SALGA 2021/22 Annual Performance Plan

Meeting report

The Chairperson convened the virtual meeting and welcomed Members and the delegation from the South African Local Government Association (SALGA), whose executive management included Cllr Thembi Nkadimeng, President; Cllr Sebenzile Ngangelizwe, Deputy President; Mr Xolile George, Chief Executive Officer; Mr Lance Joel, Chief of Operations; Mr Mthobeli Kolisa, Chief Officer: Infrastructure Delivery; Mr Kutlwano Chaba, Chief Digital Officer; Ms Pindiwe Gida, Portfolio Head: Human Capital and Corporate Services; and Mr Rio Nolutshungu, Chief Officer: Municipal Capabilities & Governance.

The purpose of this virtual meeting was for the Committee to be briefed by the SALGA on its annual performance plan (APP) for the 2021/22financial year.

Chairperson's opening remarks

The Chairperson apologised for the meeting, which was scheduled to start at 19h00, being postponed to 19h30. This was done to ensure that a quorum could be reached during the meeting, which was a continuation of a series of engagements the Committee had undertaken regarding the reporting of the APPs of governmental departments and entities for the 2021/22 financial year. Among the issues that had been picked up by the Committee was that the APPs highlighted critical gaps that continued to impede SALGA’s efforts to maximise the impact of its support to municipalities.

One example of these critical gaps was the lack of legal provisions for the extending of reports to SALGA in terms of section 71 of the Local Government: Municipal Systems Act 32 of 2000, and section 106 of the Municipal Finance Management Act 56 of 2003. This had the effect of depriving the organisation of critical data that could be used to inform rigorous planning. This anomaly, particularly in relation to the implementation by municipalities of recommendations made in terms of section 106, as well as the use of reports as early warning mechanisms in terms of section 71, needed to be addressed as a matter of urgency. Ensuring a statutory role for SALGA in these critical measures for accountability was crucial. The Committee would support the call for these legal provisions to extend to SALGA.

Another critical matter raised in the APPs was related to the general economic decline in many towns due to a deceleration in the output in the mining, manufacturing and agricultural sectors. Approximately two months ago, the Committee commenced with a series of engagements on issues of local economic development and small-town regeneration. This process began with a discussion of SALGA’s small town regeneration programme, including a case study on the project for the Karoo.

There was also reference in the APPs to the underutilisation of infrastructure in mining towns and agricultural or farming communities, and how this missed a potential revenue-generation opportunity to create vibrant local economies. The Committee regarded this issue as a serious and urgent matter, and would pursue it with all the relevant stakeholders during its remaining term of office. She commended the continuous cooperation and support from SALGA regarding the challenges faced by local government. However, it could respond to these problems only through a multi-pronged response with other stakeholders. She appreciated the leadership of SALGA in attendance.

SALGA President's opening remarks

Cllr Thembi Nkadimeng, President of SALGA, thanked the Committee for the opportunity to engage with Members during this meeting. She agreed with the Chairperson regarding the need to ensure a statutory role for SALGA in the critical measures for accountability relating to section 71 of the Local Government: Municipal Systems Act, and section 106 of the Municipal Finance Management.

She then referred to the issue of the fair allocation of resources to smaller and rural municipalities, which had to be a priority to ensure that they were funded properly in line with their service delivery mandates. She emphasised the importance of working on an early warning system for municipalities to ensure that support could be given before systems were out of control and impacting service delivery. Another issue that had to be considered included the increase of the debt of municipalities and its recovery, as outlined in the report and the feedback from the Auditor-General of South Africa (AGSA).

SALGA briefing on 2021/22 APP

Mr Xolile George, Chief Executive Officer (CEO), SALGA, confirmed that Members had read the presentation documents before the meeting had commenced, and said he would focus on the most important issues. The first part of the briefing would cover the background and context to the APP, while the second part would focus on the contents and priorities as outlined in the APP for the 2021/22 financial year.

Background and context

He said South Africa was celebrating the 27th year after the dawn of its democracy in 1994. Local government continued to play a significant role in fulfilling the aspirational statements found in the preamble of the Constitution.

