Intergovernmental Fiscal Review: hearing

Meeting report

LOCAL GOVERNMENT AND ADMINISTRATION SELECT COMMITTEE
7 October 2004
INTERGOVERNMENTAL FISCAL REVIEW: HEARING

Chairperson: Mr S Shiceka (ANC, Gauteng)

Documents handed out:
Briefing on Trends in Intergovernmental Finances: National Treasury (Awaited)
Department of Provincial and Local Government briefing: Overview of Trends in Local Government Finance - Challenges and Progress
SALGA submission on Trends in Intergovernmental Finances

SUMMARY
The National Treasury, the Department of Provincial and Local Government, and the South African Local Government Association (SALGA) briefed the Committee on trends in local government finances. Particular attention was paid to the increases in personnel costs, debt recovery and the implementation and projected impact of the Municipal Infrastructure Grant. Representatives from the Eastern Cape, Free State, Kwazulu-Natal and Western Cape Provinces then briefed the Committee on their personnel costs, MIG readiness, capacity and the status of basic service delivery in their provinces.

MINUTES
Mr Shiceka reminded the Committee and visitors that the meeting had been jointly convened with the Finance Select Committee and welcomed its Chairperson, Mr T Ralane (ANC, Free State). The Committee was in the process of looking at trends across the country and was focusing on municipalities at this meeting. He expressed disappointment at the poor attendance of MECs.

National Treasury briefing
Mr I Momoniat (Deputy Director General: Intergovernmental Affairs) said it was very hard to get a consolidated picture on local government figures. Total municipal budgets were at R86 billion with R16.17 billion budgeted for capital expenditure. Municipalities displayed varying dependence on grants, ranging from 3% to 92% in the poorer municipalities.

Key challenges included personnel costs, revenue collection and pro-poor policies. Personnel costs had increased by 15,2% since 2002-2003, with 32,9% of the operating budget spent on these costs. It was likely that these figures had in fact been understated. Outstanding consumer debt had increased to R28bn. This was being addressed through the Municipal Property Rating Act, the Municipal Finance Management Act and the review of the local government fiscal framework.

There were substantial backlogs in water and sanitation. A wide range of organisations were involved in the delivery of water services: the municipalities as water services authorities, the Department of Water Affairs and Forestry and the water boards who were mainly responsible for bulk water provision. Institutional reforms were likely to take several years to complete. Whether water boards were more efficient than direct provision was difficult to answer as facts were not easily available.

Electricity, gas and water sectors contributed approximately 2% of the national GDP. Government had prioritised the addressing of backlogs in electrification and the provision of free basic electricity. A lot of information had not been given where Eskom was the direct supplier. Service-level and funding agreements had now been signed between municipalities and Eskom to enable roll out of free basic electricity in Eskom areas of supply. Reforms were required in both the electricity supply and distribution industries and would address the monopolistic nature of the industry (98% of electricity generated by Eskom). The role of the municipalities in the provision of electricity reticulation had to be acknowledged and six regional electricity distributors (REDs) had been proposed. The restructuring should not adversely impact municipalities. Debt would have to be addressed in the creation of the REDs - some of the debt would have to go to the RED as well. Salaries were of great concern - the municipality paid lower salaries than the metros, for example. If the two were brought under one utility, would salary levels go up or down. If they increased, there would be no economies of scale. He urged SALGA to look at these issues critically and check debt and staffing in particular. It was important that Eskom be able to answer queries on salaries, assets and staffing.

Department of Provincial and Local Government briefing
Ms N Hangana (Deputy Minister) said that an examination of expenditure trends showed that operating costs were the highest factor. Concerns had been raised in the media at the salaries of municipal managers. Managers have a variety of different duties and performance agreements need to be linked to salaries. Salaries and benefits of municipal employees were significantly high, but increases in personnel costs might mirror the impact of the new system of local government. The capital budget of municipalities had grown faster than the operating budget in the previous two years. The bulk of the budgeted capital expenditure was attributed to general infrastructure including roads, water reservoirs and electricity reticulation.

