Municipal Indigent Policy: World Cup Readiness &Economic & Human Development Strategies: City of Cape Town briefings

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Cooperative Governance and Traditional Affairs

05 September 2005
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Meeting report

 

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
6 September 2005
MUNICIPAL INDIGENT POLICY: DEPARTMENT BRIEFING; WORLD CUP READINESS AND ECONOMIC AND HUMAN DEVELOPMENT STRATEGIES: CITY OF CAPE TOWN BRIEFINGS

Chairperson: Mr M Lekgoro (ANC)

Documents handed out :
Department Framework for a Municipal Indigent Policy. Executive Summary
Department Municipal Indigent Policy Framework
Department Status of Municipal Indigent Policies
City of Cape Town Report on State of Readiness for Soccer World Cup 2010
City of Cape Town Report on Economic and Human Development Strategy Part1
City of Cape Town Report on Economic and Human Development Strategy Part2
Department PowerPoint Presentation on Skills Levels in Municipalities, Indigent Policies and Urban Development

SUMMARY
The Department briefed the Committee on its Municipal Indigent Policy. This policy would provide for an integrated approach to a comprehensive social safety net, and it would allow government to target the delivery of essential services to particularly vulnerable citizens. The need for an indigent register was discussed.

The City of Cape Town then presented a report on its state of readiness for Soccer World Cup 2010. It highlighted financial requirements, the Athlone Stadium upgrade; the conceptual framework in compliance with FIFA requirements; and the development opportunities for Cape Town. The period until December 2005 was critical as all planning, budgets, and finances had to be approved by then. By 2008, all playing venues had to be complete.

The City of Cape Town also presented its Economic and Human Development Strategy. Officials focussed on the need to sustain economic development that benefited all. Key issues around poverty were addressed. The City had a budget of R14 billion, with a large allocation for housing, particularly the N2 Gateway Project.

In the afternoon session, the Department outlined the background to the audit conducted into the skills levels of municipalities; the key observations of the audit with regard to capacity, skills level and training; the training challenges regarding the financial, institutional capacity and technical skills needed, and the recommendations of the audit committee in addressing these problems.

The Committee proposed that the Department work with educational institutions, relevant government departments and the Local Government Sector Education Training Authority (SETA). in devising an integrated and co-ordinated approach to the problem of lack of skills in the local government sector. Members suggested that the Department consider offering state bursaries to matriculants in the "hard" sciences for employment in the local government sector for a stipulated time. The IFP expressed concern about the costs involved in outsourcing by municipalities, because its officials did not have the necessary skills themselves.

MINUTES

Department briefing on Indigent Policy

Mr P Flusk (Department Deputy Director-General of Free Basic Services and Infrastructure) briefed the Committee on the Department’s Municipal Indigent Policies. He explained that a framework on indigent policies was needed for municipalities. The policies should provide for an integrated approach to a comprehensive social safety net, and would allow the government to target the delivery of essential services to citizens who experienced a lower quality of life.

The indigent policy should define the municipal approach to poverty and providing services to the indigent. It should also clearly indicate who would benefit, as well as making clear which services would be delivered, and what processes would be used to manage the indigents. There was a need to lift people out of poverty. He discussed the need for an indigent register. This was a complex issue and municipalities required support as the monitoring of such a register would be expensive. The positive aspect of such a register was that it allowed for planning. An exit policy was important because the indigent policy was designed to lift people out of poverty.

City of Cape Town briefing on World Cup readiness
Mr W Smith (City Director: Special Programmes) presented the State of Readiness for the 2010 Soccer World Cup Report. The report discussed the programme calibration, financial requirements, the Athlone Stadium upgrade, ongoing development projects, consultations, and the way forward.

The conceptual framework was focused on two issues: compliance with FIFA requirements, and the development opportunities for the City. The latter included marketing, trade and investment, arts and culture, sports development, transport management, safety and security.

The contract for the Athlone Stadium upgrade had been awarded and the contractor was on site. There were ongoing consultations with the City, Province and parastatals regarding infrastructural requirements. Feedback sessions with the general public were planned.

