Local Government and Water Seta; Municipal Demarcation Board: budget briefing

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Cooperative Governance and Traditional Affairs

04 June 2004
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

4 June 2004

Mr Y Carrim (ANC)

Documents handed out:
Municipal Demarcation Board presentation
Local Government and Water Sector Training Authority (LGWSETA) presentation (see appendix)

Municipal Demarcation Board website

The Local Government and Water Sector Education and Training Authority briefed the Committee on its budget and challenges. He, amongst others, made a plea that the budget allocation should be increased by about 15%. The Committee asked searching questions about the state of training in municipalities; whether their skills levy contributions were transformed into the implementation of skills plans at local government level and why the SETA requested additional funding if it had under-spent on its previous budget allocation. The Committee was also concerned about SETA progress and performance monitoring and suggested a closed workshop with external evaluators to determine the current position.

Despite various reservations regarding the re-demarcation process and the issue of non-viable municipalities, the Committee was supportive of the Municipal Demarcation Board, and backed their request for a budget increase.

Local Government and Water Sector Training Authority presentation
The CEO, Mr S Nkosi, highlighted the challenges faced by the LGWSETA as complaints from the public that LGWSETA was invisible; a lack of co-operation from smaller municipalities due to capacity problems; the role of community development workers; the legacy of apartheid, finalisation of human resources policy and a lack of capacity within the provinces. The CEO presented the budget with details on how LGWSETA fulfilled employment equity requirements, and managed to forward staff to the metros. An intensive marketing drive had been launched which included the creation of a website, outreach programmes and countrywide roadshows. Mr Nkosi highlighted key challenges such as the finalisation of a capacity building network; establishment of a leadership training framework; reaching targets qualitatively rather than quantitatively and transforming local government to a service delivery arm of the government.

Mr B Solo (ANC) commented that "ready made" training programmes were sometimes problematic giving an example of a training session he attended where most of the trainees could not understand the facilitator due to the language used. He asked what strategies were employed in ensuring training was provided in the trainees' language and what role had the LGWSETA played in the local government academy.

Mr Sithole (ANC) asked what the compliance levels of employers were and whether they were contributing to the SETA. His other questions were who benefited from training; whether the SETA approach needed assessment before embarking on training; whether prior learning was recognised and why the training institutions were not transformed to benefit the disadvantaged.

Mr P Smith (IFP) asked who the external verifiers of training provided by the LGWSETA were and how they ensured its efficacy. Other questions included how the budget was allocated to the provinces; what form of skills training was in the highest demand and how community development workers related to councillors.

Mr Likgotsi (ANC) asked what the SETA was doing for the unemployed and whether it had a database of unemployed graduates. He also asked what the target group of the LGWSETA was and how the SETA expected to help people with qualifications but no experience. Finally, he asked whether there was "synergy" with higher education institutions that were churning out graduates with no readily marketable skills.

The Chairperson asked how much money was allocated in the 2003 budget and how much was spent. He indicated concern that the bulk of the SETAs budget went to learnerships and asked what had been done to address other needs. He further asked what LGWSETA's three top priorities were and what had been done to meet them. In addition, he asked how funds were allocated to meet these priorities.

Ms L Mashiane (ANC) enquired whether it was possible for people outside the council to undergo training at their own expense and what the criteria was for acceptance into learnerships. She also asked what was done to train illiterate councillors in rural areas.

Mr Sithole (ANC) asked what measures were taken to ensure that Public Finance Management Act understanding filtered downwards. He also wanted to know what measures the SETA had taken in addressing language proficiency problems.

The Chair stated that previously LGWSETA had underspent its allocated budget which made it difficult to understand why it was demanding an increased allocation.

Mr Nkosi replied that the budget allocation for 2003 was R165 million of which 70% was used for training; 10% was used for administration and 20% was held for discretionary spending. The payouts to municipalities were below the grants received by the SETA to the fact that municipalities were not claiming back their contributions. The LGWSETA had only five provincial offices instead of nine, which clearly hindered its capacity to carry out its programmes. The LGWSETA targeted poorer provinces instead of the large Metropolitan Councils that had dedicated staff for training within their human resources department.

The key challenges were the provision of training for water purification and sanitation personnel in conjunction with the Treasury and Department of Water Affairs. New qualifications had been established, more training was provided in rural areas, Local Economic Development nodes had been established and municipal finance training had been provided.

Sixty-nine percent of municipalities complied by paying the levy but there were no dedicated personnel to compile their skills plan which hindered implementation. Most municipalities had paid the required levy to the Skills Development Fund but they failed to submit their skills plan. Municipalities that had not complied with the skills plan would not be funded. In the 2001-2002 budget allocation vast amounts of money was consumed by learnerships. This meant that the SETA had to develop means to curb spending by providing in-house training.