User charges for water, sanitation, refuse removal and electricity were the most significant source of revenue. Property rates make up twenty per cent of local government revenue. Regional Services Council (RSC) levies were an important source of revenue but had been found to be an inequitable and poorly administered tax and were under review. Local government equitable share had progressively formed a greater proportion of overall transfers and was under review to ensure equalisation between municipalities with a revenue base and those solely dependent on national grants. The Municipal Infrastructure Grant (MIG) would ensure investment in infrastructure for basic services thereby accelerating access to these services. Other grants included the capacity building grant and the restructuring grant. Progress had been made in poverty targeting especially in the form of the introduction of free basic services. Population and income also drove the local government equitable share and the review of the equitable share focused on targeting basic service delivery assistance to municipalities with larger proportions of poor people. The introduction of the Municipal Property Rating Act would assist municipalities to broaden their property rates base and thus increase their revenue base, while budgetary reforms would pave the way for a sustainable and more accountable local government sphere.

The implementation of the MIG pilot projects overlapped with the full implementation of the MIG programme which was brought forward by two years, starting on 1 April 2004. This would place pressure on municipalities to deliver, as the MIG programme required a number of business processes and procedures to be put in place. The MIG unit management and establishment costs were funded from the MIG. Provincial Programme Management Units (PPMUs) were established in all nine provinces. These units cooperated with other provincial sector Departments including SALGA and the Department of Public Works on the Expanded Public Works Programme to provide technical support. To date, eight PPMUs have been established. The oversight of the implementation of the MIG was done through the Municipal Task Team (MITT), consisting of senior officials at national level, the Municipal Infrastructure Technical Task Team (MIT3) and the Provincial Municipal Infrastructure Task Team (PMITT). The 2004/05 MIG allocation amounted to R4.45bn. Municipalities had registered new MIG projects and these were running behind schedule in terms of preparation.

National and provincial workshops had been held with all key government stakeholders and a multi-sectoral task team had been established to manage and guide the communication on the MIG programme. All sector Departments participated in this forum.

The National Treasury was responsible for the implementation of the Municipal Finance Management Act and an implementation strategy had been rolled out. The Municipal Property Rating Act had been signed on 11 May 2004 but the commencement date had not yet been provided. One of the main implementation challenges was the valuation of the public service infrastructure. The valuation methodology would be included in both regulations and / or guidelines. The Department also would also launch the Act with national and provincial workshops.

An effective early warning mechanism was needed and the Department had completed an exercise of information gathering through the Municipal Transformation Monitoring Programme. The information system enabled the Department to collect strategic information on a quarterly basis to identify areas requiring support and or intervention at municipal level. Some of the key challenges included the following: poor response rate by municipalities, lack of IT infrastructure to respond readily to questionnaires electronically and lack of credible data from some municipalities. Together with the provinces, the Department was developing a uniform framework for early warning indicators to avert some of the triggers of distress by collectively supporting municipalities.

The work that the Department was doing on Project Consolidate should start to address some of the challenges in the Intergovernmental Fiscal Framework. The challenge was to ensure that the various pieces of legislation and programmes were consolidated so that the system was stabilised.

Discussion
Mr Shiceka remarked that one fundamental problem was the ballooning of personnel costs. The increase of over 15% was drastic and could not be sustained. Measures had to be found to reverse the trend. Government was a service delivery vehicle, not an employment agency. The second fundamental issue was debt collection. The Masakhane campaign had tried to encourage a culture of payment. It was important that those people who could afford to pay for services should not ride on the backs of the poor.

Mr Ralane welcomed the increase in capital expenditure but said he had a problem with the data supplied. For example, only one female-headed household was shown for the Free State Province, which was not the case. This information had been supplied by Provinces, who then disputed it. In terms of capital budgets versus operating budgets, everyone was looking at things in isolation but not looking at the positive direct link of issues like incentives to ensure that Provinces were not losing top quality staff. Some form of motivation was essential. He also asked why the per capital expenditure given for Stellenbosch was so high.

Mr Z Ntuli (ANC, Kwazulu-Natal) asked how municipal managers were employed if there were no key performance areas in performance agreements. He said a number of people were working overtime and asked why more staff were not employed instead.

Mr Shiceka said that there were some performance contracts but that even organograms were missing in some municipalities. Uniformity was needed.

Mr A Moseki (ANC, North West) said that one of the tables on page 24 of the document only listed the Rustenburg and Mafikeng municipalities in the North West Province. There were actually five key municipalities and he asked what criteria had been used.