Planning was very conceptual at present but full implementation was expected early next year. The business case would be presented to the local organising committee which would then present this to FIFA in September/October. The period from the present to December 2005 was critical as all planning, budgets, and finances had to be approved by then. In 2006 the focus would be on the implementation of strategies. By 2008 all playing venues had to be complete.

City of Cape Town briefing on Economic and Human Resources Strategy
Mr Z Siswana (City Director of Community Development) presented the City’s Economic and Human Resources Strategy. He discussed their approach, socio-economic indicators, meeting the challenges, and the R14 billion budget. He emphasised the need for sustained economic development benefiting all, and addressed key issues around poverty.

There was a need to redefine the urban core, and improve the design and management of urban areas. Job creation was important. Key projects should be based on the principles of integration. He used as an example the Athlone Power Station Site. Strategic shifts were required to create a city that worked for ordinary people.

Discussion:
Mr C Kekana (ANC) commented on the problem of job creation and asked what progress had been made in partnership with the private sector. He noted that people derived pride and dignity from working and that job creation would overcome one of South Africa’s biggest problems. He asked how many municipalities were implementing indigent policies, and whether people were benefiting from these. Mr Flusk replied that the government had expanded public works programmes, and was implementing projects in a labour intensive way to facilitate job creation. At the development summit the major stakeholders (government, labour, the community, and business sector) had agreed on a number of strategies, e.g. banks were offering loans to municipalities at a lower interest rate.

A Member asked if the names of the municipalities who had not responded were available. Mr C Malekasi (Department) replied that a list was available and would be forwarded to the Committee.

Ms L Mashiane (ANC) asked if there was any monitoring mechanism in place to ensure that the benefits of an indigent policy reached ground level. Rural municipalities should be used for benchmarking rather than larger urban ones, as the problems in rural areas were greater. She cited the use of property values to register indigents - often people might live in a large house, but still be extremely poor and lack basic services.

Ms Mashiane commented that indigents in very rural areas had no services at all. She asked if there was a way of communicating to them that they would eventually be provided with basic services.

Mr Flusk agreed that benchmarking was sometimes skewed and that there was a focus on big cities. It was important that all municipalities have indigent policies and each and every person in South Africa should get involved, and engage with ward committees to make sure their issues were heard. The issue of basic services belonged to everyone.

Mr M Mshudulu (ANC) said that the free basic services workshops had made it clear that municipalities should know what was at stake. The government had an obligation to care for the poor. Where no reliable data on the indigent was available it made it difficult to allocate resources. Municipalities should take the initiative in caring for the poor, but needed reliable information in terms of capacity. He was not sure if the Department and Treasury were defining poverty correctly. He also asked how resources allocated from national government were traced to their final destination, and how outcomes were being monitored. It was important to ensure that delivery arrived at the correct destination. Standards needed to be set and those not complying should be called before the Portfolio Committee.

Mr Flusk replied that a variety of elements should be used to assess who the poor were. More money needed to be channelled into the smaller municipalities than those with revenue raising capabilities. Regarding the tracking of resources, he noted that there was a weakness in the system as it was not possible to provide an exact number of services provided. This had to be done in the future. Many municipalities had already done a good job. The Department would engage with the Auditor General’s Office to get exact numbers of people serviced and money supplied.

Ms M Gumede (ANC) pointed out that the statistics on the number of municipalities in the report did not tally. She asked how non co-operative municipalities were being dealt with. Mr Malekasi replied that the statistics only referred to local municipalities, and excluded district municipalities. Regarding non-compliance, Mr Flusk replied that this was improving but more audits needed to be done this year.

Mr M Likotsi (PAC) asked how much money had been used by the different municipalities to implement the indigent policy. He asked whether money was being channelled towards job creation. He also asked about the implementation of the policy, as it was one thing to have a policy in place, but another to implement it. He also asked about intervention in non-compliant municipalities and if there were time frames set to enforce compliance.

