Department Strategic Plan and Budget 2006/07: briefings

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Cooperative Governance and Traditional Affairs

12 March 2006
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Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
13 March 2006
DEPARTMENT STRATEGIC PLAN AND BUDGET 2006/07: BRIEFINGS

Chairperson:
Mr T Tsenoli (ANC)

Documents handed out:
Department Strategic Plan, 2006-2009 [available shortly at
www.dplg.gov.za]
Department of Local and Provincial Government: Annual Report, 2004-2005 [available shortly at
www.dplg.gov.za]
Project Consolidate
Urban Renewal Project Booklet: Programme 3
Strategic Overview of the Department and the Budget
Governance, Policy and Research: Programme 2
System Capacity and Building: Programme 4
Free Basic Services and Infrastructure: Programme 5
Administration: Programme 1
Financial Overview

SUMMARY
The eight branches of the national Department of Provincial and Local Government presented their strategic plans and budgets for 2006/07. In the next three years, the Department would focus on policy implementation and coordination to improve service delivery. Provincial governments would play a more prominent role in assisting municipalities to deliver services.

The Committee expressed satisfaction with the Department’s Strategic Plan. Concerns were however raised about the Department’s capacity to implement the strategy. Members highlighted a need for greater clarity on the relationship between local, provincial and national governments, district and local municipalities as well as the responsibilities of ward councillors.

MINUTES
(Please refer to documents for presentations).


Discussion
Mr W Doman (DA) wanted clarity on who administered the Municipal Finance Management Act (MFMA). Were the National Treasury or the Department of Provincial and Local Government (DPLG) responsible for issuing regulations? Who should be held responsible for hiring and firing municipal managers?

Ms Ndlela (Director-General) answered that National Treasury administered the MFMA. The issue of the performance of municipal managers required the Department to work together with National Treasury in the context of the Municipal Systems Act to ensure municipal governance was improved.

The Chairperson requested the Department to reflect on its working relationship with the Committee and whether it had made progress on the previous recommendations of the Committee.

Ms Ndlela said the Department had a very impressive relationship with the Committee and always sought to improve upon it. The Department had previously made summaries of issues raised during meetings available to the Committee. This documentation had proven to be a very useful guide to evaluate progress.

The Chairperson asked for further elaboration on the Department’s work at regional and international levels.

Ms Ndlela answered that the initiatives at regional and continental levels remained important and would be raised by the relevant representatives in their presentations. A meeting had been held with local government representatives in the Southern African Development Community (SADC) region and plans were being developed to establish a SADC Desk in the Department. She expressed her hope that United Nations (UN) Secretary General Kofi Annan would discuss South Africa’s role and responsibilities for reaching the UN Millennium Goals during his visit to South Africa.

Mr P Smith (IFP) said that the Department was very ambitious in its planned targets and activities for the next five years. He raised concerns about the internal capacity of the Department to implement these plans.

Mr Africa (Deputy Director-General: Project Consolidate) responded that although the Department had a specific role to play, the implementation of the strategy was the responsibility of the entire government. The Department would facilitate and put in place mechanisms to ensure that government acted on the outlined objectives.

Mr Africa explained that different branches of the Department would implement and co-ordinate different aspects of the Strategic Plan. The January Cabinet Lekgotla had endorsed the decision that all provincial and national departments should indicate in concrete terms the manner in which they would fund these plans.

Mr Smith wanted clarity on the Department’s stance on councillor remuneration. Linked to this, how did the Department view the role of local council Speakers?

Mr Africa answered the equitable share allocations published in the Division of Revenue Bill reflected Treasury and government provision for a general increase in the remuneration of councillors. This amounts to approximately R200 million for the next financial year. Regarding the role of Speakers, he said that the Department was committed to strengthening their status.

Mr Smith asked to what extent provincial budgeting for support and funding for local government formed part of the Department’s plans.

Mr Africa said that this issue, although a focus point, was not central to the Department’s review. The Department regarded all provincial departments responsible for local government as important to its work. Preliminary assessments of these departments indicated a variance in budgets together with a big difference in the number of municipalities these structures were responsible for. These were key to assessing the extent to which provinces could provide support to municipalities.

Mr Smith enquired about the 1 March 2006 deadline for the submission of draft Integrated Development Plans (IDPs). Was this deadline met?