Mr R Basson (Department of Local Government, Western Cape) said there was a need for strategic and financial management at municipal level. The move to institute uniform conditions was a medium or long term one. Salary increases were not the only issues driving expenses. Recruitment was a long-term budget objective, while overtime was a once-off expense. All municipalities were working with debt control and needed community backing. He asked whether the figures for capital expenditure were actual or budget figures and pointed out that when operating costs went up, capital expenditure was the first to be cut. In terms of early warning, he said there was a reliance on trust for monitoring as there was no uniform system.
The sustainability of services had to be considered, for example where water was not available for flush toilets. Free basic services should not be given to those who were able to pay for them.

Ms S Makotoko (Department of Provincial and Local Government) said that the Department was not trying to justify high personnel costs but trying to work towards a uniform system with one salary stream. Salary levels had to be reconciled to service delivery and the number of employees in the system. The process of amalgamation had meant duplication of staff and there was a challenge to contain the salaries, given the various responsibilities of local government. The government was still in development and was not yet able to isolate performance areas, but was working on it. In terms of revenue collection, a huge amount of historical inherited debt had come over to the new system. This was possibly irrecoverable and systems had to be set up to address this. There had been a reduction in debt by national and provincial government to local governments. Electricity formed a very large portion of revenue and allowed cross-subsidisation of services. There were also unfunded mandates, such as health, and efforts were being made to develop a local government fiscal framework and assess which municipalities were able to raise revenues.

SALGA submission
Cllr M Mvoko said that SALGA's input was informed by its policies and data from the budget week process, analysis of budgets, internal data and input from municipalities and the SALGA National Conference. Financial sustainability of municipalities was imperative and was the responsibility of all spheres of governments. Municipalities had also not yet fully established themselves as constitutional governments. The total budget had doubled in eight years, reflecting progress in extending services to all. There was a marked difference in per capita expenditure between large urban municipalities and smaller (poor), largely rural municipalities. The focus on increasing capital expenditure put pressure on operating budgets and operating costs were not adequately provided for in many municipalities. While the cost of service provision was greater in more sparsely populated areas, customers were less able to pay. Equitable share transfers were not based on the cost of service provision and operating impact had been inadequately provided for.

SALGA supported the need to control the increase in personnel expenditure and had concluded a three-year wage agreement linked to inflation. It was national policy to use manpower intensive methods, however and municipal service provision was inherently labour intensive. Economies should be achieved without compromising service delivery and national policy. The 30% expenditure norm was viewed as a private sector norm and was not necessarily applicable to municipalities.

Infrastructure investment in smaller municipalities was driven by national policy and availability of funds but there had been inadequate consideration of operating and maintenance implications at planning stages. The development of the MIG budget should be accompanied by provision for shortfalls in operating funding in poorer municipalities. Profit on electricity sales was a critical component of municipal financial viability. SALGA policy supported electricity distribution reforms but felt that the consequential costs required careful management. SALGA budget analysis revealed a pattern of under recovery with other revenue generating services not being self-sustaining. The implementation of the new Municipal Property Rating Act posed a challenge with a recovery gap in under subsidisation of the indigent homeowner, inadequate records, recovery structures and political pressures. SALGA supported the review of the local government fiscal framework and felt that the allocation basis of equitable share and MIG funds should be linked. A flat rate approach was not supportable and households with equivalent income were worse off in more rural areas.

Functions referred to as national or provincial responsibilities were all delivered within municipal areas and affected municipal finances in some way. The responsibility of other spheres of government to comply with their obligations as corporate citizens remained an issue as well. Education, roads, housing and health all had an impact on municipal finances. The determination of municipal roads was a provincial responsibility, and housing was an integral component of social development but was a provincial function. Many municipalities had assumed responsibility for housing with financial consequences. Certain municipalities also subsidise provision of primary health care and the transfer of municipal health services to the district municipalities had not been implemented while the local municipalities had not budgeted to continue the service.

Transfers of water services posed financial challenges, including adequacy of provision for manpower, operation and maintenance costs, and the adequacy of equitable share transfers to cover irrecoverable costs of basic service provision in largely indigent areas when the Department of Water Affairs and Forestry transfers stop. In respect of electricity, SALGA believed the solution was intergovernmental cooperation politically driven at all levels with the outcome to be regulated by comprehensive agreements and not legislation. It was important that the financial interests of municipalities were not compromised by unilateral deadlines.

Discussion
Mr Ralane asked what SALGA's own norm would be, if 30% were a private sector norm. What norms of delivery would be set. In terms of the health funding, he asked if district municipalities already had the funding to provide health services.