Mr P Doman (NNP) asked whether the LGWSETA could revert to legal action when municipalities did not comply with requirements. Mr Nkosi replied that municipalities that did not claim were catered for in the discretionary funds allocation. The main problem was that municipalities that could not pay due to unavailability of funds were free to apply for exemption. Unclaimed funds reverted to the discretionary fund which last year stood at R102 million. The plan was to help municipalities with compiling skills plans and training personnel for the future.

The Chair asked for clarification on non-compliance. He wanted to know whether the CEO meant that some municipalities did not contribute due to funding shortages or did he mean that municipalities were not claiming back due to not submitting their skills plan. Mr Nkosi said all municipalities were paying the skills levy but some were not claiming which resulted in a surplus. The SETA was targeting senior personnel to be trained in skills planning and wanted to ensure municipal managers' contracts included skills development as part of their monitored performance.

Mr Sithole (ANC) asked how LGWSETA addressed gender imbalances and disability in training programmes and what role the SA Local Government Association (SALGA) played in solving these problems. Mr Nkosi said that 10% of learnerships were reserved for the unemployed. Such persons had to approach their municipalities and enquire about available skills training programmes. They would then be referred to a SETA which would provide the learnership while the local government authority had to provide workplace coaches and mentors for each candidate. The 10% learnership allocation for unemployed persons is compulsory for all municipalities.

On recognition of prior learning, the SETA used an assessment tool to ensure that people could cope and were not set up for failure. In cases where people were not coping due to illiteracy and innumeracy, practical adult basic literacy and numeric training programmes were developed. Recognition of prior learning was also used for access to further learning which could lead to recognised qualifications. It would then be up to the individual whether they wanted to start their own business, progress in their existing workplace or to move to another job with their qualification and experience. Technical colleges had been used for the implementation of RPL strategies, for example, Iqhayiya Technical College in Port Elizabeth.

The Chair asked what could be done to assist the SETA, but the CEO had to compile a list of all municipalities that have not submitted their skills plans and a workshop would be held to solve the impasse. Mr Nkosi replied that they required an increase of 15% in their next budget allocation.

The Chair inquired about the progress of LGWSETA compared to other SETAs. Mr S Mofokeng, Learnership Manager, replied that SETAs worked in clusters and LGWSETA was part of the government cluster. External evaluators and monitors had been identified to give an objective assessment of progress. A broad performance monitoring mechanism had been created, but there was no external evaluating body besides the Department of Labour.

The Chair suggested a series of closed hearings where external evaluators were to give an honest progress report on the SETAs that involved service delivery.

Municipal Demarcation Board presentation
The Head of the Municipal Demarcation Board, Mr William Lekote introduced the new Board. He noted that the mandate and the mission of the Board were drawn from the Constitution and from the Municipal Demarcation Act. Its special focus was the re-demarcation of wards, which the Board has identified as their most immediate challenge. Included under this was the re-demarcation of non-viable municipalities, especially urgent in the rural areas, roughly mirroring the old Bantustan system and concentrated in the Eastern Cape, the North West, the Free State and Limpopo and especially KwaZulu-Natal. In conclusion, the Board made it clear that they thought their allocated budget was inadequate. The shortfall on ward demarcation was around R5 million, despite relying heavily on funding from the Norwegian Government.

Various questions were posed by Ms L Mashiane (ANC), Ms M Mentor (ANC), Mr P Smith (IFP), Mrs M Gumede (ANC), Mr W Doman (DA) and Ms P Bhengu (ANC). Due to length and repetition, the Chairperson broke the questions down into seven broad areas of concern:
1) Non-viable municipalities, and the relationship between financial and municipal viability.
2) Cross-boundary municipalities (CBM's) and the legislative implications of these for the Committee
3) Wards
4) The issue of capacity regarding the powers and functions of the Board
5) Budget
6) Time-frames and whether these were achievable
7) A synopsis of the Board's past achievements

The Chairperson noted that drastic measures were needed regarding viability and stressed that in some cases changing boundaries was not the only solution, but would in fact complicate matters.

The Board responded that financial non-viability stemmed from the inability of municipalities to manage resources, and that to address this was not necessarily the responsibility of the Board, but that of other departments. However, the Board could obtain information on the non-viability issue and then pass it on to the relevant departments. In turn they would be able to obtain information to help them with their work.

Many municipalities failing to meet the Auditor-General's standards might have had the capacity to do so, but had faltered in other areas such as not complying with legislative requirements. It was difficult for the Board to give exact figures for when a municipality should be re-demarcated and when it would benefit the situation if it were to remain the same.