The crucial question that was asked by SALGA was whether any transformational gains had been made in the local government system since 1994. In accordance with its mandate, it focused on four areas of socio-economic transformational advances, which included the improvements made in the delivery of municipal services, budgetary performance (in terms of revenue and expenditure), governance and accountability performance, and the improved implementation of consequence management.

There had been a clear improvement in the municipal service delivery performance, as reported by Statistics South Africa (StatsSA). For the 2019/20 financial year, there had been an increase in the number of customer units receiving municipal services, as follows:

5.2% increase in water access;
4.2% increase in electricity access;
7.6% increase in access to sewerage and sanitation; and
5.8% increase in access to solid waste management.

In these four components, local government continued to provide services on an incremental basis, and there was cause for celebration that many communities now also benefited from those services.

Access to municipal services

The reality remained that 1.5 million South African households (8.7%) still do not have access to improved water. Regarding the municipal backlog in access to improved water, the lowest backlog was reported in urban municipalities, while the highest backlog was in rural areas. The cluster of B4 municipalities had reported 891 224 households as part of the backlog. Based on the assumption of four people per household, these statistics could be interpreted to mean that approximately eight million South Africans had not yet received the benefit of having their dignity restored. Various structural challenges impeded the achievement of the milestone of ensuring that all South Africans had access to clean water. The greatest focus of the country must be on those rural municipalities to realise the milestone.

SALGA reported that 4.1 million households do not have access to improved sanitation. The cluster of B4 municipalities reported a backlog of 1.6 million. While more consumers units were receiving services, a smaller proportion were receiving these basic services free of charge. SALGA committed to undertaking empirical assessments to determine why this matter showed a decline.

Revenue and expenditure performance

Municipalities spent 79.9% (R384bn) of the total adjusted expenditure budget. In respect of revenue, aggregate billing and other revenue amounted to 88.8% (R427bn) of the total adjusted revenue. In addition, municipalities had adjusted the budgets for salaries and wages expenditure downwards, which constituted 30% of total adjusted operational expenditure budgets. The aggregate year-to-date total expenditure for metropolitan municipalities amounted to R234bn (84.4%) of the adjusted expenditure budgets of R277bn. The aggregated revenue for secondary cities was R52bn (81.9%) of the total adjusted revenue budgets.

Governance and accountability performance

SALGA reported that 94% (241 out of 257) municipalities submitted their annual financial statements on time, and that 89% of the municipalities’ audits were completed before January 2020 for the 2018/19 financial year. Eight municipalities received improved findings of clean audits from the previous audit cycle, and 33 municipalities had generally improved audit outcomes. This had shown an improvement in the compliance levels of the municipalities.

Furthermore, 121 municipalities had initiated internal investigations in response to the respective findings made by the AGSA, and 80 municipalities had investigated findings related to supply chain management (SCM) and satisfactorily resolved these investigations. Consequently, 2 200 municipal officials were dismissed for maladministration. Further consequence management had been implemented through investigation by the National Prosecuting Authority (NPA) and the Special Investigating Unit (SIU). It was reported that the NPA had had 86 cases of fraud and corruption referred to it in this regard, amounting to over R 1.3bn. The SIU was investigating 66 cases of fraud, corruption and maladministration, and 34 senior managers had been suspended for misconduct.

Challenges facing local government

Mr George said that various structural challenges impeded the achievement of the goal of ensuring that all South Africans had access to basic services and the optimal operation of municipalities. These included:

Capabilities, governance, and leadership. The weakening municipal governance and leadership was characterised by poor oversight, limited consequence management, instability at senior management levels, and a lack of skills which consequently undermined service delivery and transformation at the local level.

Spatial transformation and inclusion. The challenges were the prevalence of depressed economic conditions, the increasing impact of climate change, regressing social cohesion, poor coordination in planning, the lack of access to land, bulk services, limited decentralisation in housing delivery, transport challenges, safety and security.

Fiscal policy and financial management. There was a marked increase in the number of municipalities in financial distress due to the increase in the cost of services, the decrease in revenue collection, supply chain management inefficiencies, irregular, fruitless and wasteful expenditure, low revenue bases, and the high levels of unemployment and poverty.

