Risks Facing Local Government and the Importance of Accountability: Municipal IQ briefing

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Cooperative Governance and Traditional Affairs

19 October 2017
Chairperson: Mr R Mdakane (ANC)
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Meeting Summary

Protests are fine, but they frustrate economists.

This came out during the discussion when the Municipal IQ briefed the Committee on Cooperative Governance and Traditional Affairs on the risks facing local government and the importance of accountability.

The Committee stated it wants people to protest. But the violent nature of protests is worrying because it involves destruction of property and the killing of councillors. The Committee said it wants peaceful and responsible protests.

On the other hand, the Municipal IQ, an independent organisation that specialises in the collection and analysis of local government data, stated the protests are accelerating and violent. Political killings are profoundly destabilising. Since 2011, 43 councillors have been killed, 24 injured, and 28 properties destroyed. The average municipal manager served only 3.3 years of a 5-year term contract. New councillors are distracted by factionalism and, possibly, the national ANC leadership race from important tasks of induction and overseeing new boundaries, especially where there is resistance e.g. Vuwani, Mbombela, Ventersdorpetc.

The Municipal IQ reported the local government is under severe pressure. The fragile coalitions are posing a serious political risk. Personality issues are a source of contention as has happened in the Nelson Mandela Bay. It stated the coalition barometer it has conducted shows there are no coalitions that have yet collapsed in the metros. There are only tensions. The KZN is leading in tensions, followed by Gauteng and Western Cape. There are coalitions that have collapsed in the Western Cape, KZN, Free State, and Gauteng.

Ongoing dysfunctionality like acting municipal managers and CFOs, poor cash flow management, reliance on conditional grants, and underspending of municipal infrastructure grants are cited as other contributors to economic risk.

The Municipal IQ maintained the country urgently needs a national policy response to protests to promote feedback and cooperative governance response. Communities are expressing a need to be meaningfully heard. Usually, protests follow a trajectory of sustained frustration often starting in peaceful representations. That is why it said it is encouraging the restoration of the “Golden Triangle” which involves three key players: community, municipality, and South African Police Service (SAPS).

It stated there is a need to shift incentives to performance by enforcing B2B, scrutinising spending outcomes, and putting importance on meritocracy and professionalism. Inter-governmental efforts have to seek solutions to rising electricity costs and Eskom tariffs, political violence, and promote a culture of service.

Members commented that sometimes it is the MECs that play a role in the collapse of the coalitions; wanted to know if coalitions in the Eastern Cape and KZN are stable or in a state of collapse; wanted to find out if the Western Cape coalitions are working seeing that it has got more coalitions than many provinces and what the three main reasons are for the killing of councillors; asked why there are few protests in the Western Cape; and wanted to establish how much of the protests that are seen are masking other protests or political activity.

Meeting report

 

Briefing by Municipal IQ
Mr Kevin Allan, Managing Director: Municipal IQ, stated the local government is under severe pressure. There are political risks on the stability of the coalitions, factional pressures, and political assassinations. Economic risks are around the looming recession and electricity tariffs. Social pressures are in the form of protests and poverty, and all these underpin the importance of accountability and oversight.
 
The fragile coalitions are posing a serious political risk. Personality issues are a source of contention as has happened in Nelson Mandela Bay Municipality. KZN is leading in tensions, followed by Gauteng and Western Cape. There are coalitions that have collapsed in the Western Cape, KZN, Free State, and Gauteng. He stated that the kingmakers had a significant leverage to re-demarcate provincial boundaries and referred to the AIC to illustrate this point.
 
Ms Karen Heese, Economist, Municipal IQ, indicated that recessionary pressures, rising consumer debt and creditors, backlog risk from downgrade, increase in cost of capital for infrastructure, electricity tariffs, reduced margins, and opportunity for cross-subsidy and investment in infrastructure  are contributing to economic risks. Poverty and inequality are putting pressure on Free Basic Services (FBS). Ongoing dysfunctionality like acting municipal managers and CFOs, poor cash flow management, reliance on conditional grants, and underspending of municipal infrastructure grants were cited as other contributors to economic risk.
 
