In a virtual meeting, the Department of Local Government presented its budget vote. The Department emphasised the COVID-19 pandemic is not over. There has also been a continuation of budget cuts in the last couple of years. The Vote 14 budget was adjusted earlier this year, to R346.445 million. With the Second Adjustment, there was a further budget cut of R49 185 million which brought the total to R297 260 million. The Department is also apprehensive that its ability to assist and support municipalities is going to be affected
Members questioned the funding of hotspots, administrative support in Kannaland, compensation of employees and the delay in filling posts.
The Department was applauded for transfer for the vegetable gardens to the Department of Agriculture and the experimental initiative for the roll out of bicycles.
The budget vote was adopted with the ANC registering its minority view to not support the budget.
Western Cape Department of Local Government (WCDLG) Vote 14: Second Amendment Appropriation Bill 2020/ 21
MEC’s introductory remarks
Mr Anton Bredell, MEC: Local Government, Environmental Affairs and Development Planning, began the meeting by saying that the COVID-19 pandemic is not over. There are some problems in the Garden Route as well as in the Khayelitsha area. Looking at the province as a whole, there needs to be consensus amongst Committee Members on combating the virus; motivating people to wear their masks, and to sanitize properly. He said that the pandemic has had a big influence on the economy as it is currently on an all-time low growth, which will inevitably impact the municipal income streams in the long run. In most of the Western Cape municipalities, the tourism and hospitality related industries are the economy drivers and government foresees that next year, it will have to come up with a plan to help those municipalities.
There has also been a continuation of budget cuts in the last couple of years, which has disadvantaged the proper development and increase on service delivery. Due to poor service delivery, the Department must invest in bulk infrastructure; and if the infrastructure is not there it becomes difficult to provide said services. He went on to say that the Vote 14 was adjusted earlier this year, to R346 445 million. With the second adjustment, there was a further budget cut of R49 185 million which brought the total to R297 260 million. The Head of Department (HOD) would give further clarity on the numbers during this meeting, along with his team. The Minister closed off his introduction by sharing his condolences with those who have lost their loved ones. He asked for the community to work together during this festive season, especially in light of the Black Friday weekend and COVID-19 numbers still rising.
On behalf of the Committee, the Chairperson congratulated the Head of Department (HOD) for his award as one of the best HODs in South Africa and commended the staff that works behind him—management and other employees of the Department— as well. The HOD has received two such awards.
Input by the Department
Mr Graham Paulse, HOD: Western Cape Department of Local Government (WCDLG), briefly addressed the budget cuts by highlighting the fact that the Department is small. Based on the budget cuts of R49.1 million, for both compensation of employees and non-compensation of employees, the indicative figures over the next three years show that there will be more budget cuts. The Department is also apprehensive that its ability to assist and support municipalities is going to be affected. The Department has done a summation of the blue book [Estimates of Provincial Revenue and Expenditure], which the Department would take the Committee through, explaining all budget cuts and amendments.
Ms Bhavna Sewlall-Singh, Chief Financial Officer (CFO), WCDLG, presented the Vote 14: Second Adjustment Estimates 2020/ 21. The Department started with a baseline of R346 445 million after the first adjustment. The shift of funds between votes includes:
-R5 million that was allocated to the Department of Health (DoH) for the Hotspot Strategy: for the initial sourcing of Personal Protective Equipment through bulk contracting and community-based manufacturing.
-R10 250 000 that went towards the Department of Agriculture (DoA) in order to provide training to youth within communities in order to support and revitalise community food gardens for sustenance and small scale trade.
-A further R1.5 million was allocated to the Department of Transport and Public Works (DTPW) for the Hotspot Strategy and bicycles experiment.
Programme 1: Administration
The Compensation of Employees (CoE) was R4.5 million—this includes vacancies that were delayed or that were decided to not be continued, and the Cost of Living Adjustment (CLA) which was to be removed from the baseline completely. As a result, the CoE looks inflated in the projections.
R2 million for the Joint District and Metro Approach (JDMA) was also surrendered to the PRF and the Department has asked for it to be deferred into the new financial year so that it can continue to make appointments. These appointments were not concluded because the Organisational Design (OD) process has not yet been completed.