Service delivery and infrastructure.  The challenges included an increase in coverage of basic services that were being placed under pressure by the widening funding gap for infrastructure, poor life cycle asset management, maintenance and effective project implementation, as well as a lack of technical capabilities.

SALGA was aware of the significant impact of the COVID-19 pandemic on the levels of unemployment and poverty in South Africa. It was reported that more than 30 million people were living in poverty, with the majority black population who were indigent. High levels of unemployment and poverty were reported in metropolitan and rural areas. Further challenges to local government were that municipalities were unable to grow and sustain employment opportunities or income levels, and there were poor revenue bases, structural underfunding, and inadequate capacitation of municipalities. The lack of accountability, together with inadequate oversight and failures to implement recommendations, exacerbated the problems faced by local government.

Another issue was related to conflicts of interest within municipalities, which included awards made to employees or close family members, awards made to other state officials, and false declarations. SALGA did not have the executive power to hold municipalities accountable in this regard. However, in July 2020, the Executive Committee of SALGA had agreed on a resolution stating that the administration must be able to follow up with municipalities, and hold mayors and councillors accountable for consequential action that had to be taken.

The outstanding debts that were owed to municipalities had a significant impact on service delivery. As at the end of 2020, R230.5bn was owed to municipalities, and the inadequate collection of these debts put a strain on their financial situations. SALGA needed to address the root causes of the failure to make payments, both to municipalities and to service providers such as Eskom.

The impact of COVID-19 pandemic

Mr George said that the municipalities were already facing severe socio-economic conditions before the commencement of the COVID-19 pandemic and the national lockdown periods. The pandemic had now more than ever forced municipalities to think about how they would operate post-COVID-19 while still providing service delivery, especially to the vulnerable. There would be a significant impact on municipalities in the long term as a result of the COVID-19 pandemic. This would include an increase in poverty levels resulting from job losses, an increase in indigent registers and dependency on the government for financial support, and the need for more affordable services.

For municipalities’ economic performance, SALGA projected significant additional responsibilities and costs, declining economic growth, an increase in unemployment, consumer debt increasing, the expansion of the informal sector economy as unemployment increased, and declines in foreign investments. It also expected  that municipalities dependent on the tourism sector would be worst affected due to continued restrictions on travel.

Proposed APP priorities for 2021/22

Mr George said the APP briefing would focus on the high-level priorities of the entity, while noting that significant reform would be required for the next strategic phase. SALGA responded to the problems of local government through a multi-pronged response with other stakeholders relating to regulatory, policy, financial management and capacity responses, and collaboration and political intervention. The work towards the stabilisation of local government required an approach which included:

A re-invigorated implementation strategy, with credible delivery mechanisms and priorities;
Focused and committed leadership across society, as well as a stronger role by the private sector and other social partners;
Improvement in the quality and efficiency of government spending through better planning, and streamlining the institutions of government;
Sound procurement systems, as well as greater competition and productivity in the economy;
Fixing municipalities and their agencies to restore governance and service delivery;
Being decisive in professionalising the public service and stabilising management and leadership;
Pursuing fiscal sustainability, sound municipal financial governance, and eliminating corruption.

The priorities of SALGA’s APP contributed to the strategic outcomes of the 2017-2022 strategic plan, which included four main outcomes -- municipalities with sustainable and inclusive economic growth underpinned by spatial transformation, good governance with resilient municipal institutions, the financial sustainability of local government and greater fiscal equity, and an effective and efficient administration support service. To this effect, SALGA had outlined 18 priorities to focus on for the 2021/22 financial year, which were outlined and categorised per the outcome they related to the 2017/22 strategic plan. as follows:

Outcome One: Municipalities with sustainable, inclusive economic growth underpinned by spatial transformation

SALGA outlined five key priorities, which were to support the establishment of the municipal health function in municipalities; improve public and private sector partnerships in local government systems; spatial transformation and social cohesion; climate change, with proofing of infrastructure; and contributing towards the development of a national rural development strategy.

Achieving these priorities would be done by lobbying for the refinement of institutional frameworks to enable partnerships with the private sector for network infrastructure investment and maintenance; a complete assessment of the capacity of municipal health function in municipalities, and using it as a basis for profiling local government and advocating for improvements; preparing a position paper to lobby for a national rural development strategy that takes into account the various facets of rural development (not just agriculture); and developing a list of identified critical infrastructure owned by municipalities and lobbying for the Minister's declaration of some municipal infrastructure as critical.

