The Committee convened to hear a presentation from the South Africa Local Government Association (SALGA) on its annual performance plan, and was told that the Association was starting to engage with people in terms of accomplishing their set goals and objectives. There had been a holistic appraisal of the efforts to streamline the activities of SALGA and the relevant officers in local government administration, such as Speakers and councillors. The Association was trying to restore the necessary pride and dignity to government.
Members were concerned about the drastic reduction in the funding from the national fiscus, but queried the Association’s plea for more income and funding. There was a proposed expenditure budget, but there was no way of knowing how the expenditure was being justified. The issue of financial sustainability of municipalities had not been discussed sufficiently. There were municipalities which were struggling to finance their own operations, and yet those municipalities were expected to make an increased contribution to SALGA. They themselves might not be able to cope financially.
Members sought clarification on challenges facing the Association. They advised that SALGA must continue to interact with government departments, especially those in charge of water and sanitation. The presence of the Minister was crucial, so that he could explain the political rationale behind the cut in funding, and how funding was going to take place in future. There were a lot of competing interests, and funding was crucial to the existence of SALGA.
Members also expressed shock on the issue of unqualified personnel. In their response, SALGA noted that about 70% of municipal officials were unqualified. They pointed out that while there were qualified people in the municipalities, these people were not necessarily competent. The Association had to make sure that new regulations did not make life difficult, and would still enable them to attract experienced people to make the municipalities function efficiently.
Local government was owed money by provincial governments, central government and others, to the tune of R96 billion. SALGA owed Eskom R4 billion. If the government funded SALGA, it would not have to owe any organisation money. The Association needed to be creative to be able to get more funding and to deal with the issues at stake.
Chairperson's opening remarks
The Chairperson called the meeting to order at 9:30 am. He welcomed the Committee Members and highlighted the purpose of the day’s meeting.
SALGA on its Annual Performance Plan.
Mr Thabo Manyoni, Chairperson: South Africa Local Government Association (SALGA), said that their mission in Parliament was to present their annual performance plan (APP), with the purpose of making SALGA more focused and result oriented. This was patterned on the Back to Basics (B2B) principle. The Association was starting to engage with people in terms of accomplishing their set goals and objectives. He gave a holistic appraisal of the efforts to streamline the activities of SALGA and the relevant officers in the local government administration, such as Speakers and councillors. The Association was trying to restore the necessary pride and dignity to government. He also used the opportunity to invite Committee Members to SALGA’s Members’ Assembly, which would be held towards the end of March, 2015.
Mr Xolile George, Chief Executive Officer: SALGA, presented the annual performance plan) of SALGA for 2015/16. He said that the presentation would take place in the context of a major policy drive that had begun last year. This was evident in the mandate of the Association, which included lobbying, advocating and representing employer bodies, capacity building, support and advice, strategic profiling, and knowledge and information sharing. The core mission of the Association was to transform local government to enable it to fulfil its developmental mandate. SALGA was the voice of local government.
Mr George identified the challenges facing the Association that required urgent redress. (See Document).
These were insufficient institutional capacity, a low rate of revenue collection, unskilled or incorrect personnel, slow service delivery, inadequate public participation, ward councilors and committees, and the social distance of officials. They would no doubt affect the working of the National Development Plan if not seriously addressed. He stressed the fact that the local governments were in an election mood and the state of readiness of SALGA would be tested in the wake of the aftermath of the election, especially in the induction programme period.
The SALGA APP for 2015/16 was premised on seven strategic goals and four apex priorities. The priorities were to:
- Review the legislative and policy framework impacting negatively on local government;
- Review local government’s fiscal and financial management framework;
- Improve municipal capacity;
- Reposition SALGA as a center for local government excellence, knowledge and intelligence.
The 36 planned outcomes would be jointly achieved by the SALGA at the national and provincial levels through continuous efforts to streamline the plan towards greater performance and reporting efficiencies. The SALGA strategic plan, which had started in 2012, would run through to 2017. The Association had identified some municipalities for re-demarcation.