Programme 2: Local Governance
The CoE in this programme amounts to R6.7 million. R 1.7 million relates to capacity— which is earmarked for the Forensic Investigation Unit (FIU) — and which was also requested to be deferred to the next financial year for additional capacity to be made available for that Unit in the new year.
Programme 3: Development and Planning
R17.3 million, which includes the CoE of R5.7 million. The reallocation of R1.7 million is to be deferred into the new financial year and it is related to the replacement of the audio-visual infrastructure of the Disaster Management Centre (DMC). The bid closed at a lesser amount than the Department had anticipated and budgeted for. Subsequently, as this amount was also earmarked, and the Department had to ask for it to be deferred over the MTEF period for the maintenance contract on the video wall Lastly, the amount of R10.250 000 for the Hotspot Strategy was surrendered to the PRF for the Department of Human Settlements.
Members were taken through the detailed figures related to economic classification
Ms M Maseko (DA) thanked the Department for the presentation and acknowledged its role of taking great care of the community, since the beginning of the COVID-19 pandemic. Her question was on the money for the hotspots, for example, Human Settlements, being deferred with the possibility of there being a second wave. She wanted to know how much still remains, after the budget cuts, and if it will be enough to sustain communities again. She gave an example from her constituency, where the end of December marks the season for pears and plums, and then January and February are the seasons for apples. There is then an influx from the Theewaterskloof Municipality. If there is not enough money to make sure that the hotspots are taken care of, this may be a disadvantage and impact communities in need. Her concern was whether there would still be enough funds left even after money has been allocated to other departments, and after some funds have been deferred.
Mr A van der Westhuizen (DA) started off by thanking the Department and congratulating it because, even though there were so many budget cuts there were still some wonderful initiatives that had been taken. As the Chairperson of the Standing Committee for the Department of Agriculture, he was satisfied with the transfer for the vegetable gardens to the Department of Agriculture. He also found the experimental initiative for the roll out of bicycles to be interesting, and expressed the hope that the Department has made locks to keep all those bikes safe for the DTPW. He noted that there were quite a few references made in the presentation on the administrative support in Kannaland, taking into account that there has been a political landscape change recently. Accordingly, he wanted to know the administrator’s position for those costs going forward, or whether there would be an early termination of that arrangement. Lastly, he asked the Committee to observe the trend that many of the poorer municipalities are given support for capital expenditure yet maintenance is an elected item, and he hopes that there will be a solution for some of those areas in the future.
Mr P Marran (ANC) made a statement in passing on what Mr van der Westhuizen had said - he hoped that Mr van der Westhuizen was not suggesting that the MEC should target Kannland based on the new coalition. He said that it should be expected that at this level, budget cuts exist for the CoE due to national decisions. There is a court case on 2 December which was also mentioned by the HOD, where workers have taken government to court because of the agreement in place about increases to salaries. Should the court rule in favour of the workers, the Department would definitely have to find a way to get a hold of those funds. The section on the CoE being surrendered to the PRF, which also includes posts that have not been filled, was his next point. He wanted to know the reasons there was a delay in that regard without the Department using COVID-19 as the reason or excuse. He went on to say that this is the first time since he became a Member of the Provincial Parliament that there is such an instruction by National Treasury, that there should be cuts as a result of the pandemic. He wanted to know the reason for those funds being surrendered to the PRF and why there was a delay.
The HOD answered the question from Mr Marran first, pointing out the significant amount of R16 million, upon the request of Treasury, had been deferred in relation to the COLA. The only other sections that had delays were the OD for the appointment of the JDMA for R2 million. This is earmarked funding which the Department had negotiated with Treasury requesting R2 million to increase capacity in dealing with the district modelling of provinces. This had been rolled out to provinces accordingly and the Department had gone through a lengthy process of writing up the job descriptions, understanding what each department post entails, etc. Thereafter, there will be a job evaluation process before the post can be advertised. Given the long consultation with the Department of the Premier, the Department decided it will be prudent to surrender that money and allocate it in the new financial year instead.