SALGA had also committed to conducting an assessment of its influence in the intergovernmental space.

Outcome Two: Good governance with resilient municipal institutions

SALGA outlined seven key priorities:

the proactive management of a transitional plan before and after the local government elections;
ensuring representation in the bargaining processes;
adopting an integrated plan for municipal reporting, monitoring, evaluation, and advisory support for local government;
the professionalisation of local government;
extracting accountability and consequence management;
maximising the impact of local government; and
building cutting-edge research capabilities.

Mr George said SALGA was committed to continuing to prepare position papers for Parliament from the perspective of the sphere of local government, and to sponsor amendment bills relating to local government in the areas of grading, pension fund, the professionalisation of local government, and independent municipal power producers through the increase of licensing thresholds. It would continue to function as the employer body through developing a collective bargaining strategy anchored on municipal financial sustainability and financial relief, flexible exemption and an opt-out dispensation developed to inform the next term negotiations, and to represent municipalities in labour relations and wage negotiations.

Continued efforts would be made to support and advise stakeholders and members, and to share knowledge through municipal engagements regarding spatial transformation and documented practices for the investments, operation, and maintenance of social infrastructure in municipalities. Another impact goal of SALGA was to produce an enhanced and improve image of the entity and its reputation in the sector, especially through online media, national broadcasting, and community radio and media partnerships.

Outcome Three: Financial sustainability of local government and greater fiscal equity

SALGA outlined four key priorities:

the support of municipalities to finance, operate, and maintain trading services with a focus on non-revenue water, energy transitions, and waste management;
supporting municipalities to be more financially stable (by developing and benchmarking a financial sustainability index, and diagnosing why property rates were not being collected;
attracting investments for municipalities through support with economic development strategies, and trade and investment guidelines, and
providing support through the Municipal Audit Support Programme (MASP) to improve the various audit outcomes of municipalities.

To this extent, SALGA committed to sponsor proposals relating to improving the municipalities’ collection of revenue, to introduce innovative measures for the restructuring of historical uncollectable debt (including write-offs), and to improve audit outcomes and trade and investment opportunities. It would also focus on supporting municipalities in efforts to finance, operate and maintain trading services with a focus on non-revenue water, energy transitions and waste management, with the objective of making municipalities financially stable.

Outcome Four: Achieving an effective and efficient administration support service for the programme delivery of SALGA

Mr George emphasised that this outcome was paramount to ensure achievement of the first three outcomes. SALGA had identified three key priorities in this regard, including:

the reconfiguration of SALGA to better deliver on its mandate, especially regarding the digitalisation of the environment, adopting an improved human resources strategy, enhancing current operating models, and introducing project management methodologies;
working towards the diversification of SALGA’s revenue model; and
improving the image and reputation of the entity alongside that of the sphere of local government in South Africa. This would be achieved by its commitment to continue to achieve a clean audit from the AGSA, diversifying its revenue sources to reduce the entity’s overwhelming reliance on membership levies and to reconfigure its internal operations to improve the delivery and achievement of its mandate.

Moving towards the fourth industrial revolution

SALGA said that the benefits of the technological revolution had become apparent to the entity. It would take advantage of the shift towards a heavier reliance on technology by modernising its governance systems and processes through the use of digital technology, exploring new interface models with its members, and developing a digital integration and digitalisation strategy which would see the entity moving to the cloud and integrating and automating operations where appropriate. It would explore how SALGA could support municipalities in this area and would be rolling out a comprehensive programme in this regard, providing support to municipalities through information communication technology (ICT) assessments and advice, and ramping up its digital analytical capabilities and platforms for more nuanced and effective advice to its members.

