) asked if the National Treasury solely funded the training programmes.

Ms Harmaon explained that the World Bank through the National Treasury funded the training programmes. Financial training was a priority geared towards complying with the IMF requirement for running Municipalities.

Mr Solo asked what calibre of people were the trainers. Were they sufficiently motivated to educate trainees?
The Chair asked how these trainers qualify for their job.

Ms Harmaon replied that trainers had to register with education institutions before being accredited.

Ms Borman (DP) expressed her frustration with the slow pace of capacity building. The Committee has time and again revisited this issue yet up until now it had informed on what had actually taken place on the ground.
The Chair suggested that the best way to go about this issue was to bring all stakeholders together and workshop them around the question of capacity building.

Briefing by Local Government, Water and Related Services (LGWSETA)
Mr Alastair Machin the CEO of SETA said that LGWSETA (SETA) was established in terms of the Skills Development Act (SDA) 1998 on 20 March 2002. He pointed out that SETA was one among 25 SETAs that were established by the Minister of Labour on the same date.

Mr Machin noted that the Department of Labour initiated a review of the demarcation of boundaries of SETAs in the previous year to which LWGSETA made some representations. He said the effect of this was to re-define how employers register with the LWGSETA.

The changes would not in any significant way alter the scope of the sector and would have a marginal effect on the LWGSETA's levy income. For the financial year ending March 2002, the SETA had an operational budget of R13.1 million, which represents 10% of the expected total skills levies collected in the sector.

Mr Machin pointed out that LWGSETA had written to the two National and nine Provincial Government departments which are affiliated to it to request that they make financial contributions of 10% of one percent of their payroll towards the SETA's
administrative costs.

Mr Machin lamented that so far no department had made a contribution in the first two years and this despite a Cabinet resolution recommending the same in December 2000. He said that if both these initiatives are successful then the budget for operational expenditure could increase by another R 2 million.

On the levy grants and disbursements, Mr Machin said that the income is contributed by approximately 430 organisations of which only fifteen (about 3%) contribute about 70% of the total (about R91 million). He said that the majority of the Municipalities pay an insignificant amount in levies and that it is questionable whether these funds are sufficient to sustain any real effective learning delivery in those organisations from this source of income.

Mr Machin said that SETA is required to review and approve Workplace Skills Plans (WSPs) submitted by each levy-paying employer as a condition for receiving one of the grants. Mr Machin revealed that until now this has been done as a purely administrative exercise with little qualitative assessment being achieved. However, with the implemetation of a new quality management system later this year, it is expected that the WSPs for the next financial year would be evaluated properly.

Mr Machin said that no employee is presently engaged in a learnership or skills programme (as defined by Chapters 4 and 5 of the SDA) in the local government and water sector. He however, promised that this would change by June/July this year when the first recruits to the first two pilot learnerships would commence learning in the Eastern Cape.

Development work in Five Task Teams is yet to commence which implies that delivery in terms of leanership programmes in all of these sub-sectors will not occur in the period to March 2003. Some skills programmes could be developed and delivered in the Water, Electricity and Engineering sub-sectors in the current year.

The previous year, a Quality Management System (QMS) was developed for internal SETA procedures. He was quick to clarify, however, that more work still needs to be done to link the QMS system to the new management information system.This measure is meant to train management and staff and to align the initial development work with the proposals arising from the recent research on accreditation and assessment systems that are presently being conducted.

Discussion
Mr Magashule (ANC) complained that the Committee had difficulties understanding SETA's terrain as it related to the work being undertaken by SALGA. What were SETA's plans in getting the Department of Labour to assist in propping up its programmes.

Mr Machin replied that the Department of Labour is already involved especially with regard to the demarcation of boundaries of SETAs.

Ms Borman, (DP) again, expressed serious concern that the slow pace at which programmes for capacity building are moving is alarming when one bears in mind the vast ground that remains to be covered. She said that the SETA report refers to ' various committees' that have been established and yet no report comes out of them.

