Provincial and Local Government 2006/07 Budget: Department briefing

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SELECT COMMITTEE ON LOCAL GOVERNMENT AND ADMINISTRATION

SELECT COMMITTEE ON LOCAL GOVERNMENT AND ADMINISTRATION
24 May 2006
PROVINCIAL AND LOCAL GOVERNMENT 2006/07 BUDGET: DEPARTMENT BRIEFING


Chairperson: Mr S Shiceka (ANC, Gauteng)

Documents Handed Out
Strategic Overview of the Department and the Budget
Details of Project Consolidate and Local Government Priorities for 5 years: Part 1, 2 & 3
Governance, Policy and Research (Programme 2)
Urban and Rural Development (Programme 3)
Systems and Capacity Building (Programme 4)
Basic Infrastructure (Programme 5)
Administration (Programme 1)
Financial Overview
Director General's Speech

SUMMARY
The Committee was briefed by the Department of Provincial and Local Government on its 2006/07 budget.

Members raised concerns about inactive ward committees, performance bonuses and contracts, disaster management, private sector support for municipalities and infrastructure spending by local councils. The Committee supported the Department’s budget.

MINUTES

Department of Provincial and Local Government (DPLG) presentation

The Director General of DPLG, Ms Lindiwe Msengana - Ndlela in giving an overview of the budget pointed out that municipalities will receive R82 billion through the DPLG budget, and that great strides had been made in terms of institutional transformation and capacity building with funds set aside for improving skills and systems in municipalities. She then asked her Deputy Directors-General to make the following detailed presentations:

Details of Project Consolidate and Local Government Priorities for 5 years. (Mr Elroy Africa (Deputy Director General: Governance, Policy and Research); Mr Derek Powell (Deputy Director General: Urban and Rural Development); Ms Bernadette Leon (Acting Deputy Director General: Systems and Capacity Building); Ms Shiva Makotoko (Deputy Director General: Basic Infrastructure); Mr Patrick Flusk (Deputy Director General); Ms Tumi Mketi (Deputy Director General); Financial Overview. Mr Mbulelo Sigaba (Acting Chief Financial Officer)

(See the attachments for detailed presentation)

Discussion

Mr J Le Roux (DA, Eastern Cape) thanked the Department for a comprehensive presentation. He asked if the private sector were going to work in local government areas, would this be a form of privatisation? He further expressed concern about community participation at ward level. He asked what the Department was doing to assist the SA Local Government Association.

Mr G Krumbock (DA, KwaZulu-Natal) asked for further clarification on the resourcing and capacity building of ward councilors. Why had it taken so long to fill the vacancies in the Department?

Mr A Watson (DA, Mpumalanga) asked for an explanation of why the Auditor-General had reported that 65% of municipalities had not submitted financial reports and documents, some as far back as 2000. He also asked how detailed the performance contracts of municipal managers ere.

Mr K Mokoena (ANC, Limpopo) asked whether the DPLG had a good working relationship with the Department of Public Works. When would disaster management move from reaction to prevention? Which province performed the worst? What type of assistance was the DPLG providing to the Municipal Demarcation Board (MDB)? How did local governments facilitate the involvement of councilors and ward committees?

Mr K Windvoel (ANC, Mpumalanga) expressed concern that tender processes might be impeding Black Economic Empowerment (BEE) goals, especially with the insistence of collateral on the tenders applied for. Poor communities did not have the money or the assets to put up as collateral. What was the DPLG doing about this? He further expressed concern on health services and facilities in the rural district where some centres were using old Volkswagens as mobiles covering long distances. He further asked the DPLG to be very clear about the position of municipal managers, especially as it related to performance bonuses. What was the process of determination for bonuses and was this prone to abuse?

Ms F Nyanda (ANC, Mpumalanga) expressed serious concern about the ward committees, asking whether there had been any training for them on leadership and coordination skills?

The Chairperson also expressed concern about the ward committees, noting the notion and concept had evolved as though these committees were voluntary institutions not necessary or mandated by law. There was a need to look at more legislative measures to ensure that the ward committees were compulsory all over the country. He further noted that, while the DPLG had presented good statistics, there was a need to present the most up to date statistics and data to the Committee. He urged to Department to improve in this regard. On performance bonuses, he urged the DPLG to come up with a policy that would ensure that the bonus system was not abused.. He further expressed concern about SALGA, given that the Auditor General reported that SALGA had failed to reconcile its books. Was the DPLG assisting SALGA in this regard and how? He noted that some municipalities were failing to spend their allocations; some had only 12% expenditure of the Municipal Infrastructure Grant (MIG). What was DPLG doing about the low spending levels? He noted that there was mention of a bill in one presentation. What did this bill focus on?