Mr Moseki asked if it was possible to reconcile personnel expenditure with the organograms of the various municipalities.

Mr J le Roux (DA, Eastern Cape) asked whether SALGA did not feel that personnel expenditure was as out of control as the National Treasury viewed it. What was meant by a "robust" bargaining strategy, he asked. The salaries of municipal managers were not necessarily too high provided they were performing adequately. Certain managers were in fact getting performance bonuses without performance agreements. He asked Mr Basson whether the first duty of local government was not to supply services at a reasonable cost, rather than employing people at all costs.

Mr V Skosana (SALGA Gauteng) agreed that there should be regulation of salaries. Municipalities and different services had been integrated and therefore salaries would change. Local government was dependent on manpower, for example in the Metro Police Force. He acknowledged that a number of municipalities were going through a process of seeing how to improve service delivery. SALGA was liasing with the public service and others to discuss salary structures. He asked whether SALGA was in fact capacitated to intervene.

Mr Z Kolweni (ANC, North West) said the Department of Water Affairs and Forestry was no longer in a position to deliver water and sanitation and asked whether local government was ready to assume this function.

Mr D Botha (ANC, Limpopo) said that role players needed to get together to finalise the process of debt collection and suggested that the Deputy Minister engage in the process. The Government Departments that were not paying outstanding debts to municipalities were creating cash flow problems and a culture of non-payment. He mentioned some municipalities that were financially bankrupt but still increasing staff numbers, employing people to deliver services to generate income. High salaries and perks for municipal managers in small municipalities had a negative impact on the people on the ground.

Mr Shiceka said that the intention of the White Paper had been to build capacity within districts and it seemed that this had been undermined.

Mr T Mokaila (ANC, North West) said that there was a certain acceptance level for salaries but that it was a problem that they had exceeded this level. Internal systems should have indicated this. He said that Cllr Mvoko had disagreed with a statement on page 31 of the document and asked for his reasons. In addition, in certain district municipalities, separate bureaucracies were being created to manage MIG, and this is raising costs. He viewed this as locking funds into personnel costs.

Ms Hangana offered to do research on salaries and present it to the Cabinet. She agreed that there was a need to regulate them. It was a disturbing trend that workers were not responding to calls for services during working hours but waiting for overtime. She would raise the issue of non-payment of municipal accounts by Government Departments at MinMec the next day. Municipal structures had only been in place for four years and many were still experiencing problems with an intergovernmental approach to issues. Some areas had never had services; now there was an attempt to provide services for all.

Cllr S Somyo (SALGA, National Exco member) said that municipalities could not legally perform functions that were not theirs. It was not that they did not want to co-operate. Local government was a sphere strategically placed to operate projects funded by other government Departments. In terms of personnel costs, SALGA had negotiated a multi-year agreement for the first time, thus knowing the impact of salary increases for the future. There were previously more than 800 municipalities, now there were 284. Provinces had also amalgamated various homeland systems administrations, and the public service was bloated.

SALGA had established job evaluation units, and employees would be placed in specific functions. Conditions of service varied, and there was a need to streamline these. For example, there were more than seventy pension funds in operation, either as defined contribution or defined benefit funds. Defined benefit funds placed the risk on the employer and carried a range of contributions, up to 35%. SALGA was in the process of rationalising these pension funds, but this was a very big project. MIG was infrastructure based funding, but if there was no element of maintenance and operations, Government would be wasting money. It needed personnel and sustainability. There would always be justification for personnel costs.

Mr Shiceka mentioned the view that the increase in personnel costs was an unintended consequence of amalgamation and said the National Treasury report needed to look at the reasons for this. The use of labour intensive methods was also an issue. It was not enough to have infrastructure without maintenance, but other Departments were also involved, for example, the Department of Housing builds, but the municipality tars the roads and maintains them.

Cllr Mvoko said that MIG did not address backlogs at all. It might be necessary to analyse backlogs by districts. Municipalities cannot be funded for the backlogs.

Mr Shiceka said that Project Consolidate was looking at backlogs. Gauteng had done a study and it would take R45bn to address the backlogs in the Province. All provinces should be looking per municipality and identifying critical areas. A framework should be developed as a tool to monitor municipalities across the country.