On the subject of councillors, he observed that the government was creating power struggles between ward councillors and PR councillors as some felt excluded from decision making. It was these councillors who were mobilising communities into marching. Mr Flusk commented that the marches involved only a very small percentage of the community, and the Department had made an effort to engage with them.

Mr B Solo (ANC) commented that the system of ward and PR councillors was designed to ensure that all communities were represented. The two should complement each other. The ward committee system needed to be strengthened to empower communities.

Mr P Smith (IFP) expressed approval that the Department had offered a variety of targeted options, as it was important for municipalities to adjust to local conditions. He asked which municipalities were using which methods and suggested it would be useful to have representatives explaining their choices. The issue of ‘means testing’ needed further discussion. It was widely promoted in South Africa and seldom properly implemented, and yet most of the discussion was about this. How important was it, and was it feasible to eliminate it entirely and use other options, or combinations of options?

Mr Flusk agreed that it would be good to bring different municipalities in to debate different approaches and the need for interventions. There was a need to examine what big cities had done to create and contribute to economic development and emulate that in smaller municipalities. Indigent policies should serve as a base and contribute to the economic development of municipalities, as they were a large investment in people.

Mr W Doman (DA) said that he was pleased with the progress. The administration of indigent registers was difficult but should not deter the delivery of free basic services. Some municipalities offered free basic services to all, adding on charges for those who exceeded the allocated usage. This method eliminated problems with a register. He noted that the municipalities who achieved the greatest success were those who provided free basic services in combination with strict credit control and debt collection. This forced the indigent to come forward for registration.

Mr Solo said a strategy was needed to draw in the big industrial players. He felt there were very poor communication, and few campaigns to empower communities. He asked what role the South African Local Government Association (SALGA) was playing in this. There was a need for discussion with MECs to ascertain how much assistance the province could provide to local government. Mr Flusk replied that it would be useful to get the three spheres of government together: SALGA, the Provinces and national government to jointly account for indigent policy. Different acts were adequate but effective implementation needed time. Solutions should not be found in legislation but at grassroots level – here one would find where and what legislation needed altering.

A Member asked if there was a way to ensure that indigent people would receive benefits despite their political affiliations. This question was not answered.

The Chairperson asked whether there had been efforts to go beyond provincial and local governments. An integrated, holistic approach was needed to determine who were indigent. He asked if there was an intention to go deeper into understanding the indigent population, and alleviating their problems, rather than treating the symptoms. The existing laws were not discretionary but binding, yet he did not get the impression that they were being enforced. He asked why there was no policy framework, and observed that a major strategic approach was needed.

Mr Flusk said all councillors were expected to serve their communities. Regarding finances, he pointed out that this year over R9 billion had been allocated to municipalities and about a third of that was used for free basic services. The government was providing a large amount of money. Monitoring the implementation of an indigent policy was the joint responsibility of all stakeholders. On the issue of compliance, he noted that the Auditor-General’s Office was expected to audit municipal books to check on money usage.

No final conclusion was made but there was agreement that representatives from different municipalities be requested to attend a Portfolio Committee meeting and debate approaches to indigent policy.

Discussing the Human Strategy Plan, Mr Kekana asked if it was possible to measure how much raw material was leaving the Western Cape for the overseas market. Exporting raw materials was a loss of opportunity for job creation in South Africa. Mr Siswana replied that the harbour was a very strategic infrastructure. The bulk of the raw material exported was fruit, and the establishment of a canning industry was being discussed with the Province.

Ms Mashiane commented that along with a growing infrastructure, and with developments around the 2010 World Cup, came a growing problem of traffic congestion and inadequate transport. She asked what was being done about this. Mr Mgoqi replied that the Metropolitan Transport Authority was responsible for roads and transport. Its report would be used as a tool for promoting access and mobility, and restructuring the city, giving access to all.

Mr Siswana added that public transport was the key issue. This needed to be improved and extended, and people should be encouraged to use public transport. Funds were needed, and a transport study had been launched. Transport was a constraining factor for development and required enormous investment.