The Director-General welcomed the questions and agreed with the sentiments and concerns raised by the Committee, especially on the need to interact more and share information. On the questions raised, she called on the Committee to note that the three-year budget was premised on a solution-oriented approach to problems, with emphasis on policy refinement and reinforcement measures. Through this the Department had acknowledged the existence of problems and was now through the plan, working towards solutions.

Tackling the question of skills development and private sector partnerships, The Director-General stated that there would be no privatisation of services by the DPLG and municipal councils. Instead it was partnership programme with he private sector to compliment and support the local municipalities in capacity building through cash donations or other types of support such as manpower provision, training and equipment.

Ms Msengana - Ndlela agreed with the concerns raised about the ward committees and to this end the DPLG had finalised and distributed a general guidelines manual on the committees. It is from the guidelines that legislation will be drawn from, though the key to this problem was the need to improve the quality of leadership .On financing the ward committees, the DPLG had discussed the issue with Treasury and concluded that through the equitable share, the municipalities must provide for ward committee funding.

On low expenditure levels, the Director-General noted that the trend had improved at Departmental level and as such the Department would be spending much of the time assisting municipalities in this area so that they are able to implement and produce reports on time as required. The new approach of development finance was helping in this issue.

The Director-General acknowledged the existence of vacancies but noted that the DPLG had done well in this area. She explained that the current vacancies were due to the long process of employment where after advertising, a huge number of applications were received and in some instances none of the applicants met the required standards for the job. Nevertheless, the DPLG was moving with speed to fill the positions, while following the stipulated procedure.

On performance bonuses, Ms Msengana - Ndlela explained that the DPLG had established a mechanism, which due to time constraints, could not be explained in detail to the Committee. She proposed that another presentation be organised so that the Department can inform the Committee about performance bonuses, remuneration and contract matters.

Ms Msengana - Ndlela felt the DPLG had a good working relationship with the Department of Public Works. On disaster management, Mr L Williams had been appointed to lead the unit and it was now standing on its own as a separate unit. This would help to make it more prepared for disaster prevention, reconstruction and response.

On health mobile units, Ms Msengana - Ndlela explained that the DPLG had a new health budget line which would among other things help attend to health related problems. Commenting on tenders, she pointed out that though the matter was a Department of Trade and Industry issue, the DPLG would take it up with them.

On SALGA, she assured the Committee that the DPLG would work to assist SALGA to overcome its problems, though with acknowledgment that SALGA was an independent organisation separate from the DPLG.

The Director-General informed the Committee that the Department was in the preparatory stages for the relevant bill. The focus of the bill would be on creating synergies between the national, provincial, district and lower strata with an emphasis on planning for growth and development. Powers and functions would also be dealt with in the bill, outlining the role of the central authority among other things. The bill would be tabled in Parliament by August.

The Director General called on Mr Powell to respond to the question of the worst performing province with regards to finance. In his response, Mr Powell noted that he did not have the current data and statistics to give an accurate response. He noted that there was dynamic change and tremendous progress in this regard and the Medium-term Expenditure Framework (MTEF) had shown a shift towards increases in expenditure on capital projects, which before was lagging behind.

Mr Africa noted that the private/public partnerships had greatly improved the municipalities and the DPLG. Through Project Consolidate, more people of various key professions were made available to assist the municipalities. For instance 39 engineers are currently working with the DPLG as part of an agreement with the South African Civil Engineers Association.

On the question of revenue and revenue capacities, the Director-General explained while the Department recognised the different capacities of councils in revenue generation, it could not punish municipalities for lack of revenue. Where incompetence was seen as a factor in revenue demise, then different administrative and punitive measures would be used.

On the MDB, Ms Msengana - Ndlela noted that the DPLG had granted R4, 6 million to support the work of the Board.

The Chief Financial Officer assured the Committee that the funds of the DPLG were in safe hands, pointing out his vast experience in the job. He took the opportunity to alley concerns on BEE and tendering procedures. There were a number of complications in the tendering process, some bordering on abuse of the process. Hence the National Public Works Department was working on a mechanism to address these problems and one of the ways was through a register of constructors.

In the interest of time, the Chairperson thanked the Director General for the effort and well articulated responses to tough questions posed by the Committee. He noted that more time was required to exhaustively deal with the issues raised by the Committee. He assured the DPLG of the support of the Committee in the budget debate.

Meeting adjourned.

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