Mr Africa answered that quite a number of municipalities had completed their draft IDP documents and that this was liked to an ongoing process to ensure that all municipalities had IDPs by the end of June/July 2006.

Mr Smith expressed concern about the two-tier system of local governance. He said that initially the district and local municipalities had different yet complementary functions. It was not clear how the strengthening of the district municipalities would impact on this relationship. Would these local municipalities be "subservient" to districts?

Mr Africa responded that the Department would not challenge the fundamentals of the two-tier system, but would seek to strengthen the original concept. All types of municipalities were regarded as relatively on par with each other. The extent of debate between strong B and C municipalities indicated a need for greater clarity on the roles of district municipalities. A need thus existed for clearer role classification. The Department would develop programmatic interventions to recognise the role of strong B municipalities.

Mr Mshudulu (ANC) asked how the key performance indicators could be kept static so that they could guide municipalities that did not have the capacity. He found the prominence of consultants in drafting the IDPs of some municipalities a big concern. In what ways could the Department simplify issues relating to integrated development so that it was more user-friendly to municipalities?

Mr Mshudulu also wanted more clarity on deploying skilled individuals to municipalities in relation to its impact on the Chapter Three powers of municipalities. Did the Department see itself as a ‘big brother"?

Mr Africa said that the Department had begun to institutionalise key performance areas and indictors which would serve as a benchmark for all municipalities. This formed part of the national evaluation system. He stressed that the Department would make more user-friendly guidelines concerning integrated development available to municipalities. He stressed that greater cooperation between all three levels of government was important

Mr Mshudulu stated that there was a problem regarding alignment of targets between national, provincial and local governments. This could be seen in "fiscal dumping" during March, the last month of the financial year.

Mr Doman congratulated the Department on their efforts to deal with the weaknesses of and challenges faced by local governments. However, the lack of reports about the work of Project Consolidate made it difficult to assess the project’s success.

Mr Africa stated that the Department was converting the work of Project Consolidate into accessible reports. He recognised the need to better communicate progress.

Mr Doman commented that he was very sceptical about the effectiveness of ward committee and suggested the Department refine legislation regarding the responsibilities of ward councillors. Ward councillors should be required to report to the provincial legislature once every quarter while the participation of civil society organisations, through a municipal register, should be increased.

Mr Africa reaffirmed a commitment to the existing council system. He recognised the need for greater clarification and strengthening of the role of ward councillors.

Mr Phadagi (ANC) said that the presentation emphasised the role of national and local governments, but placed lesser focus on provincial governments. How would the Department deal with provincial underspending, especially since provinces were expected to assist local government in developing both infrastructure and capacity to deliver services?

Mr Doman added that the Department should identify those provinces that would be able to monitor local governments, while the national department focussed on central quality control. He asked that the working relationship between national and provincial governments be made clear.

Mr Africa responded that the Department viewed provinces as very central in the overall programme of support for and work with local government. The Department would undertake a review of the current state of provinces to evaluate their ability to provide the necessary support to local authorities. In this vein, all national and provincial departments had to indicate in concrete terms how they would lend support to municipalities. Mechanisms, guided by the intergovernmental system, would be developed to monitor this process. The Presidential Co-coordinating Council as well as the MinMEC forum would also be utilised.

The Chairperson asked why the Department had shifted from the national vision of "South Africa; Alive with Possibility" as this vision was needed for the next five years of implementation.

Mr Africa answered that the presentation focused on what needed to be done in order to realise that vision. The focus were thus on mainstreaming governance arrangements and policy refinement. The Department had not shifted its vision and remained committed to the vision set out in the White Paper on Local Government.

The Chairperson requested clarity on the short and long term capacity plan of the Department in light of a demanding strategic plan. He said that the importance of inter-provincial and inter-municipal co-operation should not be neglected for improvement of local governance.

Mr Africa repeated endorsed the Department’s commitment to inter-municipal and inter-provincial cooperation as it formed part of the Intergovernmental System. This would be emphasised more strongly.

Mr Mogasi (ANC) asked what the Department had done to ensure that people working in municipalities were equipped with the necessary skills to ensure sustainable local government.