Ms Mashiane also asked if there was any plan to solve the problem of shipping containers that occupied so much space. Mr Siswana agreed that the containers were a problem. It was an area that had not been regulated but the problem was being dealt with.

Mr Mshudulu (ANC) said that historically Cape Town had been a divided city. He asked what plans there were to reverse this, and give black people access to the city. Economic apartheid was still a challenge. He commented that only certain categories of people were accessing tenders in Cape Town. Also, because of the mountainous nature of the city, the transport system was an issue. Transport networks were needed to free residents and tourists to move easily around the city.

Dr W Mgoqi (Cape Town City Manager) replied that there was an awareness of the City’s legacy. The design of the programme aimed to address this, and there was a very deliberate and conscious approach to reversing this legacy.

Mr Smith brought attention to the consistent increase in negative trends in the last decade (discussed in the report). He asked what role migration played in that trend, and what strategies were being employed to counter negative trends. Dr Mgoqi replied that there was a need to create some base to hold people to the land. He added that rural-urban migration was a worldwide phenomenon. It was not necessarily a negative process but required careful management.

Mr Doman asked in which suburbs the houses for the Gateway Project were to be built in. He asked what part of the capital budget had been allocated to this and if funding would be spread over a few years. Dr Mgoqi replied that as part of the integrated human settlement programme a list of housing projects was underway. This list was available in issue no. 20 of "Contact" (staff newsletter of the City of Cape Town) (page 10). Development was not restricted to the Gateway Project.

Mr Doman stated that it was important to bring the poor closer to their jobs, and asked what success had been achieved in taking job opportunities into the poorer areas. This would also help with upliftment. Dr Mgoqi replied that in taking job opportunities to the people, four primary sites had been identified: Culemborg, Ysterplaat, Wingfield, and Youngsfield. Mr Siswana added that taking industry to poor areas was a challenge because of the transport constraints. The City needed to look at developing another entrance and exit to the city in order to unlock areas like Phillippi.

Mr Likotsi observed that the report had not covered major problems like drug trafficking. The City should reflect on combating this as it was handicapping development. The migration trends from the Eastern Cape to Cape Town were a result of poverty and unemployment. To alleviate this, he suggested that Cape Town should forge a relationship with the Eastern Cape Province, and assist in the upliftment of its economy.

Regarding the negative trends and the increase in poor households, he asked for current statistics as 2001 statistics were outdated. He also asked if informal settlements included the people living under bridges. There was a need for more information about shack dwellers in backyards.

After the lunchbreak, Mr P Smith (IFP) requested an update of the Department’s legislative programme for the remainder of the year. He stated that the Department had indicated at the beginning of the year that its programme would be pretty full, yet there were several pieces of eagerly awaited legislation that had not yet been presented to the Committee.

The Chairperson informed the Committee that he had requested the Department’s Parliamentary Liaison Officer last week to provide that information, but they have not yet replied. He had to leave the meeting for an appointment and requested Mr S Mashudulu (ANC) to take the chair.

Department briefing on municipal human resources
Mr Nyanisile Jack, Department Executive Manager: Local Government Leadership Academy, indicated that a skills audit had been undertaken to capture the current and existing skills in the local government sector, and efforts were underway to consolidate all the available human resources information held by various stakeholders into a concise Skills Audit Baseline Information Report.

He outlined the skills levels and National Qualifications Framework (NQF) grades of current employees in the local government and water sectors, and the following were identified as scarce skills within those sectors:
- financial management skills,
- contract management skills with particular emphasis on building good procurement practices,
- an overriding concern with the development of political and administrative leadership in the sector,
- project management skills,
- ABET (Adult Basic Education), and
- technical skills of all types.

The staffing levels in the municipalities were outlined, and it was noted that the Free State’s staffing levels were significantly lower than those of the other provinces. The introduction of equity targets had resulted in the sector losing staff and not being able to fill the vacant posts, because insufficient black professionals had reached the level of experience required, since black graduates only started entering the technical skills profession in larger numbers in the late 1990s. The Local Government SETA was currently engaged in a Sectoral Skills Plan review process to be incorporated into the final submission to the Minister of Labour on 30 September 2005.