Special interventions in response to local government challenges

Mr George provided the Committee with an outline of SALGA's proposed interventions to address the following challenges:

Coalition governments -- no framework legislation on coalitions or guidance had been given to political parties on how to govern in coalition governments.
Addressing the unintended consequences of amalgamated municipalities -- the merging of municipalities in 2016 had not resulted in improving settlement patterns, leadership and economic bases, and had not created more financially viable municipalities.
Addressing the unintended consequences of interventions -- most of the interventions had failed to achieve the goals of long-term improvements in service delivery and the financial sustainability of municipalities.
Reducing regulatory and legislative compliance -- legislative compliance obligations were excessive, currently standing at 75 reporting requirements.
The need to strengthen accountability and consequence management measures.

Budget parameters and recommendations:

SALGA referred the Committee to the 2021/22 to 2023/24 medium-term expenditure framework (MTEF) budget regarding the budgetary parameters of the entity, and recommended that it note the document, as well as the context and priorities of the APP for the 2021/22 financial year.

Discussion

The Chairperson thanked the SALGA delegation for its comprehensive briefing, and invited Members to engage with the information.

Ms H Mkhaliphi (EFF) said that the briefing was a true reflection of the challenges faced by the municipalities in South Africa. It was paramount that SALGA be brutally honest about the nature and extent of these challenges, to ensure that measures were implemented to overcome the obstacles faced. She asked how dependable the information obtained from StatsSA was, as it did not truly reflect the situation that the people of South Africa were experiencing on the ground. It remained concerning that 1.5 million households did not have access to clean and improved water. The Committee had interactions with municipalities, and it was clear that the issue regarding access to water continued to dominate the challenges and complaints received. People were suffering from no access to water, and there was no sign that any progress was being made. The aging infrastructure leading to dysfunctional systems were affecting the poorest of the poor. It was unacceptable that little progress had been made, given that the country was almost 30 years into its constitutional democracy.

She stressed the importance of SALGA sharing its ideas and frustrations with the Committee in its efforts to resolve the challenges relating to basic service delivery. The politics of these challenges had to be addressed. What was the role of the SALGA when the entity experienced political interference, such as corruption or fraud? It was paramount that incidents of corruption, fraud and administrative or financial maladministration be addressed, as these factors were significant impediments to ensuring adequate service delivery to the people of South Africa. The SALGA must commit to further engagements with the Committee regarding its capacity challenges.

She referred SALGA's disclosure that 121 municipalities had initiated internal investigations in response to the respective findings made by the AGSA, and 80 municipalities had investigated findings related to supply-chain management issues and had satisfactorily resolved them. It was important that the entity share the details of these investigations with the Committee, such as which municipalities were involved and what recommendations had been implemented. She noted the statement that 86 cases of fraud and corruption, amounting to over R1.3bn, had been referred to the NPA, that the SIU was investigating 66 cases of fraud, corruption and maladministration, and that 34 senior managers had been suspended for misconduct. She asked that the Committee be provided with more details on the nature of these cases, and which municipalities were involved.

Ms M Tlou (ANC) said the AGSA’s audit findings and reports from the previous financial years had indicated concerns on compliance with legislation and weak internal controls in various municipalities. What was the SALGA going to do to ensure that the financial sustainability of these specific municipalities was improved?

Mr K Ceza (EFF) remarked that the achievements reported by SALGA regarding improvements in service delivery did not speak to the lived experiences of the people and the dire situation on the ground. He referred to the statistics presented regarding the number of households that did not have access to basic services, and said that SALGA’s presentation had not addressed the housing issues in this regard. What measures had been implemented to protect communities from fraud and corruption, especially regarding government housing programmes?

Regarding spatial transformation and inclusion, he asked for clarity regarding the route that the SALGA suggested municipalities should take to improve access to land for vulnerable groups, such as women and the youth. What interventions were the SALGA implementing in this regard? The issue of housing was a significant challenge that was faced by households, which was then compounded by the challenges relating to basic service delivery. Municipalities and the government were then faced with violence because they did not heed their constitutional mandate to deliver houses. What measures had been put in place to reallocated houses to the rightful owners who had been deliberately sidelined by those who were politically connected? What interventions had been undertaken by the SALGA to ensure that the money that was owed to the municipalities was recovered?

He asked how the COVID-19 pandemic would impact rural municipalities that were incapable of attracting or recruiting people with the skills needed. It was crucial that the capacity challenges of municipalities were addressed to limit the impact on the service delivery of the entities. How would SALGA recover the money spent on consultants that had yielded no value? What measures were in place to reduce such wasteful spending? How would issues of underfunding and the inadequate capacity of municipalities be addressed going forward?