Ms Borman (DP) asked what is happening on the ground. What measure of urgency, for instance, do we have in these programmes if at all. She asked whether the levy should be increased to move things forward.

Mr Machin replied that realistically the levy could be increased by four percent set by Parliament but this he said would not have a significant impact. He explained that the levy itself is one route to go but that the better route is one taken by Holland, for example, where a substantial amount of the education levy goes to vocational training.

Mr Lyle (ANC) said that he was excited when the skills levy system was introduced but that the picture being painted on these programmes was very depressing.

Mr Machin said that it was important to make the critical decision to divert resources to skills development.

Mr Kgarimetsa (ANC) pointed out that service delivery was integral. He said the Committee was interested in what is taking place on the ground or in simplicity what had been achieved so far with the scarce resources available.

Mr Machin reiterated his earlier observation that for the last 12 months no learning had taken place and therefore there had been zero achievement. It is likely that a maximum of about 1000 learners would be taken in next year but that this can only happen if money diverted from the Skills Levy would move faster.

Mr Lyle (ANC) noted that SETA's accounts were audited but there was a mathematical error, which it should look into and rectify.

The Chair stated that there must be some progress to report on. He said that the Committee on Labour should resolve issues around the legal framework although a review of these instruments might be a critical suggestion.

The Chair concurred with members concerns that there was no report-back on money disbursed so far. He said that it might be necessary to consult with the Finance Committee on how to assist in this regard.

Nonetheless, the Chair acknowledged the improvement from last year's presentation in that at least there was a framework within which progress and achievements could be measured.

Briefing by the South Africa Local Government Association (SALGA)
Mr Thabo stated that SALGA has a key role to play, not only as an employer in the South African Local Government Bargaining Council, but also in building capacity in the area of Labour relations among its membership and maintaining open and constructive relationships with organised Labour.

SALGA's Mandate derives from the South African Constitution, the Organised Local Government Act and the White Paper on Local Government. He added that these mandates generally define SALGA as a representative of and resource to Local Government on national, regional and international level.

Due to the nature of SALGA as a political interaction, the cultivation and maintenance of good relationships with its partners and entities are vital to its effectiveness. He noted that these relationships extend over a wide range and scope of entities impacting directly or indirectly on the local government sector in general and SALGA in particular.

Relationships necessary for the survival and growth of SALGA could be defined to exist in three broad categories and that is Government, Non-Governmental and Internal. As the representative and resource of the local government SALGA needs to deliver high level complex services for the implementation internationally comparable systems and strategies.
SALGA strategy responds to the challenges facing organised local government, addresses past weaknesses and drives forward the process of consolidating the transformation of local government.

In outlining the vision and mission of SALGA Mr. Thabo said that SALGA envisioned a developmental and co-operative local government system in South Africa which is democratic and provides a better life for all.
SALGA's aim was to build an integrated, sustainable and an organised local government in provincial, national, regional and international relations. One that supports and strengthens the capacity of municipalities and serves as a nerve centre for knowledge and information management by the provision of professional, value adding products and services.
Turning to SALGA's strategic objectives, Mr. Thabo said that his organisation hoped to increase effectiveness and efficiency to enhance the level and quality of services to its members.

The other target is to ensure the sustainability of Organised Local Government by enhancing its financial, administrative and political position. Other areas are to foster policy strategy and operational integration and cohesion of national and provincial components.

SALGA was looking forward to develop a communication capacity and practice in Organised Labour and Government and to enhance internal and external communications that support these objectives. This is connected to the support and facilitation of capacity building of municipalities to enable and enhance service delivery.

SALGA would entrench and expand the role of the organised local government in human resource management and development in local government. This, he noted, would position the organised local government as a centre of knowledge and information management.