He stated that very few vacancies were being declared at senior management and management level within municipalities. However, people occupying these positions appeared not to be adequately qualified for the jobs and there was salary/ rank inflation, thus resulting in sacrificing salary allocations at lower level for higher-level staff.

A lack of technical capacity could become a key challenge for the majority of municipalities in South Africa. This was most evident in low capacitated municipalities, where technical staff without adequate experience and qualifications had been recruited at all levels. The demand analysis noted that there was a considerable shortage of technical skills across the full spectrum of local authorities. Institutional development and human resource capacity development were amongst the most urgent tasks confronting local government.

Councils across the spectrum faced a growing crisis of institutional sustainability. Institutional training was important to address critical shortcomings in institutional and associated human resource capacity in municipalities across the board, as well as the need to promote general "institutional awareness.

He concluded by outlining the human resource interventions that needed to be taken to address the skills level problem.

Discussion
Mr Smith asked whether the audit report was a final document and whether the Department had composed it itself or had outsourced the task.

Mr Jack responded that it was a tentative report because the Department was currently undertaking its own skills audit, and it was for that reason that some of the information contained in the tentative report was illustrative at best and speculative in part. The report contained information compiled by organisations outside the Department, because it was believed that they had raised important concerns that needed to be addressed.

Mr Smith asked whether there was any link between this problem in municipalities and the role of the Department in terms of what it should be doing in the way of legislative interventions. He proposed that the Department consider linking the required skills with grading within municipalities by way of departmental regulations.

Mr Jack replied that there was an emerging opinion that there was a need for minimum qualifications, especially for technical positions. This must be done even if it had implications for equity considerations. There must however be a creative way to deal with such problems.

Mr Smith sought clarity on the role of Project Consolidate in this process, and whether it was related to a longer-term issue regarding the sustainability of skills.

Mr Jack replied that it was a two-year programme with unique features as it sought to intervene in those municipalities that were struggling. The unfortunate aspect was that it was only a two-year programme. The danger was that there could be an over-reliance on outside help, where officials from the Department or private sector assisted municipalities. It allowed for sharing of facilities, which the Department would oversee.

Mr Smith expressed his approval of staff sharing between municipalities, as this would enable capacitation. He asked whether any pro-active measures could be taken to facilitate that.

Secondly, since the presentation indicated that financial skills were of the most important skills needed within municipalities, had the Department given any thought to following the health professionals model and requiring a one-year community service stint for financial graduates at a local municipality.

Ms M Gumede (ANC) stated that her municipality had constant problems with erratic meter readings and inaccurate accounts delivered to households. There were also problems in municipalities with municipal managers and other officials being paid double.

Mr Kekana (ANC) stated that the problem with the production of graduates in the mathematics and physics fields remained. One of the largest problems was that the public service struggled to provide incentives for such graduates that could compete with the offers of the private sector.

Ms L Mashiane (ANC) she stated that she did not understand the Department’s constant problem with the retention of skills in the local government sector, because staff were being trained by the municipalities. The problem was that the Department had placed no effective monitoring mechanisms in place to ensure that those people took up active and productive posts within the municipality once trained. She proposed that persons who received training from local government be bound to a two-year contract with local government.

Mr Solo asked the Department to explain the nature and extent of the relationship it enjoyed with the educational institutions, especially with regard to encouraging high school learners to pursue a career in the mathematics and science fields. Secondly, he asked whether any in-house training courses were set up to train the 30 000 or so interns.

Mr Jack stated that the Department was currently engaged in a process with the Development Bank of South Africa (DBSA) and the Umsobomvo Youth Fund to cultivate young engineers who were unemployed for possible employment in the local government sphere. The Department would however work together with the professional associations to get their assistance in mentoring and coaching them. Retired personnel would also be employed to mentor and train the young technical personnel.

He stated that the remuneration of councillors was an ongoing initiative and a legal intervention was being sought in this regard to make sure the matter was addressed. He was however not able to indicate the time by which the matter would be finally resolved.