Ms Ndlela responded that the plans for development were not merely focused on technical planning. Important skills were needed at local and provincial levels in order to implement these development programmes. She would meet with all directors-general of provincial departments to ensure that local municipalities and provinces complied with the strategies. She acknowledged that more clarity was needed about the role of provinces in municipal governance. She emphasised that skills development was a broad area which had to take into account the entire system of education to ensure that municipalities were realigned to important issues.

Mr Mogasi (ANC) said that the turmoil experienced in townships indicated that local government could not be left to function on its own. National intervention should be the "modus operandi". What were the specific interventions by government to assist those affected by recent riots, for instance in Khutsong?

Mr Smith requested the Department to provide reasons for the lack of compliance with the indigent register. How could the accuracy of this register be maintained?

Mr P Flusk (Deputy Director-General: Free Basic Services and Infrastructure) responded that the cost of maintaining an indigent register discouraged municipalities and provinces. Certain municipalities such as Ethukweni Municipality had done away with this system as free basic services were provided to all within the municipal area. The Department would make the development of an indigent register compulsory for all municipalities as a means to record unemployment and poverty.

Mr Smith asked whether the level of basic services such as housing would be increased.

Mr Flusk answered that the provision of housing was a provincial competency. Local government could merely act as an agent. The Department would continue a process to ensure that delivery of these services was increased.

Mr Smith asked how many Bills the Committee had to pass this year.

Mr Mshudulu (ANC) raised a concern about the evaluation of municipal managers in the absence of performance management agreements. Would the Department set performance standards?

Ms Makotoko (Deputy Director-General: Systems and Capacity Building) said that no new legislation would be introduced as the Department would place more emphasis on the implementation of already-existing legislation. Moreover, the Department would also focus on legislative accountability. Currently, performance management contracts are not included in employment agreements. This together with increasing the competencies of municipalities would form the areas of focus. The Department would also review and evaluate the method of application of municipal property rates.

Mr Powell (Deputy Director-General: Policy Research) added that minor adjustments would be made to the Municipal Systems Act. These would deal with the discrepancies between the line functions of national and provincial governments and the special arrangements of municipalities. These were more technical adjustments to refine rather than change the system.

Mr B Solo (ANC) said that some municipalities who lacked funds could not scrap bylaws. How did the Department deal with this issue?

Ms Makotoko said that bylaws were generic in character. In other words, bylaws were not implemented and had no implication for actual local governance. She however stressed the importance of eradicating these bylaws from the statute book. This was an ongoing process.

Mr Doman wanted clarity on the Municipal Infrastructure Grant (MIG). Currently 22% of this grant had been unspent. What was the cost of this grant and had studies been conducted concerning its effectiveness?

A Department representative said that MIG comprised a global amount. Draft budgets had been used to calculate and collect levies. No specific formula had been used, but adjustments had been made to account for changes in the inflation rate.

Mr Mshudulu (ANC) asked why development nodes were important.

Ms Malapo (Deputy Director-General: Urban and Rural Development) responded that extra development nodes could be identified, especially in the Eastern Cape region. A national focus on the challenges facing cities and other urban areas were also needed.

Mr Phadagi said that the majority of South African did not have addresses. Was progress being made in this regard?

Ms Ndlela said that the Department had been in constant contact with the relevant government departments and would strive to eradicate this problem.

Mr Lokgoro (ANC) asked why the Khoisan leadership had been separated from the rest of the traditional leadership issues.

A representative from the Department responded that studies of the genealogy of the Khoisan revealed that their leadership and traditions were qualitatively different from the rest of traditional leadership. The final policy would recognise the differentiated leadership.

Mr Lokgoro asked if the Department was involved on the African continent beyond the SADC.

Mr Powell answered that the work of the Department was in line with the universal approach of government. The Department’s work provided support for ongoing initiatives such as the New Partnership for Africa’s Development (NEPAD). More attention was given to local government related matters primarily within the Southern African region. Through the cluster system, the Department played a role in the African Peer Review Mechanism (APRM).

The Chairperson noted that the presentation reflected on the internal and not external importance of gender equity. How could gender representatively be realised? Information should reflect an impact on gender related issues. What is the reason for this shortage of information?

Ms Mketi (Chief Director: Corporate Services) said that the Department did not monitor the gender equity process in isolation. Gender equity formed part of the process of mainstreaming all departmental activities.

The Chairperson thanked the Department for their presentation.

The meeting was adjourned.

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