The Chairperson asked Mr C Clerihew (Department of Provincial and Local Government) whether it was correct that more than 80% of municipalities did not obtain an unconditional positive report from the Auditor-General (AG). Mr Clerihew answered that the AG does not "qualify accounts" but rather highlights "matters of emphasis". Only two national departments get entirely clean reports, though the reasons for this vary greatly.

The Chairperson stated that although most municipalities do not meet the standards, the focus should be on empowering them with the necessary skills, and not just automatically merging municipalities. He cited the Municipal Finance Act as an example of this empowerment. He went on to ask the Board what their practical strategy was when they encountered a non-viable municipality due to fundamental lack of resources. Mr B Solo gave Hamanskraal as an example of this, but the Chairperson responded that he was speaking of municipalities where the surrounding municipalities were equally non-viable, whereas Hamanskraal could easily be included in the neighbouring "big, fat Metro".

Mr Sitole (ANC) asked the Board how current legislation and the pinpointing of issues by various bodies, such as Sector Education and Training Authorities (SETAs), had helped it in its work. He queried the extent to which changes such as demarcation had improved problematic situations.

The Chairperson added that municipalities, under the "fully-fledged, new legislation", have many more areas of responsibility and the criteria for being "functional" have increased dramatically. The legislation drafted by the Board in 1999 was presently under much pressure, and although the Committee commended the work done so far by the Board with very limited resources, he questioned how it could be improved further.

Mr P Smith (IFP) pointed out that whether municipalities were in fact viable should first be addressed before it could be seen whether they had the necessary capacity. In the present South African situation municipalities have to raise 90 - 95% of revenue - the situation is not one where municipalities floundering can be rescued by national grants as is the case in some countries. He concluded that the only available options seemed to be amalgamation or more funding.

Mr Lekote responded that various options for solving the problem of non-viable municipalities were open to the Board - one of these was to append part of a non-viable municipality with a viable municipality (rather than "lumping together" two whole municipalities), while making sure that structures already in place remained functioning. He reiterated that current options were incomplete because of the many other factors caused by considerable changes over the last five years. The Board agreed with the Committee that re-demarcation was not the only solution to the many problems non-viable municipalities faced.

Concerning the ward issue, the Chairperson highlighted the pursuit of non-racialism; the use of consultants by the Board; attempts to factor in traditional authorities, as well as the question of whether an entire review was necessary, or only a focus on certain wards.

Mr Lekote answered that the creation of wards was informed by the Voters' Roll, and the changes made to the Voters' Roll over the last five years had influenced ward changes. Wards could increase if the MEC's and provinces had increased the number of councillors. However, the norms for ward division remained the same. De-racialisation of communities remained a guiding objective in the division of wards as the White Paper had proposed.

The Chairperson expressed the view that not enough was being done, although admitting that the dynamics in communities and subsequent attempts at de-racialisation were extremely complex. He emphasised the Committee's view that spatial segregation, which extended to town planning, had to stop.

Mr Lekote went on to stress that consultants were used so as not to "bloat" the Board and to keep costs low as they were paid substantially less than market value. The consultants were independently monitored at a project management level, and were not hired again if they under-performed. The Chairperson reiterated that more measures must be put in place to make sure that consultants consulted with affected communities and that the low rates being paid did not impinge on the quality of consultation.

Ms Mentor further asked what amounts were being spent on the consultation process, whether there was not an over-reliance on consultants, and whether the amounts spent on consultants would not be better spent developing staff within the Board. She further queried how consultants were made accountable. A member from Bushbuckridge added his concerns that people on the ground were not being consulted, especially in rural areas. He added that when a municipality was not viable it was likely to have capacity problems too, and that in such cases it was difficult for the Demarcation Board to push through changes, and reach the communities.

The Chair once again raised the need to monitor consultants and to ensure that the consultants have the resources to consult with affected communities. This could include pressurising the relevant authorities to provide the funds for this.

Mr Solo emphatically added that more use should be made of people from within affected communities for consultation processes, as this would circumvent many of the issues raised, including that they would do the work required for less or for free as they have an emotional attachment. Mr Sitole added that there needed to be "link-up" between the Board and MP's, since MP's have the needs of their constituencies at heart.

The Board replied that the consultants were used for specific areas and that the Board often deployed their own staff. Furthermore, there are links between MP's and the Board, and they are often asked by MP's to visit communities to explain the processes being carried out. Regarding traditional areas, Mr Lekote pointed out that the Board worked closely with "kingdoms", and have made it clear within the last five years that traditional leaders should approach the Board with their concerns. However, this was a difficult process.