Mr George said the B2B Approach would ensure the creation of an enabling environment for local governments, and would further enhance service delivery. The legislative environment remained highly problematic and was often characterised by over-regulation, under-regulation or policies and legislation that was misguided. It was particularly problematic where it related to powers and functions, reporting, finance and fiscal management.
SALGA was being repositioned as a centre for local government excellence, knowledge and intelligence. To achieve this, there was the need to tackle problem areas before they had escalated to the point that communities took action into their own hands and resorted to protests and violence. Information and knowledge were fundamental ingredients in the proactive redress of challenges. Accurate and accessible data management was key to informed planning processes, and enabled prioritisation of processes and concomitant financial outlays. This underlay the B2B approach.
On the deliverables for strategic goals in 2015/16, Mr George identified the link to the B2B approach, which was essentially delivering basic services to the people. He assured the Committee that the long term sustainability and relevance of SALGA was assured, based on the projected outcomes of the strategic goals. Apart from this, the image and credibility of local government would be strengthened. In furtherance of their effective service delivery, SALGA was globally acknowledged as a leading local government association.
SALGA’s nine flagship projects for 2015/16 were:
- Development of the model for decentralisation for local government;
- Research into the state of by-laws in municipalities in order to determine how they facilitated developmental local government or not;
- Implementation of the Municipal Audit Support Programme;
- Cost of free basic services study;
- Service authority role for infrastructure services;
- Response referral results;
- Implementation of the SALGA Centre for Leadership Academy;
- Implementation of the small town regeneration;
- Municipal barometer rollout.
SALGA was also actively involved in the sustenance of B2B. This it did through putting people first and engaging with communities, delivering basic services, good governance, sound financial management and building capabilities.
Mr George agreed that SALGA could only support and advice municipalities for the next five years under the B2B Approach. This could be achieved if some key ingredients were vigorously pursued. This would necessitate SALGA providing basic services in the form of decent living conditions, ensuring good governance and public participation, achieving institutional capacity and maintaining financial management.
He presented the budget for the year 2015/16 (see document), which was in conformity with the Public Finance Management Act (PFMA). The proposed budget was R456.7 million, against expenditure of R455.5 million, leaving a surplus of R1.2 million. However, he decried the significant drop in revenue from government funding, from R29million to R9million, which meant that membership levies would have to be increased drastically.
Mr K Mileham (DA) said he wondered why the Association was pleading for more revenue, income or funding. There was a proposed expenditure budget, but there was no way of knowing how that was being justified. He wanted an explanation as to what the Association intended to spend the money on.
He reiterated the fact that the Minister had spoken on unqualified personnel before, and the need to do away with unqualified people. Back then, the Minister had promised to make positions available for qualified people. He wanted to know the strong action being taken against those who were involved in financial mismanagement. What was the Association doing in terms of stronger accountability?
He said he was a little bit worried that the Association’s flagship projects in the municipalities had a specific focus on good news stories. Though he did not raise any objection to this in principle, he wondered why the only news reported was good news. He insisted on identifying what the challenges were that faced the municipalities, and which needed to be fixed. The good and the bad news must be reported, to ensure a holistic appraisal of what happens. He commended the Association for clearly identifying the role of the Speaker in the presentation. However, he noted that there were municipalities with biased Speakers who did not follow the rules or order. Thus he advised that the role of the Speaker should be unpacked in detail.
On the increase in the conditions of service, Mr Mileham sought an explanation about the hours of work allowed by the Association. To ensure the capacity building initiative, there had to be the need to educate the people. He wanted to know if the people were given the right skills and the resources they needed to do the job. He emphasised best practice knowledge sharing. Formal education took people out of the work environment for a long time. The resources the people needed to do their jobs were toolkits, not formal education. The emphasis was on skills and resources.
Ms N Mthembu (ANC) said she was interested in the capacity building initiatives as well as the challenges that needed to be worked out. She was more concerned if the initiatives had been implemented by all municipalities. She also thanked the Association for the presentation, as it showed that the department was a working department. She appreciated the SALGA’s strategies and mechanisms for closing the inherited structural gaps which existed in society today.