The second delay was the FIU, which is also earmarked funding that Provincial Treasury has given the Department. There have at least been two recruitment and selection processes. There was another one held last week where they went through a process of interviews, to see to what extent they could get the skill and the competency to deal with the forensic investigations into municipalities. Moreover, given that some of the posts are not permanent, there has been a struggle to attract people to a year-long contract. Should the Department be successful in this process, it could comment on it from 1 April.
In response to the Kannaland matter, the Provincial Treasury has asked National Treasury to develop a plan in terms of its finances and a financial recovery plan. The Department has worked with the municipality and with the Provincial Treasury, and the documentation is currently being drafted. Given the developments and discussions they have had, the HOD says there is a view that the intervention into Kannaland will continue until the documentation is submitted to Cabinet, to extend the appointment of the administrator at the municipality. This extension could be for a further six months.
On the maintenance of the poorer municipalities, he said that in the first place, municipalities make cuts when they do not have ballot budgets. There is a prescribed threshold for this but the budgets are not balancing, so the Department itself as well as Treasury are putting a lot of funds into Kannaland. They are not only putting the funds in for governance but also for other initiatives in the Karoo area, especially around the summer season. They are contributing roughly R10 million to Kannaland which is subject to further discussion between the Department and Provincial Treasury. The Department has also allocated money for the food gardens to help with the sustenance and for people to have jobs, even if it is just for six months. The bicycles were fundamentally used to assist in the process of delivering medicines from clinics and hospitals, to people’s homes. This was to avoid the influx in clinics and day hospitals where citizens collect their medication, and to enhance social distancing.
The HOD said the Department would call upon the Provincial Treasury for additional funding particularly in the case of disasters, and he believes the Department had made adequate representation in their engagement with the Treasury should there be further disasters. Since the Western Cape is disaster-prone, there is a certain amount set aside for that possibility and the COVID-19 funding is being extended on a month to month basis, which makes the Department comfortable that it could allocate additional funding. To help with the health crisis and the transmission of Covid-19, R5 million was allocated to the Department of Health in order to help procure masks, and distribute them in hotspot areas and where people could not afford to buy them.
Follow-up questions and responses
Mr Marran had a follow up question on the Municipality of Kannaland considering the potential extension of the appointment of the Administrator for another six months. Based on a previous discussion that the Members had for an oversight visit, it was concluded that should there be an extension, then Section 139 has to be in effect. He wanted clarity on whether that could be agreed on. Secondly, he needed an elaboration on the response from the HOD on the COE matter. Although he understands that it was a decision made by the Treasury to have those funds surrendered, and the HOD said there was a delay in finalising the posts, he thought all those things would already be in place regardless. Therefore, he wondered if the Department just decided to surrender the process because it would take too much time to complete and finalise.
The HOD responded by reiterating that there is paperwork currently being drafted which would need to be approved by Cabinet, after which Cabinet will decide on whether to extend the appointment at the Kannaland Municipality or not. On the delays of job descriptions, many departments do not have their own human resources section/ department. These departments rely on the Department of the Premier and the CSC, who correlatively, service more than one department. This Department also has to “stand in line” in awaiting a response. All the prerequisites have been considered and the consultation has been extensive between the Department and Treasury so the Department is waiting for a response in due course.
The Chairperson thanked the Department on behalf of the Committee, and wished them luck as the year to come will also be tough.
The MEC also thanked the Department as well as the Standing Committee, for their continued hard work. The officials, the MEC, HOD, and other people who were part of the meeting were excused, leaving the Standing Committee to deliberation on the Vote.
Consideration of the budget vote
Ms Maseko supported the vote as presented.
Mr van der Westhuizen seconded the support.
Mr D Smith (ANC) requested for the ANC minority view to be recorded as not supporting the vote.
The budget vote, and the Committee report thereon, was adopted.
The Chairperson asked the Committee if there were any resolutions that Members wished to propose, but there were none raised by the Committee.
As such, the Chairperson thanked everyone who had attended, as well as the technical staff who conducted the meeting for the Standing Committee.
The meeting was adjourned,
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