Ms Sandra Greyling, Local Government Leadership Academy: Curriculum Development, added that it had become apparent to the auditing team that it was not possible to ascertain the skills that were needed at local government level if systems such as job descriptions and performance agreements were not in place. Thus the skills audit would outline the knowledge, skills and attributes required within an occupational category. The municipalities that were similar in type would have to be compared to ascertain the legislative, generic and specific competencies that were required at every occupational level. This would provide a competency framework that the people that actually occupied those positions would be measured against to determine the skills gap. It was only at that point that a strategy could be compiled to address the problem. This was the route currently being followed for the engineering profession.

Furthermore, the Department was currently not in a position to monitor and evaluate the actual skills levels in municipalities. Thus at the same time that the Department conducted the skills audit it would have to put in place a database, so that the Department could in future monitor and evaluate where it stood in the process.

Co-ordination between the Department, the South African Local Government Association (SALGA) and the LGSETA had been a problem. Attempts were being made to address this in the skills project to ensure skills development was approached in an integrated fashion.

Mr Smith asked whether municipal functions were being outsourced as a consequence of the skills problems within municipalities, and whether the extent of the outsourcing could be explained. Secondly, he asked whether the Single Public Service initiative was applicable in this case.

Mr Jack replied that outsourcing remained a major problem in municipalities. Some of the appointments at senior level did not have the necessary qualifications to hold that office, and they would thus perform their job by outsourcing people who had the necessary skills. There were cases in which the consultant would do all the work for the municipal official, with the official simply signing off on reports. He argued that outsourcing was a problem within the public sector as a whole, and not solely within the local government sphere.

Mr Smith asked whether the Local Government SETA was doing enough to address the problem.

Mr Jack responded that the Local Government SETA had new leadership, and it enjoyed a closer working relationship with the Department. The Department was working with the LGSETA to address the problem with leadership and capacity building.

Mr Kekana stated that although the presentation focused on shortcomings, he wished to congratulate the Department on the good work it had done with regard to skills development in municipalities. It had achieved success under very difficult circumstances, and was very good by international standards.

Ms L Mashiane (ANC) stated that she had consistently been raising the issue of the Department only providing Members with copies of the documentation at the meeting, when Members should have been provided with the documentation before the time to examine it thoroughly before the meeting. She requested that in future Members be provided with all the documentation well before the time.

Mr B Solo (ANC) seconded Ms Mashiane’s request. Mr Jack apologised for not providing the documentation timeously. Mr Mshudulu proposed that it be made a requirement for documentation to be provided before the meeting, or no meeting would be allowed to take place.

Concluding remarks
Mr Mshudulu stated that one of the problems was that municipalities allocated the task of skills development and creating a skills plan to junior managers who did not have the necessary capacity. This must be corrected and monitored. Secondly, the Integrated Development Plan (IDP) must include a skills audit and a reflection of the capacity within the municipality. Thirdly, government should consider offering bursaries to matriculants in the mathematics and science fields in the local government sector. Fourthly, the Department’s "excuse" regarding equity targets should be ruled out as it was not acceptable, and he proposed that government departments devise an integrated strategy to address the problems with scarce skills.

Furthermore, the Department must inform the Committee of the extent to which municipalities were providing disaster relief funds, as that was a legislative obligation. A workshop might even be necessary to map out the way forward. He requested that the tentative report presented to the Committee today be used as the foundation document for ensuring that all the relevant stakeholders involved in providing training to local government worked together from the same document.

Mr Solo agreed that the Committee should make a resolution that an integrated approach would have to be followed by all those involved in skills development in local government.

Mr Smith asked whether Cabinet would respond to the tentative report. Mr Jack responded that the report was part of the approach of the Forum of South African Directors-General (FOSAD), but the concrete decision taken on local government aspects at the Cabinet Lekgotla which was subsequently endorsed by MinMEC, was that a comprehensive skills audit must be undertaken. However, no clear policy directive had yet been devised to address the problem.

Mr Mshudulu noted the agreement that the resolution would be effected by convening a workshop.

The meeting was adjourned.

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