Mr N Masondo (ANC) sought clarification on the challenges facing the Association. He advised that the Association should strive to capture the challenges in a way that included the Back to Basic plan. The Association must continue to interact with government departments, especially those in charge of water and sanitation. He also welcomed the idea of the mining economy and, in particular, mining towns. Those towns should be given the same publicity and treated the same way as other towns and cities. He also commended the Association for a good presentation and the work so far done at the municipal level.
He enjoined the Association to work more closely together to ensure an effective oversight function so that they could achieve a better result. He decried the level of performance of the municipal managers. He said that they were performing below expectations and if there was a way they could be spurred to provide leadership, it would be a great achievement. Overall, leadership was what was needed. On the question of revenue, he wanted to know the percentage of revenue raised from the municipalities.
Mr M Mapulane (ANC) expressed surprise at SALGA’s decision not to elaborate on the expenditure profile in the presentation. One of the issues that the Committee had not received sufficient explanation on was the reduction in the allocation from the national fiscus to SALGA, and he wanted to know the reason for the reduction in the funding. He agreed that SALGA was not just an association of the members of the municipalities, but it was also a creation of legislation. When legislation established an association, there was a concomitant expectation that that institution should be funded by the state.
He claimed that the problem of financial sustainability of municipality had not been discussed sufficiently. There were municipalities which were struggling to finance their operations, and yet they were expected to make a contribution to SALGA. They may not be able to cope financially themselves. This reduction would mean that there would be an additional burden on the municipalities to increase their allocation to SALGA.
Among SALGA’s apex priorities was the local government review of the financial and fiscal framework of municipalities. Would the allocation from the fiscus be able to finance the framework of municipalities, given the fact that there were serious issues at that level of government? What were the specific proposals coming from the local governments about their funding? The Association should highlight the proposals they hoped to implement. Most of the burden of provision of services has been placed on local government.
He referred to the issue of a review of legislation, and informed SALGA, as part of the apex priorities, there was an intention by the Department to introduce the Local Government Laws Amendment Bill to Parliament. He thus urged SALGA to provide specific identification of pieces of legislation that impacted on local government.
Mr Mapulane expressed delight on progress with the outcomes of the different apex programmes, particularly the 82% achievement on the clean audit of local government. This was a significant deviation from the perception in the country about how local government functioned. There was indeed steady progress.
Mr B Bhanga (DA) raised the importance of a meeting with the Minister to ask him some salient questions. This included the situation of the Municipalities. He was bothered about the monitoring and implementation of forensic audits. He wanted a situation where people would look at the recommendations, and say it was a realistic situation. On the nine priorities as presented, he wanted to know what programmes had been put in place, and what had been done about them.
With regard to funding, he said that the Minister’s presence was important so he could explain how funding would take place. This was because there were lots of competing interests, and it was crucial to the existence of SALGA. An explanation for the cut in funding from the fiscus was necessary -- the Minister should explain the political rationale behind this cut in funding.
Mr George responded to the questions and issues raised. He said the Association had a collaborative programme with the Minister in terms of pushing for some infrastructure projects. There was a major effort on the part of COGTA to actually push hard for a report on a variety of issues.
On flagship programmes, he noted that good work was happening in the municipalities. Tremendous efforts had been made with the provision of water to improve on service delivery. Most of the municipalities were doing very well. On the issue of new councils and the role of key role players, he gave an assurance that those players performed their responsibilities in a neutral and balanced way.
SALGA would be guided by the Minister of Finance on the collective bargaining efforts in the Association’s three year programme,. The Association emphasised knowledge sharing and physical training, as well as improving leadership, in the capacity building initiative. To reinforce this point, he indicated that SALGA had run a leadership training programme at the local government level in 2013 and 2014. The area of staff training was meant to be done at the municipal level. He agreed that the municipalities had major problems, but efforts were being made to address such problems. Collective labour issues were currently under review to ensure that they were handled harmoniously.
Mr Simphiwe Dzengwa, Executive Director: SALGA, briefed the Members on issues surrounding financial administration at SALGA. He said that local governments did not have sufficient instruments to generate all their funds. There was an investigation going on to ascertain the mismanagement of any money from the revenue collected. The current revenue formula was still being implemented over the NTF plan. However, there were challenges with the implementation.