The Chairperson commented that the re-demarcation of cross-boundary municipalities would require constitutional amendments, which take a long time to be completed. He asked the Board how they proposed to draw boundaries until the legislation had been changed. The Board responded that they were preparing for when the cross-boundary municipalities have been done away with, but realised that this would become a serious issue if not achieved by July. The Chairperson went on to berate the Board for not bringing this to the attention of the Committee earlier, and emphasised the lengthy constitutional amendment process. Deadlines had to be finalised quickly as local elections must be held by March 2006.

He went on to state that there was not enough time to go over the capacity report, but noted the need for a workshop in the third quarter to thoroughly cover the powers and functions of the Board. He said that last year's committee report had raised concerns regarding the alignment between the Minister's powers and the division of powers between provincial and local government. The Board responded that the issues at hand were complex, but that proposals in this regard had been tabled.

The Chairperson then asked Mr Clerihew how likely the Board was to obtain the requested budget increase. He also noted that "legislation and policy-finalising in respect of the work of the Demarcation Board in preparation for the local elections has to be addressed in a one-day workshop in August".

Mr Clerihew responded that the Board had previously been involved in areas that the National Treasury had advised them not to engage in and that the Treasury was trying to work these out in consultation with the Board. Changes were being made to the budget, in the light of the President's State of the Nation address, but the likelihood of the Board being given an additional R2 million was unlikely. It was a possibility that they would receive an additional lesser amount as demarcation of wards is a high priority.

The Chairperson went on to say that despite reservations in the past, the Committee felt that the Board was doing a good job. They fully supported the Board's request for more funding, and endorsed the view that the Department should enter into serious negotiations with the Board and the Treasury to address the gap in the budget. The Chairperson stressed that this did not mean they supported the Board acquiring external funding (e.g. from the Norwegian government), which the Committee saw as inappropriate.

The Board responded that they had agreed with the Department and the Ministry on the motivation for the requested budget increase. They have tried to develop the most workable option surrounding CBM's, taking into account recent statistics. The Board was working in conjunction with Cabinet to try to achieve the constitutional amendments within the timeframe, and within their and Parliament's work-programme.

Mr Clerihew reminded all present that in the past four days the Committee had requested in excess of R50 million for different problems related to local government, so although the Demarcation Board's request was seen as a priority, there was a limit to what was feasible.

In conclusion, the Chairperson asked what the Committee could do to facilitate the work of the Board without interfering with its independence. Mr Lekote responded that they wished the Committee to engage the Minister, Director General and other relevant authorities to "come to their rescue".

The meeting was adjourned.



LGWSETA ETQA accredits education and training providers against a set of specified criteria as contained in the Accreditation Manual. These criteria are based on South-African Qualifications Authority (SAQA) requirements. The accreditation approach is developmental and emphasises Quality teaching, Assessment and learning. As a way of promoting a developmental approach to accreditation, LGWSETA's accreditation strategy has various levels of accreditation. It also pro-actively support and or build capacity of providers to meet the requirements as well as build a good quality assurance system internally as providers. Once a provider has been accredited LGWSETA monitor and evaluates their learning and provision. This is to ensures that quality is continuously promoted amongst its constituent education and training providers. (All documents are available on the website and hard copies)

All the ETQA Bodies are supposed to be audited by SAQA on their system and performance after every three years. LGWSETA was audited in May 2004, and was commented on its system and as such has been given further three years to perform Education, training quality assurance (ETQA) functions as per SAQA ACT of 1995.

ETQA functions are:

  • Accreditation of education and training providers
  • Monitoring and evaluation of provision and learning
  • Training and registering Assessors, Verifiers and RPL advisors
  • Implementation and Promotion of recognition of prior learning (RPL)
  • Promoting quality leaning and teaching amongst constituents providers
  • Quality assuring learner achievements (QALA) etc


Trained Assessors (list of verifies not included)

Assessment is the cornerstone of education and training. All the trainers (ETD Practitioners) should be trained as assessors to ensure that they practice outcome-based, continuous assessment which is fair, valid, reliable, cost effective humane and practical. Once trained and registered as assessors, they may be trained as verifiers (moderators) previously called inspectors. Attached is the list of trained assessors.

Trained Verifiers (list of verifies not included)

The LGWSETA requires verifiers to assist in the accreditation process. A verifier is the person, acting on behalf of the LGWSETA and checks that the training centre meets the requirements to be accredited. They are mainly employees with the sector and subject matter expertise on certain field of learning for example, Water, electricity, metro police etc. (criteria and related documents available at the SETA)




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