Ms D Direko (ANC) expressed concern regarding the declining state of municipalities, especially the high prevalence of unauthorised and wasteful expenditure. The spatial legacy of the apartheid era was still visible across many municipalities, which was a contributing factor to the declining local economic development of these entities. What was SALGA doing to assist municipalities to implement spatial transformation? The Committee’s previous engagements with the SALGA had always been characterised by good proposals that were made, but there was a noticeable lack of implementing them at the municipalities. What challenges were faced in implementing these proposals and recommendations? What measures were being implemented to help municipalities overcome the factors affecting their sustainability? What lessons had been drawn from the dismissal of employees and staff relating to unethical conduct? Did the backlogs in service delivery have any bearing on the fiscal allocations to SALGA or municipalities? She asked for clarity regarding those municipalities that had not instituted any internal investigations, despite having reports that those municipalities had significant amounts of irregular or wasteful expenditure. The lack of policies and maintenance plans to address aging infrastructure at municipalities was a serious concern.

She commented that there seemed to be a complete disregard for laws and regulations, and this could be seen in the AGSA’s findings regarding non-compliance. What mechanisms were in place to hold the municipalities accountable if they failed to adhere to the laws of the country? How did SALGA hold its members accountable? Was there a code of conduct in place for members of SALGA to ensure that adequate processes were followed?

She asked that the Committee be provided with a list of the latest updates regarding the legislative amendments proposed by SALGA. Members should also be provided with a list of municipalities that were unable to contribute membership levies to SALGA, and the impact this had on the entity's operations. What progress had SALGA made in advocating a statutory role for the entity in regard to the critical measures for accountability, as outlined in section 106 of the Municipal Finance Management Act?

What progress had been made by SALGA to rectify the situation resulting from the underutilisation of infrastructure in mining towns and agricultural or farming communities, and was influencing potential revenue-generation opportunities to create vibrant local economies? What interventions were proposed by SALGA in this regard?

SALGA's responses

Cllr Nkadimeng thanked the Committee for the input of Members, and for the concerns that were raised.

Regarding the reliability of Statistics South Africa, she said it was a government entity that provided the information that informed the national allocation of funding. It was an indicator of the progress made regarding the delivery of basic services. There had been recognition that the number of people who had been provided with basic services had increased, despite the large amount of work that still had to be done. Migration and the influx of people contributed to the challenges faced by the municipalities.

She referred to the influence of politics in local government, and said that the SALGA had taken the step of inviting all political parties to join discussions on how to solve this problem, but there had been an exceptionally low rate of attendance from the political parties. SALGA was unsatisfied with the capacity and the calibre of councillors, and the breakdown of qualifications for councillors had previously been shared with the Committee

SALGA was not empowered to hold municipalities accountable and, if necessary, the legislative provisions needed to be revisited and reviewed. However, SALGA had drafted a consequence management framework which had been submitted to the Committee for consideration and adopted. SALGA would share the details of the internal investigations of municipalities with the Committee, such as which municipalities were involved and what recommendations had been implemented.

Regarding spatial transformation, she said that municipalities were assisting with pilot programmes.

She said that emphasis must be placed on strengthening accountability and oversight over municipalities to ensure that a better municipal system was created to address the findings of AGSA. This would ensure that consequence management could be implemented when there was wrongdoing in the governance of the municipalities.

Regarding the question about political influence, she said that SALGA should not hide away from politics. South Africans stood up and called for a single type of tax-based municipal system that benefited all people in the country. It was important to work from this frame of understanding of the transformative agenda that had been engaged on. StatsSA played a pivotal role in determining what resources should be dedicated to which municipalities.

There were many aspects of the local government system that had to be corrected, including the accountability of councillors that were elected. It was not SALGA that was responsible for the election of councillors. The attempts to engage political parties had been unsuccessful, which had created a deadlock in SALGA’s attempts to enforce accountability measures for elected municipal councillors.