Mr G Richards (SALGA: Executive Director: Governance and International Relations) said that Project Consolidate was a set of data that extrapolates trends for a defined period. The data was useful but the components were engaged in addressing issues. It was not bringing in extra money. It was identification of critical shortages by analysis and reference to shortages in service delivery, and then applying joint resources to address the problem. He agreed that there were circumstances where problems arose, but said these could not be generalised into trends.

The mechanism of measurement of personnel cost was important. He suggested increases be linked to available data and have increases measured against service delivery. A number of issues were pertinent to the salaries of municipal managers, including management performance. SALGA had conducted an extensive survey looking also at world norms. A report had been drawn up recommending guidelines for the determination of salaries, a standard form of employment agreement and standard forms of performance agreements. Extensive progress had been made in instituting performance assessments. Measurement of performance by institutions was equally important.

The process of electrical restructuring was in place and was a multisectoral approach. Revenue raised from all resources allowed government to cross-subsidise and this needed to be brought into the debate on the structure of the new framework on local government finances. He linked the emphasis on capital expenditure to operating expenditure and repeated that it was an ongoing process. As a collective of municipalities, the SALGA role is facilitative. SALGA works with Departments to assist individual municipalities to achieve their goals and objectives.

Separate bureaucracies were needed to manage MIG. A project management unit was required at provincial level and a similar unit at district municipal level. It had been recognised that this might not have been provided for and might need additional personnel. This had been recognised in the MIG funding structure.

Mr Shiceka agreed with the need to revise personnel expenditure and the need to relate them to performance. He asked whether entities like water boards had helped or created a problem. It was important to look at best practices of institutional performance and the capacity of provincial Departments was very important. There was a need to agree on capacity and how to build it. He asked whether SALGA had capacity on a provincial level. In addition, the issue of management of financial affairs was very important. Only 29% of municipalities had performed to budget.

Mr Ralane said he was aware that SALGA participated at the budget forum and asked whether they should not also be participating in budgetary processes in the budget forums in provinces. Provinces might have particular priorities but SALGA might be left out when distributions were done at provincial level. Cllr Mvuko agreed.

Mr Somyo said the intention was not to regulate salaries but to formulate a framework.

Mr Shiceka excused himself from the meeting and handed the chair to Mr Ralane.

Eastern Cape briefing
Ms L Mqokoyi (Chief Director: Development Local Government Branch - Department of Housing, Local Government and Traditional Affairs) welcomed the rationalisation of the public service and said it allowed efficiency and supported local government in dealing with responsibilities. The Eastern Cape was incapacitated in terms of skills and the number of people available for jobs. The Province was unable to attract and retain professionals because of the remuneration package offered. There was a significant backlog in respect of the delivery of free basic services. A schedule had been developed with the Department of Provincial and Local Government that looked into a number of variables, and costed them. The service needs and population of all 45 municipalities had been included.

She agreed with the need for uniformity and mentioned poor financial management in some municipalities. A turnaround strategy was being worked on, and billing was being looked into. District municipalities coming up with uniform IT systems linking to municipalities, e.g. the OR Tambo Municipality. The MIG was an internal problem in the Eastern Cape, and the provincial and municipal infrastructure task team had not yet been set up. Municipalities needed assistance and support and monitoring would continue as long as needed. The Eastern Cape was trying to follow the MIG policy framework to the letter.

The Eastern Cape was not very strong in the area of early warning mechanisms because of lack of capacity. The current system contained annual checks, where monthly checks were needed. A performance evaluation framework was in place and reports were made directly to the Head of Department. An early warning system was urgently needed and should be inter-structural. Reliance on reports drawn up by municipalities was not effective and not all municipalities complied. Not all were prioritising the development of reporting strategies either. A solution was needed that linked the Department to all municipalities. There was a need to integrate monitoring and performance management.

Mr Ralane noted the incapacity and said it was critical to have such interactions.

Free State briefing
Mr S Polelo said there was a similar situation in the Free State. Capacity caused most problems, with communication. In most municipalities budgets were close to 50% on operating costs. There was also a need to indicate counsellors' allowances and he asked that the NCOP consider assisting with the allowances. The amalgamation of municipalities took in staff on different salary scales, which increased the personnel budget.

Most municipalities had implemented uniform billing. It was difficult to maintain, however, for a number of reasons, such as demographics. IT systems often did not mesh and reconciliations were impossible and full of errors, yielding unreliable data. He supported the need for a uniform billing system but felt it was a national directive.