The country urgently needs a national policy response to protests to promote feedback and cooperative governance response. Communities are expressing a need to be meaningfully heard. Usually, protests follow a trajectory of sustained frustration often starting in peaceful representations. That is why the Municipal IQ is encouraging the restoration of the “Golden Triangle” which involves three key players:
 
-   Community – where there is going to be a community organiser
-   Municipality – to facilitate the protests
-   South African Police Service (SAPS) – to police the protests
 
In conclusion, Ms Heese stated it is time for accountability. There is a need to shift incentives to performance by enforcing B2B, scrutinising spending outcomes, and put importance on meritocracy and professionalism. Inter-governmental efforts have to seek solutions to rising electricity costs and Eskom tariffs, political violence, and promote a culture of service, not bling.
 
Discussion
 
Mr K Mileham (DA) commented that it is sometimes the MECs that collapse the coalitions. For instance, in one of the municipalities in KZN a council was formed, but there was no coalition. In that case, he said, you need to point a finger at the MEC who did not play a role in the council. He had seen coalitions where the MEC would block or interfere in the appointment of municipal managers.
 
Mr Allan agreed with the Mr Mileham on the issue of the MECs involved in the collapse of coalitions. The local government arena is changing because people no longer see the dominance of certain political parties. Municipal IQ, including the media, have made projections on the proportional representations in municipalities and it is clear in Gauteng there are many things happening on the ground. For example, no one knows what is happening in Mogale City or what is going to happen. So, a level of maturity is needed on all political parties. The ordinary man on the street is not responsible for the immaturity of a political party.

Mr E Mthethwa (ANC) wanted to know if coalitions in the Eastern Cape and KZN are stable or in a state of collapse.
 
Mr Allan stated there is only instability at the Nelson Mandela Bay Municipality in the Eastern Cape, while in the KZN area most coalitions are stable.
 
The Chairperson remarked there are many coalitions in the Western Cape - more than any other province. He asked if in terms of percentages they are working well and what the three main reasons are for the killing of councillors.

Mr Allan said he would send the Committee a detailed report. He did not think assassinations would stop unless people responsible for the killings are brought to book. The country needs to see a situation where people are charged for killings and imprisoned.
 
Ms Heese added there is no information on whether unstable coalitions are giving birth to assassinations.  The coalition barometer is talking of difficulties in quantifying things. It is trying to reflect on the proportion of tensions in coalitions though they are reasonably stable. Coalitions are peculiar and individual. Personalities play a huge role in coalitions.

Mr Mthethwa asked the presenters to give the Committee information on the status of service delivery in municipalities before the coalitions, during coalitions, and after the coalitions. He stated they are interested to know of a comparative study.
 
Mr Allan replied that the Committee is fortunate because it is speaking with people who had large volumes of data. He added they would send the Committee their analysis of the coalitions and their financial impacts.
 
Ms J Maluleke (ANC) asked why there are few protests in the Western Cape. She said there are two centres of power that exist in the Western Cape – the one between the province and national government and the other between the province and municipalities.
 
Ms Heese indicated factionalism has been raised as anecdotal. It is erratic this year, and political instability could feed into it. It had nothing to do with ideology, but was all about individuals and personalities. It is destabilising. She said they did not have data on service delivery. The focus was on the coalition barometer. She noted that capital expenditure had dropped in Johannesburg and Tshwane since the DA took over, but it has increased in the Nelson Mandela Bay Municipality. It is highly likely there is going to be a high level of low capital expenditure in the metros, but the Nelson Mandela Bay Municipality had proved things otherwise.
 
Mr Mileham wanted to find out how much of the protests that are seen are masking other protests or political activity. For example, the DA-led Midvaal Municipality has seen protests for houses and other things that were promised by the ANC Gauteng before the municipal elections.
 
Ms Heese replied that nothing frustrates economists like service delivery protests. Some of these protests are genuine. But in most of them there has been an underlying reason. That is why the Municipal IQ is encouraging responsive service delivery protests to promote feedback to communities.
 
Mr Allan added that when you look at the protests for a very long time, it is worrying not to see a response from the municipality. He indicated that they would like the Committee to start lobbying around responsive service delivery protests because it is in a good position to do that. That is why Municipal IQ is promoting the restoration of the “Golden Triangle”. This triangle involves three key players:
 
-   Community – where there is going to be a community organiser
-   Municipality – to facilitate the protests
-   South African Police Service (SAPS) – to police the protests
 
The Chairperson stated what is worrying is the violent nature of the protests – the killing of councillors, destruction of property, etc. Protests are fine but the Committee wants to see people protesting in a responsible and peaceful manner. He asked the Municipal IQ to assist the Committee by telling it things it does not want to hear. That is the role of the researchers.
 
The meeting was adjourned.
 

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