Cllr Sebenzile Ngangelizwe, Deputy President of SALGA, said that the concerns raised by the Committee showed that there was an understanding of the frustrations experienced by the entity. There was a need to change the funding formula for rural and small municipalities. SALGA was committed to lobbying for an infrastructure grant to assist small towns and rural municipalities, and had emphasised the need for provincial governments to engage with the reports regarding the financial positions of municipalities before they reached a point of failing to provide basic services to the people. However, it was clear that these reports were not receiving the necessary attention. The Members of the Executive Councils (MECs) had been cautioned to comply and assist the municipalities under their governance. The limitations of SALGA in this regard could not be overemphasised. It would be useful if the Committee used its oversight and Parliamentary powers to call on the MECs and the provincial governments to heed these calls from SALGA. It had to be remembered that SALGA was only an association, with limitations.

The Committee could rely on the report from SALGA and could use the information to provide the entity with the necessary support to receive feedback and responses from the provincial governments and political parties.

Mr Mthobeli Kolisa, Chief Officer for Infrastructure Delivery, referred to the question on what SALGA was doing to respond to the need for spatial transformation. He said there were three main interventions in this regard. Firstly, SALGA assisted the municipalities in adhering to and implementing the Spatial Planning and Land Use Management Act 16 of 2013, as this was a mechanism to achieve spatial transformation. Secondly, it worked with the Department of Human Settlements to identify priority areas of migration and developments in human settlements, to ensure that these areas were prioritised to implement spatial transformation as the areas were developed. Thirdly, the measurement indicators helped SALGA to identify municipal areas that were in dire need of spatial transformation, to ensure that those areas were prioritised.

Regarding the backlogs in access to basic services and infrastructure, he responded that SALGA’s report had highlighted the factors that contributed to the backlogs. There was a need for a rural development strategy to address these issues, and the processes of engagement were already under way. The role of traditional leadership was another issue that had to be considered in this regard.

Mr Rio Nolutshungu, Chief Officer for Municipal Capabilities and Governance, added that SALGA responded to problems of local government through a multi-pronged response with other stakeholders relating to regulatory, policy, financial management and capacity responses, collaboration and political intervention. There was a long history of stability within the Association regarding matters of municipalities and labour relations. It was important that relationships with trade unions were managed through good faith collective bargaining, as required by the Department of Employment and Labour. Multi-labour collective agreements contributed greatly to labour peace, but the extraordinary conditions of the COVID-19 pandemic had had a significant impact on these agreements, showing the need for more flexible contractual conditions to support municipalities that were in financial distress.

Mr Lance Joel, Chief of Operations, said that SALGA would provide the requested information to the Committee, as well as further information needed for clarity on the issues raised by Members.

The status of levy payments was an area that remained of concern to SALGA. A plan would be implemented to mitigate the risks resulting if it was unable to collect the money owed to it by its members. It had been agreed that an internal committee would be established to review the legislation surrounding the powers of the SALGA, and to find ways to strengthen accountability.

Mr George said that there had been an imperfect transition from the apartheid era to the new constitutional democracy. There were various challenges in local government that had to be addressed. The expectation was that all municipalities had to take action where there were instances of wrongdoing, or expenditure that was unauthorised or irregular. However, to truly ensure that consequence management and accountability was enforced, the continued support and help of Parliament and the provincial governments was required. It was necessary for the powers of SALGA to be reviewed to strengthen its accountability measures over municipalities, especially to ensure that the findings of AGSA were given effect to and that the recommendations made were implemented.

The supply of resources to municipalities remained a major concern. There were serious gaps in the fiscal side of local government, which included the collection of debt and for the municipalities to deliver quality services through the spending of their allocated funds in ways that obtained value for the money spent. The continued underfunding of municipalities must be made a policy priority.

The Chairperson said that the Committee was mindful of the limitations of SALGA, and welcomed the progress that had been made. She asked for a written report regarding the challenges experienced on labour issues and what interventions were being implemented by SALGA to address Members' questions.  The report should outline the solutions for labour issues at all of the municipalities that were members of SALGA. Clarity was also required as to how SALGA holds municipalities that were members of the Association accountable.

Mr George assured the Committee that SALGA would submit the required information and documents to Members in line with any deadline set by the Committee.

The meeting was adjourned.