The Department had assisted municipalities to compile business plans and PMUs had been set up in some areas.

There was a decentralised management system and district managers implement management performance systems. They were, however, not well capacitated. They also monitored media and community issues. Municipal support teams had not been doing a very good job in terms of investment. He was concerned that the amount of money allocated was decreasing annually and appealed for continued funding. Roadshows had been held on the Municipal Property Rating Act and Municipal Funding Act.

Mr Ralane said that the visitor from Mpumalanga did not represent the Department and that her input would not be correct.

Western Cape briefing
Mr Basson said there were backlogs in basic services in the Western Cape that would take quite a few years to alleviate. All municipalities provided free electricity, water and sanitation and this had been prioritised. The Western Cape was looking at the sustainability of free services to those able to pay. The province was moving from a basic to a developmental government. Policies should make life easier for people on the ground.

There were no foreseeable problems with MIG and some smaller municipalities had received assistance. Problems had been experienced with the flow of funds from the National Government. The Western Cape was using the Department of Provincial and Local Government monitoring tool. Municipalities did not share systems, and some had to be taken on trust, and this was not always merited. The National Treasury was now doing financial monitoring and local government was doing performance monitoring.

KwaZulu-Natal briefing
Ms H Krishnan (Director: Municipal Finance, Department of Traditional and Local Government Affairs) said that salary costs were at 35% of budget on average. Salaries were perceived as a challenge and the high salary levels of municipal managers were a constant issue. The potential existed for a single public service. Different grades of municipalities also existed - each still needed to operate in terms of legislation so there had to be some rationalisation. The amalgamation of the Transitional Local Councils had been a problem as municipalities now had inappropriate structures. Re-skilling might be needed. The Department was trying to assist with rationalisation of staffing.

There was a 43% backlog of free water services and lack of access to basic infrastructure was the main reason for this. It was anticipated that MIG would address the infrastructure problem. No municipalities offered free basic sanitation, and the backlog for electricity was at 61%.

Uniform billing was not necessarily going to be the enabler to unlock debt, but a more comprehensive model of debt management was required. A number of systems had already been upgraded and were now able to communicate. Provincial Departments were now paying their debts as well.

All municipalities had established PMUs and these continued to implement previous programmes. Very positive results had been obtained and they had adequate capacity and skill. The province had all its business plans and was ready for implementation but no MIG approvals had been received to date.

Two years ago, the province had looked at a means of monitoring service delivery and financial management. An electronic monitoring system had been developed that could be accessed by the province. Business intelligence was built into the system. A slow response rate was one of the problems with the system although this had improved. Another issue was data integrity as it was not an automated system. The IT architecture was being changed to interface with actual municipal systems. Data cleansing was also critical, as much of the data was historic and outdated.

A phased approach had assisted and worked well in readiness for the Municipal Finance Management Act. Support initiatives were also being targeted in a phased approach. Workshops had been held and the province was clear on all roles. Valuations and the cost of valuations will be extensive for the Municipal Property Rating Act but municipalities had been given funding and technical support. A draft rates guideline had been developed at provincial level.

Discussion
Ms Makotoko said that good things were happening but the forum needed to monitor how duties were being discharged. She emphasised the need to take advantage of a programme of action to work together to acknowledge and address challenges.

Cllr Somyo said that provinces had a constitutional duty to support municipalities for Project Consolidate to succeed. The Eastern Cape had said that capacity was a challenge and the Project could not succeed without capacity. Success relied on intergovernmental co-operation. SALGA felt that capacity gaps were contributing to general gaps in the sector. The system was supposed to be at the consolidation phase, but this was still a challenge. He felt that if the provinces had the required capacity, the picture would be different. He asked how the provinces could contribute to ensuring stability.

Mr Richards said that the provinces were finally conceding that there were gaps. Local government was saying that they had capacity. This should be leveraged to assist the provinces to understand how municipalities operate. There were also a number of knowledge-sharing programmes in local government and there was scope for such a programme amongst the provinces.

Mr Ralane said that many counsellors were not backing up the system and this may become a challenge for SALGA and the NCOP. Knowledge sharing was very important. He expressed disappointment that SALGA had missed some of the hearings as it had a direct interest in the issues. It was important to ensure that SALGA became a participant in the hearings.

Cllr Somyo said that SALGA would have like to contribute to the other hearings and committed SALGA to availability to the NCOP and to the Provinces.

The meeting was adjourned.