Mr Thabo said that SALGA would position organised local government as a hub for co-ordination and interface with municipalities and to support and facilitate social and economic development by the local government.
The other objective SALGA hoped to achieve is to proactively represent local government through effective inter-governmental relations, advocacy and policy formulation. And also to support and consolidate the transformation of local government through the development of policy and best practices.

The extent to which local government identifies with and supports SALGA would largely be influenced by the quality of support processes and resources that SALGA provides as a service to its members. Resource constraints operating on SALGA further require that any use of resources be done in an optimal manner with the highest quality outcomes available under the prevailing circumstances.

Mr Thabo said that SALGA spent all its funds on personal, rental and travelling and sundry expenses. He said that there was no budget for consultants as yet. SALGA had undertaken a restructuring programme process at a cost of 1.3 million. With so much to be done, a budget of 15 million was far too low to realise any significant impact.

Discussion
Ms Borman(DP) wanted clarification on the increase of the budget bill from a low of R20 million to R120 million. She also queried the huge increases against big savings. She singled out housing allowance and said that she was not sure where the increases were going.

Mr Thabo said that the budget is actually low as no projects were being undertaken. He said most programmes envisioned were costly and would require big money. Yet for the present time SALGA dealt with operational costs only. He added that items like the information technology systems do not cost less than R50 million.

Mr Thabo noted that SALGA would need to spend at least R60 million if it were to make a substantive presentation to Parliament on programmes run so far. At present SALGA dealt only with payments for attendance of meetings.

Ms Borman expressed concern that a huge budget like the one SALGA had was not a subject of audit. The Norwegian sponsored programme for Counsellor training was not reflected anywhere in the budget.

Mr Thabo invited the Committee to dispatch auditors to audit SALGA 's budget since a request made to the Auditor General in September 2000 had not been acted upon.

As for the Norwegian sponsored programme, Mr Thabo explained that it was not the intention of SALGA to incorporate this item in the Committees' report but that if the Committee so desired particulars of this programme could be made available to the Committee.

Ms Borman asked for comment on how electricity restructuring was going and how if at all it had impacted municipalities. Had there been any workshops on this and how successful were they?

Mr Thabo said that SALGA has chaired several workshops on electricity. Issues to be discussed were the principles that underpin electricity supply and the financial implication on municipalities such as how credit control had been used to supply electricity from meter to houses.

Mr Ngubeni (ANC) wondered why SALGA seemed to avoid political issues yet it was supposed to be a politically fired institution. Participatory democracy seemed to be absent in SALGA's briefing.

The Chair concurred with Mr Ngubeni and asked if SALGA had a political representative on its board. It would be strange for an organisation with a R15 million budget not to have a political representative seating on its board.

The Chair then pointed out that the onus, really was on SALGA to explain why it needed the R15 million additional funds. The Chair said that it would be of great interest to the Committee to know how the jump from R30 million to R90 million could be justified.

Ms Borman (DP) referred to SALGA's White Paper and asked if there were areas already adequately provided for by the department.

Mr Thabo replied that the Business Plan unveiled by his organisation clearly delineated what SALGA's mandate is. Apart from the White Paper the Constitution, too, clearly demonstrated this position.
The Chair asked where funding for the programmes would come from and if it would be the responsibility of the Department or SALGA.

Mr Thabo replied that SALGA enterprises had been created to look at ways and means of raising the necessary funds for these programmes.

Ms Borman asked if the provinces were buying into SALGA's business plans.

Mr Thabo replied that provinces had in fact been very supportive of SALGA's restructuring exercise. This support had been informed by a number of workshop resolutions. The biggest handicap had been that many stakeholders were not informed on SALGA's mandate. He said that this explained the huge bill for administrative costs.

The Chair noted members requests that all stakeholders in the Local Government sector be workshopped to resolve the apparent disharmony in service delivery. The Chair accepted this request and promised to work on a suitable date and that members would be informed on developments in this regard in due course.

Meeting was adjourned.

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