Mr Manyoni, as SALGA Chairperson, also contributed to the briefing. He informed Committee Members that the Minister of COGTA was having meetings with key role players to strategise on the effective administration of local governments. He indicated that this same approach applied to mining companies which had challenges.
He said that the issue of over-registration was an important issue. For instance, 70% of municipal officials were unqualified, but people who were qualified could be incompetent. He explained the difference between the issue of qualification and the question of competence. To be competent, one needed to attend a course -- probably a three-month course. It was only then that such person could claim to be competent. There were qualified people in the municipalities but these people were not necessarily competent. The Association had to make sure that the regulations put in place did not make life difficult for people. This would enable them attract experienced people who could make the municipalities function.
If SALGA was going to get people to run municipalities, those people must be ready and willing to go there. He cited the example of Soweto, that had been greatly transformed from a black community to an open society.
On the issue of funding for SALGA, he urged Members to exercise extreme caution on how the matter was handled. He foresaw a future where SALGA would not be able to come before the Committee. This was because coming before the Committee implied a lot of things, one of them being to account for money that the government had paid. The South African constitution was founded on interdependency. If the central government did not fund the Association, where else would the Association get money? The main issue for the Committee was to look seriously into the issue of internally generated revenue (IGR) for SALGA, so that it was not undermined.
Mr Manyoni informed the Members that local government had been owed by provincial governments, central government and others, to the tune of R96 billion. SALGA owed Eskom R4 billion. If government funded SALGA, it would not have to owe any organisation money. To be able to get more funding, the Association needed to be creative to deal with issues at stake.
The issue of Nelson Mandela municipality was also brought up. Mr Manyomi said that what needed to be done was to look into the root causes of the problem, instead of asking what was being done about the problem. The Association’s stance was that whichever party was ruling that in that community, the municipality had to provide the basic needs and services. There must be an oversight function to ensure that those municipalities provided such services for the people.
Electioneering should not happen at the expense of service delivery, no matter what the difficulty or politics were. He appealed to the Committee to really assist the local governments in the efforts to amend laws. SALGA had compiled a list of legislation and laws that needed to be amended for local government. The function would be to build a research capacity for government. The Association was trying to improve the situation at the municipal level. He appealed to Members to cooperate with the Association in building local government that everyone could be proud of.
Mr Mileham remarked on the R96 billion owed to the municipalities by various departments. He gave his experience as a councilor, where his municipality had faced the same experience. He advised the Association to identify key clients of the Association and direct their recovery drive to the relevant district offices -- health or education, for instance. From his experience, those who owed his municipality had paid those bills. He reiterated Mr Manyoni’s suggestion that one needed to be creative in the ways revenue collection and debt management was applied.
On the issue of unqualified personnel, Mr Mileham said that there were Treasury regulations, and there was the propensity to over-regulate. He said that there were people in senior management positions who were blatantly incompetent -- that was why they were unable to submit their financial reports in time and unable to do other similar tasks. The Minister had acknowledged that there were 648 people who were not qualified. He reminded his colleagues that as Parliament, they had a responsibility to uphold the law. Members must stand firm on this issue and unqualified people should be chased out. That would go a long way in addressing the issues with the municipalities.
Mr Mapulane reminded SALGA about the proposed changes to a number of laws affecting the municipalities. He wanted to know when SALGA would share with Committee Members the details of their report.
The Chairperson spoke of the need to amend the legislation. He emphasised that even as the Committee conducted its oversight functions, there was a need not to employ unqualified people. However, a lot of people were highly qualified, but incompetent. There must be a policy that allowed only qualified and competent people in the local community to be employed, otherwise the recommendations would not be implemented. There were people who were highly qualified but did not want to work in some places.
Mr Manyoni said the issue of legislation was quite important. 80% of funding was from the membership. There was a constitutional and legislative mandate for SALGA to carry on with their task, so funding was crucial to its existence.
The Chairperson commented that there was a dilemma on the issue of unqualified personnel, and the efforts of the Committee should be geared towards ways to resolve it.
The meeting was adjourned